Prevailing Wages Explained: Davis-Bacon, Rates, Rules & FAQs for 2026

TL;DR

Prevailing wages are mandatory minimum pay rates (base wage plus fringe benefits) on government-funded construction projects.

Federal projects over $2,000 trigger the Davis-Bacon Act. Most states have their own versions covering state-funded public work.

Find current rates at SAM.gov/wage-determinations (federal) or your state labor department’s website. Rates are set by trade classification and geographic area. Always use the rate in effect at contract award.

The Davis-Bacon Act governs prevailing wages on federally funded construction projects, and most states have their own versions. If your crew works government jobs, you owe prevailing wages. Getting it wrong means back pay, debarment, and potentially criminal exposure.

This guide covers how rates are set, what certified payroll requires, and what changed in 2024-2025, part of Workyard’s broader resource on labor compliance software. For state-specific rates and certified payroll requirements, see our guides to prevailing wages in construction by state. These are linked in the related guides section below.

Editorial note: Rates and rules in this guide reflect current U.S. Department of Labor (DOL) regulations and applicable state statutes as of June 2026. Consult a labor attorney for project-specific advice.

What are prevailing wages in construction?

Prevailing wages in construction are the minimum hourly rates (base pay plus fringe benefits) that contractors must pay workers on government-funded public works projects. Government agencies set these rates by surveying what workers in each trade actually earn locally.

The goal is to stop contractors from winning public bids by underpaying crews. Without prevailing wage laws, a general contractor (GC) could flood a market and pay below-standard wages. That undercuts every local contractor on price.

Three things define prevailing wages in construction:

• Government agencies set the rates: Federal, state, or local agencies set these rates through wage surveys.
• The law applies to public works projects only: Projects involving construction, repair, or maintenance funded by government money.
• Fringe benefits count toward the total: Health insurance, retirement, and vacation pay all count toward the wage requirement.
• Enforced weekly: Certified payroll is filed every week under penalty of perjury.

Prevailing wage vs. minimum wage

The federal minimum wage sets a floor for all workers. Prevailing wage sets a much higher floor specifically for public construction work. A general laborer on a federal project in California earns $45–$55/hour all-in under prevailing wage versus $16.90/hour at state minimum wage. That is far above any minimum wage standard.

Prevailing wages vary by trade, location, and project type. Minimum wage is flat and universal. If you work on a covered public project, prevailing wage overrides minimum wage entirely.

Prevailing wage vs. union wage

Union wages are negotiated between a union and an employer through collective bargaining. Prevailing wages are government-mandated minimums based on area wage surveys. They often mirror union rates in heavily unionized markets, but they are legally separate.

On a non-union jobsite, you can still owe prevailing wages. The contract determines the obligation, not whether your crew carries a union card. In markets where unions dominate (New York, Illinois, California), prevailing rates and union rates may be nearly identical. In less-unionized states, prevailing rates can fall below union scale.

When did prevailing wage laws start?

Kansas passed the first state prevailing wage law in 1891. Other states followed, protecting local workers from out-of-state contractors paying below-area wages to win public work.

The federal standard arrived in 1931. The Davis-Bacon Act was named for Senator James Davis and Representative Robert Bacon. It was a direct response to the Great Depression, when out-of-state contractors were undercutting local workers on federal jobs. Congress stepped in and required federal contractors to pay locally prevailing wages on any construction project over $2,000. 

That threshold has never changed. The law still governs every federally funded construction project in the country today.

Since 1931, states have layered in their own versions. Today, more than 30 states have prevailing wage laws covering state-funded projects outside federal jurisdiction. These are often called “Little Davis-Bacon Acts”.

How prevailing wages are determined

Government agencies set rates through wage surveys. The process differs slightly between federal and state determinations. The core logic is the same: find what workers in a trade earn locally, then set that as the minimum.

Federal determination (Davis-Bacon Act)

The U.S. Department of Labor’s Wage and Hour Division (WHD) conducts surveys of contractors and unions operating in specific counties and metro areas. Data includes hourly wages, fringe benefits, and hours worked by trade classification.

The U.S. Department of Labor (DOL) identifies the rate paid to the majority of workers in each classification. If no single rate covers a majority, it uses a weighted average. The DOL publishes these rates as wage determinations: documents tied to specific geographies and project types.

