Pennsylvania has significantly expanded the reach of its Prevailing Wage Act. On October 22, 2026, Governor Josh Shapiro approved Act 101 of 2026, which amends the Pennsylvania Prevailing Wage Act to apply to certain off-site custom fabrication work.
The change is particularly important for contractors, subcontractors, manufacturers and fabrication shops involved in Pennsylvania public construction projects. Certain work performed away from the construction site that historically fell outside prevailing-wage requirements may now be covered.
What Changed?
Pennsylvania’s Prevailing Wage Act generally applies to covered public construction projects exceeding $25,000 and has largely applied to “on-site” work. Act 101 expands that framework to certain off-site “custom fabrication” performed for public works projects.
What Is Custom Fabrication?
The Act reaches project-specific fabrication or assembly involving several construction trades and systems, including:
- plumbing and pipefitting;
- heating, ventilation, air-conditioning and refrigeration systems;
- sheet metal or other duct systems;
- boilers;
- electrical systems;
- welding;
- mechanical insulation;
- ornamental iron;
- reinforcing-bar assemblies;
- certain signs; and
- substantially complete prefabricated modules or structures.
Importantly, not every manufactured product or off-site fabrication becomes subject to prevailing wage requirements. Structural-steel members and precast concrete, for example, are expressly excluded from the new custom-fabrication definition. Act 101 also specifically exempts “the rehabilitation of a residential property or school safety and security improvements.”
Why This Matters to Manufacturers
For some Pennsylvania manufacturers and fabrication shops, Act 101 may create prevailing-wage obligations in circumstances where the company historically viewed itself as a supplier rather than a construction subcontractor or fabricator.
A company supplying a customized component for a covered public project should no longer assume that performing the work at its own manufacturing facility places it outside the Prevailing Wage Act.
Covered off-site fabrication may implicate not only wage rates, but also employee classifications, timekeeping, payroll reporting and other prevailing-wage compliance obligations.
Which Wage Rate Applies?
For covered custom fabrication, the applicable craft rate is tied to the locality of the public project, rather than the location of the fabrication facility.
That distinction may present practical issues for manufacturers supplying projects across Pennsylvania. Employers will need to identify whether particular fabrication is covered and, if it is, determine the wage requirements associated with the public project.
What Should Contractors and Manufacturers Do Now?
The Act takes effect December 21, 2026. Affected businesses should use the period before the effective date to evaluate their current practices and prepare for potential compliance obligations. Businesses involved in Pennsylvania public projects should consider:
- Reviewing current and upcoming public-project contracts to identify work that may constitute custom fabrication.
- Identifying off-site fabrication operations that previously were treated as outside Pennsylvania prevailing-wage requirements.
- Reviewing subcontract and purchase-order language addressing responsibility for prevailing-wage compliance.
- Evaluating employee classifications and wage determinations for workers who may perform covered fabrication.
- Reviewing timekeeping and payroll systems so covered project work can be identified and documented separately if necessary.
- Examining bids and pricing for upcoming public work, since prevailing-wage obligations for off-site labor may affect project costs.
- Reviewing relationships with suppliers and fabricators, particularly where customized components are being produced specifically for a Pennsylvania public project.
Although the Department of Labor and Industry has not published guidance on this new law, it is expected to do so soon.
The Bottom Line
For contractors, the amendment warrants closer scrutiny of the fabrication incorporated into public projects and the businesses performing that work. For manufacturers and fabricators, the key question is no longer simply where an employee works. Businesses also need to determine whether what the employee is producing constitutes covered custom fabrication for a public project.
Because the distinction between ordinary manufacturing and covered custom fabrication can be fact-specific, businesses participating in Pennsylvania public projects should evaluate their potential obligations under Act 101 before bidding, contracting for or beginning potentially covered work.
For assistance, contact Kevin A. Moore, Keith Mooney, or any attorney in Barley Snyder’s Construction or Employment groups. Our attorneys assist contractors, subcontractors, manufacturers and fabricators in evaluating Act 101, reviewing contracts and prevailing-wage requirements, and addressing compliance and enforcement issues.
