Prevailing wage is mandatory on all California public works projects over $1,000. Rates are set by the Department of Industrial Relations (DIR) and vary by trade, county, and project type. Current rates range $45-$70/hour base wage plus fringe benefits. To budget correctly: (1) identify all worker positions, (2) look up current rates at dir.ca.gov/dip, (3) estimate hours per classification, and (4) calculate total cost before adding overhead. For example, on a $500k project with 5 workers, prevailing wage cost might be $320k+. Common mistakes: using old rates (rates change January 1), wrong classifications, not including fringe benefits, using apprentice rates incorrectly, and forgetting foreman premium. Penalties for non-compliance are severe: $300+ per worker per day in penalties, back pay owed, potential license suspension, and debarment from future public works. Keep complete payroll records for 4 years. Prevailing wage compliance is not optional - budget accurately and track carefully.