Are Owners Exempt from Prevailing Wages?

Under Washington state laws, owners who meet certain criteria are exempt from being required to be paid prevailing wages, but must nevertheless comply with other reporting requirements.

According to the Washington Administrative Code (WAC 296-126-026), the prevailing wage requirements of state law (chapter 39.12 RCW) do not apply to:

1. Sole owners and their spouses
2. Any partner who owns at least 30% of a partnership
3. The president, vice-president and treasurer of a corporation if each one owns at least 30% of the corporation.
   

The purpose of this exemption is to not require the owner of a construction business to pay themselves prevailing wages on public projects. There are other provisions of chapter 39.12 RCW that deal with issues other than what wages must be paid to individuals.

For example, even owners who are exempt from paying themselves the prevailing wage rates must still file a "Statement of Intent to Pay Prevailing Wages" (before the public agency makes the first payment) and an "Affidavit of Wages Paid" (prior to release of retainage by the public agency). This is often not clearly understood by public agencies and contractors.

In addition to company owners being exempt from paying themselves the prevailing wage, the prevailing wage requirements of chapter 39.12 RCW do not apply to workers employed by public agencies in the State of Washington.