Service sector prevailing wage laws require service workers on government projects to be paid wages and benefits that at least match market levels for workers who are employed in similar professions in a given area. For example, they set compensation floors for janitors on government-funded projects in Illinois and for security guards at publicly owned buildings in Montana. These laws are closely related to the better-known and more widely used prevailing wage laws that set standards for construction workers on government building projects such as bridges and highways. Prevailing wage laws also complement state and local minimum wage laws, since the wage and benefits rates they set are typically higher than minimum standards and target a specific subset of workers whose jobs are funded through government spending.
Prevailing wage laws help ensure that government dollars do not undercut market wages and benefits, bringing high-value services to the public and preventing contractors from slashing wages to generate low contract bids and undercutting employers offering good wages. They can also uplift pay and benefits while closing compensation gaps
The federal government maintains a prevailing wage standard for its service contracts, as do eight states and several cities and counties. Since 1965, the McNamara-O’Hara Service Contract Act (SCA) has mandated prevailing wages for service...
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