The World of Prevailing Wages

In the world of prevailing wages, not all prevailing wages are created equal. There’s a confusing array of different categories of prevailing wages, and it’s important for contract administrators with public agencies to know the difference so as to be in compliance with a variety of regulations.

Federal vs. State Wages: The most basic distinction is between prevailing wages established by the federal government (U.S. Department of Labor) and Washington State (Department of Labor and Industries).

If you have a federally funded public works project (even with just a small amount of federal money), both federal and state prevailing wages will apply. Your bidding and contract documents should specify that the more stringent or highest wage rate for a given classification will apply between federal and state prevailing wages.

There is one exception to this rule and that is for projects funded by the federal U.S. Department of Housing and Urban Development (HUD) for public housing purposes. 24 CRF 965.101 requires that only federal prevailing wages be used on these projects and that federal prevailing wages preempt state prevailing wages. This exception primarily applies to public housing authorities.

Type of Work Distinctions: In addition to the distinction between federal and state prevailing wages, the other major distinctions relate to the type of wages. Under both federal and state prevailing wages, there are different categories of wages depending on the type of work being performed.

For example, there are federal prevailing wages for the following: building (or commercial wages), heavy and highway, and residential. For Washington state prevailing wages, there are separate prevailing wages that apply to residential construction versus buildings and highways. Both federal and state prevailing wages have a multitude of requirements that specify when each type of prevailing wage is applicable.

Journey-level vs. Apprentice Wages: Another major category that distinguishes prevailing wage rates relates to journey-level wages versus apprentice wage rates. Generally, apprentices who are enrolled in an approved apprenticeship program under either federal or state requirements may be paid a percentage of the journey-level wages during their apprenticeship. Again, there are complex regulations governing apprenticeship prevailing wages.

Web Links: Visit the Online Reference page of Michael E. Purdy Associates for a list of links related to prevailing wages (and other subjects).

Questions: If you have specific questions about prevailing wages, when federal or state wages are applicable, what type of wages are appropriate for a particular project, or how apprentice wages work, please let me know.