Prevailing wage determinations are used to establish the rate paid to workers involved in comparable classifications of work in a certain locality. Most wage determinations are updated annually.
The prevailing wage is the hourly rate paid to the majority of workers engaged in the same occupational class in a certain locality. Wage determinations are set based on available data depicting the prevailing rates in a certain locality and vary based on local wage conditions.
Analysts use data collected through surveys to determine the prevailing wages. The single rate that is paid to a majority of the laborers in a category of service employees who perform similar jobs in a specific locality is considered the prevailing rate. Contracting agencies have to request a wage determination for every contract in excess of $2,500. The number of employees expected to work on the contract is irrelevant.
The prevailing wage determinations are usually obtained from the Bureau of Labor Statistics (BLS) or other surveys. Some prevailing wage determinations can be pulled directly from Federal Wage System schedule or the Non-Appropriated Fund schedule. The mean or median is used to determine the prevailing rate. The median is commonly used as a reliable indicator. However, in some instances in which the median is not necessarily a reliable indicator, the mean can be used.
Authorities review and adjust wage determinations regularly as new data is collected.