Federal wage determinations are updated annually but may be revised more often when wage data shifts materially. Always check SAM.gov for the current determination before bidding.

State determination

States with their own prevailing wage laws run parallel processes. California’s DIR, New York’s DOL, and Illinois’s Department of Labor (IDOL) all publish state wage determinations independently. These can be higher than federal Davis-Bacon rates, and in California, New York, and Illinois, they typically are.

Update cycles vary: California refreshes rates semiannually, other states quarterly or annually. The update cycle matters when bidding. Use the rate in effect at contract award, not when you look it up.

How to look up prevailing wage rates (step-by-step)

For federal projects:

1. Go to SAM.gov/wage-determinations.
2. Select your state and county.
3. Choose the project type (Building, Heavy, Highway, or Residential).
4. Find the wage determination number (WD number) assigned to your contract. Contracting agencies include this in solicitation documents.
5. Identify your trade classification (e.g., Carpenter, Ironworker, Laborer).
6. Note the basic hourly rate and the fringe benefit rate. Both are required.

For state projects, go directly to the state labor department’s website. Each state publishes its own wage schedule, typically searchable by county and trade.

How long does a prevailing wage determination take?

For federal projects, the contracting agency obtains the applicable wage determination from SAM.gov before the solicitation goes out. The WD is embedded in the contract. As a contractor, you get the applicable rates when you receive the solicitation documents, before you bid.

If you need a specific or custom determination for an unusual project or classification, submit a request to DOL’s WHD. That process typically takes several weeks to months, depending on data availability and project complexity.

See how GPS-verified time tracking keeps your certified payroll clean from the first clock-in.

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What’s the difference between prevailing wages and Davis-Bacon wages?

“Prevailing wage” is the broad term. “Davis-Bacon wage” is a specific type of prevailing wage that applies to federally funded construction contracts over $2,000. Think of Davis-Bacon as the federal layer; state prevailing wages are separate layers underneath.

Key differences

• Scope: Davis-Bacon applies to federal projects. State prevailing wage laws cover state- and locally funded projects.
• Determination: Davis-Bacon rates come from the U.S. DOL. State rates come from state labor agencies.
• Enforcement: Davis-Bacon is enforced by the DOL’s WHD. State laws are enforced by state labor departments.
• Thresholds: Davis-Bacon kicks in at $2,000. California kicks in at $1,000. New York has no threshold at all.

What are Davis-Bacon wages?

Davis-Bacon wages are the minimum wage standards the DBA sets for laborers and mechanics on federal and federally assisted construction projects. It applies to contracts for the construction, alteration, or repair of public buildings or public works. 

Two related laws work alongside it. The Service Contract Act (SCA) covers federal service contracts. The Contract Work Hours and Safety Standards Act (CWHSSA) governs overtime on covered projects.

Who is covered and who is exempt?

Covered workers include laborers and mechanics employed by contractors and subcontractors. The $2,000 federal contract threshold applies, but in practice, nearly all federal construction jobs exceed it easily.

Exempt from Davis-Bacon wages:

• Contracts valued at $2,000 or less.
• Work not classified as construction, alteration, or repair.
• Administrative staff, office employees, and workers not performing manual construction tasks.
• Apprentices and trainees in DOL-registered programs may be paid at lower apprentice rates (see Apprentices section below).

Davis-Bacon wage rates

Davis-Bacon wage rates are the prevailing wages that the DOL determines for specific trade classifications in specific geographic areas. Contracting agencies pull the applicable wage determination from SAM.gov and incorporate it into the contract. Contractors must pay at least these rates: no exceptions, no negotiation with the worker.

Fringe benefits and overtime rules

Under Davis-Bacon, “wages” include both the base hourly rate and fringe benefits. Contractors can meet the fringe obligation in two ways. They can pay cash wages equal to the full prevailing rate. Or they can provide bona fide fringe benefits (health insurance, retirement, vacation pay) that cover the fringe component.

Overtime rules fall under the Contract Work Hours and Safety Standards Act (CWHSSA). Workers must receive 1.5x their basic rate for hours over 40 in a workweek. Fringe benefits are paid at the regular rate for overtime hours, not at the overtime multiplier.

