EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW. [Brackets] indicate matter deleted from existing law. Underlining indicates amendments to bill. Strike out indicates matter stricken from the bill by amendment or deleted from the law by amendment. *hb0145* HOUSE BILL 145 P2 2lr0652 (PRE–FILED) CF SB 1 By: Delegate Crosby Delegates Crosby, Brooks, Charkoudian, Fennell, Harrison, Jackson, Rogers, Turner, and Valderrama Requested: October 6, 2021 Introduced and read first time: January 12, 2022 Assigned to: Economic Matters Committee Report: Favorable with amendments House action: Adopted Read second time: March 10, 2022 CHAPTER ______ AN ACT concerning 1 State Finance and Procurement – Prevailing Wage – Stop Work Orders 2 FOR the purpose of authorizing the Commissioner of Labor and Industry to issue a stop 3 work order for each work site where the Commissioner has made an initial 4 determination that a contractor or subcontractor may have violated the prevailing 5 wage requirements; requiring the Commissioner to follow certain procedures under 6 certain circumstances; authorizing a prime contractor to terminate the contract of a 7 subcontractor without incurring certain liability if the subcontractor has a stop work 8 order issued against them; authorizing the Commissioner to assess a penalty against 9 a contractor or subcontractor for each day the contractor or subcontractor violates 10 the stop work order; requiring the Commissioner to release a stop work order on a 11 showing that the contractor or subcontractor is properly paying the required 12 prevailing wage to employees and has paid all associated penalties; authorizing an 13 appeal from the issuance of a stop work order; authorizing the Commissioner to 14 impose a civil fine for each day an employer or employer’s agent knowingly fails to 15 comply with an investigation; granting the Maryland State Board of Contract 16 Appeals jurisdiction to hear a certain appeal; and generally relating to stop work 17 orders for the enforcement of prevailing wage laws. 18 BY repealing and reenacting, with amendments, 19 Article – State Finance and Procurement 20 Section 15–211, 17–201(b), and 17–221 Section 17–221 21 Annotated Code of Maryland 22 2 HOUSE BILL 145 (2021 Replacement Volume) 1 BY repealing and reenacting, without amendments, 2 Article – State Finance and Procurement 3 Section 17–201(a), (b), (c), (f), (g), and (h) 4 Annotated Code of Maryland 5 (2021 Replacement Volume) 6 BY adding to 7 Article – State Finance and Procurement 8 Section 17–201(b) 9 Annotated Code of Maryland 10 (2021 Replacement Volume) 11 SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 12 That the Laws of Maryland read as follows: 13 Article – State Finance and Procurement 14 15–211. 15 (a) The Appeals Board shall have jurisdiction to hear and decide all appeals 16 arising from the final action of a unit: 17 (1) on a protest relating to the formation of a procurement contract, 18 including a violation of § 13–212.1 of this article; or 19 (2) except for a contract claim relating to a lease of real property, on a 20 contract claim by a contractor or a unit concerning: 21 (i) breach; 22 (ii) performance; 23 (iii) modification; or 24 (iv) termination. 25 (b) THE APPEALS BOARD SHALL HAVE JURISDICTION TO HEAR AND DECIDE 26 AN APPEAL ARISING FR OM A DECISION OF THE COMMISSIONER OF LABOR AND 27 INDUSTRY TO ISSUE A S TOP WORK ORDER IN AC CORDANCE WITH § 17–221 OF THIS 28 ARTICLE. 