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What is Prevailing Wage?

What is Prevailing Wage? Credit: Money image via Shutterstock

Prevailing wages are the salaries and benefits that contractors working on publicly funded projects are required to pay their laborers.

The rates are determined by the minimum cost of living for a family, which includes food, childcare, housing, medical care and transportation costs.

Projects covered under prevailing wage laws include construction, alteration, demolition or repair work, which affects employees specializing in everything from construction and electrical to tree-trimming and asbestos removal.

The rates are different for each job in each area of the country. For example, current rates for a carpenter in Northern California are $37.50 an hour, while electricians in the Chicago area make $40 an hour.

Federal prevailing wage laws have been in effect since 1931, when Congress passed the Davis-Bacon Act calling for fair pay for all laborers working on publicly funded projects. Since then, 32 states and the District of Columbia have enacted their own prevailing wage requirements.

The wages are used to level the playing field by ensuring contractors are not paying their employees unfair salaries so they can in turn be more competitive when they bid for the project.

Chad Brooks is a Chicago-based freelance business and technology writer who has worked in public relations and spent 10 years as a newspaper reporter. You can reach him at chadgbrooks@gmail.com or follow him on Twitter @cbrooks76.

Chad  Brooks
Chad Brooks

Chad Brooks is a Chicago-based freelance writer who has nearly 15 years experience in the media business. A graduate of Indiana University, he spent nearly a decade as a staff reporter for the Daily Herald in suburban Chicago, covering a wide array of topics including, local and state government, crime, the legal system and education. Following his years at the newspaper Chad worked in public relations, helping promote small businesses throughout the U.S. Follow him on Twitter.

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