December 31, 2014

L&I Clarifies Prevailing Wage Issue on Privately Owned Projects

By John Parnass

The prevailing wage typically applies to a project owned by a public body, such as a new school or a roadway.  But what happens when the project is owned by a private company?  Does the prevailing wage apply as a consequence of the private firm receiving some funds from a public body? 

Earlier this year, PSE requested guidance from L&I on this question.  In response, L&I determined that the prevailing wage did apply to the work performed by a private utility (such as moving street lighting) because that work was reimbursed by the public body (Kitsap Transit).  Prevailing Wage on Moving Privately Owned Utilities (1) 

In other words, L&I reasoned that the work was a “public work” (and thus subject to prevailing wages) even though the work belonged to PSE and PSE had the obligation to repair and maintain it in the future.  Project ownership, according to L&I, is not necessary; what counts more is whether the work was done at public cost.