Prevailing Wages

What Are Prevailing Wages?

Prevailing wages are the minimum hourly wages that must be paid to workers on local government public works and maintenance contracts.

The wage rates vary by county and type of labor, and they are determined and enforced by the Department of Labor and Industries (L&I) based on collective bargaining agreements or—if collective bargaining agreements are not available—wage surveys or other methods.

When Are Prevailing Wages Required?

Chapter 39.12 RCW requires local government contractors and subcontractors to pay prevailing wages to all workers for all public works and maintenance contracts, regardless of the dollar value of the contract.

This includes the following activities:

• Public works, including maintenance when performed by contract (RCW 39.04.010)
• Building service maintenance—defined as janitors, waxers, shampooers, and window washers (RCW 39.12.020 and WAC 296-127-023)
• Construction, reconstruction, maintenance, or repair (RCW 39.12.030)
• Turn-key leases, rentals, or purchases (RCW 39.04.260)
• Off-site fabrication of non-standard items for a public works project (WAC 296-127-010(5)(b))

However, there is a narrow exemption for irrigation districts, various diking and drainage districts, conservation districts, and reclamation districts—described later on this page.

What Are the Applicable Prevailing Wage Rates?

To find current Washington State prevailing wage rates, see L&I's page Find Prevailing Wage Rates by Classifications, which also includes a link to descriptions of trades and classifications.

Prevailing wage rates are updated twice per year, on the first business day in February and August, and take effect 30 days after publication.

Most contractors and subcontractors must adhere to the prevailing wage rates in effect on the prime contractor's bid due date, regardless of how long the project lasts, as long as the bid is awarded within six months. For bids awarded more than six months after the bid submittal deadline, contractors must follow the wage rates in effect on the award date. See WAC 296-127-011(3).

For public works contracts that are not awarded pursuant to bids, contractors must follow the wage rates in effect on the date the contract is executed, and these rates will remain in effect for the duration of the contract. See WAC 296-127-011(4).

However, there are a few exceptions:

• Job order contracts: Contractors must pay the prevailing wage rates in effect on the date the individual work order is issued. See WAC 296-127-011(3)(c).
• Building service maintenance contracts longer than one year: Wage rates must be altered every year and include contract language to that effect. The cost of the wage increases must be borne by the awarding agency. See WAC 296-127-023.
• Unit priced public works contracts: Wage rates must be updated annually using the rates in effect at the beginning of each contract year. Intents and affidavits must be submitted annually for all work completed during the previous 12 months. (Refer to your agency-specific statutes.)

Sole Proprietors

Contractors who are operating as sole owners (sole proprietors) are exempt from prevailing wages under WAC 296-127-026, meaning that they do not have to pay themselves or their spouses prevailing wages.

However, sole proprietors are still required to file Intents and Affidavits as discussed below; see L&I Policy 05/11/2009. If the sole proprietor will self-perform all the work, they can simply write "owner operator" on the forms. However, any employees or subcontractors working for the sole proprietor (other than their spouse) most likely do need to be paid prevailing wages.

In addition, a sole proprietor must comply with the bidder responsibility requirements in RCW 39.04.350—which includes a prevailing wage training component or sufficient public works experience—to be awarded a public works contract. For more information on bidder responsibility, see our page Bidding and Awarding a Public Works Contract.

Irrigation, Diking, Conservation, and Reclamation Districts

While all "public works" contracts require payment of prevailing wages under state law, there is one exception that affects:

• Irrigation districts,
• Various diking and drainage districts, and
• Any other district authorized by law for the reclamation or development of waste or undeveloped lands—which includes conservation districts according to L&I’s prevailing wage determination 06082012.

“Public work” is defined in RCW 39.04.010 as “all work, construction, alteration, repair, or improvement other than ordinary maintenance, executed at the cost of the state or of any municipality…” [Emphasis added.] The same definition states that “[a]ll public works, including maintenance when performed by contract,” are subject to the prevailing wage requirements of chapter 39.12 RCW.

However, RCW 39.04.010 then defines “municipality” as:

[E]very city, county, town, port district, district, or other public agency authorized by law to require the execution of public work, except drainage districts, diking districts, diking and drainage improvement districts, drainage improvement districts, diking improvement districts, consolidated diking and drainage improvement districts, consolidated drainage improvement districts, consolidated diking improvement districts, irrigation districts, or other districts authorized by law for the reclamation or development of waste or undeveloped lands. [Emphasis added.]

Similar definitions are provided in WAC 296-127-010.

L&I has not interpreted this to be a blanket exemption for these agency types, as prevailing wage laws are to be liberally interpreted in favor of worker protection. See Everett Concrete Products, Inc. v. Department of Labor & Industries (1988).

Instead, L&I applies this exemption narrowly to projects that are solely for the reclamation or development of waste or undeveloped lands. All other work ordered—as well as janitorial services or other contracted maintenance—still requires payment of prevailing wages.

See WAC 296-127-030 regarding irrigation districts, as well as L&I’s prevailing wage determinations regarding irrigation districts (04042013) and conservation districts (06082012).

If a project is funded with grants and/or federal funds, consult the grant terms and the awarding entity. Prevailing wages and/or federal Davis-Bacon wage rates might still be required.

Whether this exemption applies to a specific contract will depend heavily on the facts. Below are some examples; if you are unsure whether prevailing wages are required for a particular contract, you can contact the L&I Prevailing Wage team (PW1@lni.wa.gov) to get their opinion, and eligible agencies can also Ask MRSC.

Notifying Contractors

RCW 39.12.030 requires all public works contracts and public building service maintenance contracts, regardless of dollar value, to include specifications requiring the payment of prevailing wages to all workers employed in any part of the contract. The specifications must either list all of the applicable prevailing wage rates, or else provide the URL address for L&I’s Prevailing Wage Rates for Public Works Contracts with the exact wage publication date and county.

