certified payrolls in the new electronic format. Electronic
certified payrolls must be submitted by contractors and
subcontractors directly with the State within 14 days after
the end of each payroll period. Contractors must accurately
report the classification of each worker on the project and
reflect payment of the wage and fringe benefit payments
determined to be prevailing by the State.
Under another new rule effective in 2013, contractors
can pay 20% less than the prevailing wage listed in the
wage determination so long as they pay that differential
into bona fide fringe benefit programs (in addition to
any fringe benefit amounts already determined by the
State). Contractors should be careful that they assign work
according to the classifications identified as prevailing by
the State, which are often union classifications requiring
adherence to union work assignments. Contractors should
not assume that the same work rules apply on State projects
as on private jobs.
A New Executive Order May Lead To More
PLAs But Offers An Apprenticeship Alternative
On September 20, 2013, Governor Martin O’Malley issued
an Executive Order entitled: “Procurement Guidelines -
Authorization of Project Labor Agreements, Authorization
of Apprenticeship Agreements, and Community Hiring.”
As the title implies, the new Order presents PLAs and
Apprenticeship Agreements as alternative options for state
procurement officials on selected State-funded projects.
The key section of the Order states that successful bidders
for such projects can be required to execute either a PLA
or an agreement with an entity that operates a registered
apprenticeship program (including ABC). The agreement
must demonstrate that the bidder will have access to a
reliable supply of properly trained labor personnel who
possess the requisite skill and safety training to ensure
successful project delivery. No one knows what this means
and it remains to be seen what sorts of agreements will be
accepted by the State in lieu of PLAs, but at least some sort
of apprenticeship alternative appears to be contemplated
by the new Executive Order.
Workplace Fraud Act Enforcement Continues
Contractors continue to report intrusive investigations
into their compliance with the Workplace Fraud Act. This
relatively new law applies to both public and private work
and requires construction contractors to treat all workers as
their employees unless theymeet stringent criteria to receive
“1099s” as independent contractors. The Act also requires
contractors to notify subcontractors of the Workplace
Fraud requirements and to monitor their compliance with
the Act. State investigators have demanded records of all
subcontractors and vendors and have made unannounced
job site visits to interview employees and determine their
proper classification status. Contractors and subcontractors
should audit their classification of workers to ensure those
classifications are proper under the Act.
Conclusion
Contractors seeking to perform work in Maryland,
particularly on government-funded projects, will face new
compliance challenges in the years ahead. Understanding
and complying with the new rules will be necessary for
any contractor to avoid enforcement penalties and stay in
business in Maryland.
1
Mr. Baskin is a shareholder with the Washington, D.C. office of Littler
Mendelson, PC and Littler’s Workplace Policy Institute. He represents ABC
and member contractors in all aspects of labor and employment law.
28 Building Washington
