What is a prevailing wage, and when does it apply?

• A. A voluntary bonus program; private projects
• B. A wage standard for public works projects; applies on applicable public construction
• C. It applies only to union shops
• D. It is the minimum wage for all workers on site

Answer: (B)

Prevailing wage means a wage rate set for specific trades in a given locality that must be paid on public works projects. It applies whenever a construction project is funded or required by government contracts, so on applicable public construction the contractor must pay workers at least the prevailing wage and typically provide the associated fringe benefits. The idea is to ensure workers on public projects are paid fair, local-standard wages for their craft and to prevent underbidding on government work.

This isn’t a voluntary bonus program, nor is it limited only to union shops, and it isn’t simply the minimum wage for everyone on site. It governs public works contracts and depends on the job classification and location, rather than being a universal on-site minimum.