“Missouri Prevailing Wage Laws Have Broad Application” by by Richard B. Maltby

As a matter of public policy in Missouri, workers employed by or on behalf of any public body engaged in public works construction projects must be paid prevailing hourly wages, which rates are administered by the Missouri Department of Labor and Industrial Relations. The Prevailing Wage Act, RSMo. §§ 290.210 through 290.340, is modeled after the federal counterpart, the Davis-Bacon Act, and is intended to prevent payment of substandard wages.
The Missouri Supreme Court reinforced these longstanding principles in a recent case, Utility Service Co., Inc. v. Department of Labor and Indus. Relations, finding that the
Act is remedial in nature and therefore all doubts are to be resolved in favor of applying the Act. The case centered on how much a contractor was obligated to pay its workers to repaint and perform other work related to a water tower in Monroe City. The Supreme Court ruled that the work qualified as “construction” which is covered by the Act rather than “maintenance” which is not covered by the Act. Thus the contractor had to pay higher wages to its workers.
The Supreme Court gave strong deference to the Department of Labor which deemed the work to be construction. Maintenance is defined as “the repair, but not the replacement, of existing facilities when the size, type or extent of the existing facilities is not thereby changed or increased” whereas construction includes “reconstruction, improvement, enlargement, alteration, painting and decoration, or major repair” according to the Act. The Supreme Court held that the term “maintenance” cannot be applied in a way that reduces the scope of what is “construction” under the Act. In this regard, construction can encompass work that occurs without any change to a facility’s size, type, or extent if the work is considered a “major repair.” The Department of Labor considers a major repair to be a repair done by overhaul or replacement of major constituent parts that have deteriorated. The Supreme Court found that the scope of work of the contract at issue contained a combination of reconstruction, improvements, alterations, and painting, and therefore the contractor was subject to the Act’s higher wage rates.
The devastation in Joplin has elevated the debate over the viability of the Missouri Prevailing Wage Act. Some legislators and lobbyists have campaigned for the suspension of the prevailing wage laws during reconstruction in Joplin with the notion that lower wages and thus decreased cost of construction would expedite the City’s revitalization. However, the common response is that the absence of wage laws would violate workers’ rights to fair wages and that the workmanship of the construction would be sacrificed due to the absence of skilled laborers onsite.
One thing remains very clear based on the Missouri Supreme Court’s recent decision. Although they should be taken on a case-bycase basis, many of the planned public works projects in Joplin as a result of the tornado will likely be deemed “construction” projects rather than “maintenance” projects, in which case prevailing wages must be paid. Public entities, contractors, subcontractors should make sure that they are following all rules and regulations concerning prevailing wage projects long before the bidding phase of the project in order to avoid surprises during construction. The Department of Labor has provided helpful check-off lists, prevailing wage law guidelines, and other information on its website concerning the application of the Missouri Prevailing Wage Act. You should not hesitate to contact the Department of Labor or a member of our firm’s litigation group if you have any questions about this process.