Prevailing Wages California
California Prevailing Wage Requirements
California Labor Code requires that all workers employed on "public works" be paid not less than the general prevailing rate of per diem wages applicable to the trade or craft of their work. This is true whether a contractor or subcontractor employs the worker in performing the work required by a contract for public work.
"Public works" is defined in the Labor Code to include all construction, alteration, demolition, installation, maintenance, or repair work done under contract paid for in whole or in part out of public funds. This can also include pre- and post-construction activities related to a public works project.
These rates originate in the Department of Industrial Relations (DIR) of the State, which makes the official announcements. A vast spectrum of prevailing wage rates are included in these releases, which vary according to the nature of work conducted and the geographical region of operation. These rates are subject to pre-determined and periodic increases.
These documents present the rates applicable to diverse worker classifications such as Laborers, Carpenters, Plumbers, and Operators.
Prevailing Wage Determinations
The California Labor Code (under section 1774) stipulates that the wages and fringe benefits dispensed to workers engaged in the execution of a contract must not be less than the "prescribed prevailing rates of wages." These specified rates are contained in the General Determinations and apply to the actual nature of work performed by individual workers.
Understanding the Basic Hourly Rate versus the Total Rate
General Determinations comprise both the Basic Hourly Rate and the Total Hourly Rate for each location and classification. California law mandates employers to provide the Basic Hourly Rate as the minimum wage for every hour worked. There are exceptions to this rule and eMars, the best payroll compliance software, can accommodate these exceptions.
The Total Hourly Rate encompasses the Basic Hourly Rate and the extra remuneration for "employer payments." These payments typically cover fringe benefits like health and welfare, vacation/holiday, apprentice training and pension.
Employers are free to either directly pay these fringe benefits as part of wages or to acquire an offset for the "actual cost" of the benefit offered to the employee, which was funded into a bona fide health, pension, vacation, or fringe benefit plan. In either case, the total remuneration offered by the employer to the employee must align with the Total Hourly Wage stipulated by the Director in the General Determination.
View California's industry-specific wage rates on the official DIR site.
What Are California's Prevaling Wage Exemptions
In California, prevailing wages are the norm for most public works projects and their workers. However, exemptions exist to this rule. Here's a clear breakdown of who or what qualifies for exemption:
Labor Compliance Program (LCP): If the entity overseeing a public project has its own LCP, prevailing wage requirements don't apply until construction costs exceed $25,000. For maintenance, demolition, or general assistance, prevailing wages aren't mandatory unless the project surpasses $15,000.
Federal Government Control: Projects under 100% federal funding and management are exempt from state prevailing wage laws. Partial federal funding usually entails compliance with prevailing wage guidelines.
Volunteers and Non-Profits: Individuals volunteering for non-profits or public projects are not subject to prevailing wages. While not contracted by the awarding body, they may still receive reasonable accommodations.
Professional Personnel: Prevailing wage regulations target trade and construction roles, not professionals outside these fields. Architects and similar exempt professionals fall under this category.
California Prevailing Wage FAQs
Q What is Prevailing Wage?
The prevailing wage is a base pay rate established by State and Federal law to ensure that all construction workers engaged in public works projects are paid adequately for the craft they are working in. It is a combination of an hourly pay rate plus fringe benefits. Payment of the prevailing wage ensures that contractors will hire qualified workers and the City will therefore receive quality work.
Q Who is subject to receiving prevailing wages?
All construction personnel working on a publicly-funded project must receive prevailing wages.
Q What about apprentices?
State law requires that apprentices be employed on all public works projects. If no apprentices are available or the work is not in an apprenticeable craft, proper documentation must be submitted to indicate this. All apprentices must be in a State approved program and must be in an appropriate ratio to the hours worked by the of journeymen present. If the project has federal funding, apprentices must be in a federally approved program.