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California Prevailing Wage Law: How Prevailing Wages Determined

California uses a modal rate system to determine the prevailing wage rate. While the DIR from time to time does conduct wage surveys, most of the prevailing wage determinations are taken from collective bargaining agreement and are the union rate. The modal rate means that the State adopts the single rate which is paid most often by contractors. In nearly all instances, this is the union rate.

The DIR also adopts “prevailing” fringe benefit amounts based on trade classification. Like federal Davis-Bacon, it is the total package of benefits which must be paid to the worker or for the benefit of the worker.

Remember, the prevailing wage determination posted for a job bidding in May of this year will be different than the determination posted on the website one year later.

The information above is brought to you by: Deborah Wilder’s “What Every Contractor Should Know About Prevailing Wages”

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