On March 2, 2010, the Ohio Supreme Court issued its third in a series of decisions over the last nine months addressing prevailing wage matters. In Bergman v. Monarch Constr. Co., the Court ruled that the statutorily prescribed financial penalties for failure to pay prevailing wage are mandatory and may not be adjusted by the court deciding the case. Ohio Revised Code Section 4115.10(A) provides a financial penalty for failing to pay prevailing wage equal to double the amount of the prevailing wages that were due but not paid. In addition to paying the construction worker the unpaid difference between the amount they received and the prevailing wage rate, the violator must also pay to the worker a 25% penalty and pay to the Ohio Department of Commerce an additional 75% (to be used for the enforcement of prevailing wage laws). In Bergman, the Court found that the only exception to this mandatory penalty amount is in cases where the Director of Commerce determines that the underpayment was the result of misinterpretation or erroneous preparation of payroll documents. In light of these mandatory financial penalties in prevailing wage cases, public project owners, contractors and subcontractors are well advised to take steps to ensure compliance at the time wages are paid.
Information on the Court’s prior two decisions regarding prevailing wage can be found in our June 2009 Alerts "Ohio Supreme Court Rules Prevailing Wage Requirements Apply Only When Public Funds Are Used for Construction of a Public Improvement By or To Benefit a Public Authority" and "Ohio Supreme Court Rules Prevailing Wage Payments Apply Onsite Only."