Dive Brief:

• The Massachusetts Attorney General’s office has cited contractor I.W. Harding Construction Company and its owner James E. Shalek for violating state prevailing wage and record keeping laws and has fined the company $54,000 in restitution and penalties.
• The AG’s office alleged that in addition to not paying prevailing wages, the company did not pay required overtime, failed to provide "true and accurate" certified payroll records, and did not produce requested documentation to the AG’s office in association with its investigation of 11 state public projects.
• Under the Massachusetts Prevailing Wage Law, contractors doing work on public construction projects have to pay their employees a minimum wage established by the state and based on trade classification. Even salaried employees' pay must be equivalent to at least the minimum prevailing wage for their job class.

Dive Insight:

"Companies can’t cheat their employees out of their proper wages in order to gain an unfair advantage over their competitors," Attorney General Maura Healey said in an announcement. "Prevailing wage laws are in place to ensure there is a level playing field for those who work on our public projects."

The issue of prevailing wage has always been a point of contention in the construction industry. Proponents say it puts all bidders on a level playing field and eliminates the risk of employees being paid lower-than average wages in order for the low bidder's numbers to "work." Critics, however, maintain that the law interferes with the free market and uses union wages as the benchmark, even in areas where that wage may be higher than the market would normally support. 

The prevailing wage debate took center stage in January when New York City's independent budget office (IBO) said that if developers are forced to pay workers at the prevailing-wage level, it would add 13% to the city's affordable housing budget over 10 years. Union representatives were quick to contest the report's results.