Prevailing wage laws vary significantly by state. Understanding these requirements is essential for contractors bidding on public works projects. This guide covers the prevailing wage landscape across all 50 states.
Understanding State Prevailing Wage Laws
What Are State Prevailing Wages?
State prevailing wage laws require contractors on public construction projects to pay workers no less than the wages and benefits prevailing in the local area for each trade.
Relationship to Davis-Bacon
| Scenario | Which Law Applies | |----------|-------------------| | Federal funding on federal land | Davis-Bacon only | | Federal assistance, state/local project | May apply both | | State/local funding only | State law only (if any) | | No government involvement | Neither |
When both apply, contractors must pay the higher of the two rates.
State Prevailing Wage Overview
States WITH Prevailing Wage Laws
Strong Laws (Similar to Davis-Bacon):
- California
- New York
- New Jersey
- Massachusetts
- Illinois
- Pennsylvania
- Ohio
- Washington
- Maryland
- Connecticut
Moderate Laws (Limited Scope):
- Nevada
- Oregon
- Colorado
- Minnesota
- Missouri
- Hawaii
- Maine
- Rhode Island
- Vermont
States WITHOUT Prevailing Wage Laws
The following states have repealed or never enacted prevailing wage laws for most construction:
- Alabama
- Arizona
- Arkansas
- Florida
- Georgia
- Idaho
- Indiana (repealed 2015)
- Iowa
- Kansas
- Kentucky (repealed 2017)
- Louisiana
- Michigan (repealed 2018)
- Mississippi
- New Hampshire
- North Carolina
- North Dakota
- Oklahoma
- South Carolina
- South Dakota
- Tennessee
- Utah
- Virginia
- West Virginia (repealed 2016)
- Wisconsin (repealed 2017)
- Wyoming
Note: These states may still have prevailing wage requirements for federally-funded projects under Davis-Bacon
Major State Requirements
California
Key Features:
- Applies to all public works $1,000+
- Robust enforcement (DLSE/DIR)
- Apprenticeship requirements
- Skilled and trained workforce requirements
- Penalties for violations
Thresholds:
| Project Type | Threshold | |--------------|-----------| | New construction | $1,000 | | Alteration, demolition | $1,000 | | Maintenance | $1,000 |
Special Requirements:
- DIR registration required
- Certified payroll to awarding body
- Electronic submission for large projects
- Contractor responsibility for subs
New York
Key Features:
- Applies to contracts $2,500+
- Bureau of Public Work determines rates
- Strong enforcement
- Significant penalties
Thresholds:
| Project Type | Threshold | |--------------|-----------| | Building service | $2,500 | | Construction | $2,500 |
Special Requirements:
- Certified payroll required
- Rate schedule attached to bids
- Supplements (fringe benefits) required
Texas
Key Features:
- Limited prevailing wage law
- Applies mainly to building construction
- Local option for some projects
- Less comprehensive than other large states
Thresholds:
- Building construction contracts by state agencies
- $2,000+ threshold for state buildings
- Local governments may opt in
Illinois
Key Features:
- Applies to all public works
- Department of Labor sets rates
- Strong enforcement
- Significant penalties
Thresholds:
- No minimum threshold
- Applies to all public works
Special Requirements:
- Monthly certified payroll
- Contractor and subcontractor compliance
- Debarment for violations
Pennsylvania
Key Features:
- Applies to projects $25,000+
- Department of Labor & Industry sets rates
- Required on state and local projects
- Apprenticeship requirements
Thresholds:
| Project Type | Threshold | |--------------|-----------| | New construction | $25,000 | | Alteration, repair | $25,000 |
Ohio
Key Features:
- Applies to projects $250,000+
- Department of Commerce administration
- Required certified payroll
- Journeyman/apprentice ratios
Thresholds:
| Project Type | Threshold | |--------------|-----------| | New construction | $250,000 | | Reconstruction, renovation | $75,000 |
Washington
Key Features:
- Applies to all public works
- Department of Labor & Industries sets rates
- Intent to pay affidavit required
- Strong enforcement
Thresholds:
- No minimum threshold
- All public works covered
New Jersey
Key Features:
- Applies to all public works
- Department of Labor sets rates
- Required public contractor registration
- Strong enforcement
Thresholds:
- $2,000 for contracts
- All public works covered above threshold
Massachusetts
Key Features:
- Applies to all public works
- Department of Labor sets rates
- Weekly payroll submission
- Significant penalties
Thresholds:
- No minimum threshold
- All public works covered
Maryland
Key Features:
- Applies to state-funded projects $500,000+
- Commissioner of Labor sets rates
- Certified payroll required
- Penalty and debarment provisions
Thresholds:
- State projects: $500,000
- School construction: $500,000
Compliance Requirements
Common Requirements Across States
Wage Determination:
- Obtain applicable wage rates
- Post at job site
- Pay at least minimum rates
- Include fringe benefits
Certified Payroll:
- Submit weekly or as required
- Include all required information
- Certify accuracy
- Maintain records
Apprenticeship:
- Use registered apprentices
- Comply with ratios
- Pay appropriate rates
Documentation Requirements
