Every government contractor that works on prevailing wage projects deals with wage determinations. And while the idea of a wage determination seems simple, there’s a bit more to it than a list of hourly rates for workers. Since understanding wage determinations is so critical to staying compliant on government projects, we wanted to go over the types of wage determinations you may run into.
Wage determination laws
Prevailing wage laws, both federal and state, set hourly rates for projects funded by the government. At the federal level the Davis Bacon Act (DBA) applies to projects over $2,000 for the construction, alteration, or repair (including painting and decorating) of public buildings or public works. Davis Bacon and Related Acts (DBRA) is a provision in DBA that applies to “related acts” in which the federal government provides grants, loans, loan guarantees and insurance for construction projects. The Federal-Aid Highway Act is an example of a “related act.”
Contractors and subcontractors working on projects that fall under these laws have to pay laborers and mechanics no less than the locally prevailing wages and fringe benefits. This is where wage determinations come into the picture because these are published by the DOL and show what these prevailing rates are. It is the Wage and Hour Division (WHD) of the Department of Labor that administers these acts.
Many states have their own prevailing wage laws for state-funded public works projects. These are overseen by the state DOL or a similar governing body, like the Department of Industrial Relations (DIR) in California.
What is a wage determination
Wage determinations list the hourly pay and fringe benefit rate for every classification of laborer and mechanic. The WHD sets these rates, and they determine them by surveying the area for local wage information. They publish these rates in the form of wage determinations. You can find them on Sam.Gov, the official website for federal wage determinations.
What types of wage determinations are there?
Although there are wage determinations for every classification of laborer and mechanic, there are only two categories: general wage determinations and project wage determinations.
General wage determinations
General wage determinations have the current wage rates determined by the WHD for each specific geographic area. Contracting agencies can incorporate these rates into contracts that fall under prevailing wage law. Contractors are required to post them at the worksite on covered projects.
Project wage determinations
Project wage determinations are requested by a contracting agency and only apply to the project for which they requested them. An agency may request these by submitting an SF-308. Project wage determinations usually expire 180 calendar days after being issued and are not very common.
Types of construction represented in wage determinations
Wage determinations break construction projects into four categories: building, residential, highway and heavy. When you search for a wage determination you will be asked to select the type of construction in order to view wage determinations for that category.
Here is what each category includes:
Building: This category includes the construction, alteration, or repair of sheltered enclosures with walk-in access for the purpose of housing persons, machinery, equipment, or supplies. It includes the installation of utilities and equipment, as well as incidental grading and paving, that may be associated with covered construction.
Residential: This category includes the construction, alteration, or repair of single-family houses, townhouses, and apartment buildings. To be in this category the structure cannot be taller than four stories in height. Associated work for the building is included, like site work, parking areas, utilities, streets, and sidewalks.
Highway: This category includes the construction, alteration, or repair of roads, streets, highways, runways and parking areas. It also covers most other paving work not incidental to building, residential, or heavy construction.
Heavy: This category includes projects that don’t fall into the previous categories. This can make it seem like a catch-all category, but it is distinguished a bit by the characteristics of the construction project, like dredging, water and sewer lines, flood control and major bridge projects.
Wage determinations and conformances
If a project requires work that is not covered by a labor classification already listed on the applicable wage determination, a conformance may be needed. This doesn’t create a new classification of labor, but simply determines the prevailing wages for work that’s needed but missing from the wage determination for the project. According to the DOL, this usually only happens if there is a low response rate for the Davis-Bacon wage survey in the area. Conformances are not common, but when they are needed they are granted by the WHD.
Correctly using wage determinations is key to staying out of trouble on your prevailing wage projects. You can learn everything you need to know about them in our wage determination guide.
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.
