What is a prevailing wage?
A prevailing wage is a rate that workers must be paid for construction projects involving public money. It includes hourly pay, benefits such as healthcare, and overtime. This is different from regular minimum wage, which applies to most workers regardless of industry or occupation.
Congress first passed a federal law in 1931 called the Davis-Bacon Act that requires private contractors to pay workers on projects that get more than $2,000 in federal taxpayer money the “prevailing wage.” It has been updated several times. Prevailing wages are usually higher than minimum wage and can reflect what union members in construction trades are paid.
The original act prevented “contractors from basing their bids on wages lower than those in the prevailing area.”
States can pass their own prevailing wage laws for projects that get state taxpayer money. About half of the states have passed their own laws, which Ohio did in 1931.
When does prevailing wage apply in Ohio?
When a construction project reaches a certain cost, prevailing wage laws take effect. That amount is different depending on the type of project.
For example, prevailing wage laws take effect when the estimated cost of a new building goes over $250,000. Renovations to current buildings have a lower threshold of $75,000.
Prevailing wage laws also take effect for other types of construction related to roads, bridges, alleys and sewers. The threshold for those projects is $91,150.
Bricklayers, insulators and cement masons are a few examples of workers who receive a prevailing wage in Ohio.
Other exemptions to Ohio’s prevailing wage laws include projects funded or financed by port authorities. Though port authorities are public bodies, the law allows them to choose whether or not to require that prevailing wages be paid to workers. The Port of Cleveland recently voted to change their policy, giving developers the choice to pay workers a prevailing wage. The Port of Cleveland had required contractors to pay a prevailing wage since 2018.
Who decides the prevailing wage in Ohio?
Ohio’s Department of Commerce sets and enforces prevailing wage laws. They also handle minimum wage and minor labor laws. Prevailing wage laws are used by policymakers to set wage and benefit floors for workers in different areas of the state.
Cuyahoga County has set prevailing wage rates. For example, the prevailing wage for a cement mason is $54.45 per hour. This number is the base wage ($32.75 per hour) plus benefits ($21.70 per hour).
When working more than 40 hours per week, overtime rates kick in and a worker must be paid overtime at time and a half. In this example, a cement mason would earn $81.68 per hour of overtime.
What happens if a company doesn’t follow the prevailing wage laws?
Workers can file a complaint with Ohio’s Department of Commerce. You have to have worked on the job to file a complaint. Complaints related to wages have to be filed within two years of a job being completed.
The Cleveland-Cuyahoga County Port Authority board approved a controversial policy Thursday that will allow developers on port-funded projects to pay workers less than what they are now required to pay them.