Washington Contractors Fail To Prevail: Changes To Act Held Constitutional By State's Highest Court

• Published date: 31 October 2022
• Subject Matter: Employment and HR, Employee Benefits & Compensation, Employee Rights/ Labour Relations
• Law Firm: Seyfarth Shaw LLP
• Author: Mr Alex J. Reganata and Lauren Parris Watts

Seyfarth Synopsis: In an en banc decision, the Washington Supreme Court struck down a recent challenge of the state's prevailing wage rate law. A 2018 amendment to the law provides that when a county has at least one collective bargaining agreement ("CBA") for a trade or occupation, the highest rate in any CBA in that county becomes the prevailing wage countywide. Contractor and builder associations challenged the amendment arguing that requiring the industrial statistician to use the wages from CBAs constitutes an unconstitutional delegation of legislative authority. The Supreme Court disagreed.

Government contractors and subcontractors in the state of Washington must pay a "prevailing wage" to all workers for work done on "public works and maintenance contracts." A prevailing rate of wage includes the "hourly wage, usual benefits, and overtime paid" for a specific county. A 2018 amendment to the law requires that the prevailing wage rate for a trade in a county be set at either the highest rate set by a CBA in that county or, in the absence of a CBA in that county, by statistical estimation.The result of this change - the prevailing wage rate is set at the highest rate allowed in a CBA in the county, regardless of the number of employees covered by said CBA.

The Challenge - Who Decides The Prevailing Wage?

The prevailing wage rate prior to 2018 was set only after a collection of local data and analysis checking for accuracy and removing outliers or data that "raised questions." The data collected included wage survey responses from businesses engaged in work in Washington State as well as CBAs. The industrial statistician posts the prevailing wage rate twice a year.

In 2018, the legislature modified the above system. Instead of conducting data collection and systemic analysis to set the prevailing wage, the industrial statistician is required to look at all CBAs in the county and simply set the prevailing wage at the highest rate. Only in the absence of a CBA will the industrial statistician perform the previous method of wage surveys and analysis. In counties where a CBA includes a prevailing wage, the new amendment does not require the industrial statistician to conduct any analysis or collect any data, and only requires that the industrial statistician review the applicable CBAs and identify the highest wage. Contractors brought numerous challenges against the new law.

One of the challenges was that this law violated the nondelegation doctrine. The...