Guidance for Investor Owned Utility Project Contractors and Subcontractors (Public Utilities Article § 5-305) - Prevailing Wage

1. What work is covered by the law?

Under §5-305 of the Public Utilities Article, prevailing rates must be paid for work that meets the following criteria:

• The work must be performed on a project by an investor–owned gas company, electric company, or combination gas and electric company
• The project must involve the construction, reconstruction, installation, demolition, restoration, or alteration of any underground gas or electric infrastructure of the company
• Traffic control activities related to such projects are considered covered work
• The work must be performed under a contract entered into on or after March 1, 2024. During the 2025 Legislative Session, the Maryland General Assembly enacted Chapter 626, Laws of 2025 (HB1035), which clarifies that contracts “entered into” after March 1, 2024 includes contracts that are amended, altered or executed on or after that date.

2. How will contractors and subcontractors know what rates to pay, and how will workers know what rates they are entitled to receive?

Wage rate determinations are not issued by the Prevailing Wage Unit for projects covered by 5-305. Rates for these projects are under the Heavy/Highway rate schedule.  To obtain rates, anyone can go to the Division’s public prevailing wage portal and select the “Highway” informational wage rates for the jurisdiction in which the work is performed. At the dropdown menu, select “other” under “Type of Requestor”, select “Highway Rates” under “Type of Prevailing Wage,” and select the appropriate jurisdiction

3. Is the Division establishing any new classifications specific to the performance of work under Section 5-305?

Yes. 

The Division is conducting a survey to determine rates for three classifications specific to the performance of work on projects covered by §5-305.  Please see below for more information.  All other work covered by the law should be paid at the rate for that classification of work, as listed in the Heavy/Highway rate schedule for the jurisdiction. 

4. Is there a process for determining whether a new classification should be established?

Yes. However, this process (which is called a "conformance" under federal prevailing wage law (the Davis-Bacon Act)) is limited in nature. It is used to establish a new classification only when the work performed by the proposed new classification falls outside the scope of work of any other existing classification(s).

5. What kinds of information should I provide to propose the establishment of a new classification?

Please contact the prevailing wage unit at dldliprevailingwage-labor@maryland.gov to discuss the issue and receive any specific guidance. As a general matter, for any proposed new classification, it will initially be helpful to have as thorough an understanding as possible of the job duties performed by the proposed new classification. A written, detailed description of the work performed should be submitted by the requestor, substantiated with documentation such as, job descriptions, task lists and responsibilities, unique tools or techniques used by the proposed classification, work structure (crew composition or organization), etc. If the requestor contends that this classification is part of an "area practice" in the industry, evidence of that practice in the specific jurisdiction or jurisdictions in which the classification is sought to be established should be provided. It is also helpful to provide hourly wage and fringe rate information for the classification (again, for each jurisdiction in which the classification is sought to be established), as that may demonstrate the skill level of the proposed classification relative to other existing classifications. Under the federal process, the requester must also include the views of other interested parties, including any prime contractor, and any workers and/or worker representative(s) if known. Although the Department’s process is not as formal, information concerning any potential areas of agreement or disagreement is helpful, if that information is known. Finally, a rationale for establishing the new classification (meaning an explanation of why you think the work performed lies outside the scope of work performed by existing classifications) is helpful in the Department’s consideration of the issue.

6. How are the prevailing rates established?

A wage survey is held each year soliciting payroll information from contractors, contractor associations, labor organizations and other interested parties. The survey asks for wage data for all classifications in all counties, and that data is used to determine the rates.

You do not have to be a prevailing wage contractor to participate in the survey. Note: The special requirements for submitting data in the supplemental targeted survey are described below for further information. If you have any questions, please contact dldliprevailingwage-labor+utilitysurvey@maryland.gov.

7. How long are the rates determined in effect?

Rates determined through the annual survey are published annually on or around December 1, and change each year. Contractors should therefore be aware that the rates they are required to pay for covered work may change, and are not fixed for the term of their contract. Please note that for 2025-2026, the Commissioner is conducting a supplemental targeted survey. Please see below for more information.

8. Why should I participate in the survey?

The survey process relies upon information voluntarily submitted during the survey period. Higher levels of participation help to ensure accurate prevailing wage rates. Participation is crucial in the survey process.  You need not be a prevailing wage contractor to participate in the surveyIf you have any questions, please contact
dldliprevailingwage-labor+utilitysurvey@maryland.gov

9. Must a contractor or subcontractor performing work on a covered project submit certified payroll records under the law?

