What to Know

Prevailing Wage in California

Prevailing Wage. Los Angeles, California.

If you work on a government-funded project and your employer didn't pay you the full prevailing wage you are entitled to, you should contact an employment lawyer immediately. We invite you to call us at 888-762-0297 to discuss your case.

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What is a prevailing wage?

In California, prevailing wage is the rate of pay that contractors and subcontractors must pay their workers when doing business with government agencies. Prevailing wage is a fixed hourly rate predetermined for eligible occupations employed in the performance of public works projects.

The rate of prevailing wage is typically based on rates established by collective bargaining agreements.

In California, prevailing wage determinations are updated twice a year, on February 22 and August 22. Prevailing wages vary depending on the location of the public works project, the type of work performed, and job classification.

What type of projects uses prevailing wages?

California law requires that workers employed on public works projects are paid prevailing wages. Public works projects are projects funded in whole or in part out of public funds. Examples of public works projects include:

Public housing, including HUD housing
Parks
Recreational facilities
Healthcare institutions, including hospitals
Governmental structures, including courthouses and jails
Public education facilities, including schools, colleges, and universities
Bridges and roads
Power facilities
Airports

Generally, prevailing wages projects include repair work, construction, pre-construction, installation, design, alteration, and demolition. The only exception is work done directly by a public utility company (see California Labor Code § 1720 for more info).

What kind of workers receive prevailing wages?

All workers employed on public works projects must receive prevailing wage determined according to (a) the location of the project and (b) the type of work performed. Typically, the following workers who work on public works projects receive prevailing wages:

Carpenters
Electricians
Laborers
Painters
Plumbers
Blacksmiths
Ironworkers
Landscapers
Roofers
Operating engineers
Fence builders
Bricklayers
Cement masons
Mechanics
Pavers
Asbestos workers

That is not the complete list of job classifications and occupations that may be eligible for prevailing wages in California. (See California Department of Industrial Relations website for more info.)

Who is eligible for prevailing wages?

Under California Labor Code § 1774, all workers employed on public works projects are eligible for prevailing wages. The requirement applies to all public works projects worth over $1,000. All workers employed in the execution of a qualifying public works contract are eligible for prevailing wage. Contractors or subcontractors cannot pay eligible workers less prevailing wages than the rate determined by the Director of the California Department of Industrial Relations.

Do prevailing wage workers get paid overtime?

Yes, California’s overtime laws, including California Labor Code § 510, apply to prevailing wage workers. Thus, for qualifying public workers projects, any prevailing wage worker who works over 8 hours per day or 40 hours per week must get paid overtime.

For public work projects, employers must pay overtime to eligible workers as specified by the California Department of Industrial Relations. You can see current prevailing wage rates for each job classification on the DIR’s website.

How is overtime paid on a prevailing wage project?

Overtime pay is paid at 1.5 times the basic rate of pay if the worker works more than 8 hours in a workday. When employees work more than 12 hours in a workday or over 8 hours on the 7th day, they must be paid double time.

Travel time provisions for prevailing wages

Travel time is usually compensable time for workers eligible for prevailing wages. It means that an employee who performs work on a public works project must be paid for the time spent traveling from a separate location to the location of the project. Pay for travel may also apply to the time traveled between multiple public works projects during the workday.

Will I get paid for time spent hauling construction materials?

Depending on the circumstances, workers may get paid for the time spent hauling construction materials from a separate location to the public works site. Under California Labor Code § 1720.3, construction materials include gravel, sand, soil, asphalt, concrete, rocks, construction debris, and excavation materials.

Offshore projects provisions

In 2014, the California Court of Appeal held that the state’s prevailing wage law is not applicable to workers who produce or fabricate materials for a public works project at an off-site manufacturing facility unless the facility is exclusively dedicated to the project.

Thus, workers who perform fabrication work at permanent, off-site facilities are exempt from California’s prevailing wage law because workers at off-site facilities are considered material suppliers rather than on-site workers.

What are the typical prevailing wage violations?

Common examples of violations of California’s prevailing wage laws include:

Failure to pay the correct rate of prevailing wages
Worker misclassification
Inadequate recordkeeping
Failure to report all workers
Underreporting workers’ hours
Failure to pay overtime or fringe benefits
Failure to pay for travel time

California law imposes serious penalties for prevailing wage violations. Workers who are underpaid or not paid prevailing wages can file a complaint with the California Department of Industrial Relations.

Penalties for not paying prevailing wages correctly

An employer who violates California’s prevailing wage laws will be subject to penalties such as:

Restitution of unpaid wages plus interest
The payment of liquidated damages to workers
A monetary penalty per unpaid worker
Reimbursement for the costs incurred by the DIR during its investigation
Criminal prosecution for willful violations
Disbarment from public works projects for a certain number of years

The penalties for failing to pay prevailing wages correctly vary depending on the number of violations, the number of underpaid workers, and other factors. Under California Labor Code § 1775, employers face penalties of up to $200 per underpaid worker, per day, for failing to pay prevailing wages correctly.

Special reporting requirements for employers

Contractors and subcontractors on public works projects must submit certified payroll records to the Labor Commissioner using the special payroll reporting system.

The Public Works Payroll Reporting Form by the California Department of Industrial Relations states that any payments required by prevailing wage determinations “must be separately listed.” In addition to special reporting requirements for employers who pay prevailing wages to eligible workers, employers must also maintain accurate payroll records.

Prevailing wages: Federal laws

Under the Davis-Bacon Act, the federal law that governs prevailing wages, employers must pay prevailing wages when their employees work on public works projects funded by the federal government. Common examples of federally-funded public works projects include construction or repair of public buildings and construction of public roads, among others.

The Davis-Bacon Act requires that any contract worth over $2,000 and funded by the federal government contain a clause setting forth the prevailing wage to various classifications of workers employed under the contract.

States, including California, must abide by the federal Act when a public works project within the state is funded by federal funds.

Prevailing wages: California state laws

Under California law, employers must pay prevailing wages to workers employed under a public works contract at a rate not less than the rate determined by the California Department of Industrial Relations. The requirement does not apply to contracts worth less than $1,000.

Prevailing wage determinations in California vary depending on the work performed by different job classifications. If an employer pays less than the specified prevailing rates of wages, they can be held responsible for violating California’s prevailing wage laws.

For more information

Prevailing wage laws are complex and constantly changing.

If you work on a prevailing wage project and face issues with your base pay, overtime, or travel expenses, call us at 888-762-0297 to discuss your situation.

Consultations are free.

We represent clients in Los Angeles, Sacramento, San Diego, San Bernardino, Santa Clara, San Francisco, San Jose, Oakland, Orange County, and Northern and Southern California.

Last updated on September 24, 2021.