Prevailing Wages
Share
Print this Page
RSS FeedPrevailing wage rates came into being with the passage of the Federal Davis-Bacon Act of 1931. The legislation required workers to be paid a specific wage rate. “Officially” the idea behind the legislation was to make sure that on federally funded projects, union shops and non-union shops compete fairly, tradespeople are paid a fair wage, and qualified tradespeople are used. There may have been other motives, but that’s another story outside of the scope of this article but worth researching.
At first the act only applied to base wage rates, but later covered supplemental (fringe benefit) rates as well. Over the course of time, 41 individual states adopted their own versions of the federal act pertaining to state funded projects. The US Department of Labor uses a complicated survey method to calculate the prevailing wage rates. Individual states calculate prevailing wage rates differently. In New York, for example, the prevailing wage rates are basically union scale, so it’s important to know which prevailing wage rate is being used.
Prevailing wage rates are extremely important for contractors because they provide the basis for the wage portion of their labor costs. They’re also important to cost estimators because they provide the minimum labor rates for project estimates, while concurrently providing the maximum rate for change order negotiations.
Finding the prevailing wage rate for specific trades is easy enough for federal projects. Simply check the Department of Labor’s Wage Determinations website at www.wdol.gov. Then click on “Selecting DBA WDs.” Select the state, county, and type of construction (building, highway, heavy, or residential). Wage rates are listed by trade. For some states you can find the prevailing wage rate online as well. For example on New York’s Department of Labor web site www.labor.state.ny.us, you can click on the Worker Protection tab to get to the Prevailing Wage section by county. The rates are listed by trade.
The crew rates used in Means cost data books and CostWorks are all based on union scale wages. (Means also publishes a cost data book and provides a CostWorks toggle for open shop.) This is convenient when prevailing wage rates are based on union scale — a lot easier than trying to track down and obtain wage rates from the individual unions and locals.
Member Comments
Related News & Information
 | Forecasting the need for product is one of the most difficult tasks required for planning. The effort requires understanding product demand by building type, geography and construction type. It also requires knowing your market share, your competitors market share and how these change over time. The RSMeans Product Demand Dashboard provides all of this information aggregated in a single dashboard available from anywhere you can access the web. |
Prevailing wage in term for those who are retired and still processing their retirement is the median wage paid to workers in a specified locality. In the Davis-Bacon Act all federal government construction contracts, and most contracts for federally assisted construction over $2,000, must include provisions for paying workers on-site no less than the locally prevailing wages and benefits paid on similar projects.In the Walsh-Healey Public Contracts Act the federal government set the minimum wage equal to the prevailing wage in an area. It is am employee benefits and (especially in British English) benefits in kind (also called fringe benefits, perquisites, perqs or perks) are various non-wage compensations provided to employees in addition to their normal wages or salaries. Where an employee exchanges (cash) wages for some other form of benefit, this is generally referred to as a ‘salary sacrifice’ arrangement. In most countries, most kinds of employee benefits are taxable to at least some degree.