Prevailing Wage Glossary
Key terms used in Davis-Bacon Act and Service Contract Act compliance.
- Prevailing Wage
- The rate of wages and fringe benefits paid to a majority of workers in a particular trade or occupation in a specific geographic area. Established by the DOL through wage surveys and published in wage determinations. Contractors on covered federal contracts must pay at least these rates.
- Wage Determination (WD)
- An official document issued by the Department of Labor Wage and Hour Division specifying minimum wage rates and fringe benefits for each trade classification in a specific county and construction type. Incorporated into federal contracts by the contracting agency.
- Fringe Benefit
- Benefits paid to workers in addition to base hourly wages, including health and welfare insurance, pension, vacation pay, and apprenticeship training. Under Davis-Bacon, the total hourly cost (base + fringe) must meet the prevailing wage. Employers may pay fringe as cash or through bona fide benefit plans.
- Total Package
- The sum of the base hourly rate plus the hourly fringe benefit rate. Also called the "total hourly cost" or "prevailing wage rate." This is the minimum hourly labor cost contractors must incur for each covered worker.
- Conformance
- The process of adding a new trade classification and wage rate to an existing wage determination when work requires a classification not listed in the applicable WD. Contractors submit a conformance request (SF-1444) to the DOL for approval. The new rate must bear a reasonable relationship to existing WD rates.
- Craft Classification
- A specific occupational category defined in a wage determination, such as Electrician, Plumber, or Carpenter. Each craft classification has its own prevailing wage rate within a WD.
- Davis-Bacon Act
- Federal law (40 U.S.C. §§ 3141–3148) enacted in 1931 requiring payment of locally prevailing wages on federal construction contracts. Named after Senators James Davis and Robert Bacon. Applies to contracts of $2,000 or more for construction, alteration, or repair.
- Service Contract Act (SCA)
- The McNamara-O'Hara Service Contract Act (41 U.S.C. §§ 6701–6707), which requires payment of prevailing wages on federal service contracts exceeding $2,500. Covers service employees (not construction workers). Administered by the DOL Wage and Hour Division.
- More than 60 federal statutes that apply Davis-Bacon prevailing wage requirements to federally assisted (not just direct federal) construction contracts. Includes the Federal-Aid Highway Act, Housing Act, and others. Collectively known as DBA/DBRA.
- Collective Bargaining Agreement (CBA)
- A negotiated contract between a union and an employer specifying wages, benefits, and working conditions. Under SCA, if a successor contractor performs the same work at the same location, they must honor the predecessor contractor's CBA wages for one year.
- WH-347
- The DOL Form WH-347 (Payroll), used to submit certified payroll records on Davis-Bacon covered projects. Must be submitted weekly to the contracting agency. Shows worker name, trade, hours worked, wage rate, fringe payments, and deductions.
- Apprentice
- A worker enrolled in a DOL-registered or state-approved apprenticeship program. Apprentices may be paid a lower rate (percentage of journeyman rate) as specified in the apprenticeship program standards. Must be registered — informally labeled apprentices may not qualify for reduced rates.
- Debarment
- Exclusion from contracting with the federal government, typically for 3 years, as a consequence of willful violations of Davis-Bacon or SCA. The Comptroller General of the United States maintains a debarment list.
- Certified Payroll
- A payroll statement signed by the contractor under penalty of perjury affirming that workers were paid the prevailing wages shown. Required weekly on Davis-Bacon projects. Failure to submit or falsifying certified payroll records is a federal crime.
- Health & Welfare (H&W)
- A component of fringe benefits covering medical insurance, dental, vision, and related benefits. Under SCA, the H&W rate is set annually by DOL (e.g., $4.98/hr in 2024) and is the primary fringe requirement. Under Davis-Bacon, H&W is listed separately in each wage determination.