29 (C) A decision of the Appeals Board is final, subject to any judicial review. 30 17–201. 31 HOUSE BILL 145 3 (a) In this subtitle, unless the context indicates otherwise, the following words 1 have the meanings indicated. 2 (B) “APPEALS BOARD” MEANS THE MARYLAND STATE BOARD OF 3 CONTRACT APPEALS. 4 [(b)] (B–1) “Apprentice” means an individual who: 5 (1) is at least 16 years old; 6 (2) has signed with an employer or employer’s agent, an association of 7 employers, an organization of employees, or a joint committee from both, an agreement 8 including a statement of: 9 (i) the trade, craft, or occupation that the individual is learning; and 10 (ii) the beginning and ending dates of the apprenticeship; and 11 (3) is registered in a program of the Council or the Office of Apprenticeship 12 of the United States Department of Labor. 13 (c) “Commissioner” means: 14 (1) the Commissioner of Labor and Industry; 15 (2) the Deputy Commissioner of Labor and Industry; or 16 (3) an authorized representative of the Commissioner. 17 (f) (1) “Employee” means an apprentice or worker employed by a contractor or 18 subcontractor under a public work contract. 19 (2) “Employee” does not include an individual employed by a public body. 20 (g) (1) “Locality” means the county in which the work is to be performed. 21 (2) If the public work is located within 2 or more counties, the locality 22 includes all counties in which the public work is located. 23 (h) “Prevailing wage rate” means the hourly rate of wages paid in the locality as 24 determined by the Commissioner under § 17–208 of this subtitle. 25 17–221. 26 (a) Each public body that awards a public work contract shall: 27 4 HOUSE BILL 145 (1) take cognizance of a complaint of a violation of this subtitle committed 1 in the course of performance of the public work contract; and 2 (2) when making payments to the contractor, withhold any amount that 3 the contractor owes to its employees or the public body as a result of the violation. 4 (b) (1) The Commissioner shall PROMPTLY institute an investigation as 5 necessary to determine compliance with this subtitle and regulations adopted under this 6 subtitle WHEN THE COMMISSIONER: 7 (I) RECEIVES A COMPLAINT OF A VIOLATION OF TH IS 8 SUBTITLE; AND 9 (II) IS OTHERWISE MADE AW ARE OF A POSSIBLE VI OLATION OF 10 THIS SUBTITLE. 11 (2) [The Commissioner promptly shall investigate a complaint of a 12 violation of this subtitle. 13 (3)] Any written or oral complaint or statement made by an employee is 14 confidential and may not be disclosed to the employer without the consent of the employee. 15 (c) A contractor or subcontractor subject to an investigation under this section 16 shall allow the Commissioner, DURING NORMAL WORKIN G HOURS, to observe work being 17 performed at the site of a public work project, to interview employees, and to review books 18 and records, to determine: 19 (1) the correctness of each classification; 20 (2) the ratio of apprentices to mechanics; and 21 (3) payment of straight and overtime prevailing wage rates as required 22 under the public work contract. 23 (d) (1) If, after investigation, the Commissioner determines that a provision of 24 this subtitle may have been violated, the Commissioner immediately shall notify the public 25 body. 26 [(e) (1)] (2) On notification, the public body shall withhold from payment due 27 the contractor or subcontractor an amount sufficient to: 28 (i) pay each employee of the contractor or subcontractor the full 29 amount of wages due under this subtitle; and 30 (ii) satisfy a liability of a contractor for liquidated damages as 31 provided in § 17–222(a) of this subtitle, pending a final determination. 32 HOUSE BILL 145 5 [(2)] (3) If a subcontractor is responsible for a violation of this subtitle, 1 the contractor: 2 (i) may withhold from payment to the subcontractor an amount 3 equal to the amount withheld from the contractor under paragraph [(1)] (2) of this 4 subsection; or 5 (ii) if payment has been made to the subcontractor, may sue to 6 recover that amount. 7 (E) (1) (I) IF, AFTER INVESTIGATION , THE COMMISSIONER MAKES AN 8 INITIAL DETERMINATIO N THAT A CONTRACTOR OR SUBCONTRACTOR MAY HAVE 9 VIOLATED THE REQUIRE MENT TO PAY THE PREV AILING WAGE RATE UND ER THIS 10 SUBTITLE, THE COMMISSIONER IMMEDIAT ELY MAY ISSUE A STOP WORK ORDER TO 11 CEASE ALL BUSINESS OP ERATIONS AT EVERY SI TE WHERE A VIOLATION OCCURRED 12 AND SHALL: 13 1. NOTIFY THE CONTRACTO R OR SUBCONTRACTOR O F 14 THE VIOLATION , TO INCLUDE A STATEME NT OF FACTS DISCLOSE D IN THE 15 INVESTIGATION ; 16 2. MEET WITH THE CONTRA CTOR OR SUBCONTRACTOR 17 WITHIN 48 HOURS OF ISSUING THE STOP WORK ORDER ; AND 18 3. PROVIDE THE CONTRACT OR A REASONABLE 19 TIMEFRAME, AS DETERMINED BY THE COMMISSIONER , TO RESOLVE THE 20 VIOLATION. 21 (II) THE COMMISSIONER MAY ISSU E THE STOP WORK ORDE R 22 EVEN IF THE COMMISSIONER HAS REFERRED THE MATTER TO THE ATTORNEY 23 GENERAL OR ANOTHER AP PROPRIATE AUTHORITY FOR INVESTIGATION OR 24 PROSECUTION . 25 (2) IF A STOP WORK ORDER IS ISSUED AGAINST A SUBCONTRACTOR ,: 26 THE PRIME CONTRACTOR ON THE CONTRACT MAY TERMINATE THE CONTRA CT WITH 27 THE SUBCONTRACTOR WI THOUT INCURRING LIAB ILITY FOR DAMAGES RE SULTING 28 FROM THE TERMINATION . 29 (I) THE PRIME CONTRACTOR ON THE CONTRACT MAY NOT 30 TERMINATE THE CONTRA CT WITH THE SUBCONTR ACTOR UNTIL 48 HOURS AFTER 31 THE MEETING BETWEEN THE COMMISSIONER AND THE SUBCONTRACTOR ; 32 6 HOUSE BILL 145 (II) THE PRIME CONTRACTOR MAY NOT TERMINATE TH E 1 CONTRACT WITH THE SU BCONTRACTOR IF THE V IOLATION HAS BEEN RE SOLVED; 2 AND 3 (III) THE PRIME CONTRACTOR MAY NOT INCUR ANY CI VIL 4 LIABILITY FOR DAMAGE S TO THE SUBCONTRACT OR WHOSE CONTRACT WA S 5 TERMINATED , OTHER SUBCONTRACTORS AFFECTED BY THE TERM INATION, OR ANY 6 PUBLIC BODY RESULTIN G FROM THE TERMINATI ON. 7 (3) THE COMMISSIONER MAY IMPO SE A PENALTY OF UP T O $5,000 8 PER DAY AGAINST A CO NTRACTOR OR SUBCONTR ACTOR FOR EACH DAY T HE 9 CONTRACTOR OR SUBC ONTRACTOR VIOLATES A STOP WORK ORDER . 10 (4) A STOP WORK ORDER ISSU ED UNDER THIS SUBSEC TION SHALL: 11 (I) TAKE EFFECT WHEN SER VED ON THE CONTRACTO R OR 12 SUBCONTRACTOR ; AND 13 (II) REMAIN IN EFFECT UNT IL THE COMMISSIONER ISSUES A N 14 ORDER RELEASING THE STOP WORK ORDER . 15 (5) THE COMMISSIONER SHALL IS SUE AN ORDER RELEASI NG A STOP 16 WORK ORDER ISSUED UN DER THIS SUBSECTION ON A SHOWING BY THE 17 CONTRACTOR OR SUBCON TRACTOR THAT THE CON TRACTOR OR SUBCONTRA CTOR: 18 (I) IS PROPERLY PAYING E MPLOYEES THE APPROPR IATE 19 PREVAILING WAGE RATE SET IN ACCORDANCE WI TH THIS SUBTITLE ; AND 20 (II) HAS PAID ALL PENALTI ES ASSESSED AGAINST THE 21 CONTRACTOR OR SUBCON TRACTOR UNDER THIS S UBTITLE. 22 (6) THE COMMISSIONER MAY INCL UDE IN THE ORDER REL EASING A 23 STOP WORK ORDER A RE QUIREMENT THAT THE CONTRACTOR OR SUBCONTRACTOR 24 SUBMIT PERIODIC REPO RTS TO THE COMMISSIONER DEMONSTR ATING 25 COMPLIANCE WITH THE REQUIREMENTS OF THIS SUBTITLE. 