Changes in Ohio's Prevailing Wage Law

August 2, 2011 By Labor and Employment and Government Services
Legal Updates

House Bill 153, Ohio's recently passed biennial budget legislation, includes significant changes to prevailing wage law for construction of public improvements other than roads and bridges.

The dollar threshold for application of prevailing wage requirements for new construction of a public improvement other than roads was increased to $125,000 in year one; $200,000 in year two; and $250,000 in year three. Each year is measured from the effective date of the new legislation, September 29, 2011. The dollar threshold for application of prevailing wage requirements for repairs, reconstruction or improvements was increased to $38,000 in year one; $60,000 in year two; and $75,000 in year three.

There was no significant increase in the dollar threshold amount for road or bridge construction.  Prevailing wage applies to new road construction when the total overall project cost is estimated to be $78,258, or greater, and to repair roads, bridges or ditches when the cost is estimated to be $23,000, or greater.

School construction was exempt from prevailing wage requirements under prior law and continues to be exempt under new law [RC §4115.04(B)(3)]. A new provision in the House Bill 153 makes it unlawful for a school district to apply the Ohio prevailing wage law as a condition in any contract. RC §4115.04(C), the new section added in the Budget Bill, provides: "Under no circumstances shall a public authority apply the prevailing wage requirement of this Chapter to any public improvement that is exempt under division (B)(3) of this Section [4115.04, the section that exempts schools]."

House Bill 153 also deleted prevailing wage requirements for construction of port authority facilities, including projects financed by port authority economic development revenue bonds, and projects funded by State economic development programs and the State enterprise bond fund. Prior law at RC §§4582.12(D) and 4582.37 required prevailing wages be applied to port authority-owned or financed improvements. House Bill 153 deleted both of these sections. House Bill 153 also deleted RC §166.02(E), which required prevailing wage to be applied on projects receiving financial assistance from State economic development programs under RC Chapter 166 or the enterprise bond fund.

The Davis Bacon Act [40 U.S.C. 341-48], the federal wage and hour statute, is not affected by House Bill 153. Davis Bacon may apply to state, local government and school public improvements. Davis Bacon, as first enacted, applied only to contracts to which the federal government was a party, having a value of $2,000. However, coverage has been extended by subsequent legislation to many federally funded projects, such as those funded by the American Recovery and Revitalization Act of 2009 and the Comprehensive Environmental Response Compensation Liability Act (CERCLA). Accordingly, Davis Bacon mandated prevailing wages may apply to public authority, school district or port authority projects receiving federal funding, even if the estimated project cost is below the applicable new Ohio prevailing wage dollar thresholds.