Is prevailing wage the same as the union rate, and do I have to hire union labor to bid a public job?

Prevailing wage rates are not always the same as union rates, and you do not have to hire union labor or become a union signatory to bid on a public job. The Davis-Bacon Act applies to federal construction contracts above $2,000 and requires payment of local prevailing wages and fringe benefits. Many states and cities have similar requirements for their public works projects. The wage determination lists the minimum wage and fringe benefit rates that must be paid for each labor classification, regardless of whether the workers are union or non-union. The contracting officer determines the applicable wage rates based on surveys of local wages for similar work. If your company's actual fringe benefit costs for your non-union employees are less than the amount specified in the wage determination, you must make up the difference by paying the additional amount as cash wages. This ensures all workers on the project receive the prevailing total compensation. You need to track your payroll carefully to show compliance with the wage determination.