If your business is considering bidding on state-funded or public construction projects in Minnesota, understanding prevailing wage requirements is essential. The Minnesota Department of Labor and Industry (DLI) recently released the 2026 certified prevailing wage rates for highway and heavy construction projects, and contractors should review them carefully before submitting bids.
👉 View the 2026 Highway & Heavy Prevailing Wage Rates on DLI’s website
What Is Prevailing Wage?
Minnesota’s prevailing wage law, outlined in Minn. Stat. §§ 177.41–177.44, requires contractors and subcontractors working on state-funded projects to pay workers the prevailing wage rate for their trade or classification within the county or region where the project is located.
The prevailing wage includes both the hourly base rate and the value of benefits provided. These requirements ensure fair competition by standardizing wages across contractors bidding for public work.
In short: if state dollars are funding a construction project, the wages paid to covered workers must match or exceed the certified prevailing rate for that trade and location.
Why It Matters
Many smaller general contractors, remodelers, and specialty trades are expanding into public projects. While these jobs offer new opportunities, they also introduce additional compliance requirements.
Failing to meet prevailing wage standards can lead to significant consequences, including:
- Repayment of back wages;
- Penalties assessed by DLI; and
- Potential disqualification from future public bids.
By contrast, contractors who understand and comply with these rules demonstrate reliability and professionalism, building credibility for future public-sector work.
2026 Updates: What Contractors Should Know
The Minnesota Department of Labor and Industry (DLI) has posted the 2026 prevailing wage rates for highway and heavy construction projects. These certified rates were developed using data collected through DLI’s annual statewide wage survey.
Contractors should note:
- Rates have generally increased across many trades due to inflation and continued demand for skilled labor.
- Rates differ by region, classification, and type of work (e.g., commercial, highway, or heavy construction).
- Separate prevailing wage schedules will apply for commercial building projects once certified.
Before preparing a bid, verify the applicable rates for your project’s trade classifications and county or region. Using outdated rates or incorrect classifications can result in underpayment and compliance violations.
Incorporating Prevailing Wage Into Your Bid and Payroll
- Determine whether the project is covered.
Confirm whether the project receives state or public funding and meets the statutory definition of public work.
- Find the correct wage schedule.
Consult DLI’s published tables for the appropriate classification and county. Separate schedules exist for highway/heavy and commercial work.
- Adjust your labor costs.
Incorporate both the base wage and required benefits (or equivalent cash payments) into your bid.
- Track compliance during the project.
Maintain certified payroll records, verify subcontractor compliance, and ensure posted wage notices are current.
- Retain documentation.
Keep payroll and classification records for at least three years in case of an audit.
Common Mistakes to Avoid
- Misclassifying workers or using incorrect wage determinations.
- Failing to update rates when DLI certifies new schedules.
- Omitting fringe benefit equivalents from wage calculations.
- Incomplete recordkeeping or missing certified payroll documentation.
Each of these issues can lead to financial penalties or disqualification from future bidding opportunities.
Preparing for 2026
With the 2026 prevailing wage rates now available, contractors should review their bidding processes, payroll systems, and subcontractor agreements to ensure compliance. Doing so not only avoids costly penalties but also strengthens your position as a qualified bidder on public projects.
North Star Law Group, PLLC helps construction professionals understand and comply with Minnesota’s wage, bid, and payroll requirements. For questions or legal guidance, contact our Construction Law team.
