The Pennsylvania Supreme Court has agreed to hear a case involving application of prevailing wages to a $17.2 million build-to-lease project for a State Police barracks and training center in Luzerne County.
Administrative rulings sought to apply prevailing wages to the project, based on the notion that the state’s 20-year lease for the property essentially paid for the construction.
But in a ruling last year, Commonwealth Court reversed the administrative decisions and said prevailing wages did not apply.
The contractor, PSP NE LLC, used its own money to pay for construction, even if the company expected to recoup its costs through long-term lease payments from the state, the court said.
The Department of Labor & Industry, which makes initial determinations on applying the prevailing wage, appealed the ruling earlier this month.
Under state and federal law, contractors must pay workers prevailing wages when at least a certain amount of government money is involved in a project. The wages are often higher than what might otherwise be paid.
The background: The PSP case is at least the second prevailing-wage case to come before the state’s highest court over the last year.
The court also is weighing whether prevailing wages should apply to a bond-financed project at Ursinus College.
In both cases, builders and developers have argued that applying prevailing wages would increase their costs.