Frequently Asked Questions

Q. What is Prevailing Wage?

A.  A Prevailing Wage is the basic hourly rate of wages and benefits paid to a number of similarly employed workers in a given geography. Prevailing Wage laws can ensure that government dollars do not undercut local wage and benefit standards, prevent a race to the bottom among publicly funded contractors, support good jobs, and provide good value to taxpayers.

Q. Where can Prevailing Wages be used?

A. Prevailing Wage comes from the Davis-Bacon Act and Service Contract Act which have long required contractors and subcontractors on federally funded or assisted construction and service contracts to pay locally Prevailing Wages and provide benefits.

Q. What are the benefits of Prevailing Wage Laws?

A. The benefits of Prevailing Wage laws are focused on the workers, businesses, and taxpayers that all benefit from the Prevailing Wage laws. These benefits include:

  • Support good wages and benefits for blue-collar workers.
  • Help close pay gaps.
  • Promotes quality work and produce good value for taxpayers by boosting worker productivity, reduce injury rates, and increases apprenticeship training, which helps to address the shortage of skilled labors in construction.
  • Evens the playing field for high-road employers by preventing low-road businesses from undercutting high-road employers committed to paying decent  wages and benefits in bid competitions. 
  • Promotes sectorial standards by standardizing compensation across an industry leads to higher wages and benefits for more workers, moderates economic inequality, and reduces pay gaps across race and gender.

Q. Which industries could benefit for Prevailing Wage Laws?

A. Many industries that benefit from Prevailing Wage protections are construction, service workers, such as custodial staff, security guards, food service workers, call center workers, and temporary office service workers.

Q. Are Prevailing Wages only from government contracts?

A. Prevailing Wages are not only applicable to direct government contracts, Prevailing Wage standards can be applied to employees on service contracts at properties owned or leased by the government.

Q. Where do Prevailing Wages and minimum wages stand?

A. Prevailing Wage standards can fit alongside minimum wages. Your state and local policymakers can set wage and benefits standards in a variety of ways.  Your state and local policymakers can adopt multiple approaches to raise standards for workers across the income spectrum. Prevailing Wage standards are useful even in places with high area-minimum wages because they come with required benefits supplements and can protect high standards for middle-income earners.