This month, West Virginia Governor Earl Ray Tomlin signed Senate Bill 361, which significantly adjusts the state’s calculation of prevailing wages to establish an amount more reflective of actual earnings in regions across the state.  As Governor Tomlin states, the new law will “address the concerns of hardworking West Virginians while establishing a common sense approach to continued investments in [the] infrastructure.”

Law gavel on a stack of American money.

Currently, all contractors on public projects pay wages calculated by the West Virginia Department of Labor.  When the new law goes into effect on April 13, 2015, economists at West Virginia University and Marshall University, as well as Workforce West Virginia, will be tasked with calculating those wages.

The most impactful aspect of the new law is that any West Virginia public project under $500,000 will be exempt from paying prevailing wages.  For projects over $500,000, before the public entity can advertise for bids, it must obtain from Workforce West Virginia the fair minimum rate of wages to be paid by the successful bidder to the laborers. This schedule of wages is to be made part of the construction specifications.

There is a July 1, 2015 deadline for the calculation of the new 2015 prevailing wages.  If, for any reason, Workforce West Virginia, together with West Virginia University and Marshall University, fail to determine the prevailing hourly wage rate by this date, no prevailing wages will be in effect until the determination is made.  There are provisions in the Bill that allow for an extension of time during which current prevailing wage rates would remain in effect, but if a determination is not made at the expiration of the extension period, no prevailing wages will be in effect until a determination is made.

West Virginia is one of a growing number of states enacting laws to narrow the types of construction projects affected by prevailing wages, and in some cases, to remove the law entirely.  We will continue to monitor the prevailing wage reform across the country, and, as always, we welcome your comments and questions.

Lisa M. Wampler is a Partner in the Construction Group of Cohen Seglias Pallas Greenhall & Furman PC.

Lori Wisniewski Azzara is an Associate at Cohen Seglias Pallas Greenhall & Furman PC. Lori practices in the areas of construction and commercial litigation and has experience in contract negotiation, claims for delay and inefficiency, mechanics’ liens, and all types of contractual disputes.