Finance & Contracts

Prevailing Wage

A wage rate (and fringe benefit rate) set by state or federal law that contractors must pay on public-works projects.

Federal prevailing wage is set by the Davis-Bacon Act on federal projects over $2,000. Many states have parallel prevailing wage laws covering state-funded work (California, New York, Illinois, etc.). Rates are set per craft per locality and typically include base wage + fringe (health, pension, training). Certified payroll reporting (WH-347) is required, with sworn statements from the contractor for each pay period. Non-compliance carries severe penalties.