Prevailing Wage on a Public Job: What You Owe the Crew and What You File

$2,000 is the line. A federal contract over $2,000 to build, alter, repair or paint a public building brings the Davis-Bacon prevailing wage with it, and so does most construction paid for with federal grants or loans. If you work on one, even as a sub, you pay each worker at least the rate and fringe listed for their trade, figure overtime on the base rate, and file a certified payroll every week. Many states add their own prevailing wage law for state- and city-funded jobs, sometimes at a lower trigger.

The Davis-Bacon Act is a federal law, at 40 U.S.C. 3141–3148, that sets minimum wages and fringe benefits for laborers and mechanics on federal construction contracts. The Department of Labor’s Wage and Hour Division enforces it, under the rules in 29 CFR parts 1, 3 and 5. It is a legal requirement, not an option you can bid around. The “Related Acts” are federal funding laws that carry the same wage rules into work a city, school district or housing authority pays for with federal money.

Is your job covered by prevailing wage?

Start with where the money comes from, because that decides which law applies.

• A federal agency contract over $2,000 for construction, alteration or repair, including painting and decorating, is covered by Davis-Bacon.
• A city, county or school job funded with federal money is usually covered through a Related Act. The bid documents will include the Davis-Bacon clauses and a wage determination.
• A job paid for with state or local money falls under your state’s own law, if it has one. California’s applies above $1,000.
• A janitorial or grounds-maintenance service contract with a federal agency comes under a different law, the Service Contract Act, above $2,500. It doesn’t apply to construction, alteration, repair or painting.

The rules cover laborers and mechanics working on the site, and that includes every subcontractor’s crew. Being a sub doesn’t take you outside them.

Reading the wage determination

The wage determination is the price list you bid against. It’s published on SAM.gov by county and by construction type: building, residential, heavy or highway. It gives each trade classification a basic hourly rate and a fringe amount. Use the determination attached to the bid package, not one you look up yourself, and note its number and modification number. They go on every certified payroll.

Workers are paid by the classification of the work they actually do, not their title or experience. The rates can surprise you either way. In one current Harris County, Texas, building determination (TX20260253, modification 1, dated May 18, 2026), electricians are listed at $38.50 an hour plus $10.71 in fringe. Painters on the same determination are $17.24 plus $4.41. Classifications can be narrow too: the same sheet lists one rate for sheet metal workers installing HVAC units and a much higher one for those installing ductwork.

If your kind of work isn’t listed, the contracting officer has to ask the Department of Labor for an added classification, called a conformance. Raise it before you start, not after.

What a covered week costs: a worked example

Take an illustration, not a real job. You send an electrician to a covered building job in Harris County for a 45-hour week, using the rates above. Normally you pay him $32.00 an hour, and his health plan costs you $650 a month. The prime contract is over $100,000, so the overtime rules of the Contract Work Hours and Safety Standards Act apply: time and a half after 40 hours, figured on the basic rate.

The covered week costs $621.95 more, about 37%, before payroll taxes and insurance on the extra pay. That’s the gap your bid has to carry for every worker-week.

Overtime and the health plan

Two details in that table save money if you get them right. First, overtime is time and a half on the basic rate only, $57.75 here, with the fringe added at its straight amount. 29 CFR 5.32 keeps fringe out of the overtime base. Multiplying the whole $49.21 by 1.5 isn’t a violation, but it pays out money you didn’t have to.

Second, a health plan you already pay for only counts for part of the fringe. The credit has to be spread over every hour the worker works in a year, private jobs included, under 29 CFR 5.25. At $650 a month over 2,080 hours, that’s $3.75 an hour. You pay the other $6.96 of fringe in cash. The total stays $2,310.70: the plan only cuts the cash you hand over. A bid that counts your health plan as covering the whole fringe comes in low.

The range runs the other way as well. If you already pay a painter $22.00 an hour in cash, you’re above that determination’s $21.65 total, and the extra cost of the job comes mostly from the paperwork.

Certified payroll, week by week

Paying the right rate isn’t enough. You have to show it every week, in writing, under 29 CFR 5.5:

1. Pay at least once a week. The Act requires it for everyone on the site.
2. File a certified payroll for every week with covered work, numbered from 1, with the last one marked final. Subs send theirs to the prime, and the prime answers for every tier below it.
3. Use Form WH-347 or your own format. The WH-347 is the Department of Labor’s optional form, revised in January 2025. It has columns for fringe credited to a plan and cash paid instead of fringe. Any format works if the certification wording matches.
4. Leave full Social Security numbers off. Weekly payrolls carry the last four digits or another identifying number only.
5. Sign the Statement of Compliance, by hand or with a valid electronic signature. It certifies that everyone was paid at least the rates for the work they actually did. A false certification can lead to prosecution under the False Claims Act.
6. Keep the records for three years after all work on the prime contract is finished.

Apprentice rates apply only to apprentices individually registered in a Department of Labor or state-recognized program, within the allowed ratio. Anyone else doing the work gets the full journeyworker rate. If it goes wrong, the consequences include back wages, contract payments withheld and liquidated damages of $33 per worker per day for unpaid overtime. Serious cases can mean three years of debarment.

State prevailing wage laws

On state- and city-funded work, your state’s law decides the rules, and they differ a lot. Some states have none. A few examples, each checked at the state’s own site:

Fees and thresholds change, so read your state labor department’s page before you bid. The Department of Labor’s own state summary dates from 2023 and still lists Michigan as repealed, so it isn’t a safe guide on its own.

Should you bid it?

A prevailing wage job is worth bidding when you can price three things before you submit: the wage determination’s rate and fringe for each classification you’ll use, overtime on the base rate only, and the hours someone will spend on weekly certified payroll and any state portal. If the determination’s rates sit above your normal pay, the labor line has to rise to match, as the example showed. If they sit below it, your real cost is the paperwork.

Public work usually comes with bonding requirements too; our guide to bonds on US public work covers that side. For the payroll basics behind any of this, see what hiring your first employee costs, and our guide to worker classification for the employee-or-contractor question on any crew. More is in our USA licensing and regulations guides.