Cornell University

Catherwood Library

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Question of the Month

From the Catherwood Library reference librarians

June-July 2007

PLEASE NOTE: The Reference Question of the Month is kept current only during the month for which it was written. Archived questions will not be updated, and over time may contain inaccurate information or broken web links. We provide archived questions as a service, since much of the information will remain accurate and of continued interest to the ILR community.

Question: Minimum wage, living wage, prevailing wage—what’s the difference and am I entitled to any of these?

Answer: This question is more complicated than it might seem! If you think you are being paid below the legal limit, please contact an attorney specializing in labor and employment law.


Most employees are entitled to either the federal minimum wage or to their state’s minimum wage, whichever is higher. However, minimum wage laws do not cover some types of employees or employees in certain industries. Examples of workers who may not be covered include workers in some job training programs and sheltered workshops. Workers in some seasonal industries, such as agriculture or amusement, also may not be covered.

More information:

U. S. Department of Labor’s Wages and Hours Division

Fair Labor Standards Act

State minimum wage rates


A living wage is now defined as a wage that provides workers with enough money for reasonable needs and comforts. What constitutes a living wage is dependent on expenses, including healthcare, and is often community, rather than state or country specific. Living wage ordinances, where they exist, are local laws that usually cover only municipal or county employees or employees working for employers who are parties to local government contracts. A few communities, such as San Francisco, have living wage laws that cover private employers, but these are very rare.

More information:

Association of Community Organizations for Reform Now (ACORN)

San Francisco’s Minimum Wage Ordinance

Buffalo’s Living Wage Ordinance (City of Buffalo Living Wage Commission)

Alternatives Federal Credit Union’s "livable wage studies"(Ithaca, NY)


Prevailing wages apply to some employees working for the government or on government-sponsored projects or contracts. Prevailing wages are determined by administrative agencies according to regulations adopted in response to legislation. The prevailing wage for an occupation is based on the median or, sometimes, mean wage of similar workers doing similar jobs in the locality. Three federal laws proscribe prevailing wages: the Davis-Bacon Act of 1931, the Walsh-Healey Public Contracts Act of 1936, and the Service Contract Act of 1965. States may have "Little Davis-Bacon" Acts that call for the payment of prevailing wages.

Prevailing wages are also used as standards in other laws. For instance, payment of Davis-Bacon prevailing wages is a requirement in over 60 Federal statutes which assist construction projects through grants, loans, loan guarantees, and insurance. Under current immigration laws, before an employer hires a permanent foreign worker, it must prove that no U. S. worker is able, willing, qualified and available to accept the job at the prevailing wage for that occupation in the area of intended employment and that employment of the alien will not adversely affect the wages and working conditions of similarly employed U.S. workers. Unemployment insurance recipients in some states are not required to accept a job offer when the offered wage rate is less than the prevailing wage.

More information:

U. S. Department of Labor’s Wages Topic Page

New York State Department of Labor’s Wages and Hours Page

U. S. Department of Labor’s Wages Under Foreign Labor Certification


Comparison of various base wage requirements*

Law

Who is covered

Wage

U. S. Federal Minimum Wage

Most U. S. Workers

$5.15/hr.

New York State Minimum Wage

Most Workers in NYS

$7.15/hr.

Buffalo Living Wage Ordinance

Buffalo City employees or employees working under service contracts with the City when the contract is for more than $50,000 and the employer has more than 10 employees.

$9.59/hr. when the employer provides health insurance; $10.77/hr if no employer-provide health insurance

NYS Prevailing Wage

(Erie County rates)

Workers employed under most public work construction contracts; Wages vary by locality and occupation.

Building Carpenter Wages=$25.83/hr.; Supplemental Benefits=$18.04/hr.

Davis Bacon Prevailing Wage

Workers employed under District of Columbia or Federal contracts over $2000 for the construction, alteration, or repair of public buildings or public works

Building Carpenter

Wages=$ 26.27/hr.; Fringes= $18.80/hr.

Residential Carpenter

Wages=$14.48; Fringes= $4.64/hr.s



*As of June 22, 2007. Please contact the appropriate agency for wage verifications.

— Researched by Susan LaCette