How to calculate Davis-Bacon wages

1. Find the wage determination for your project at SAM.gov.
2. Identify the trade classification for each worker.
3. Note the basic hourly rate (BHR) and fringe benefit rate (FBR).
4. If you provide qualifying fringe benefits, pay the BHR in cash wages. If not, pay BHR + FBR entirely in cash.
5. Calculate overtime at 1.5x the BHR only. Do not apply the overtime multiplier to fringe.

Example: A journeyman carpenter with BHR $42.00 and FBR $14.50. Total prevailing wage = $56.50. If you provide $14.50 in qualifying benefits, pay $42.00 in cash. If you provide no benefits, pay the full $56.50 in cash.

What changed in 2024–2025: Davis-Bacon regulatory updates

Three developments since 2023 directly affect what Davis-Bacon requires on federal construction projects today: a court injunction blocking parts of the 2023 Final Rule, a 2025 executive order on contractor wages, and active repeal legislation in Congress.

2023 Davis-Bacon and Related Acts (DBRA) final rule: partial injunction (June 2024)

The DOL’s 2023 Final Rule overhauling Davis-Bacon regulations took effect on October 23, 2023. On June 24, 2024, the U.S. District Court for the Northern District of Texas issued a nationwide preliminary injunction blocking three specific provisions:

1. The material supplier/contractor distinction would have extended Davis-Bacon to material supply workers.
2. The on-site delivery truck driver provision would have required prevailing wages for drivers’ on-site time.
3. The “operation of law” provision would have imposed Davis-Bacon automatically when agencies omitted it from contracts.

All three blocked provisions have reverted to pre-2023 standards. The remainder of the 2023 Final Rule remains fully in effect, including updates to wage survey methodology, fringe benefit calculations, and contract coverage definitions.

Trump administration changes (2025)

Executive Order 14236 (signed March 14, 2025) revoked EO 14026, which had required federal contractors to pay a minimum wage of $17.75/hour. The older EO 13658 rate of $13.30/hour now applies only to contracts entered into between January 1, 2015, and January 29, 2022, that were not renewed after that date.

Critical for contractors: this executive order does NOT affect Davis-Bacon Act or Service Contract Act (SCA) prevailing wage requirements. If you work on a federally funded construction project over $2,000, you still owe full Davis-Bacon rates. The EO revocation only affected the executive-branch contractor minimum wage overlay.

In February 2025, the Trump DOL sought a 90-day stay of ongoing litigation challenging the 2023 DBRA amendments. A federal judge granted the stay, pausing litigation while the new administration reviews the case. Davis-Bacon compliance requirements remain unchanged during this period.

Legislative watch: Davis-Bacon Repeal Act

H.R. 8602 (119th Congress) and Senate companion S. 4477 would fully repeal Davis-Bacon wage requirements for federal construction projects.

Neither bill has passed. The Davis-Bacon Act is fully in effect.

The Congressional Budget Office estimates full repeal would reduce federal spending by $17.8 billion between 2025 and 2034.

Republican Policy Committee has called for repeal. No floor vote has been taken as of June 2026.

Contractors bidding on federal projects should plan for continued Davis-Bacon compliance.

State vs. federal prevailing wage laws

Federal law covers federally funded projects. State laws cover state-funded projects. California, New York, and Illinois cover more project types and pay higher rates than the federal Davis-Bacon.

California

California’s prevailing wage law applies to all public works projects over $1,000. The state requires contractors to register with the DIR (Department of Industrial Relations) and pay an annual registration fee to bid on public projects. California’s rates are often the highest in the country. 

The prevailing wage California rates are updated semiannually by the DIR. California’s Court of Appeals (Fourth District) upheld aggressive enforcement standards in Anton’s Services Inc. v. Hagen (November 2025).

New York

New York’s prevailing wage law applies to all public works projects with no minimum dollar threshold. New York runs its own wage determination process and typically produces rates higher than federal Davis-Bacon determinations. Separate provisions apply to building service employees, a category not covered under the federal Act. Certified payroll is required on all covered projects.

