Prevailing wage isn't optional. Get the compliance right or lose the bid.
Prevailing wage is the wage rate, including fringe benefits, that a wage determination sets for each worker classification on public works. When a project triggers federal Davis-Bacon, state and union (CBA) rates, you owe the highest of the three for every classification, and you must submit certified payroll weekly and keep records for three years or more.
Which wage rules apply to a public project?
Up to three wage regimes can apply to one public project: federal Davis-Bacon, state prevailing wage laws and union CBA rates. Federal Davis-Bacon Act (DBA) sets prevailing wages on federal contracts ≥ $2,000. Most states have their own "little Davis-Bacon" statutes — some stricter than federal. Union projects layer collective bargaining agreement (CBA) rates on top. When a job is funded with federal dollars on a state project with a CBA workforce, all three apply and you owe the highest of the three on every classification.
| Regime | Coverage | Trigger | Where to find rates | Penalty for non-compliance |
|---|---|---|---|---|
| DAVIS-BACON | Federal construction contracts of $2,000+. Includes "Davis-Bacon Related Acts" — federally-funded state/local projects. | Direct federal contract OR project receiving federal funding (HUD, FHWA, USDA, EPA grants). | SAM.gov / Wage Determinations Online (WDOL) — by county + construction type. | Back wages, debarment up to 3 years, contract termination. |
| STATE | State-funded public works. 26 states have prevailing wage laws ranging stricter than DBA (CA, NY, NJ) to threshold-only (KY, MO). | Varies by state. CA triggers at $1,000; NY has no threshold; KY only on projects $250K+. | State DOL websites. California: DIR.ca.gov. New York: labor.ny.gov. Each state issues its own determinations. | Civil penalties ($50-$200/day per worker), debarment (1-3 years), state contract bans. |
| CBA | Union signatory contractors. Wages, fringes, work rules from the collective bargaining agreement. | Project requires union labor (project labor agreement) OR your firm is a CBA signatory. | Local union hall / IBEW / UA / Carpenters / etc. Rates are public per local. | Grievance proceedings, contract back-charges, NLRB action for unfair labor practices. |
Rule of thumb: when in doubt, ask the awarding agency in writing for the applicable wage determination(s). Get the answer in your bid file. "I didn't know" isn't a defense the DOL accepts.
How do you comply with prevailing wage from bid to closeout?
Confirm coverage at bid time
Solicitation should list applicable wage determinations as exhibits. If absent — ASK before bid day. Document the response.
Lock in the wage rates
The determination in effect on bid opening (or 10 days before, for some procurements) is the rate locked for the project's duration. Updates to determinations do not apply mid-project.
Price labor at prevailing
Use the higher of federal, state, or CBA rate for each classification. Account for fringe benefits — payable in cash or as bona fide benefit contributions.
Classify workers correctly
Tradesman vs apprentice vs trainee vs laborer — wrong classification is the #1 audit finding. Apprenticeship ratios are enforced (usually 1:3 apprentice-to-journey).
Display posters
Federal projects: WH-1321 (Davis-Bacon poster) and the applicable wage determination must be posted on-site, visible to all workers, in English + relevant languages.
Submit certified payroll weekly
Form WH-347 (or state equivalent — CA uses DAS-140/142) due within 7 days of payday. One submission per pay period for every covered worker on every covered project.
Retain records 3+ years
Timecards, payroll registers, classifications, apprentice ratios. DOL audits can come 2-3 years post-completion. Cloud storage with version history beats a banker's box.
What is the WH-347 and what must it show?
The federal Statement of Compliance (WH-347) is the single most-audited document in public works. Get the form right and most DOL investigations close at the file review. Get it wrong and they pull worker interviews.
What every WH-347 must show
- Worker name + last 4 of SSN — full SSN goes on the Statement of Compliance; only last-4 on the payroll itself per DOL Field Operations Handbook 15j02.
- Work classification — exact title from the wage determination (e.g. "Carpenter — Form Setter" not just "Carpenter").
- Hours worked per day — broken out by day of week, separated into straight-time + overtime columns.
- Hourly rate paid — base wage plus fringe rate (or cash equivalent).
- Gross + deductions + net — itemized; "Other" deductions need a footnote per Sec. 5.5.
