Baltimore County Executive Johnny Olszewski Jr. wants to set a standard pay rate and requirement to hire locally for contractors who win county-funded projects.
Olszewski, a Democrat, has introduced legislation that would require prevailing wage — the typical hourly pay for local workers, often the rate for union labor — for most county-funded capital projects. The legislation also would require at least 51% of all new jobs for these projects to be filled by Baltimore County residents. A public hearing for the bill occurred during Tuesday’s council meeting.
The law would create “a level playing field for workers,” improve workplace safety and enhance project quality, Olszewski said in a statement. He also said it would support the county’s workforce as the region continues its economic recovery amid the coronavirus pandemic.
“The men and women who build our roads, our schools and all the public infrastructure supporting our quality of life deserve the ability to earn a fair, living wage,” Olszewski said.
If approved, the law would apply only to capital contracts or projects put out for bid beginning July 1.
Supporters of the legislation said it would stop employers from violating wage and labor laws whenever those companies allegedly denied workers benefits and earnings. Opponents, however, are worried the law would impose burdens on small contractors and push employers out of the county.
The capital projects include work on roads, bridges, buildings, water and sewer infrastructure necessary for the county government to operate. Under the law, contractors would have to pay employees — including apprentices — at a rate set by the Maryland Commissioner of Labor and Industry based on annual wage determination surveys of construction employers.
The proposal also would apply to “county-subsidized” capital projects — projects funded through public-private partnerships — receiving assistance of more than $5 million.
On Tuesday, Councilman Julian Jones, a Woodstock Democrat, said the proposal would ensure residents receive a livable wage. Councilman Izzy Patoka, a Pikesville Democrat, said the bill would increase the county’s revenue and “pool of construction workers."
“This is the direction that Baltimore County ought to be going,” Patoka said. “I think we’ll have a stronger workforce from this.”
But Councilman Tom Quirk, an Oella Democrat, said he’s worried there could be a decrease in jobs if the legislation leads to increased construction costs.
Councilman Wade Kach, a Cockeysville Republican, called the hiring requirement “an excellent idea." Kach said he hopes the administration will work with the school system to help schools train students who want construction jobs.
The prevailing wage proposal comes with some exceptions. The law wouldn’t apply to contracts already subject to federal or state prevailing wage law, contracts with a government entity, contracts awarded without competition, or “emergency” contracts, among other exceptions, according to the 16-page bill.
The county may waive or lower the hiring requirement if the contractors shows “a good-faith effort” to comply, or none of the work is performed within the Baltimore metro area. The contractor also could get an exception if there aren’t enough residents with the skills needed for the work, or if the contractor agrees to a special workforce development training with the county.
“Anytime you eliminate competition, price goes up, so now you’re eliminating the competition from people who are not able to meet that hiring requirement."— Mike Henderson, president of Associated Builders and Contractors of Greater Baltimore
Under the law, contractors and subcontractors may only make “fair and reasonable deductions” required by law and authorized in a written agreement with the employee concerning food, sleeping quarters, or any collective bargaining agreements with a labor group and the employer.
“Both short-term and long-term, this legislation will help the county because it’ll put people in jobs that their taxes are paying for, and you’re guaranteeing them training and livable wages,” said Stephen W. Courtien, president of the Baltimore-D.C. Building Trades Unions.
Courtien said the legislation would reduce “wage theft” because it would require companies to pay workers what they’re owed. One of the largest projects in the county is Tradepoint Atlantic, and Courtien pointed out Tradepoint has committed to providing a prevailing wage while “you have other projects right around Baltimore County that aren’t that have completely stalled out.”
Employers would have to comply if an employee files a lawsuit against the employer to recover the difference between the prevailing wage and the amount actually received. Under this scenario, the employer also may be ordered to pay damages to the county for noncompliance of no more than three times the amount of wages owed to the employee.
The bill also prohibits ways to sidestep the requirements, such as paying employees through a third party or treating workers as subcontractors or independent contractors. Employers would have to maintain payroll records and allow county inspections. If violations are found, the county could withhold payment and even bar contractors from future county work in cases judged to be intentional.
Although some opponents argued the legislation could drive up the cost for construction projects, Courtien said those increased costs would be “minimal.”
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But Mike Henderson, president of the Associated Builders and Contractors of Greater Baltimore, disagrees. Requiring employers to train several new workers for a project “could be a disincentive for pursuing Baltimore County work,” Henderson said.
Henderson said a study should occur to understand how many electricians and carpenters live in the county.
“Anytime you eliminate competition, price goes up, so now you’re eliminating the competition from people who are not able to meet that hiring requirement,” Henderson said.
Henderson is worried the law will place “a significant regulatory burden” on small contractors who already struggle to fill skilled jobs during a construction workforce shortage. He nonetheless stressed his organization wants to help the county with finding jobs for residents.
Rick Binetti, a policy director with the Baltimore Washington Laborers' District Council, said that while labor costs might go up, studies show the overall cost of a project won’t increase. He said training would create new “access to a workforce created by a pipeline of work” from the county
Based on six years of the county’s capital budget, Olszewski’s administration said a prevailing wage policy is expected to generate 232 jobs, $35.1 million in income for workers, and $6 million in state and local tax revenue, according to a March 2020 analysis by Pinnacle Economics.
If approved, Baltimore County would join the state of Maryland, as well as four jurisdictions — Baltimore City, Charles County, Montgomery County and Prince George’s County — that currently have prevailing wage laws. The council is slated to vote on the legislation on Nov. 2.