Pennsylvania Labor Secretary discusses prevailing wage and wage theft challenges

The Pennsylvania House of Representatives Appropriations Committee meeting on February 21, 2025, focused on critical discussions surrounding prevailing wage laws and wage theft in the Commonwealth. The meeting highlighted concerns about the enforcement of these laws and the implications for state-funded projects.

A significant point of discussion was the interpretation of prevailing wage requirements for projects receiving state grant funding. Representative Mostello raised concerns that under the current administration, the entire project must adhere to prevailing wage standards if any part of it is funded by state grants. This marks a shift from previous practices where only the portions funded by state dollars were subject to these wage laws. The Secretary of Labor and Industry clarified that this interpretation is guided by judicial mandates rather than administrative decisions, emphasizing that exceptions to prevailing wage laws are very limited.

The committee also examined the transparency of the prevailing wage calculation process. The Secretary explained that prevailing wage rates are determined based on various factors, including geography and project duration, and are publicly available for bidding on state-funded projects. Despite inquiries about potential changes in how these rates are issued, the Secretary confirmed that no alterations have been made to the existing process.

In addition to prevailing wage discussions, the committee addressed the issue of wage theft, which has significant financial implications for workers and the state. Representative Kinkade inquired about the estimated impact of wage theft in Pennsylvania. The Secretary provided data from the Unemployment Compensation Tax Review Office, revealing that audits uncovered over $6.7 million in unpaid taxes due to misclassified or unreported workers. The meeting also reported substantial recoveries for workers affected by wage theft, including nearly $4.2 million returned under various labor laws.

Overall, the discussions underscored the ongoing challenges related to wage enforcement and the need for adequate resources to ensure compliance with labor laws in Pennsylvania. The committee's focus on these issues reflects a commitment to protecting workers' rights and ensuring fair compensation in the state.