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Differences in State, Federal, Mixed Funded Public Works

Updated: May 26

Overview: The differences between state, federal, and mixed funded public works project requirements

Navigating the complexities of prevailing wage requirements can be a challenging task, especially when dealing with different funding sources. Whether your project is state-funded, federally funded, or a mix of both, understanding the nuances of prevailing wage regulations is crucial. In this blog post, we'll explore the key differences between state-funded prevailing wage requirements, federally funded prevailing wage requirements, and projects with mixed funding.

State-Funded Prevailing Wage Requirements:

State-funded projects are governed by prevailing wage laws specific to each state. These laws typically outline the minimum wage rates and fringe benefits that must be paid to workers on public construction projects. State prevailing wage rates are determined through surveys and are meant to reflect the wages that are commonly paid in a particular locality for specific trades and occupations.

Key points regarding state-funded prevailing wage requirements:

  1. Variable Rates: Each state has its own methodology for determining prevailing wage rates, leading to variations in rates between states and even within different regions of the same state.

  2. Scope of Projects: State prevailing wage laws generally apply to publicly funded construction projects, including those initiated by state agencies, municipalities, and other government entities.

Federally Funded Prevailing Wage Requirements:

Projects funded by the federal government, such as those under the Davis-Bacon Act, are subject to federal prevailing wage requirements. The U.S. Department of Labor determines the wage rates for various trades and occupations based on local surveys.

Key points regarding federally funded prevailing wage requirements:

  1. Davis-Bacon Act: Enacted in 1931, the Davis-Bacon Act requires contractors and subcontractors on federally funded or assisted construction contracts over $2,000 to pay their laborers and mechanics the locally prevailing wage rates and fringe benefits.

  2. Compliance Monitoring: Federal agencies, such as the Department of Labor, actively monitor compliance with Davis-Bacon Act requirements to ensure contractors adhere to the prescribed wage rates.

Mixed-Funded Projects:

In some cases, projects receive funding from both state and federal sources. These mixed-funded projects present unique challenges as contractors must navigate the interplay between state and federal prevailing wage requirements.

Key points regarding mixed-funded projects:

  1. Dual Compliance: Contractors working on mixed-funded projects must comply with both state and federal prevailing wage laws. This includes adhering to the higher of the two wage rates when they differ.

  2. Documentation and Recordkeeping: Contractors should maintain meticulous records to demonstrate compliance with both state and federal requirements, as audits may occur from either or both levels of government.

Understanding the differences between state-funded, federally funded, and mixed-funded prevailing wage requirements is essential for contractors and project managers. Compliance with these regulations is not only a legal necessity but also contributes to fair compensation for workers and the overall success of your public works construction projects. As you embark on your next project, make sure to stay informed about prevailing wage laws at both the state and federal levels to ensure a smooth and compliant construction process.

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