What You Need to Know About Prevailing Wages Under the Davis-Bacon Act

If you are a contractor working on a public works project funded by the federal government, you are subject to specific regulations, such as the Davis-Bacon Act (DBA). We will cover prevailing wages under the DBA, the Davis-Bacon Act requirements, and the consequences of noncompliance, particularly regarding Davis-Bacon wages.

Meeting the DBA’s prevailing wage obligations is essential for contractors to avoid legal issues and remain competitive when bidding on federal projects. