States Take Varied Approaches on BEAD Wages
States are using several approaches to prevailing wages in their broadband equity, access and deployment (BEAD) state plans, we found in our analysis of BEAD volume 2 initial plans. How a state considers prevailing wages in application reviews could possibly affect providers' participation in BEAD (see 2309080027) and 2403060005). NTIA has signed off on 31 BEAD volume 2s so far.
NTIA didn't require prevailing wages in its BEAD notice of funding opportunity. "An effective plan for compliance with federal labor and employment laws can include a subgrantee’s binding commitment to strong labor standards and protections for the project workforce," such as payment of "prevailing wages and benefits to workers, including compliance with Davis-Bacon and Service Contract Act requirements," the NOFO said. States and territories that decide to mandate such labor requirements should lay them out in initial and final plans, NTIA said.
Communications Workers of America “supports prevailing wage requirements in publicly funded broadband programs because prevailing wage is a commonsense way to set a wage floor, avoid a race to the bottom, and have companies compete on their merits, not their ability to lowball workers,” a CWA spokesperson said: Such policies “boost productivity, reduce injury rates,” create local jobs and help address skilled labor shortages. CWA recognizes “that in some states prevailing wage classifications need to be updated to include new job titles for broadband work,” the spokesperson acknowledged, but “that's a reason to update prevailing wage classifications, not to ignore the huge benefits of prevailing wage policies.”
Some states treat prevailing wages as completely up to subgrantees in their approved volume 2s.
Pointing to its being a right-to-work state, Virginia said its Office of Broadband won’t require subgrantees to use a directly employed workforce vs. a subcontracted one, nor will it require paying prevailing wages and benefits to workers. It also won’t require local-hire provisions. Instead, those items are “completely optional requirements of subgrantees,” it said. Utah similarly said that such provisions as prevailing wages, local hiring and direct employees won’t be included in legally binding BEAD subgrantee commitments or in the application scoring process. Colorado and Indiana also said they didn’t plan to include prevailing wages or other optional items from the BEAD notice of funding opportunity in legally binding commitments for subgrantees.
Conversely, in Illinois, paying prevailing wages and benefits is mandatory. The state broadband office in its volume 2 said it “is strongly committed to ensuring that subgrantees, contractors, and subcontractors use strong labor standards and protections,” said its plan: Paying prevailing wages and benefits is mandatory. All construction contracts must include “a stipulation that not less than the prevailing rate of wages … shall be paid to all laborers, workers, and mechanics performing work under the award.” Additionally, Illinois will require “all bonds of contractors to include a provision that guarantees the faithful performance of such prevailing wage clause as provided by the contract.” Subgrantees must report monthly on their compliance.
To ensure “strong labor standards and protections for the project workforce,” Connecticut said, it plans to require a statement in each contract and subcontract saying that workers will be paid wages "customary or prevailing for the same work in the same trade or occupation in the town in which such project is being constructed." Hawaii considers paying prevailing wages and benefits to workers as a minimum requirement, its plan said. Rhode Island also said it would require subgrantees to pay prevailing wages.
Other states are putting their thumb on the scale of subgrantees paying prevailing wages though not explicitly requiring it. Massachusetts said it plans to “guarantee that subgrantees uphold robust labor standards and safeguards for project workers," and its Massachusetts Broadband Institute will award extra points in scoring for use of a directly employed workforce instead of subcontractees, paying of prevailing wages, and use of local-hire provisions. Maine and Maryland applicants also get an extra point on their application scorecards if they commit to paying prevailing wages and benefits, their plans said. Maine said it took a voluntary approach due to “the tight labor market and difficulty competing for scarce resources.”
Kansas said it “will encourage subgrantees to offer jobs that exceed the local prevailing wage in the region, offer benefits, and that help the employee develop skills for career growth." But Kansas will require subgrantees to say only whether they are paying prevailing wages. Louisiana said applicants should describe how they will use strong labor standards, including prevailing wages. “These items will not be included in legally binding commitments, but instead utilized as criteria in the selection process,” Louisiana said.