Illinois

Illinois’s Prevailing Wage Act applies to all public works projects with no minimum cost threshold. Three bills signed in 2025 expanded contractor obligations in material ways.

2025 legislative updates

HB 2488 (signed June 30, 2025): All contractors on Illinois prevailing wage projects must pay apprentices full journeyworker fringe benefits, regardless of union contract terms. Fringe benefit packages for apprentices may no longer fall below the journeyman rate in the same trade and locality.

HB 1437 (signed November 21, 2025): Delayed the full fringe benefit mandate for apprentices to July 1, 2026. IDOL continues to enforce on a case-by-case basis during the delay period, focusing on compliance assistance.

HB 1189 (signed August 14, 2025): Expanded the Illinois Prevailing Wage Act (IPWA) to include federally funded construction projects administered or controlled by an Illinois public body, when the Illinois prevailing wage rate equals or exceeds the applicable federal Davis-Bacon rate. Projects bid after August 14, 2025, must conform.

Illinois also increased certified payroll violation penalties to $1,000 (first offense) and $2,000 (subsequent offenses).

Oregon: off-site fabrication expansion (effective July 1, 2026)

Oregon HB 2688, signed July 31, 2025, expands Oregon’s prevailing wage rate law to cover certain off-site bespoke fabrication work made specifically for public works projects. Manufacturers producing prefabricated steel or custom assemblies for Oregon public construction jobs must now pay workers prevailing wage rates. Effective July 1, 2026.

This is a trend worth tracking. Oregon is the first state to codify it into law. Expect others to follow as prefab’s share of public construction work grows.

Which states have the highest prevailing wage rates?

• California: Top rates for commercial construction trades regularly exceed $80–$100/hour all-in (wage + fringe). DIR updates rates semiannually.
• New York: NYC and surrounding counties have among the highest construction wage rates in the country. Carpenter and ironworker all-in rates often exceed $100/hour.
• Illinois (Cook County): High-density urban construction rates in and around Chicago are consistently among the top nationally.
• Massachusetts: State wage determinations for Boston metro trades are among the highest in New England.
• Washington State: L&I prevailing wage rates in King County (Seattle) are among the highest in the Pacific Northwest.

Rates change regularly. Always verify current rates at the state labor agency before bidding.

Key differences between state and federal prevailing wage laws

The most important difference is the threshold. Davis-Bacon kicks in at $2,000 on federal projects. California starts at $1,000. New York and Illinois have no minimum at all. Every public works project is covered regardless of contract value.

• Threshold amounts: Davis-Bacon triggers at $2,000. California at $1,000. New York and Illinois have no minimum.
• Scope of coverage: State laws may cover more project types and worker classifications. Maryland’s law includes state-funded businesses, not just construction.
• Wage determination methods: States run their own surveys. In major metro areas (Chicago, NYC, Los Angeles), state rates consistently run higher than the equivalent federal Davis-Bacon rate.
• Enforcement and penalties: State agencies vary in enforcement aggressiveness. Illinois and California have among the most active enforcement programs in the country.

Certified payroll and recordkeeping

Every contractor on a Davis-Bacon covered project must submit certified payroll reports: a formal, weekly accounting of wages paid. Prevailing wages in construction trigger this requirement automatically. It is not optional. It is a federal requirement, and state laws typically mirror it.

The WH-347 form

The DOL’s Form WH-347 is the standard certified payroll report for federal projects. It documents, for each worker: name, Social Security Number (SSN), work classification, hours worked each day, hourly wage rates, fringe benefit amounts, and total gross wages. Contractors sign it under penalty of perjury.

Certified payroll must be submitted weekly to the contracting agency. The submission covers the prior work week. Late or inaccurate filings are themselves compliance violations.

Records that must be maintained

Under the Davis-Bacon and Related Acts, contractors must keep:

• Certified payroll reports (WH-347 or equivalent).
• Daily time and attendance records showing hours worked by project, by worker, and by classification.
• Wage determinations for each project.
• Fringe benefit documentation: proof of bona fide plan contributions.
• Project-specific documentation: contracts, change orders, subcontractor certifications.

Minimum retention period: 3 years from project completion. The DOL can audit up to 3 years back. State requirements may be longer.

What triggers certified payroll?

