Prevailing wage is a term used in government contracting in the United States to refer to the hourly wage, usual benefits, and overtime paid to the majority of workers, laborers, and mechanics within a particular area. Prevailing wages are established by regulatory agencies for each trade and occupation employed in the performance of public work, as well as by State Departments of Labor or their equivalents. Prevailing wage may also include other payments such as apprenticeship and industry promotion.

In California, prevailing wage increases the cost of construction, with workers paid prevailing wage making approximately 50% more in hourly rates, and getting approximately double the benefits of non-prevailing wage workers. The contribution of prevailing wage requirements to overall construction costs has been estimated to be as large as a 40% increase in costs. However, supporters of prevailing wage requirements argue that it keeps the earnings of construction workers high and maintains the quality of construction work.

In summary, prevailing wage is a term used in government contracting in the United States to refer to the hourly wage, usual benefits, and overtime paid to the majority of workers, laborers, and mechanics within a particular area. Prevailing wages are established by regulatory agencies for each trade and occupation employed in the performance of public work, as well as by State Departments of Labor or their equivalents.