Prevailing wage laws are among the most misunderstood requirements in government cleaning contracts. These laws require that workers on government contracts be paid a minimum wage rate determined by the Department of Labor — typically significantly higher than market wages. Non-compliance can result in contract termination, back-pay liability, debarment from future contracts, and even criminal penalties. This guide explains how prevailing wage requirements apply to commercial cleaning contracts.
The Service Contract Act (Federal)
The McNamara-O'Hara Service Contract Act (SCA) applies to federal contracts over $2,500 for services, including janitorial and cleaning services. The SCA requires contractors to pay employees no less than the prevailing wage rates determined by the Department of Labor's Wage and Hour Division for the locality where services are performed. For janitorial workers, SCA wage determinations typically range from $15-$25 per hour depending on location, plus fringe benefits (health and welfare, vacation, holidays) that add $4-$8 per hour. The SCA also requires contractors to provide safe and sanitary working conditions and prohibits wage rate reductions during the contract term.
State Prevailing Wage Laws
Many states have their own prevailing wage laws (sometimes called 'little Davis-Bacon' or 'little SCA' acts) that apply to state and local government contracts. New York, New Jersey, Connecticut, and Pennsylvania — GreenPoint's primary service states — all have prevailing wage requirements. New York's prevailing wage rates for building service workers in NYC metro are among the highest in the nation. These state laws often apply at lower contract thresholds than federal requirements and may cover additional worker classifications. Contractors must comply with whichever law — federal or state — provides the higher wage rate.
Impact on Contract Pricing
Prevailing wage requirements typically increase cleaning contract costs by 30-60% compared to private sector contracts for equivalent scope. This premium reflects higher hourly wages (often $18-$28/hr vs. $15-$18/hr market rate), mandatory fringe benefits ($4-$8/hr additional), and compliance overhead including certified payroll reporting, poster requirements, and record-keeping. Facility managers evaluating government cleaning proposals should expect prices significantly above private-market benchmarks — bids that appear at private-market rates may indicate a contractor who is not actually paying prevailing wages, creating significant liability risk for the contracting agency.
Compliance Requirements
Prevailing wage compliance involves certified payroll submissions (weekly under Davis-Bacon, as required under SCA), posting wage determination rates at the worksite, maintaining accurate time records showing hours worked by classification, paying fringe benefits either directly or to bona fide benefit plans, complying with anti-kickback provisions, and making records available for DOL investigation. The most common compliance failures are misclassification of workers (using a lower-paid classification for higher-classification work), inadequate fringe benefit payments, and incomplete certified payroll records.
GreenPoint has extensive experience with prevailing wage government contracts across NY, NJ, CT, and PA. Our pricing transparently reflects prevailing wage requirements, and our payroll systems produce compliant certified payroll reports. As an MBE-certified contractor registered on SAM.gov, we combine diversity procurement advantages with prevailing wage compliance expertise.