The word 'yang' is just like the relative pronouns in English; that, which, who.
Unlike English, we can't omit the word yang. Eg. Buku yang saya beli kelmarin sangat berguna. (The book (which) I bought yesterday is very useful.)
We use 'yang' for this situation. Buku yang mana? (Which book?). Buku yang berwarna merah (The red book.).This is to show clearly the relation between the noun and the modifier.
For the sentence., apakah yang sedang awak pakai? = What are you wearing?, we can call 'yang sedang awak pakai' a predicative phrase which is translated as 'that you are wearing'. Just think of it as a relative pronoun. So in English we can literally translate it as 'What is it that you are wearing'.