Trends in Prevailing Wage Laws, 2017
Prevailing wage laws are laws created by state governments or local municipalities to set a rate of pay that is thought to be standard for a labor group contracted to do public-sector projects in that area. The standard rate of pay is oftentimes determined by analyzing local wage data and identifying the median or average rate of pay for a labor group or project.
While prevailing wage laws are decided on a state-by-state basis for state and local contracts, the federal government is mandated to pay prevailing wages to its contracted workers by both the Davis-Bacon Act of 1931, which governs wages for construction and repair contracts regarding public buildings or projects, and the McNamara-O’Hara Service Contract Act of 1965, which governs contracts for services rendered to the federal government.
Twenty-nine states currently have prevailing wage laws.
- Among the 29 states with a prevailing wage law, most states (21) have a dollar threshold amount for contract coverage under the law.
- Threshold amounts range from a low of $1,000 in California and Rhode Island to a high of $400,000 in Connecticut. More than half of states with a threshold (12) have a threshold amount between $25,000 and $50,000.
- Eight states—Illinois, Massachusetts, Michigan, Missouri, Nebraska, New York, Texas and Washington—do not have a threshold amount for contract coverage.
There are currently 21 states without a prevailing wage law. Among those states, 13 have had a prevailing wage law on the books at some point in the past, but those laws were either repealed or invalidated by the court.
- Recently, three states—Indiana, Kentucky and West Virginia—have repealed their prevailing wage laws:
- Indiana: repealed its Common Construction Wage statute in 2015. Prevailing wages that applied to contracts for construction greater than $350,000 awarded before July 1, 2015, are still enforceable.
- Kentucky: On Jan. 7, 2017, Gov. Matt Bevin signed HB 3, which repealed Kentucky’s prevailing wage statutes.
- West Virginia: effective May 2016, West Virginia’s prevailing wage statute was repealed.
- In two states—Arizona and Oklahoma—the courts have invalidated prevailing wage statutes. Arizona’s law was invalidated by a court decision in 1980 and fully repealed by referendum in 1984. Oklahoma’s law was invalidated in 1995.
- In addition to the three states that have recently repealed their laws, from 1979-1988 eight states—Alabama, Colorado, Florida, Idaho, Kansas, Louisiana, New Hampshire and Utah—repealed their laws.