Christopher G. Hill | Construction Law Musings
On May 1, 2021, two new statutes that passed in 2020 and that directly affect construction became effective. I’ve used the AGC-VA description of the bills and encourage you to read the statutes in full.
Prevailing Wage
Starting May 1, 2021, Virginia’s new prevailing wage statute takes effect. This statute requires any contractor bidding on state procurement jobs to pay prevailing wages for work completed on the project. Further, localities and some institutes of higher education have the option to require prevailing wages on jobs. This may have the effect of significantly raising the cost of these jobs and creating market incentives which make it very difficult for many contractors to bid on this type of work, and is consistent with work performed on VDOT and federal projects. The law further requires certified payroll for any prevailing wage job and the consequence for not following the statute includes debarment.
Click here to read the full text of the new law.
Project Labor Agreements
Starting May 1, 2021, any public body in Virginia, which includes state agencies, localities, and institutes of higher education may elect to require project labor agreements (PLA) of contractors bidding on work. A PLA is a pre-hire collective bargaining agreement on a specific construction site. Government-mandated PLAs can restrain competition, drive up costs, cause delays, lead to jobsite disputes, and disrupt local collective bargaining. AGCVA has been working with localities and others to communicate the negative consequences of government-mandated PLAs. Currently, there are no standards or guidance of when a public body can require a PLA.
Click here to read the full text of the new law.
General contractors and subcontractors alike should be aware of these changes to Virginia law and consult with a Virginia-based construction attorney to discuss how they may affect their contracts and business practices.