Prevailing Wage Rates

Written by Kimberly Clark
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The prevailing wage rate (PWR) is the average wage that is paid to similarly employed individuals. Employers are usually required to establish PWRs when seeking certification that allows them to pay their workers at a rate below the median. Examples of workers that are most often affected by the PWRs set are foreign workers and those that are physically and mentally disabled.

The Immigration and Nationality Act (INA) seeks to ensure that the hiring of foreign workers will not negatively impact wages earned and working conditions of U.S. citizens. The primary way the INA does this is by making sure that foreign workers are not paid below the PWR set for the job they are hired for. Since wages vary by location, the states generally govern the PWR set for foreign workers.

In regards to the physically and mentally disabled, the Department of Labor (DOL) gives employers the option of paying someone with a disability a special minimum wage that is below the federally mandated minimum. However, the amount paid has to be at a rate in proportionate to the PWR. In this case, the PWR is calculated based on what a person with no disability would be paid for performing the exact same tasks.

Determining the PWR

The Occupational Employment Statistics Survey, which is conducted by the Bureau of Labor Statistics, collects salary information from just about every job title in the United States. This information is then used to determine the PWRs for the sampled occupations. In some instances, the employer will conduct his own survey. This information is then submitted to the applicable regulatory agency, as evidence that the PWRs set at their place of employment are fair and representative of the industry's average. Employers may need documentation of their pay practices, so having payroll programs or software that can compile reports is a good idea.


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