- In California, public works, including many maintenance and repair jobs on publicly funded facilities, require prevailing wages for covered trades, set by the Department of Industrial Relations (DIR).
- Contractors and subcontractors on public works must be registered with DIR, submit certified payroll electronically, and meet apprenticeship requirements.
- Federal projects follow the Davis-Bacon Act, with its own wage determinations and weekly certified payroll.
- A Project Labor Agreement (PLA) is a project-specific collective bargaining agreement that sets labor terms for the job; union signatory contractors are structured to meet these requirements.
- Compliance is not paperwork you add at the end. Pricing, scheduling, and staffing all change when work is prevailing wage.
What prevailing wage is
Prevailing wage laws require contractors on covered public works projects to pay workers at least the wage and benefit rate set for their craft and locality. In California, the Department of Industrial Relations publishes determinations by classification and county, updated periodically. These rates generally track local collective bargaining agreements, so they are far above general market wages and vary by trade.
HVAC and refrigeration work involves several classifications (for example pipe trades and sheet metal), and the correct classification depends on the task being performed. Misclassification is a common source of violations.
What counts as a public work
- Construction, alteration, demolition, installation, or repair work done under contract and paid for in whole or in part out of public funds.
- Maintenance work on publicly funded facilities is generally covered under California law, not only construction. HVAC service contracts for city, county, school, and special-district buildings are often prevailing-wage jobs.
- Private projects that receive certain public subsidies or are built on public land may also be covered.
- Federal construction contracts fall under the Davis-Bacon Act instead, using federal wage determinations.
Public agencies and awarding bodies typically state in the bid documents whether prevailing wage applies. For private projects with public money involved, ask the funding source or counsel. DIR also issues coverage determinations.
The requirements on contractors
| Requirement | What it means in practice |
|---|---|
| DIR contractor registration | Contractors and subcontractors must be registered with DIR to bid or work on California public works (small-project exceptions exist). Registration is renewed annually. |
| Prevailing wage payment | Pay at least the determined rate (wages plus fringe) for each classification, with correct overtime rules. |
| Certified payroll | Keep detailed payroll records for every worker on the job and submit them electronically to DIR on the required schedule. |
| Apprenticeship | Employ apprentices in the required ratio and submit required apprenticeship forms. Union training programs support this. |
| Subcontractor compliance | Prime contractors are responsible for subcontractor compliance, so they want registered, experienced subs. |
| Record retention and access | Keep records available for inspection by the Labor Commissioner and awarding body. |
Violations bring back-wages, penalties, withholding from payments, and possible debarment. Many general contractors treat a sub's payroll compliance as a pass/fail criterion for awarding work.
Federal projects: Davis-Bacon
Federally funded construction contracts above a statutory threshold are covered by the Davis-Bacon Act. Wage determinations come from the U.S. Department of Labor (published on SAM.gov), certified payroll is submitted weekly (commonly on Form WH-347 or equivalent), and fringe benefits can be paid in cash or through bona fide plans. The details differ from California's system, so a contractor working in both needs systems for each.
For work outside California, state prevailing wage laws vary widely. See bidding commercial HVAC projects nationwide.
Project Labor Agreements
A PLA is a pre-hire collective bargaining agreement for a specific project. It typically sets wages, hours, work rules, dispute procedures, and hiring through union hiring halls, and it commonly bars strikes and lockouts during the project. Public owners use PLAs on large projects and school bond programs to improve schedule certainty and workforce quality.
- Contractors agree to be bound by the PLA's terms for that project, regardless of union status in other work.
- Union signatory contractors are set up for this model: workforce referral from the hall, apprenticeship pipelines, and benefit fund administration.
- Non-union contractors can often work under PLAs but must adopt the agreement's terms, which adds administrative changes.
Davinci Mechanical is a member of UA Local 250 and structured for PLA and prevailing-wage work. See our public works page and schools page.
How prevailing wage changes the price and the schedule
- Labor is a larger share of cost, so bids should be built from correct classifications and rates, not a general rate with a markup.
- Administrative burden (payroll processing, forms, tracking apprentices) is real overhead that should be reflected in the bid.
- Crew composition is constrained by classification and apprenticeship ratios, which can affect scheduling flexibility.
- Owners who compare a prevailing-wage bid to a non-prevailing bid are not comparing the same thing.
Owner and GC checklist before award
- Confirm DIR registration is current (the DIR site has a searchable registry).
- Confirm the contractor's California license is active and in good standing, and appropriate to the work.
- Ask how certified payroll is prepared and submitted, and who is responsible.
- Ask about apprenticeship participation and ratio compliance.
- Confirm insurance, bonding capacity, and workers' compensation.
- Ask for references on similar public projects.
- For PLA projects, confirm the contractor's ability to execute the agreement.
Frequently asked questions
Does prevailing wage apply to HVAC maintenance on school buildings?
In California, maintenance work on publicly funded facilities is generally covered. Check the contract documents and confirm with the awarding body.
Do you submit certified payroll?
Yes. We are set up for certified payroll and prevailing-wage work on public projects.
What is a PLA?
A project labor agreement is a collective bargaining agreement for a specific construction project that sets labor terms and hiring practices for all contractors on the job.
Can you work on out-of-state public projects?
We pursue larger commercial and public projects beyond California on a project-by-project basis. See our nationwide bid-projects page.
Have a site this applies to?
Davinci Mechanical is the commercial and union division of Scottish Tom's Heating & Air. Send us the equipment list or the problem and we'll tell you what we'd check first.