PHILADELPHIA — Although it is too soon to tell whether a prevailing
wage ordinance signed by Mayor Jim Kenney on Oct. 27 will force any affected
employers in the city to resort to layoffs, Fisher & Phillips associate
Gregory D. Hanscom told the Pennsylvania
Record “it’s possible, of course.”
Hanscom said the newly expanded law applies to some employers
in the city receiving government funding, such as hospitals, universities, stadiums
paying concessions workers and the convention center. The ultimate effects of
the expanded ordinance will depend on just how many employers and employees are
impacted, he said.
The new law, which was unanimously passed by the
Philadelphia City Council, took effect immediately after the mayor signed the
legislation, meaning employers who were not currently paying the prevailing
wage needed to find the extra money right away, rather than during a transition
The law is particularly designed to help lower income
workers, Hanscom said, and is part of a nationwide push to raise the minimum
wage to $15.
“This is an ongoing effort in Philadelphia to raise wages,”
Hanscom said. “(The mayor’s office is saying) minimum wage is not a living
Hanscom said the prevailing wage is above minimum wage, but is
set by individual industry standards. As a result, he said there is no one
specific wage imposed under the new ordinance. If employers are already paying
the prevailing wage, they will not be affected by the change.
The city defines the prevailing wage as “a rate of pay
determined by the U.S. Department of Labor based upon the particular geographic
area for a given class of labor and type of project.”
“They have to pay their employees more money to the extent
they weren’t already paying them the prevailing wage,” Hanscom said. “I
guarantee there were a number of employers that were below.”
The expanded ordinance is expected to cover thousands more
employees working in Philadelphia.
Hanscom said employers can contact applicable city
or state agencies to find out exactly how much they should be paying under the
prevailing wage law. “Certain employees are going to get a raise,” he said.
Hanscom said the penalty for non-compliance with the
ordinance is severe enough that most employers should be eager to pay the
“The city is authorized to withhold any funds owed to
employees,” Hanscom said.
A prevailing wage law is certainly not new to Philadelphia.
Such an ordinance has been on the books since the 1950s. However, it has only
recently been expanded to apply to more and more employees.
The city joins numerous municipalities and government
entities across the country that are taking action in an effort to raise the
federal minimum wage above the current $7.25 per hour. In fact, some of those
municipalities have already passed higher minimum wage requirements.
Meanwhile, the U.S. Department of Labor has enacted new
overtime pay regulations, which are scheduled to take effect on Dec. 1. Those
new federal overtime laws are expected to mean bigger paychecks for millions of