Labor Rates and Prevailing Wage
This article explains prevailing wage — what it is, when it applies to your work, how it changes your labor rates, and how Stimaro helps you stay compliant. For the step-by-step of setting up labor rates in the app, see Setting up labor rates.
What prevailing wage is
On most private work, you pay your people what you and they agree to. On many publicly funded projects, you don't have that freedom. The government sets a floor — the prevailing wage — and you must pay at least that much to each worker, by classification, for that type of work in that geographic area.
Prevailing wage rates are published by government agencies and updated periodically. They're often higher than what a contractor pays on private work, and they come with a specific structure: a base hourly rate plus a fringe benefit rate, both set by worker classification (operator, laborer, ironworker, pile driver, and so on).
The point is to keep public-works contractors from winning bids by underpaying labor. The effect on you, the estimator, is that the labor rate you use on a prevailing-wage job often isn't your normal internal rate — it's the government's published rate.
When it applies to your work
Two main bodies of law trigger prevailing wage, and marine and heavy civil contractors hit both regularly:
Federal — the Davis-Bacon Act. When a project is federally funded or federally assisted above a dollar threshold, Davis-Bacon requires prevailing wages set by the U.S. Department of Labor. For marine and heavy civil work, this catches a lot: Army Corps of Engineers projects, Navy and Coast Guard facilities, federally funded port and harbor work, federal navigation and dredging projects, and federally assisted infrastructure.
State — "Little Davis-Bacon" laws. Many states have their own prevailing wage laws covering state-funded work. New York is one of them. So even a state- or municipally funded bulkhead, pier, or civil project can carry a prevailing wage requirement, separate from any federal rule.
The practical takeaway: any time public money is funding the job, assume prevailing wage might apply and check before you bid. Getting this wrong is expensive — underpaying on a prevailing-wage job can mean back-pay liability, penalties, and debarment from future public work.
How it changes your estimate
On a private job, you build your labor rate from your actual costs: base wage plus burden (payroll taxes, workers' comp, liability, benefits). On a prevailing-wage job, the structure shifts:
- The base hourly rate is set by the wage determination, not by you. You can pay more, but not less.
- The fringe benefit portion is also specified. You can satisfy it by providing bona fide benefits, by paying the fringe amount as additional cash wages, or by a combination — but the total has to meet the determination.
- Your burden still applies on top — payroll taxes, workers' comp, and liability are still real costs you carry, calculated on the prevailing base wage.
So a prevailing-wage labor rate is usually higher than your internal rate, and the way the fringe is handled affects your payroll-tax and workers'-comp math. An estimator who drops their normal internal rates into a Davis-Bacon bid will under-price the labor and either lose money or lose the job to someone who got it right.
A note on classifications
Prevailing wage is set by classification, and the classifications can be specific. The rate for a crane operator differs from a pile driver, which differs from a general laborer. On marine work especially, getting workers into the correct classification matters — both for bidding accurately and for compliance when you're actually running the job and submitting certified payroll.
When you build a prevailing-wage estimate, you're effectively matching each part of your crew to its published classification and rate, rather than using a single blended company rate.
How Stimaro helps
Stimaro gives you tools to handle prevailing wage rather than working it out by hand:
Set up prevailing-wage labor rates the same way you set up any labor rate, using the published base and fringe figures for the relevant classifications. Because rates live in one place and flow into every item that uses them, you can build a prevailing-wage version of your rates for a specific job and have it cascade through the whole estimate.
Check compliance in the Analyze tab. Stimaro's Wages & Compliance view lets you verify that your labor rates clear the federal Davis-Bacon prevailing-wage minimums, so you can catch a rate that's set too low before you submit rather than after you've been awarded the work.
Benchmark your rates. The Rate Benchmark view compares your labor rates against DOT and prevailing-wage references for a selected state and county, giving you a reality check on whether your numbers line up with what the job will actually require.
Verify against the official source
One important caution: prevailing wage determinations are specific, they change, and they're legally binding. Stimaro's compliance tools help you check and benchmark your rates, but the authoritative figures always come from the governing agency — the U.S. Department of Labor for Davis-Bacon work, and your state's labor department for state prevailing-wage work. For any given project, confirm the current wage determination from the official source before you finalize your bid. Stimaro is not a substitute for the official determination or for legal advice on compliance.