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elaws - employment laws assistance for workers and small businesses - FLSA Section 14(c) Advisor

How to Conduct a Prevailing Wage Survey Under FLSA Section 14(c)

To conduct a survey, the employer must obtain wage information for each job classification being performed by workers to be paid a special minimum wage. The employer should prepare a detailed job description for each job being surveyed to ensure that all parties fully understand what job is being surveyed.

The employer should obtain wage data from comparable businesses in the vicinity that primarily employ workers who do not have disabilities performing the same work and utilizing similar methods and equipment as used by the worker with a disability.

A comparable business is one that either employs a similar number of employees or competes for contracts of a similar size and nature. The appropriate size of the sample — the number of firms surveyed — will depend on the number of firms doing similar work in the vicinity, but normally should include no less than three. The prevailing wage information should be solicited, preferably in writing, and the employer conducting the survey must record information regarding each prevailing wage survey contact.

Weighted Average vs. Simple Average

Employer

No. of
Employees

Wage Rate
Reported

Gross Wages
(#EEs X Wage)

XYZ, Inc.

36

$7.85

$282.60

ABC, Inc.

17

$8.00

$136.00

RST, Ltd.

25

$8.15

$203.75

3 employers

78 employees

$24.00

$622.35

       

Weighted Average:

$622.35 / 78 employees = $7.97884 or $7.98*

Straight Average:

$24.00 / 3 employers = $8.00

 

*Note that in this example the prevailing wage rate is $7.97884, but the employer rounded it up to $7.98 per hour. If the employer rounded to $7.97, he or she would be establishing a prevailing wage rate that is less than the true prevailing wage rate (less by $0.00884 per hour). The Wage and Hour Division will not normally question computations that are carried out to the fifth decimal point and then rounded up to four decimal places. The employer could, of course, round up (but not merely round off) sooner. For example, .04974 should be rounded to .0498 or .05.

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FLSA Section 14(c) Advisor | Wage and Hour Division