Prevailing wage basics

A prevailing wage is not a minimum wage. It is a wage the government determines to be customary for a type of work in a place, and it binds only in specific settings: federally funded construction, federal service contracts, and the employment of certain foreign workers. Three systems, three statutes, three sets of figures.

Davis-Bacon: federally funded construction

The Davis-Bacon Act of 1931 requires contractors on federal or federally assisted construction contracts over $2,000 to pay laborers and mechanics at least the wages and fringe benefits the Secretary of Labor determines prevail for corresponding classes of workers in the area. Dozens of related statutes extend the requirement to highways, housing, water projects and other federally assisted work.

The figures are published as wage determinations: one per county group and construction type (building, residential, heavy, highway), listing an hourly wage and a fringe rate for each classification. DOL’s Wage and Hour Division sets them from surveys of local projects and, where the data permit, from collective bargaining rates. Determinations are published on SAM.gov and change as surveys are completed. This site links to them and does not mirror them; there is no bulk download, and a stale copy would be worse than none.

Davis-Bacon rates apply to the laborers and mechanics on the covered site, by classification, for the hours worked there. They do not apply to the contractor’s office staff or to private projects.

The Service Contract Act: federal service contracts

The McNamara-O’Hara Service Contract Act of 1965 does the same for service employees on federal contracts over $2,500 whose principal purpose is furnishing services: guards, janitors, food service, clerical support, maintenance, information technology support and many others. Wage determinations list a minimum hourly rate per occupation and locality, plus required health and welfare benefits, vacation and holidays. The occupation list is DOL’s own directory of service occupations, which is related to but not identical with the SOC.

SCA rates are often derived from OEWS data for the locality, which is why they track the medians on the state and metro pages here, with a lag.

H-1B, H-1B1, E-3 and PERM: wage levels

Employers sponsoring certain temporary and permanent foreign workers must attest to paying at least the prevailing wage for the occupation and area, as determined by DOL’s Office of Foreign Labor Certification. The default source is OEWS. For each SOC occupation and area, the office publishes four wage levels, intended to correspond to entry, qualified, experienced and fully competent workers. By the statutory formula, Level I is set at the 17th percentile of the OEWS distribution, Level II at the 34th, Level III at the 50th and Level IV at the 67th. The levels are published in the FLAG wage library each July for the following year.

Because these levels are a direct transformation of the OEWS percentiles, the occupation tables on this site show the same distribution the levels are cut from; the 25th and median percentiles bracket Levels I through III. The site does not reproduce the levels themselves in Wave 1.

State prevailing wage laws

About half the states have their own prevailing wage laws for state-funded construction, with thresholds, coverage and rate-setting methods that differ from Davis-Bacon’s. Some use the federal determinations, some run their own surveys, some repealed their laws. They are not summarized here.

What prevailing wage is not

It does not set a floor for private employment outside a covered contract or visa. It is not the minimum wage, which applies to nearly all employment and is far lower. It is not a market average published for information; it is a contractual or regulatory requirement with enforcement attached. And a determination is specific to a classification and locality: the carpenter rate in one county says nothing about the next.

Beyond this summary

Whether a project or contract is covered, which classification a worker falls under, and how fringe benefits are credited are questions for the contracting agency, the wage determination itself and DOL. The sister site FastCalc has Davis-Bacon overtime and fringe credit calculators for the arithmetic once the rate is known.