No. The utility projects covered by §5-305 of the PUA are not subject to the requirements of the Maryland Prevailing Wage Law (State Finance Article, Title 17, subtitle 2). Contractors do not have to submit certified payroll records to the Department. The law only directs the contractors to pay certain rates for covered work, and those rates are established by the processes set forth in the Prevailing Wage Law. The law did not bring the described utility projects within the scope of the Prevailing Wage Law.

10. Are contractors performing work on covered projects required to pay overtime rates after 10 hours in a day, or on Sundays or holidays?

No.  The utility projects covered by §5-305 of the PUA are not subject to the requirements of the Maryland Prevailing Wage Law (State Finance Article, Title 17, subtitle 2). The law only directs the contractors to pay certain base hourly wage and fringe rates for covered work, and specifies that those rates are established by the Commissioner.  Because Section 5-305 did not bring the described utility projects within the scope of the Prevailing Wage Law, the special overtime provisions of the Prevailing Wage Law do not apply.  Employers must instead comply with the overtime provisions of Maryland wage and hour laws, Labor & Employment Article, Title 3, subtitle 4.

11. I am performing work on an underground utility project, and think I may have a claim for wages. How can I pursue a case?

If you are performing work covered by §5-305 and you have questions about whether you are being paid properly, you can contact the Employment Standards Service at [insert phone number] to file a claim or email dldliprevailingwage-labor+utilitysurvey@maryland.gov.

12. How will the provisions of the law be enforced?

The obligation to pay the prevailing rates under Section 5-305 is enforced  under the Maryland Wage Payment and Collection Law, Title 3, Subtitle 5 of the Labor and Employment Article. For information about filing a complaint with the Employment Standards Service, please see here. The Wage Payment and Collection Law also provides for a private cause of action. If you are interested in pursuing a private cause of action, you may wish to consult with a private attorney.

Information about the 2025 Targeted Supplemental Survey for Underground Utility Work

The Commissioner has established three new classifications under the Heavy/Highway schedule specific to the performance of work covered by Section 5-305.  Those classifications consist of the following:

Lineperson (Underground Mechanic)

1. installation, maintenance, and repair of electrical transmission and distribution infrastructure
2. applies to underground utility outside meter only
3. excludes substations/switching stations
4. cable splicing to extend cable only, no terminations permitted

  Underground Cable Splicer

1. splices/terminates/tests cables to ensure proper installation
2. energized and non-energized
3. applies to underground utility work (outside the meter only)
4. may arrange cable and equipment in manholes and vaults
5. may install, inspect, and maintain cable

 Underground Gas Mechanic

1. installation, maintenance, and repair of gas transmission and distribution infrastructure
2. applies to underground utility (outside the meter only)
3. includes “hot tap” work in connection with maintenance/repair and installation/construction of residential and commercial gas distribution lines
4. excludes pipe threading or welding

These classifications will apply to such work only when the work performed is covered by Section 5-305. 

All other construction work covered by Section 5-305 shall be paid at the rate set for that classification of work under the existing Heavy/Highway rate schedule.

Please note the following:

Work traditionally performed by “groundpersons” in connection with underground utility projects covered by Section 5-305, including laying of pipe and conduit, hand-digging trenches, and handling and clearing materials, shall be paid at the applicable Laborer rate (either Group I or Group II, depending on the function performed) on the Heavy/Highway schedule.

The work of operating heavy equipment in connection with underground utility projects covered by Section 5-305 shall be paid at the applicable Power Equipment Operator rates on the Heavy/Highway schedule.

1. When does the targeted survey open and how long is it open?

The targeted survey will open on December 12, 2025 and shall accept submissions through 5:00 PM on January 5, 2026.

2. What project or contract information will be accepted for the targeted survey?

The targeted survey will only accept data for (1) work performed by or on behalf of an investor-owned gas or electric utility company regulated by the Maryland Public Service Commission and  (2) either an ongoing project/contract, or, if the project/contract has been completed, it must have been completed no earlier than 3/1/25.

3. What time period will be considered in the supplemental survey?

Payroll information submitted for the targeted supplemental survey must conform to recency requirements similar to the annual survey (see COMAR 21.11.11.03.E.(2)), except that the period will be extended to accommodate this later process.  Accordingly, payroll information will be accepted for work performed during the period 9/1/24 through 11/30/25.

4. How do I submit payroll data for consideration in the survey?

Data submissions will only be accepted through completion of the survey form [link here]. Submissions must be complete and accurate to be considered in the survey.

5. Is the information submitted in the targeted survey subject to verification?

By submitting data in connection with the targeted survey, a submitter is attesting to the accuracy of the data reported to the Commissioner. Please ensure that you retain any and all underlying materials supporting your survey data submission. At the direction of the Commissioner, submissions will be subject to audit to ensure that the data used in determining the rate is sound. Failure to timely provide the requested data will result in exclusion of the submission from consideration.

