Wage and pay terms
Prevailing wage
Prevailing wage is the minimum combined pay (base rate plus fringe) that a contractor must pay a worker on a covered public project, set by the Department of Labor for that trade and location. It is a floor, not a suggestion.
Base rate
Base rate is the minimum hourly cash wage for a classification, before fringe. It is set by the wage determination and is not negotiable downward.
Fringe (fringe benefit rate)
Fringe is the second half of the prevailing wage. It can be paid as real benefits (health insurance, retirement contributions) or as additional cash wages, as long as the combined total meets the required amount. Base rate plus fringe equals the required total, and both parts have to independently add up, one being high doesn't excuse the other falling short.
Fringe offset
Fringe offset is the practice of using bona fide fringe benefit contributions to satisfy part of the prevailing wage requirement instead of paying that portion in cash.
Classification
Classification is the type of work a worker actually performed that week (Laborer, Electrician, Carpenter), not their job title at your company. It determines which rate on the wage determination applies to them.
Apprentice rate
Apprentice rate is a percentage of the journeyworker rate for a classification, set by a registered apprenticeship program rather than the wage determination directly. It applies to both the base rate and, depending on the program, the fringe.
Documents and process
Wage determination (WD)
A wage determination is the Department of Labor's ruling on minimum wages and fringe for a specific type of construction work in a specific area. It is identified by a number in the shape [state][year][sequence], for example CA20260001.
Modification
A modification is a republished update to a wage determination as rates change over time. Only one modification is active at a time, and a contract locks in whichever modification was active on its award date.
General (area) determination
A general determination is a wage determination covering a whole county or metro area, applying to most federal construction contracts. Most contracts use this kind.
Project determination
A project determination is a wage determination requested for a single job rather than a whole area. It is the exception, not the rule.
Statement of Compliance
The Statement of Compliance is page two of the WH-347, a signed statement certifying the payroll is accurate and that every worker was paid at least the required rate that week. It needs an original signature from the owner, a corporate officer, or an authorized designee.
Certified payroll report
A certified payroll report is the weekly payroll submission (the WH-347 federally) that documents hours, classifications, and rates for every worker on a covered project that week.
Law and people
Davis-Bacon Act
The Davis-Bacon Act is the 1931 federal law requiring prevailing wages on federal construction contracts over $2,000. It is the reason certified payroll exists at all.
Davis-Bacon Related Acts (DBRA)
The Davis-Bacon Related Acts are a set of other federal laws that extend Davis-Bacon wage requirements to construction funded (not just directly contracted) by federal money, for example through grants.
Contracting officer
A contracting officer is the government representative responsible for a federal contract, including collecting and reviewing certified payroll submissions.
Apprenticeship program
An apprenticeship program is a registered training program (through the Department of Labor or a state agency) that sets the percentage-of-journeyworker rate an apprentice is paid, and that has to be named on the Statement of Compliance for any apprentice on the payroll.
Frequently asked
What's the difference between base rate and prevailing wage?+
Prevailing wage is the whole required amount. Base rate is just one of its two parts, the other being fringe. Base rate alone is never the full prevailing wage.
Does fringe have to be cash?+
No. It can be real benefits like health insurance or retirement contributions, or paid out as additional cash wages, or a mix, as long as the combined value meets the required fringe rate.
Where do I look up an actual wage determination?+
SAM.gov publishes every active determination. Our free wage determination lookup shows the same data with the modification and publish date alongside it.