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Prevailing Wage FAQs
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Prevailing Wage FAQs

What is prevailing wage?
Prevailing wage is the market rate that must be paid to workers on qualifying publicly funded construction projects. Most public work is awarded to the lowest responsible bidder. This rate, established by wages paid on private construction projects, ensures a level the playing field for local workers and guarantees that contractors compete based on skill and productivity and not on how little they pay their workforce.
 
Is prevailing wage union scale?
Prevailing wage is not "union scale." "Prevailing wage" is determined by wage and benefit surveys of the local construction market for work done on private - not public - projects.  Under new law, these surveys are conducted only by federal Department of Labor.  Depending on the local market, resulting prevailing wage rates can be 1) collectively bargained rates, 2) a mix of collectively bargained and non-bargained rates, or 3) a weighted average of wage rates. Only when collectively bargained wage rates are shown to prevail in an area, based on these survey results, will the prevailing wage be similar to the "union scale."
 
Does prevailing wage drive up the cost of public construction?
No. Prevailing wage simply reflects wages and benefits earned in the local construction market. Low-wage and high-wage employers compete against each other every day in the private sector on the very projects that determine these rates. To suggest that prevailing wage drives up the cost of public construction ignores the fact that these wage rates are based on real wages, paid for real work, performed on real jobs in the private sector. 
 
Do State public works projects remain covered?
State prevailing wage law still applies to projects of public works by the state, state agencies, and institutions of higher education (i.e., UW System). The single trade threshold of $48,000 and the multiple-trade threshold of $100,000 was not changed by Act 55.
 
Are Contractor penalties weakened?
Contractors are no longer required to file affidavits of compliance. The mandatory penalty, 100% liquidated damages for all non-highway public works projects, was repealed. This means that a contractor only has to back pay the employee what he owes them. Debarment is no longer a penalty for contractors that fail to comply with prevailing wage laws.
 
What constitutes the prevailing wage?
The "prevailing wage" is actually more than just wages. It is a measurement of the total economic benefit per hour paid to a worker. In addition to wages, that total economic benefit may include health, pension, training and other compensation, earned by craft workers in the area.
 
Aren't prevailing wage laws enough?
Not if a public owner is interested in sustaining the construction industry. Prevailing wage requires contractors to pay the predetermined total economic benefit paid to workers, but it does not require contractors to actually provide training, health, pension or other benefits. Wages alone cannot sustain the construction industry with a safe, skilled and productive workforce. Public owners simply aren't getting what they paid for when they use contractors who comply with the law by paying the prevailing wage, but don't provide the benefits - training, health, pension, etc. - necessary to sustain the industry.
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