Prevailing Wages Definition
Prevailing wages are the minimum wages that employers engaging in federally funded projects must pay their blue collar workers.
Employers are required to pay blue collar workers (mechanics and laborers) a minimum base wage when working on projects involving federal funds. The prevailing wage rate and additional fringe benefits must be on similar lines to those paid for the same class of workers employed on similar projects in the particular geographical area. The U.S. Dept. of Labor’s Wage and Hour Division (WHD) sets the prevailing wage rates that are required to be paid on federally funded projects. Prevailing wages are applicable to employers engaged in federal contracts subject to the Davis-Bacon Act, McNamara-O’Hara Service Contract Act (SCA) and Walsh-Healey Public Contracts Act (PCA). Typically, prevailing wages are more than the state or federal minimum wages.
What are Prevailing Wages?