| Document | Purpose | Retention | |----------|---------|-----------| | Wage determination | Applicable rates | Project duration + years | | Certified payroll | Compliance proof | 3-7 years (varies by state) | | Time records | Hours documentation | Same as payroll | | Fringe benefit records | Benefit verification | Same as payroll |
Enforcement and Penalties
Common Enforcement Mechanisms
Investigation Triggers:
- Worker complaints
- Random audits
- Agency oversight
- Competitor complaints
Investigation Process:
- Record review
- Worker interviews
- Findings determination
- Enforcement action
Penalty Types
| Violation | Possible Penalties | |-----------|-------------------| | Wage underpayment | Back wages + penalties | | Falsified payrolls | Contract termination, debarment | | Repeated violations | Enhanced penalties, debarment | | Intentional violations | Criminal prosecution (some states) |
Debarment
Most states allow debarment for violations:
- Typically 1-5 years
- Applies to all public work
- May extend to related companies
- Public listing of debarred contractors
Fringe Benefit Requirements
How Fringe Benefits Work
Prevailing wage rates include two components:
- Basic hourly rate
- Fringe benefit rate
Payment Options:
- Bona fide benefit plans
- Cash equivalent to worker
- Combination of both
Common Fringe Benefits
| Benefit Type | Example | |--------------|---------| | Health insurance | Employer-paid premiums | | Pension | 401k, pension contributions | | Training | Apprenticeship funds | | Vacation/Holiday | Paid time off or fund |
Crediting Benefits
Credits toward fringe requirements:
- Must be bona fide plans
- Irrevocable contributions
- Worker receives benefit
- Properly documented
Special Situations
Multiple Wage Determinations
Workers on projects spanning jurisdictions:
- Use rate for location of work
- Track hours by location
- Apply appropriate rates
- Document carefully
Residential Construction
Some states exempt:
- Single-family residential
- Small residential projects
- Private residential work
Check specific state exemptions.
Emergency Work
Some states allow:
- Emergency exemptions
- Disaster response modifications
- Expedited processing
- Documentation still required
Technology for Compliance
Certified Payroll Software
Features needed:
- State-specific forms
- Wage determination import
- Automatic calculations
- Electronic submission
- Audit trails
Time Tracking
Critical capabilities:
- Classification tracking
- Location tracking
- Overtime calculation
- Approval workflow
State-Specific Resources
Finding Wage Rates
| State | Resource | |-------|----------| | California | DIR website | | New York | Dept. of Labor website | | Illinois | Dept. of Labor website | | Pennsylvania | L&I prevailing wage page | | Federal | SAM.gov |
Getting Help
- State labor department contacts
- Industry associations
- Legal counsel (for complex issues)
- Compliance consultants
Best Practices
Before Bidding
- Identify applicable law(s)
- Obtain wage determinations
- Include in cost estimate
- Verify subcontractor awareness
During Construction
- Post wage determination
- Pay required rates
- Submit certified payroll
- Monitor subcontractors
- Maintain records
Record Keeping
- Keep copies of all payrolls
- Document fringe payments
- Retain for required period
- Organize for easy retrieval
Common Mistakes
Mistake 1: Wrong Wage Determination
Problem: Using outdated or incorrect rates.
Solution: Verify rates before bidding and at contract execution.
Mistake 2: Improper Classification
Problem: Paying wrong rate for work performed.
Solution: Train supervisors on proper classification.
Mistake 3: Fringe Benefit Errors
Problem: Not properly paying or documenting fringes.
Solution: Establish clear fringe benefit procedures.
Mistake 4: Subcontractor Non-Compliance
Problem: Subcontractors violating requirements.
Solution: Flow down requirements and monitor compliance.
Future Trends
Expanding Requirements
- Some states considering new laws
- Expanded coverage discussions
- Enhanced enforcement
- Technology requirements
Industry Response
- Compliance technology adoption
- Training program expansion
- Industry association advocacy
- Legal compliance focus
Next Steps
Ready to ensure prevailing wage compliance?
- Identify applicable laws - Know your jurisdictions
- Establish procedures - Consistent compliance processes
- Train your team - Everyone understands requirements
- Implement technology - Tools for tracking and reporting
- Monitor subcontractors - Ensure total project compliance
Related Articles
- Davis-Bacon Act Compliance Guide
- Subcontractor Management in Government Bids
- Understanding Change Orders in Public Works
Frequently Asked Questions
Do prevailing wages apply to private work? Generally no, unless the project receives public funding or is on public property. Some union agreements may require prevailing wages.
Which rate applies when state and federal differ? Pay the higher of the two rates when both laws apply.
Can workers waive prevailing wage rights? No. Prevailing wage protections cannot be waived by worker agreement.
What if no rate exists for my classification? Request a rate determination from the administering agency before work begins.
How do I handle travel time? State laws vary. Some require prevailing wages for travel, others don't. Check specific state requirements.
