Prevailing wage is another term for an hourly wage paid to a worker or laborer employed on a public works project (aka a government contract). Workers are paid a prevailing wage rate based on the amount workers employed on projects of a similar nature in the same geographic area are paid. Generally, prevailing wages are used to determine compensation for people working on government prime or subcontracts, whether federal, state, or local.

Prevailing wage rates are required by federal government contracting laws such as the Walsh-Healey Public Contracts Act, the McNamara-O’Hara Service Contract Act (SCA), and Davis Bacon Acts (DBA), which entitle workers employed on covered contracts to be paid the appropriate rate, and may also entitle them to receive overtime pay or fringe benefits.

State Department of Labors or other regulatory agencies may set prevailing wage rates for state or local contracts. Those laws vary by state so contractors should check review regulations to ensure compliance with the law.

For more information on prevailing wages from the Department of Labor, click here.

For Department of Labor wage determinations, click here.