Statements of Intent

RCW 39.12.040 requires every contractor and subcontractor on the project to file a Statement of Intent to Pay Prevailing Wages. These statements should be filed with L&I immediately after the contract is awarded and before work begins, if possible. The statements must be approved by the L&I Industrial Statistician and may be viewed by the agency administering the contract through the L&I Awarding Agency Portal.

The agency may not make any payments under the contract until the contractor has submitted an approved Statement of Intent. Likewise, subcontractors may not receive any payments until they file approved Statements of Intent. This requirement should be stated in the specifications and contract.

It is the agency's responsibility to confirm that the contractor and all subcontractors have filed Statements of Intent prior to making payments on the contract. Agencies can Search Prevailing Wages Intents and Affidavits at the L&I website. If the awarding agency knowingly fails to comply with the provisions of RCW 39.12.040, it is liable to all workers for the full amount of wages due.

For contracts in excess of $10,000, contractors must post the Statement of Intent in a location readily visible to workers. See RCW 39.12.020.

Certified Payroll Reports

Contractors must file certified payroll reports at least once per month for all prevailing wage jobs (regardless of project amount) and submit them directly to L&I through the agency’s online Prevailing Wage Intent and Affidavit (PWIA) system (RCW 39.12.120).

The local government agency is not responsible for reviewing or checking the reports. However, public agencies may view these reports through the L&I Awarding Agency Portal if desired.

Contractors must always provide weekly certified payroll reports for federal projects. For questions regarding the federal law, contact the federal Department of Labor.

Affidavits of Wages Paid

RCW 39.12.040 also requires every contractor and subcontractor on the project to file an Affidavit of Wages Paid soon after the work has been completed. The Affidavits must be filed with L&I and approved by the Industrial Statistician before being submitted to the agency administering the contract. The Affidavit may also be viewed through the L&I Awarding Agency Portal.

The agency administering the contract may not release the retainage until the contractor and subcontractors have filed approved Affidavits of Wages Paid. These requirements should also be stated in the specifications and contract. It is the agency’s responsibility to confirm that the affidavits have been approved before releasing the retainage. Agencies can Search Prevailing Wages Intents and Affidavits at the L&I website.

Contractors must keep accurate work and pay records and submit certified copies upon request.

Combined Intent/Affidavit Forms

For small works roster contracts under $5,000, public agencies may use a combined intent/affidavit statement at their discretion. See RCW 39.12.040(2).

This option is selected when the project is set up in the L&I Prevailing Wage Intents and Affidavits (PWIA) Awarding Agency Portal. By using the combined form, the agency assumes direct liability for any unpaid wages on the project but may take action at law to seek reimbursement from the contractor.

The combined form may only be used when one payment will be made under the contract and there are no subcontractors. If the project involves subcontractors or multiple payments, separate Intents and Affidavits must be filed.

The contractor must file the combined form with the awarding agency, which must sign the form and send a copy to L&I within 30 days. Filing fees are waived. No payment may be made until the awarding agency approves the form, and the agency must retain a copy of the document for three years.

Warranty Work

Warranty work—that is, work done after completion of the contract in accordance with guarantees built into the contract—is subject to the original prevailing wages for the contract.

The original Statement of Intent for the contract is still valid, but the Affidavit of Wages Paid must be updated to include any additional warranty work hours and any new trades or occupations used.

Turnkey Contracts

RCW 39.04.260 states that any work, construction, alteration, repair, or improvement, other than ordinary maintenance, that the state or a municipality causes to be performed by a private party through a contract to rent, lease, or purchase at least 50% of the project by one or more state agencies or municipalities must pay prevailing wages in compliance with chapter 39.12 RCW.

The responsibility for an accurate determination resides with the awarding agency. Failure to comply can hold the awarding agency responsible for unpaid prevailing wages.

Common Prevailing Wage Mistakes

Below are some of the common prevailing wage mistakes public agencies make:

• Failing to notify contractors that prevailing wages are required on a public works or building service maintenance/janitorial contract.
• Failing to comply with responsible bidder criteria—including, among other things, prevailing wage training or sufficient public works experience. See RCW 39.04.350.
• Failing to obtain Intents and Affidavits for all subcontractors.
• Paying the contractor before obtaining the Statements of Intent.
• For federally funded projects, failing to pay the higher of the state/federal wages.
• Failing to manage records and ensure that contractors pay prevailing wages.
• Failing to obtain a contractor’s certified payrolls when required.

To avoid these mistakes and ensure the correct prevailing wages are being paid, we suggest creating a series of internal controls such as:

• Verifying that the prevailing wage rates listed in the contract documents are correct.
• Verifying the scope of work being performed to avoid discrepancies between the wage class information given to the employee and the actual type of work the employee is performing.
• Obtaining appropriate documentation to verify responsible bidder criteria.
• Conducting periodic job site inspections and worker interviews.
• Keeping accurate records for all contractors and subcontractors on a project, including payroll and fringe benefits.

Recommended Resources

• WA Department of Labor & Industries:
  • Awarding Agencies – Webpage provides information about prevailing wage requirements for public agencies, including access to Awarding Agency Portal where agencies can manage their legal requirements
  • The Washington State Prevailing Wage Law – Detailed PDF publication is divided into different sections for public agencies, contractors, and workers & other interested parties
  • Prevailing Wage Policies & Determinations – L&I administrative policies that apply to prevailing wages, as well as determinations and pending determination
  • Find Prevailing Wage Rates by Classifications – Look up wage rates for different trades and occupations