26 (F) (1) (I) WITHIN 72 HOURS AFTER A CONTRA CTOR OR 27 SUBCONTRACTOR RECEIV ES A STOP WORK ORDER UNDER SUBSECTION (E) OF THIS 28 SECTION, THE CONTRACTOR OR SU BCONTRACTOR MAY SUBM IT A WRITTEN APPEAL 29 TO THE APPEALS BOARD COMMISSIONER ON THE STOP WORK ORD ER. 30 (II) IF AN APPEAL IS NOT R EQUESTED WITHIN 72 HOURS, THE 31 STOP WORK ORDER SHAL L BECOME A FINAL ORD ER OF THE COMMISSIONER. 32 HOUSE BILL 145 7 (2) THE APPEALS BOARD COMMISSIONER SHALL HOLD A HEARING 1 WITHIN 7 DAYS AFTER RECEIVING THE WRITTEN APPEAL . 2 (3) IF THE APPEALS BOARD COMMISSIONER DOES NOT HOLD A 3 HEARING WITHIN 7 DAYS AFTER RECEIVING THE WRITTEN APPEAL , THE 4 CONTRACTOR OR SUBCONTRACTOR MAY RE QUEST AN ADMINISTRAT IVE LAW JUDGE 5 TO RELEASE THE ORDER . 6 (4) (I) WITHIN 5 DAYS AFTER HOLDING A HEARING ON A STOP 7 WORK ORDER UNDER THI S SUBSECTION , THE APPEALS BOARD COMMISSIONER 8 SHALL ISSUE A WRITTE N DECISION ON THE AP PEAL. 9 (II) THE DECISION SHALL IN CLUDE: 10 1. AN EXPLANATION OF WH Y THE ORDER WAS UPHE LD 11 OR RELEASED ; AND 12 2. THE GROUNDS ON WHICH THE RESULT WAS 13 DETERMINED . 14 [(f)] (G) The IF AFTER INVESTIGATIO N, THE COMMISSIONER DETERMIN ES 15 THAT A PROVISION OF THIS SUBTITLE MA Y HAVE BEEN VIOLATED AND HAS NOT 16 ISSUED A STOP WORK O RDER IN ACCORDANCE W ITH SUBSECTION (E) OF THIS 17 SECTION, THE Commissioner shall: 18 (1) issue an order for a hearing within 30 days after completing an 19 investigation; and 20 (2) expeditiously conduct the hearing. 21 [(g)] (H) (1) At least 10 days before the hearing, the Commissioner shall 22 serve, personally or by mail, written notice of the hearing on all interested persons, 23 including the public body. 24 (2) The notice shall include: 25 (i) a statement of the facts disclosed in the investigation; and 26 (ii) the time and place of the hearing. 27 [(h)] (I) (1) In conducting an investigation or hearing under this section, the 28 Commissioner is deemed to be acting in a quasi–judicial capacity and may: 29 (i) issue subpoenas; 30 8 HOUSE BILL 145 (ii) administer oaths; or 1 (iii) examine witnesses. 2 (2) The Commissioner shall grant each interested person an opportunity to 3 speak at the hearing on matters relevant to the complaint. 4 [(i)] (J) (1) After the conclusion of the hearing, the Commissioner shall: 5 (i) file in the Commissioner’s office an order that states the 6 Commissioner’s determination; and 7 (ii) serve, personally or by mail, the public body and parties to the 8 hearing with a copy of the order and notice of its filing. 9 (2) If the Commissioner finds a violation, the Commissioner shall 10 determine the amount of liquidated damages and restitution to be assessed for the 11 violation. 12 (3) On the entry and service of a Commissioner’s order, the public body, 13 from the money due the contractor or subcontractor, shall: 14 (i) pay the affected employees the full amount of wages due them; 15 and 16 (ii) satisfy the obligation of the contractor or subcontractor to pay 17 liquidated damages as required under § 17–222 of this subtitle. 18 (K) (1) IN ADDITION TO ANY OT HER PENALTY , THE COMMISSIONER MAY 19 IMPOSE A CIVIL FINE OF NOT LESS MORE THAN $1,000 AGAINST A CONTRACTOR OR 20 SUBCONTRACTOR THAT K NOWINGLY FAILS TO PR ODUCE RECORDS OR ATT END A 21 HEARING OR DEPOSITIO N AS REQUIRED BY AN INVESTIGATION INTO A POSSIBLE 22 PREVAILING WAGE VIOL ATION UNDER SUBSECTI ON (B) OF THIS SECTION. 23 (2) EACH DAY THAT A VIOLA TION UNDER PARAGRAPH (1) OF THIS 24 SUBSECTION CONTINUES IS A SEPARATE OFFENS E. 25 SECTION 2. AND BE IT FURTHER ENACTED, That this Act sh all take effect 26 October 1, 2022. 27