6. In responding to the supplemental targeted survey, what should I consider to be fringe benefits?

Fringe benefits are: (1) The hourly rate of contributions irrevocably made by a contractor or subcontractor to a third party under a bona fide fringe benefit fund, plan, or program that provides health insurance; retirement, disability or death benefits; or unemployment life or accident insurance; insurance or compensation for occupational injury or illness; vacation and holiday pay; subsidies to defray costs of apprenticeship or other similar programs; or other bona fide fringe benefits; or (2) The hourly rate of costs incurred by a contractor or subcontractor that may be reasonably anticipated in providing bona fide fringe benefits under an enforceable commitment to carry out a financially responsible plan or program that was communicated to the workers in writing. A contract may include the actual cost of health and dental insurance, pension or retirement plan, paid time off such as vacation or sick days and life insurance. To calculate the cost per hour, divide the annual cost of benefits by 2,080 hours for each employee.

Payments required by federal, State or local law should not be included in the fringe benefit calculation. These include, but are not limited to, payments required to fund Social Security, unemployment compensation, workers’ compensation programs, paid leave required by the Maryland Healthy Working Families Act, and payments required under the Maryland Paid Family and Medical Leave Insurance program. In addition, other benefits such as the use of a company vehicle, cell phones, lodging reimbursement, and company owned tools may not be credited toward the fringe benefit amount.

7. How will the rates be calculated?

A rate prevails when, based on the data submitted in the survey, that rate is paid to at least 50% of the workers performing the work of that classification in the jurisdiction. If fewer than 50% of the workers in the locality working in the same classification receive the same rate, then the prevailing rate is the rate paid to at least 40% of those workers.  If fewer than 40% of workers receive the same rate, the rate is calculated through a weighted average.

8. Do wage variations or additives  (e.g., graveyard shift premiums, Sunday premiums, foreman rate) get counted toward the modal rate when calculating the rate paid to 50% of workers in a classification in a particular locality?

No. Wage variations or additives such as shift differentials or premiums are not counted when determining the rate. The goal is to identify the base (“straight-time”) hourly rate that prevails for that classification in the locality.

9. What wage information should be submitted in the targeted survey?

The wage and fringe benefit rates reported must reflect the actual wage rate and the actual fringe benefit paid to a given identifiable worker during the identified payroll week for work performed on the qualifying project in the reported classification. See COMAR 21.11.11.03(c). The wage rate reported must be the straight-time rate actually paid for the work performed in the reported classification, not including overtime, differentials, “travel” rates, “training” rates, holidays or any pay for time not worked, other supplement or reduction.

10. Does the survey require that the specific project/contract be identified?

Yes. A survey submission must identify the specific project/contract on which the work was performed. See COMAR 21.11.11.03(c). A general description of the type of project will not be accepted.  This safeguards against duplication of information.

11.  Are there limitations on the types of projects/contracts for which payroll data may be submitted?

Yes. For the supplemental targeted survey, only data from projects or contracts performed by or on behalf of an investor-owned gas or electric utility company regulated by the Maryland Public Service Commission will be considered.  Further, the work must have been performed in a Maryland jurisdiction within the specified time period, in connection with a project or contract that meets the requirements for recency.

12. Will payroll data for work performed under master (or on-call or task-based) contracts be considered?

Yes. A master contract is considered a single “project” for purposes of the prevailing wage survey. Required information about the contract should be entered under the fields requesting project information. Only one week of data for each classification may be submitted. The contract and the payroll data submitted must be within the required time-frames to be considered.

13. May submissions reflect rates paid for work performed by direct employees of the investor-owned utilities?

Yes.  Submissions may include rate data for work performed on behalf of an investor-owned utility company subject to the law, whether that work is performed directly by employees of the utility company, or performed by employees of a contractor on behalf of the utility company.

14. Must the project/contract be current or recently completed?

Yes. Only information concerning projects/contracts that are either in effect at the time of survey or which were completed between March 1 and November 30, 2025 will be considered.

15. Does the wage information have to be from a single payroll period?

Yes. For each classification, a submitter must choose a single payroll period during the performance of the qualifying project/contract to submit data for that classification.

16. Must payroll data be recent?

Yes. For purposes of the targeted survey, only payroll data for work performed between September 1, 2024 through November 30, 2025 will be considered.

17. Does a submitter have to enter each worker’s wage information separately?

Unless workers received identical rates, both wage and fringe, each worker’s payroll information will have to be entered separately. However, if more than one worker in a given classification on a given project during the selected payroll week was paid the identical wage and identical fringe rates, a submitter need not enter each worker separately. In this circumstance, the submitter may enter the total number of workers in the classification receiving that rate and fringe under “number of workers” in the survey form.

