Tuesday, June 1, 2010

Prevailing Wages on Federally Funded Projects

Most federally funded public works construction projects require the payment of federal prevailing wages.

There are some notable exceptions to pay attention to.
  • Not all federal agencies require payment of federal Davis-Bacon prevailing wages:  For example, some grant funds from the Federal Emergency Management Agency (FEMA) are not subject to federal prevailing wages.  When an emergency occurs, a state or local agency must apply for FEMA reimbursement after the work has been performed.  Thus, at the time of the work being performed, a state or local agency does not know if federal FEMA funds will be approved.  FEMA recognizes this and requires the payment of state prevailing wages only on FEMA reimbursable projects.  Another exception to the applicability of federal prevailing wages is for some projects funded through the National Institutes of Health (NIH).
  • Joint applicability of federal and state prevailing wages:  For most public works projects funded with federal funds, federal and state regulations require that contractors pay the higher of the two prevailing wages between the applicable federal and state prevailing wages.  One exception to this rule is that federal prevailing wage rates preempt state prevailing wages for certain funds from the U.S. Department of Housing and Urban Development (HUD)Title 24, Section 965.101.
Practical Tip:  Make sure you read the terms of the federal grant to determine the applicability of federal prevailing wages.


Anonymous said...

Hi Mike, working on a law school memo on prevailing wage preemption. What is your source of authority for your assertion regarding joint applicability of federal and state prevailing wage law? Thanks for your help.


Mike Purdy said...

The Washington Administrative Code (WAC)296-127-025 addresses joint applicability of federal and Washington state prevailing wages (http://apps.leg.wa.gov/wac/default.aspx?cite=296-127-025). I hope this is helpful and the information you need.