Certified payroll is required on all Davis-Bacon covered projects, meaning any federally funded construction contract over $2,000. The requirement extends to all subcontractors. A prime contractor is responsible for the certified payroll compliance of every sub on the job.

Split-shift scenarios require separate documentation for each classification and rate. This applies when a worker performs different classified tasks on the same day. This is one of the most common certified payroll errors and a top target in DOL audits.

Example: a concrete finisher who spends the morning placing and finishing slabs (Laborer Group 4 rate), then operates a ride-on power screed in the afternoon (Operating Engineer rate) needs two separate classification entries on the WH-347 for that day, each with the correct hours, rate, and fringe amount. One line at the wrong rate for the full day is a certified payroll violation, even if the total hours are correct.

Contractors tell us this is where things fall apart: “We call them split shifts, where we’ll have to put a worker under more than one cost code or wage rate for the same day. They may do four hours as a laborer and four hours as a skilled. Getting that right manually every week is a real problem.”

Apprentices and trainees under Davis-Bacon

Apprentices and trainees in DOL-registered programs may be paid below the prevailing journeyman rate. This is one of the few legitimate ways to reduce labor costs on prevailing wage work. Strict conditions apply.

How apprentices are paid

An apprentice may be paid at a percentage of the journeyman rate based on their apprenticeship year. A first-year apprentice might be paid 50–60% of the journeyman rate. The exact percentages come from the registered apprenticeship program’s wage schedule.

Fringe benefits are a separate matter. Even at reduced wage rates, apprentices must receive the fringe benefit package specified in the wage determination. Illinois contractors take note: after July 1, 2026, apprentice fringe benefits must equal the full journeyman fringe rate. See Illinois updates above.

Apprentice-to-journeyman ratio requirements

Davis-Bacon regulations limit the number of apprentices that can be employed relative to journeymen on a covered project. The ratio is set by the applicable registered apprenticeship program and enforced by the DOL. Typically, contractors cannot employ more than one apprentice for every one to three journeymen on site.

Exceeding the permitted ratio has a cost. Those apprentices must be paid at the full journeyman prevailing wage rate.

What qualifies as an approved apprenticeship program?

The program must be registered with the DOL’s Office of Apprenticeship or a recognized State Apprenticeship Agency. Union apprenticeship programs are almost always registered. Non-union programs can also qualify if they meet federal registration requirements.

Using an unregistered apprenticeship program is not a defense to a prevailing wage violation. Workers under unregistered programs must be paid at the full journeyman prevailing wage rate.

Compliance strategies for contractors

Contractors on prevailing wage projects face three core compliance obligations: accurate recordkeeping, managing labor costs within the rules, and understanding the cost of getting it wrong.

Record-keeping and regular audits

Accurate time records are the foundation of prevailing wages in construction compliance. Every certified payroll report is only as accurate as the underlying time data. Contractors who rely on paper time cards or manual entry consistently produce errors that become costly in DOL audits.

Run internal audits monthly at a minimum. Compare your certified payroll submissions against your time records and wage determinations. Look specifically for workers clocked under the wrong project or wrong classification. Contractors doing DOT and federal prevailing wage work tell us the stakes feel different at these rates. A few misclassified hours at $60/hour add up in a way that $18/hour never did.

Managing labor costs within the rules

Three legitimate tools for managing costs on prevailing wage work:

• Apprentices: Use DOL-registered apprentices at approved reduced rates where the ratio permits. Ensure fringe benefits are correctly calculated.
• Fringe benefits: Providing qualifying fringe benefit plans can reduce your cash wage obligation. Structure your benefits package to maximize the fringe credit.
• Project scheduling: Minimize overtime where possible. Overtime requires paying 1.5x the basic hourly rate; fringe benefits don’t get the overtime premium, but base wages do.

Penalties for non-compliance

• Back wages: The full difference between what was paid and what was owed, for every affected worker, for the full period of the violation.
• Debarment: Willful or repeat violators can be debarred from federally funded construction work for up to 3 years. Debarment applies to the contractor and related parties.
• Criminal liability: Falsifying certified payroll is a federal crime. Knowingly submitting false certifications can result in criminal prosecution.
• Contractor responsibility for subcontractors: Prime contractors are responsible for subcontractor compliance. If a sub violates prevailing wage requirements, the prime is exposed.
• State penalties vary: Illinois now imposes $1,000–$2,000 in civil penalties per certified payroll violation. California enforcement is among the most aggressive in the country.

