Washington State’s prevailing wage law, the Public Works Act, administered by the Department of Labor and Industries under RCW 39.12, requires that workers on covered construction projects be paid the prevailing wage for their trade and county. The prevailing wage is set by L&I based on surveys of wages paid in each county for each trade classification, and it is updated periodically to reflect changes in the local labor market.
The prevailing wage requirement is well-understood by contractors who work exclusively on public projects. It is less well-understood by private developers who enter the Washington market without recognizing that their project may trigger the requirement, and by construction managers and owner’s representatives who don’t know to look for it.
What Projects Are Covered
Washington’s prevailing wage requirement applies to public works, construction work performed on behalf of a public agency or with public funding. Private development is not directly subject to the prevailing wage requirement unless it involves specific funding triggers.
The triggers that bring private development under Washington’s prevailing wage requirement:
Public funding or subsidy. Projects that receive grants, loans, or subsidies from public agencies may be subject to prevailing wage as a condition of the public funding. Affordable housing projects funded with HOME, CDBG, or state housing trust fund loans frequently trigger prevailing wage requirements on some or all of the construction. Tax credit projects (LIHTC) are sometimes subject to prevailing wage depending on the specific program and funding source.
Public property. Construction on land owned by a public agency, including ground leases where a private developer builds on publicly owned land, is typically subject to prevailing wage.
Community benefit agreements. Some cities and counties require prevailing wage compliance as a condition of discretionary permits, design review approvals, conditional use permits, or development agreements, for large private projects. Seattle has required prevailing wage compliance in some development agreements with private developers.
Public agency as client. When a public agency contracts directly with a private developer or owner to construct a building that will be used for public purposes, the project is subject to prevailing wage.
What Prevailing Wage Requires
For covered projects, every worker in each trade classification must be paid at least the prevailing wage for that trade in the county where the work is performed. L&I publishes prevailing wage schedules by county and trade, separate rates for journey-level workers and apprentices in each trade.
The prevailing wage schedules in King County, Seattle and the Eastside, are among the highest in Washington because the surveys on which they are based reflect the Puget Sound’s high construction labor costs. In some trades, King County prevailing wages are 20% to 30% higher than what the competitive private labor market pays in eastern Washington counties, where prevailing wages are set by lower survey results.
For developers entering the Washington market from Texas or Arizona, prevailing wage rates in King County and other Puget Sound counties can represent a significant cost increase over what they are accustomed to paying for comparable work, particularly for trades like ironworkers, electricians, and plumbers where the union-rate prevailing wage is substantially above private market rates in non-prevailing wage states.
Compliance Documentation
Prevailing wage compliance requires specific documentation that is more burdensome than standard payroll administration. Contractors on covered projects must:
File a statement of intent to pay prevailing wages with L&I before beginning work. The statement identifies the project, the contractor, and the trades that will be employed.
Pay all covered workers at or above the applicable prevailing wage rate for each trade and classification. If a worker performs work in multiple trade classifications, they must be paid the applicable rate for each classification’s work.
File affidavits of wages paid at project completion, certified by the contractor, confirming that prevailing wages were paid throughout the project.
Maintain certified payroll records for covered workers throughout the project, available for inspection by L&I or the public agency administering the project.
Subcontractors on covered projects have the same obligations as the prime contractor. The prime contractor is responsible for ensuring that all subcontractors comply, a subcontractor’s prevailing wage violation can create liability for the prime contractor.
Consequences of Non-Compliance
L&I has enforcement authority over prevailing wage violations, including the ability to assess back wages owed to workers, penalties against contractors, and debarment from public works contracts. For private projects with public funding, the funding agency may have its own enforcement remedies including loan acceleration, grant recapture, and withholding of future funding.
Developers who receive public funding for a Washington project and do not implement prevailing wage compliance as a standard part of their construction administration are creating a compliance liability that enforcement can surface at any time during or after the project.
Practical Implications for Project Administration
Construction managers and owner’s representatives on Washington projects with public funding should include prevailing wage compliance tracking as a standard element of their construction administration, verifying that statements of intent were filed before each contractor and subcontractor began work, that certified payroll records are being maintained, and that affidavits of wages paid are filed at project completion.
The compliance process is administrative rather than technical, but it requires consistent attention throughout the project. Gaps in compliance documentation are common on projects where the construction team was not informed of the prevailing wage requirement at project setup and where no one was specifically assigned to track the documentation requirements.
Washington State’s prevailing wage law, with its no-threshold application to all public works and its strong enforcement by the Department of Labor and Industries, requires construction lenders and developers on publicly funded projects to treat certified payroll compliance as an ongoing monitoring obligation, not a loan closing checkbox.
For a complete treatment of this topic, see our guide to construction management: the complete guide for developers and owners. Innergy Integral provides these services in Seattle, WA and across our six-state footprint.
Related: Construction Management, Washington State · Owner’s Representative, Washington State · SEPA and Washington State Development · Development Advisory Guide