Prevailing Wages by State 2022

Lowest Prevailing Wage Threshold States

Rhode Island, Illinois, Hawaii, Massachusetts, and California have some of the lowest wage thresholds with active legislation in place, ranging from $0-2,000. Of course, California is often extremely specific in its laws as it is the state with the largest number of people. Generally, the prevailing wage threshold holds firm at $1,000 or greater, but it is noted that the threshold increase to $25,000 for construction work and $15,000 for repair or maintenance.

Some of the laws are enacted due to ongoing situations which affect the economy. For example, California's construction labor market would be unfair to subject it to a low threshold, as wage ranges can vary greatly in this industry at an entry-level. If prevailing wages were to take hold, general laborers that are hired for a simple job might need to be compensated at exorbitant rates, which would negatively affect the federal market for that industry. Furthermore, California enjoys some of the highest real estate inventory turnover, further requiring the state to pass legislation around thresholds for home repairs and residential renovations.

Highest Prevailing Wage Threshold States

The highest threshold for no specific industry in Washington D.C and Wyoming is $100,000. Because prevailing wages take into consideration greater factors than the minimum wage, the prevailing wage can change at any time if industries or averages have been either largely depressed or have received an influx of new and loyal businesses. Connecticut has the highest mentioned prevailing wage threshold at $1,000,000 for its new construction landscape. This means that developers are often required to pay their workforce an average wage rather than a minimum one if they are on a federal contract.

Generally speaking, states try to avoid the prevailing wage clause as it can be extremely difficult to ascertain that number. They must conduct their extensive research before bringing in teams for a federal contract, with many companies attempting to circumvent it altogether. If someone finds those with the ability to work on their project of high caliber, they will most likely try to hire them through an independent business or as an employee to set their rate. Some states do not have prevailing wage information freely available, so the company could find itself in a legal position without necessarily knowing what it did wrong.

States That Do Not Have Specific Laws Related to Prevailing Wages

Nearly half of all states do not have any specific laws regarding prevailing wages. This demonstrates the split between the effectiveness of this demand from American businesses. States such as Alabama, Idaho, Michigan, South Carolina, Arizona, Indiana, and Mississippi do not require companies to pay prevailing wages to their deemed federal contracts. Some would say that this is the best approach as the market could regulate itself, and talent can decide for themselves whether or not to take on the work. Others say that prevailing wages are a form of insurance over predatory companies, which take advantage of the labor market disparity to grossly underpay top talent.

Prevailing Wages by State 2022