What is Prevailing Wage?

Davis-Bacon helps level the playing field on public projects

To pay Prevailing Wage means to pay construction workers who are working on a qualifying project the standard of what similar construction workers make in a certain geographical area. This compensation includes hourly wages, overtime and benefits provided by the employer. The intention of Prevailing Wage laws are to ensure contractors do not “low-ball” their bid on a project. This essentially levels the playing field when it comes to bids and places value on a workforce who performs their work correctly the first time. It forces contractors to compete on the basis of who can best train, best equip and best manage a construction crew.

State and local Prevailing Wage laws ensure local labor is used on local community projects. When local labor is used, the money used to pay the construction workers is reinvested back into the community where they live and patronize local businesses. Federally funded construction projects are covered under the Davis-Bacon Act, which like Prevailing Wage, require construction contractors who work on publicly funded projects to pay construction workers at least the Prevailing Wages and benefits in the area in which they are working.

The Benefits of Prevailing Wage

Enacted in 1961, the Pennsylvania Prevailing Wage mandates local tradesmen and tradeswomen earn a fair wage on public projects. By compensating construction workers fairly, the local area benefits.

Paying Prevailing Wage ensures publicly funded construction projects are completed by highly skilled and highly trained construction workers.

IBEW Local 163 believes Prevailing Wage is not only good for all construction workers, but it benefits the entire Pennsylvania construction industry. When Prevailing Wage is paid, workers produce a higher quality product and families are given a greater opportunity to be financially successful.

Paying Prevailing Wage also provides a boost to the local economy. When local construction workers earn Prevailing Wage, they have more income to spend within their community – and unlike transient out-of-state construction workers, who send their paychecks back home – local construction workers spend locally, which benefits the local economy.

Multiple studies have proved Prevailing Wage laws do not increase the cost of publicly funded projects. Contrary to what some may claim, paying Prevailing Wage has been proven to lower total project costs due to the high quality of work performed by contractors, who pay Prevailing Wage.