What does “Prevailing Wage Rate” mean?

Posted on Posted in Law

With the cutthroat competition among contractors and subcontractors, the hourly wage rates of employees are often sacrificed. Thus, the California Labor Code mandates employers involved public works to pay their employees with the State-determined prevailing wage rate to protect employees working on public construction projects against unfair compensation. Under the Prevailing Wage Law, all contractors are required to follow a uniform wage rates when bidding on a public works project.

Prevailing wage rate specifies the minimum hourly rate entitled for workers engaged in specific craft, work classification, job description, or type of work within the city or immediate labor market area. Hourly rates in a given community are usually determined by the Director of the California Department of Industrial Relations or after a collective bargaining agreement by all stakeholders. If a specific line of work or craft does not have a single rate, then the average rate being paid to the majority of workers becomes the default prevailing wage.

Under the state labor laws, it is the responsibility of the employer to ascertain their compliance with current prevailing wage rates. Failure to comply with specified hourly rates for specific worker classifications can be a valid ground for a labor dispute or claim. Some of the common mistakes employers, intentionally or unintentionally, tend to make include the following:

• Use of inappropriate wage determination
• Misclassification of employees
• Failure to apply Predetermined Increases
• Not acknowledging the double asterisk (**) rule
• Ignoring addendums in the wage determination
• Failure to submit Certified Payroll Reports
• Not following Apprenticeship Requirements
If you feel you are paid less than the prevailing wage rates for your line of work, you may need to contact a qualified California Wage Law Attorney for necessary legal remedies. Depending on your case, the Wage Law attorney may recommend either filing a complaint with the Director of the Industrial Relations or filing a suit to recover the unpaid wages and subsequent damages. The law mandates that legal actions must be implemented in such cases, regardless of whether the employee filed a complaint with the Director or not.
Usually, the services of a proficient California Wage Law Attorney are indispensable in labor claims. Successful claim or suit guarantees payment of the unpaid wages plus applicable interests and necessary charges as well as reasonable attorney’s fees. Moreover, contractors and employers who have been prosecuted and convicted for intentionally violating the Prevailing Wage Law may face severe consequences, including fines and disbarment from bidding on any public construction projects.

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