How Workyard helps contractors manage prevailing wage compliance

Enforced in the field. Not chased from the office.

Workyard’s analysis of 280 contractor discovery calls found nearly 1 in 3 construction businesses identify labor compliance (including prevailing wages in construction, overtime rules, and payroll classification) as a primary operational risk. The problem isn’t ignorance of the law. It’s the data getting it wrong in the field before it ever hits the payroll system.

Four failure points we see repeatedly on prevailing wage projects:

• Workers clocking in under the wrong project. “They just pick their own job. If it’s a certified job, we have to go back and do all the legwork to figure out if they were actually on that job or not.”
• Yard or shop clock-ins misallocated to field work. Workers who start from the yard before driving to a certified jobsite get logged under the wrong cost code.
• Split-shift classification errors. A worker doing four hours as a laborer and four hours as an ironworker needs both rates documented separately. Manual processes almost always fail this.
• Manual certified payroll re-entry across multiple people. “She does time cards for the certified payroll lady, and then that goes again to somebody else for job costing. We’re just trying to find something that would be one stop.”

Green Wall Tech, a California drywall and plaster contractor, put it directly: “California wants it down to the minute. It wants an exact clock in; it wants an exact clock out. We needed a solution easy enough for guys that want almost zero administrative responsibility to meet those kinds of standards. And Workyard was that kind of solution.”

Workyard addresses each of these directly:

• GPS auto-assignment: Workers are automatically logged to the correct project when they arrive on site. No manual job selection means no wrong-project clock-ins.
• Multiple cost codes per day: Log split-shift workers under each classification at the correct rate within the same shift. The record is clean, defensible, and ready for certified payroll.
• Audit-ready time records: Every minute is GPS-verified. Your time data will survive a DOL audit.
• Automated payroll exports: Connect directly to QuickBooks and Gusto. Certified payroll data flows through once, not re-entered by three different people.

Over 50,000 construction pros trust Workyard for prevailing wage compliance.

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Related prevailing wage & labor law guides

This page is the federal pillar for Workyard’s prevailing wage content cluster. Use the guides below to navigate state-specific rates, rules, and certified payroll requirements.

Category	Article Title	Description
State PW	Prevailing Wage in California	Rates, rules, and certified payroll for CA public works
State PW	Prevailing Wage in New York	NYS wage schedules, certified payroll, and compliance
State PW	Prevailing Wage in Illinois	Illinois Prevailing Wage Act rates and 2025 updates
State PW	Prevailing Wage in Colorado	CQATA coverage, OSA wage determinations, and certified payroll
State PW	Prevailing Wage in Massachusetts	Massachusetts prevailing wage for public construction
State PW	Prevailing Wage in Washington State	Washington L&I prevailing wage rates and requirements
State PW	Prevailing Wage in New Jersey	New Jersey prevailing wage rates, public works thresholds, and certified payroll requirements
State PW	Prevailing Wage in Florida	Florida prevailing wage law, covered projects, and compliance for contractors
State PW	Prevailing Wage in Michigan	Michigan prevailing wage rates, LARA enforcement, and public works coverage
State PW	Prevailing Wage in Missouri	Missouri prevailing wage rates, Wage and Hour Division requirements, and certified payroll
State PW	Prevailing Wage in Nevada	Nevada prevailing wage rates, OSHA-covered projects, and Labor Commissioner requirements
State PW	Prevailing Wage in Ohio	Ohio prevailing wage law, covered contracts, and compliance for public construction
How-To	Prevailing Wage Determinations	Policies, processes, timelines, and more
Labor Law	California Labor Laws	Full California employment law guide for contractors
Labor Law	New York Labor Laws	New York employment law for construction contractors
Labor Law	Illinois Labor Laws	Illinois employment and labor law requirements
Labor Law	Texas Labor Laws	Texas employment law guide for field contractors
Labor Law	Florida Labor Laws	Florida employment law guide for contractors