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State Contractors: Joint Liability under Maryland’s Prevailing Wage Law

Maryland’s Prevailing Wage Law, governs, among other things, an employee’s rate of pay, working hours, and other employer obligations on construction projects for which the state expends more than $500,000, and when state public funds cover 50% or more of the construction expenses. For construction projects covered by this law, all contractors and subcontractors on the job must pay the required prevailing wage rate, as well as overtime pay for hours worked in excess of 10 hours on any given day or for hours worked on Sundays and legal holidays.

Under the terms of the law, a contractor can be liable for the subcontractor’s failure to pay its employees on a public works project for the State.  Specifically, the law provides that a 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.  Furthermore, if a contractor or subcontractor pays less than the prevailing wage the contractor shall make restitution to the employees. 

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.  

Finally, the law 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.  

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