Wage Determination (WD)

A wage determination (WD) is a document issued by the Department of Labor's Wage and Hour Division and incorporated into covered federal contracts that establishes the minimum hourly wage rate and fringe benefit amount for each labor classification required under the Davis-Bacon Act (construction work) or Service Contract Labor Standards (service work) for a specific geographic area.

What is a Wage Determination?

Wage determinations are the mechanism through which the federal prevailing wage laws translate statistical wage survey data into enforceable contract minimum rates. For Davis-Bacon projects, DOL issues "general wage decisions" for each state, broken down by county or metropolitan area and by construction type (residential, building, highway, heavy). For SCLS service contracts, DOL issues "locality wage determinations" for each geographic area, listing minimum wages for hundreds of service occupations by their Standard Occupational Classification (SOC) code.

Each WD has a unique identifier (for example, WD 2015-4283, Revision 22, or the newer format WD2015-0001) and a date. The revision date matters: a contractor must use the WD that is current at the time of award, and a more recent revision may apply if the WD is updated before award. Contracting officers incorporate the current applicable WD into solicitations, and the WD incorporated into the award is binding for the contract period. If DOL issues a revised WD after contract performance begins, the contractor may be entitled to a price adjustment under the applicable FAR clause.

WDs list labor classifications and their corresponding basic hourly rate and hourly cash equivalent of fringe benefits. Some WD entries show collectively bargained rates (where a collective bargaining agreement covers the majority of workers in the classification in the area) while others show survey-based prevailing rates. Union and non-union contractors pay the same WD minimum, the WD does not require union wages specifically, only the prevailing wage level, whether set by union agreements or market survey data.

Contractors access WDs through SAM.gov/wage-determinations. For Davis-Bacon projects, the contracting officer specifies the project location and type of construction to select the applicable general wage decision. For SCLS contracts, the WD is selected based on the county (or multi-county area) where services will be performed and the contract's predominant service occupation.

Why Wage Determinations Matter for Government Contractors

WD compliance is a legally mandated cost floor with significant enforcement consequences, back wages, civil penalties, contract withholding, and debarment. For service and construction contractors, the WD rates are the most important cost inputs in the proposal: they set the minimum that must be paid and therefore the minimum that must be priced. Contractors that price below WD rates cannot legally perform at their proposed price without violating the law, creating both a compliance risk and a financial loss on the contract.

Example

A facilities management contractor pricing a $2.1M federal security guard services contract in Phoenix, AZ reviews the applicable SCLS wage determination for Maricopa County. The WD lists Security Guard II (armed) at $23.48/hr basic rate with $5.05/hr fringe. The contractor's commercial Phoenix market rate for armed guards is $21.50/hr base with $3.75/hr benefits. The WD rate exceeds market rates by $1.98/hr basic and $1.30/hr fringe, a total compliance premium of $3.28/hr. For a 12-guard, 24/7 operation (approximately 52,560 guard-hours per year), the WD compliance premium adds approximately $172,000 annually to the proposal's labor cost before indirect cost loading.

Frequently Asked Questions

Where do I find the correct wage determination for my contract?

The SAM.gov wage determination database (sam.gov/wage-determinations) is the authoritative source. For Davis-Bacon projects, search by state and county, then select the construction type (residential, building, highway, or heavy). For SCLS contracts, search by state and county and select the service occupation area. The solicitation typically identifies the specific WD by number and revision; contractors should verify the current revision is what is incorporated in the award, as revisions can be issued at any time. Contracting officers are responsible for incorporating the correct WD but contractors should independently verify.

Can a contractor use a Davis-Bacon WD for a service contract?

No. Davis-Bacon and SCLS WDs are separate publications with different methodologies and different labor classifications. Davis-Bacon covers construction craft workers (carpenters, electricians, laborers, operators); SCLS covers service employees (custodians, security guards, food service workers, clerical staff). A contract that includes both construction work and service work may require both types of WDs simultaneously, applied to the respective covered workers. The contracting officer is responsible for identifying and incorporating the correct WD(s) for each type of work in the contract.

What if the work location spans multiple counties with different WD rates?

When a project spans multiple counties with different applicable WD rates, the higher rate typically applies if the project is located in both county areas, but the specific rule depends on whether the work is site-specific (Davis-Bacon) or location-based (SCLS). For Davis-Bacon projects at a defined construction site, the WD for the project site's county applies. For SCLS contracts where service employees work in multiple locations, the applicable WD for each work site applies to the employees working in that location. Contractors with multi-site service contracts must track which employees work in which location and apply the correct WD for each.

How often are wage determinations revised?

Davis-Bacon general wage decisions are updated annually by DOL, with mid-year revisions issued when significant collective bargaining agreement changes occur. SCLS locality WDs are revised based on DOL's biennial survey cycle and may be updated more frequently when specific collective bargaining agreements are renegotiated. Contractors should monitor SAM.gov for WD revisions applicable to their contracts, particularly on multi-year contracts where WD updates may trigger price adjustment entitlements under FAR 52.222-43 or FAR 52.222-7.