The Prevailing Wage laws are found in the State Finance and Procurement Article of the Maryland Annotated Code at 17-201 et. seq. Section 17-222(b)(2) states that the “contractor and the subcontractor shall be jointly and severally liable for restitution to the subcontractor’s employees” for payment of less than the prevailing wage. Further, 17-222(b)(1) also states that “if a contractor or subcontractor” pays less than the prevailing wage “the contractor shall make restitution to the employees.”
In short, a contractor is liable for the subcontractor’s failure to pay its employees on a public works project for the State.
The State can withhold payment due the contractor or subcontractor in an amount sufficient to pay the back wages and to satisfy any liquidated damages.
The Contractor can withhold payment to the subcontractor in an amount equal to the amount withheld by the State or if payment has already been made to the subcontractor, the contractor can sue the subcontractor for recovery.
This Statute as it exists is a rewrite of the statute as it existed in 2001. It was rewritten because the Maryland Court of Appeals held that the statute as written in 2001 rendered only the subcontractor liable to make restitution.
Section 17-222(a) imposes a liquidated damages penalty on contractors (not subcontractors) of $20 per employee per day for each day that employee is paid less than the prevailing wage.
For further information contact Matt Hjortsberg at (410) 583-2400 or at Hjortsberg@bowie-jensen.com.