- Statement of Compliance — signed under penalty of perjury. Falsified statements = federal crime, 18 USC §1001.
Why DOL flags 4 in 10 payrolls
- Classification creep — worker doing carpenter work paid at laborer rate. Audit interviews surface this in 60 seconds.
- Apprentice without paperwork — paying apprentice rate without a registered apprenticeship enrollment certificate = full journey-rate liability for every hour worked.
- Fringe payment mismatch — fringe paid in cash but reported as benefit contribution (or vice versa). Both are legal; mixing them up isn't.
- Owner-operator on payroll — owners performing covered work must be on payroll at prevailing rate (10% min ownership exception is narrow and contested).
- Missing weeks — "no work performed" weeks still require a payroll showing zero hours, not a skip.
- Subcontractor payrolls — primes are responsible for collecting + submitting payrolls from every covered tier of subs. "I didn't get it from my sub" doesn't absolve you.
Which mistakes turn into back-wage findings?
Misclassifying journeymen as helpers
"Helper" is not a wage classification on federal Davis-Bacon (eliminated 1991). Anyone doing trade work is at journeyman rate. Cost when caught: 6-18 months of back wages × everyone who worked under that class.
Treating fringe as bonus
If fringe is paid in cash, it must be on every check, every week, at the fringe rate — not as a year-end bonus. "Annualization" rules apply to defined benefits but cash fringes must flow through current payroll. Common back-wage trigger.
Site of work overreach
Davis-Bacon covers work at the "site of the work" — usually the project site plus dedicated batch plants. A regular concrete plant supplying multiple projects is NOT covered. Don't pay prevailing on the wrong workers — and don't UNDERPAY the right ones.
Apprenticeship ratio violations
Most determinations allow apprentices at reduced rate only when paired with journeymen at a specified ratio (typically 1:3 to 1:5). Exceed the ratio and excess apprentices must be paid full journey rate retroactively.
Travel time + per diem confusion
Travel from home to job site = not covered. Travel from a staging area or shop to the actual site = potentially covered work. Per diem can offset fringes only under specific bona-fide-benefit rules — most attempts fail audit.
No additional classification request
If the wage determination doesn't list the classification you need (e.g. specialty trade), you must file SF-1444 to add it via conformance process — BEFORE the worker starts. After-the-fact conformances rarely succeed.
What does it actually cost to get this wrong?
Beyond direct penalties: insurance premiums spike, bonding capacity gets pulled, and the firm name lands on debarment lists searchable by every contracting officer for the next 3 years. State debarment can run longer.
Compliance is a documentation game.AI makes the documents bulletproof.
Most prevailing wage findings come from document inconsistency, not deliberate underpayment. Worker classified as carpenter on Tuesday and laborer on Thursday. Apprentice paired with journeyman one week, alone the next. Fringe paid in cash on some payrolls and as a benefit contribution on others.
Trueleveler's Contract Review engine reads the wage determination, flags classification mismatches in your draft bid, and surfaces the apprentice ratio you committed to. The Pay App Review engine cross-references certified payrolls submitted to date against the contract wage determination — same way an auditor would, before they ever arrive. The PM Handoff engine compiles every wage determination, certified payroll file, and posting-compliance check into one closeout package the awarding agency signs off on.
You still need a compliance officer. But the documents they're defending are clean from week one.
See Trueleveler pricing — Founding 25 · $99/mo →Public works is a documentation business.
Show up audit-ready.
Compliance isn't the place to wing it. Bring your wage determination + one certified payroll to a 15-minute call. We'll show you how Trueleveler flags the classifications + fringe issues before they become DOL findings.
Book a 15-minute walkthrough →Sources
- Davis-Bacon and Related ActsU.S. Department of Labor, Wage and Hour DivisionThe Labor Department pages on prevailing wage rules for federal and federally assisted construction work.
- 29 CFR Part 5: Labor Standards on Federally Financed and Assisted Construction ContractsElectronic Code of Federal Regulations, Office of the Federal RegisterThe regulation that carries out Davis-Bacon: coverage, wage determinations, payrolls and enforcement.
- Prevailing Wage RequirementsCalifornia Department of Industrial RelationsCalifornia’s prevailing wage requirements and rate determinations for public works.