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Guidance for Investor Owned Utility Project Contractors and Subcontractors - Prevailing Wage

Which Contractors are Covered?
During the 2023 legislative session, the General Assembly enacted Chapter 336, Laws of 2023 (HB 513) which amended § 5-305 of the Public Utilities Article. Section 5-305 requires the Commissioner of Labor and Industry to provide prevailing wage rates to contractors and subcontractors working on certain investor-owned utility projects subject to the law.

What Projects are Covered?
The law applies to projects by an investor–owned gas company, electric company, or combination gas and electric company, involving the construction, reconstruction, installation, demolition, restoration, or alteration of any underground gas or electric infrastructure of the company, as well as any related traffic control activities.

How Are Rates Obtained?
To obtain rates, the contractor or subcontractor should go to the Department’s prevailing wage portal and select the highway informational wage rates for the county in which the work is performed. View the portal.

At the dropdown menu, select “other” under “Type of Requestor”, select “Highway Rates” under “Type of Prevailing Wage,” and select the appropriate county under “Jurisdiction.”

If there is a rate that is not listed on the website, a contractor or subcontractor may request additional rates by contacting the Department by email at dldliprevailingwage-dllr@maryland.gov.

What Rate Must Be Paid?
The law requires contractors to ensure that all employees performing covered work are paid in compliance with the existing prevailing rates for such work that are set by the Commissioner. These rates are set annually on December 1 and change each year. Contractors should therefore be aware that the rates they are required to pay for covered work may change each December 1, and are not fixed for the term of their contract.

Must a contractor or subcontractor performing work on a covered project submit certified payroll records under the law?
No. The utility projects covered by §5-305 of the Public Utilities Article (PUA) are not subject to the requirements of the State prevailing wage law. Contractors do not have to post the prevailing rates, or submit certified payroll records to the Department. The law only directs the contractors to pay certain rates for covered work, and those rates are established by the processes set forth in the prevailing wage law. The law did not bring the described utility projects within the scope of the prevailing wage law.

How will the provisions of the law be enforced?
The law provides for enforcement only under the Maryland Wage Payment and Collection Law, Title 3, Subtitle 5 of the Labor and Employment Article. The obligation to pay the prevailing rates under PUA §5-305 is not enforceable under the provisions of the prevailing wage law.

What penalties may be imposed for failures to comply with the prevailing wage rates?
The Maryland Wage Payment and Collection Law does not authorize the Commissioner of Labor and Industry to impose fines, liquidated damages, or “penalties” of any kind. In contrast, the State prevailing wage law establishes a separate enforcement and remedial structure for contracts subject to that law. That structure authorizes the Commissioner to, among other remedies, impose penalties (called “liquidated damages”) for certain violations of the law. However, the utility work subject to PUA §5-305 does not fall within the scope of the prevailing wage law, and is not subject to that enforcement or remedial structure.

The bill language provides that the Commissioner will “waive all civil penalties” for contractors who come into compliance with the act by March 1, 2024. What action will be taken against contractors who do not come into compliance by March 1?
The Department is aware of the uncodified language in HB 513 (the bill that was subsequently codified as PUA § 5-305) providing that the Commissioner shall “waive all civil penalties for, and may not take any related action against, a contractor or subcontractor who, on or before the effective date of the Act is not in compliance with the prevailing wage requirements under [the law], if the contractor or subcontractor comes into compliance with the prevailing wage requirements by March 1, 2024.” As noted above, under the Maryland Wage Payment and Collection Law, which provides the enforcement structure for this obligation, no such penalties exist. When the Department investigates a potential violation under the Maryland Wage Payment and Collection Law, the employer receives notice, has an opportunity to participate and provide information during the investigation, and, should an adverse determination be made, may contest the determination.


For additional information, contact:
Division of Labor and Industry
Prevailing Wage for State Funded Construction Unit
10946 Golden W Drive Suite 160
Hunt Valley, MD 21031
410-767-2342
e-mail: dldliprevailingwage-labor@maryland.gov
Ayuda en Español: Jose Ruiz, 410-767-2370