Prevailing Wage Determinations establish the wage rates that must be paid to workers on qualifying projects, based on local standards set by the Department of Labor, ensuring compliance with fair compensation practices. Click on a question to read the answer.
Under the statute and the final regulations, a prevailing wage is the combination of the basic hourly wage rate and any fringe benefits listed in an applicable wage determination, as determined by the Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40 of the United States Code, also known as the Davis-Bacon Act. Taxpayers may comply with the prevailing wage provisions by ensuring that each laborer and mechanic performing construction, alteration or repair of a facility is paid the applicable prevailing wage for the classification of work performed entirely as cash wages or by a combination of cash wages and employer-provided bona fide fringe benefits.
General wage determinations are published by the Wage and Hour Division of DOL and available online at the System for Award Management website. If a taxpayer, contractor or subcontractor would like more information on wage determinations, the Wage and Hour Division has published a guide to understanding wage determinations PDF. For more information, please visit DOL’s Prevailing Wage and the Inflation Reduction Act.
If there is no general wage determination for the geographic area of the facility, taxpayers, contractors, or subcontractors may request a supplemental wage determination from the Wage and Hour Division of the Department of Labor. The taxpayer, contractor, or subcontractor should send requests for supplemental wage determinations to the U.S. Department of Labor at, U.S. Department of Labor, Wage and Hour Division, Branch of Construction Wage Determinations, Washington, D.C. 20210, or by email to iraprevailingwage@dol.gov.
A taxpayer, contractor, or subcontractor should make requests for a supplemental wage determination no more than 90 days before the taxpayer expects to execute the contract for the construction, alteration, or repair of the facility with a contractor. In the absence of a contract, the taxpayer, contractor, or subcontractor should make such requests no more than 90 days before construction, alteration, or repair of the facility starts.
Supplemental wage determinations issued by the Wage and Hour Division are effective for 180 calendar days from the date such determinations are issued. If a supplemental wage determination is not incorporated into the contract (or, in the absence of a contract, if construction has not started) during the 180-day period a new supplemental wage determination will need to be requested.
The request for a supplemental wage determination should contain all relevant information, including: the name of the taxpayer, contractor, or subcontractor requesting the supplemental wage determination or wage rate; the general wage determination(s), if any, applicable to construction, alteration, or repair of the facility; a description of the work to be performed, including the type(s) of construction involved and, if the project involves multiple types of construction, information indicating the expected cost breakdown by type of construction; the geographic area in which the facility is being constructed, altered, or repaired, including the name and address of the facility (if known); the date the taxpayer expects to enter into a contract with a contractor for which a supplemental wage determination is needed; the start date of construction, alteration, or repair at the facility; the labor classification(s) needed for performance of the work on the facility (excluding those for which wage rates are available on an applicable general wage determination); the duties to be performed by each such labor classification on the facility; the proposed wage rate, including any bona fide fringe benefits, for each such labor classification; any additional relevant information otherwise required by forms and instructions published by the U.S. Department of Labor; and any additional information the taxpayer, contractor, or subcontractor wants the U.S. Department of Labor to consider.
If the applicable general wage determination does not include all of the labor classifications that will be needed for the construction, alteration, or repair of the facility, taxpayers, contractors, or subcontractors may request rates for an additional classification from the Wage and Hour Division of the Department of Labor. The taxpayer, contractor, or subcontractor should send requests for prevailing rates for additional classifications to the U.S. Department of Labor at, U.S. Department of Labor, Wage and Hour Division, Branch of Construction Wage Determinations, Washington, D.C. 20210, or by email to iraprevailingwage@dol.gov.
A request for prevailing wage rates for additional classifications can be made any time after a contract for the construction, alteration, or repair of a facility has been executed between the taxpayer and a contractor. In the absence of a contract, the taxpayer, contractor, or subcontractor should make such requests no more than 90 days before construction, alteration, or repair of the facility starts. If the taxpayer, contractor, or subcontractor cannot reasonably determine prior to execution of the contract between the taxpayer and the contractor or prior to the start of the construction, alteration, or repair work that an additional classification and wage rate is necessary, the taxpayer, contractor, or subcontractor should make such request as soon as practicable after determining that an additional classification and wage rate is necessary. Any wage rate for an additional classification that is issued applies from the earlier of the date of issuance or the first day in which work in the additional classification was performed.
The request rates for prevailing rates for an additional classification should contain all relevant information, including: the name of the taxpayer, contractor, or subcontractor requesting the supplemental wage determination or wage rate; the general wage determination(s), if any, applicable to construction, alteration, or repair of the facility; a description of the work to be performed, including the type(s) of construction involved and, if the project involves multiple types of construction, information indicating the expected cost breakdown by type of construction; the geographic area in which the facility is being constructed, altered, or repaired, including the name and address of the facility (if known); the date of execution of the contract with a contractor for which a prevailing wage rate for an additional classification is needed; the start date of construction, alteration, or repair at the facility; the labor classification(s) needed for performance of the work on the facility (excluding those for which wage rates are available on an applicable general wage determination); the duties to be performed by each such labor classification on the facility; the proposed wage rate, including any bona fide fringe benefits, for each such labor classification; any additional relevant information required by forms and instructions published by the U.S. Department of Labor; and any additional information the taxpayer, contractor, or subcontractor wants the U.S. Department of Labor to consider.
Yes. If construction, alteration, or repair of the facility takes place in more than one locality (i.e., if an applicable wage determination does not cover the entire geographic area in which construction of the facility will take place), then the taxpayer, contractor, or subcontractor must use the applicable wage determination for the work performed in each geographic area. A taxpayer also is permitted to request a supplemental wage determination with respect to the facility and pay the rates determined by the DOL pursuant to the request. Additionally, more than one wage determination may be applicable where two or more construction types (e.g. Heavy and Building) apply to the construction, alteration or repair of a facility.
The applicable wage determination is the wage determination in effect at the time a contract for the construction, alteration, or repair of the facility is executed by the taxpayer and a contractor. If a taxpayer executes separate contracts with more than one contractor with respect to the construction, alteration, or repair of the facility, then for each such contract, including work performed by subcontractors pursuant to that contract, the applicable wage determinations are those in effect at the time the contract is executed by the taxpayer and the contractor. If no contract exists with respect to the construction, alteration, or repair of the qualified facility (or if the date of execution of the relevant contract cannot be determined), the applicable wage determinations are those in effect at the time the construction, alteration, or repair work starts.
Taxpayers who perform any alteration or repair of a facility after the facility is placed in service must use the applicable wage determination in effect at the time the contract for the alteration or repair work is executed by the taxpayer and a contractor.
The applicable general wage determination generally remains valid for the duration of the work performed with respect to the construction, alteration, or repair of the facility by the taxpayer, contractor, or subcontractor. Additionally, taxpayers need to update the applicable general wage determination when work on a facility is changed to include additional construction, alteration, or repair work not within the scope of work of the original contract, or to require work to be performed for an additional time period not originally obligated, including where an option to extend the term of a contract for the construction, alteration, or repair is exercised. A new applicable general wage determination is not required if the contractor is simply given additional time to complete its original commitment or if the additional construction, alteration, or repair work in the modification of the contract is merely incidental.
If a taxpayer enters into a contract for alteration or repair work over an indefinite period of time that is not tied to the completion of any specific work, the applicable general wage determinations must be updated annually based on the contract execution date.
