Below are some frequently asked questions about prevailing wage laws in California. Contact us for any specific questions.
What is Prevailing Wage?
The prevailing wage rate was established to ensure that contractors have a level playing field when bidding on government projects and ensuring that construction workers are paid a fair wage when working on these projects. These hourly wages and fringe benefits are based on craft and location.
Basics of Prevailing Wage Rates in California
For federal projects in California the Davis Bacon Act of 1931 applies. This regulation only applies to projects which are 100% funded by the federal government. However, if projects involve any California awarding body, then California prevailing wage rates also apply. In these cases projects have to comply with both federal and state prevailing and certified payroll requirements.
Public projects that are regulated by state prevailing wage rates satisfy these requirements:
- Construction, alteration, demolition, installation, maintenance, or repair work,
- Done under contract, and
- Paid for in whole or in part out of public funds
For California funded projects certified payroll reports must be submitted online, using their online portal.
Changes in the Prevailing Wage Rate
New prevailing wage determinations are issued twice a year, on Feb. 22 and Aug 22. The determinations become effective ten days after the rates are published. Contractors should refer to the date of the bid advertisement to determine what wage rates must be used for the project.
Prevailing Wages on Residential Projects
Residential projects that are paid for in whole or in part by public funds are regulated by prevailing wage laws. The same types of regulations apply as other publicly funded projects.
Threshold Requirement
Prevailing wages must be paid to all workers employed on a public works project over $1,000. If the awarding body initiates and enforces a labor compliance program with DIR approval, For public works projects worth $25,000 or less if it is for construction work, or projects worth $15,000 if the project is for demolition, repair, alteration, or maintenance work, certified payroll reports don’t have to be upload to the DIR portal unless required by the LCP.
Overtime Determinations
Working overtime is defined by the state of California as working over 8 hours a day or 40 hours a week.. Each prevailing wage determination for craft has its own regulations of overtime and the amount to pay. Refer to the determinations for more information.
More information about overtime determination can be found here.
Forms and More Information
For the federal certified payroll reporting form(WH-347) click here.
For prevailing wage determinations click here.
For more information regarding prevailing wage laws on public works projects click here.
For California funded projects certified payroll reports must be submitted online, using their online portal.
Failure to comply with California Prevailing Wage determinations can result in fines and penalties. It is the prime contractor’s responsibility to audit the certified payroll submissions of sub-contractors. This includes verifying that they are paying workers the correct prevailing wage and fringe benefits.
Have any questions about prevailing wage laws? Let us know and one our Certified Payroll Specialist will be in touch.
The material presented here is educational in nature and is not intended to be, nor should be relied upon, as legal or financial advice. Please consult with an attorney or financial professional for advice.
