Raising Wages and Narrowing Pay Gaps With Service Sector Prevailing Wage Laws – Center For American Progress – DC Initiative on Racial Equity
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What are service sector prevailing wage laws?

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

Prevailing wage laws help ensure that government dollars do not undercut market wages and benefits.

Who uses service sector prevailing wage laws?

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 workers on federal government contracts and contracts issued by agencies of the District of Columbia. The states of California, Connecticut, Illinois, Massachusetts, Montana, New Jersey, New York, and Washington also offer prevailing wages for their government service contracts. Implementation varies in terms of covered occupations and contracts. For example, Illinois covers food and security services, while New Jersey covers workers at airports and train terminals. However, every state and federal law includes janitors and custodians, making janitors an apt group to study when looking at these laws’ wage and benefits effects. Several cities and counties also have similar policies.

What does new research reveal about these laws?

New resear


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