Pennsylvania National Mutual Casualty Insurance Co. v. Department of Labor and Industry

In Pennsylvania National Mutual Casualty Insurance Co. v. Department of Labor and Industry, Prevailing Wage Division, 552 Pa. 385, 715 A.2d 1068 (1998), our Pennsylvania Supreme Court reviewed the pertinent sections of the Wage Act and its application: Turning to the public policies advanced by the Wage Act, the primary underlying policy of the Act is to protect workmen employed on public work projects from substandard pay by ensuring that they receive prevailing minimum wage . . . . A review of the Wage Act's requirements . . . of 'public works' . . . . requires that only workmen who labor on 'public work' must be paid the minimum prevailing wage . . . . Again, to constitute 'public work' four elements must be satisfied: (1) there must be certain work; (2) such work must be under contract; (3) such work must be paid for in whole or in part with public funds; and (4) the estimated cost of the total project must be in excess of $ 25,000. Under the facts of this case, the lower tribunals found that the $ 109,000.00 asbestos removal work met this definition. The asbestos removal was the kind of work covered by the Wage Act, i.e. demolition work, it was under contract, and as determined by the lower tribunals, was paid for in whole or in part out of the funds of a public body. The $ 25,000 threshold was clearly met. The lower tribunals then found that because the asbestos removal constituted public work, the entire PNI Pennsylvania National Mutual Insurance Co. building project, i.e., the remaining work, constituted public work for purposes of the Wage Act. While the remaining work is construction work, and is done under contract, the construction work is not paid for in whole or in part from the funds of a public body. Thus, failing the third element necessary to constitute 'public work,' the remaining construction work does not meet the definition of 'public work,' and, thus, is not covered by the Wage Act. The Board and Commonwealth Court 7 found that the asbestos removal work constituted public work which triggered coverage of the Wage Act for the entire PNI building project. Specifically, the Board found, and the Unions here argue, that the Wage Act speaks to the 'total project,' and not individual contracts or phases, and establishes coverage where any work is public work. Thus, the Board looked at the whole project as a comprehensive undertaking. We do not agree with the Board's interpretation of the definition of 'public work.' Assuming, arguendo, that the 'total project' is the $ 30 million PNI building project, the term 'total project,' is referred to in the definition of 'public work' only in the context of establishing a monetary threshold which excludes from coverage of the Wage Act, projects costing less than $ 25,000. We do not interpret this prong to confer public work status to work which otherwise fails to satisfy the other three elements of the definition of 'public work.' Rather, all elements of the definition must be satisfied for work to constitute 'public work.' Nothing in Section 5 of the Wage Act mandates that an entire construction project be covered by the Act. On the contrary Section 5 is a limited requirement that workmen be paid prevailing wage only on 'public work.' The legislature could have crafted the definition of 'public work' to include work that was not paid for in whole or in part with funds of a public body, but instead it chose to limit prevailing wage to be paid only on that work which satisfies the four element definition of 'public work.' Pennsylvania National Mutual Casualty Insurance Co., 552 Pa. at 394-398, 715 A.2d at 1072-74.