How to Calculate CA State Commercial Prevailing Wage Rates
- Office Admin
- Mar 20, 2024
- 4 min read
Updated: Jul 15

Introduction
The prevailing wage is the standard wage rate set for workers on public works projects in California. Understanding how to calculate prevailing wage rates is fundamental for both contractors and workers to comply with state regulations and avoid penalties.
Step-by-Step Guide to Calculating Prevailing Wage Rates
Calculating prevailing wage rates can seem complex, but following a structured process ensures accuracy and compliance with California state regulations.
Step 1: Access the California DIR Website
Go to the website of the California Department of Industrial Relations (DIR), specifically the prevailing wage rates section (linked above).
Step 2: Select the Project Determination
If you are a subcontractor, this determination should have been relayed to you by the prime contractor or awarding body. There are two determinations issued each year for example: 2023-1 and 2023-2. Your wage determination will be used for the life of the project. If you have an older determination, click on the "superseded" option for an expanded list.
Step 3: Identify Your Work Classification
Locate your classification. It's very important to select the correct classification to avoid misclassification and underpayment penalties. The classifications are divided into sections (Statewide, Northern California, Southern California, San Diego, and County).
Each classification has a "SCOPE" that you can review to ensure your scope of work is covered by that classification. Some classifications such as Laborer or Operating Engineer have groups to review as well for you to identify and pull the correct rates.
Step 4: Review Hourly Rates and Fringes
View the Hourly Rates. Once you've located the correct classification (and group if applicable), you can now review the rates. The rates are separated by Basic Hourly Rates and "Fringes". Fringes are Health & Welfare, Pension, Vacation, Training, and Other. To calculate straight time, add the basic hourly rate and fringes together. Be sure to look at all footnotes as there might be calculation rules and hidden fees that also need to be incorporated in your calculation.
To calculate overtime, times the basic hourly rate by 1.5, and add in the fringes, taking into consideration any footnotes that need to be incorporated.
To calculate double time, times the basic hourly rate by 2, and add the fringes, taking into consideration any footnotes that need to be incorporated.
Training is the one fringe that is not typically paid to the employee but must be paid to a state-approved apprenticeship hall or to the DIR CAC. When calculating your employee's hourly rates, subtract the training fringe.
There are circumstances under which you are able to take "credit" for employer-paid employee benefits to offset the prevailing wage rate, but that topic is for a different post.
Step 5: Account for Predetermined Increases
Check to see if there are any predetermined increases for your classification. You can easily check at the top of the prevailing wage rates next to the expiration date there will be either one or two asterisks (*). One means there are no future increases, and these rates are to be paid for the life of the project. Two means there are future increases.
If you go back to the classification selection menu, look for an "increase" link next to your classification. This will take you to the page with the increase dates outlined.
If the increase is not allocated (the total increase amount is not broken down by category: basic hourly rate, health and welfare, etc) you will need to call the DIR to ask for the allocation so you know where to plug in the numbers. Once you get the allocation, add the dollar amounts in the applicable category and recalculate.
Step 6: Don’t Forget Travel, Holidays, and Shift Provisions
Check the travel, holidays, and shift pay provisions
Always be sure to check all of the information for each classification so you are aware of the classification requirements.
Step 7: Read Special Notices
Check the special notices to see if there were any releases that apply to your determination and classification. This can be found on the DIR's prevailing wage homepage. There are times the DIR needs to make a correction to something they've already posted and instead of revising the page where the correction needs to be made, they will post it in the special notice section so another important tip - make sure you check to see if there are any that apply to you.
These steps are a basic overview of the CA state commercial prevailing wage rate calculation process. Should you need assistance, we are happy to help!
Common Mistakes to Avoid
When calculating prevailing wage rates in California, even small mistakes can lead to serious consequences, such as penalties or legal issues. Here are some common errors to watch out for:
Misclassifying Trades
One of the most significant mistakes contractors can make is misclassifying the type of work being performed. Each classification covers specific types of work, and selecting the wrong one can lead to underpayment and costly penalties.
For example, if a worker is performing tasks related to an Operating Engineer but is classified as a Laborer, the wage rate will be lower, and the worker may not receive the full compensation required by law. Always double-check the classification to ensure it matches the actual duties performed.
Ignoring Footnotes
Footnotes are important for understanding how certain wage rates should be calculated. They often contain additional rules or exceptions that might not be immediately obvious. For instance, some footnotes clarify how to handle overtime or share details about fringe benefits.
Ignoring footnotes can lead to inaccurate wage calculations and potential violations. Be sure to review the footnotes thoroughly before finalizing any wage rates.
Skipping Special Notices
The DIR sometimes issues special notices that amend or correct previously published wage rates. These notices can include updates about changes to classifications, wage adjustments, or other relevant details.
Failing to check for and apply these updates can result in using outdated or incorrect rates. Always make sure you review the special notices section on the DIR website before proceeding with your wage calculations to stay up-to-date with the latest information.
Need Help Understanding CA Prevailing Wage Rates?
If you need assistance navigating the California prevailing wage rates or have any questions, we’re here to help! Contact us today for expert guidance and support.
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