18. What if work was performed on the same project or under the same contract in multiple jurisdictions?

For each qualifying project, a submitter must select a single payroll week for each classification, and enter information only for that pay period. If work was performed on the same project in multiple jurisdictions, the submitter must select a single payroll week for each classification in each jurisdiction.

19. Can a submitter aggregate or average wage information as part of the survey?

No. A submitter may only submit an entry for more than one worker if all of the workers whose information is part of the entry receive the identical hourly wage rate and fringe benefit amount on the project during the selected payroll week. Averaged or aggregated wage data should not be submitted, and will be excluded from consideration in the determination.

20. How should I submit survey data for a worker who performed tasks of multiple classifications on the project in the chosen workweek?

Payroll for a worker may only be submitted under one classification on a given project. If a worker performed tasks of different classifications on the project during the chosen workweek (and those tasks were not incidental to the worker’s primary classification) the worker’s data should be reported under the classification whose tasks comprised the majority of hours for the chosen workweek.

21. How much wage data per classification does the Commissioner need in a locality to issue a rate for that classification?

The Commissioner may set a rate based on a single valid submission for the locality in a given classification.

22. How are localities grouped for purposes of determining whether survey data can be borrowed when there is not sufficient wage data for a classification?

Currently, the Prevailing Wage Unit has 6 groupings: Group 1: Baltimore City, Baltimore County, Anne Arundel, Carroll, Harford, and Howard. Group 2: Dorchester,Somerset, Wicomico, Worcester. Group 3: Calvert, Charles, and St. Mary’s. Group 4: Caroline, Cecil, Kent, Queen Anne’s, and Talbot. Group 5: Frederick, Montgomery, Prince George’s. Group 6: Allegany, Garrett, and Washington. These groups are periodically examined and may be updated.

23. What should I do with the data backing up my survey submission?

Please keep all of the data pertaining to your submission close at hand, as you will need to produce it promptly if audited.

24. What should I do if I make an error in my survey submission?

Please contact dldliprevailingwage-labor+utilitysurvey@maryland.gov with a copy of your submission  and an explanation of the information you wish to remove.

25. What should I do if I receive an audit request from the Prevailing Wage Unit?

Please provide a full response within the requested time frame. The survey period is limited, and thus time frames for responding are short. Failure to respond fully within the time frame will result in exclusion of the audited submission(s).

26. What happens if a submission does not comply with the submission requirements or it contains invalid or inaccurate data?

A submission with incomplete or inaccurate information or that otherwise does not comply with the submission requirements will be excluded. By submitting data in connection with the survey, a submitter is attesting to the accuracy of the data reported to the Commissioner. Please ensure that you retain any and all underlying materials supporting your survey data submission. At the direction of the Commissioner, submissions will be subject to audit to ensure that the data used in determining the prevailing wage is sound.  Please be advised that failure to timely provide the information requested in an audit will result in exclusion of the submission.

27. When will the public be notified of the supplemental targeted survey results? How long will those rates remain in effect?

Rates for the three newly-established classifications will be issued on or around January 15, 2026. Going forward, rates for these classifications will be determined as part of the annual survey.

28. Can I challenge a rate that is determined through the targeted supplemental survey?

Yes. The process for challenging a utility-specific prevailing wage rate determined under the targeted survey is similar to the process that is provided for in State Finance & Procurement Article § 17-211 and in COMAR Section 21.11.11.06. A party wishing to challenge a rate must begin by submitting a “petition for review” to the Commissioner of Labor and Industry within 10 calendar days after the rates are published on the Department’s website. The petition should be submitted via email to dldliprevailingwage-labor+utilitysurvey@maryland.gov, with “Petition for Review” in the subject line, and must, at a minimum:

• identify the rate being challenged, including classification and jurisdiction
• state the facts on which the challenge is based
• provide supporting documentation for the challenge, and
• be verified (signed under penalties of perjury).

If a conforming petition is not filed within the 10-day time period, the rate will remain in effect until new rates are issued.

29. What if I still have questions about the targeted supplemental survey?

If you still have questions, please contact  dldliprevailingwage-labor+utilitysurvey@maryland.gov.

For additional information, contact:
Division of Labor and Industry
Prevailing Wage for State Funded Construction Unit
10946 Golden W Drive Suite 160
Hunt Valley, MD 21031
410-767-2342
e-mail: dldliprevailingwage-labor@maryland.gov
Ayuda en Español: Jose Ruiz, 410-767-2370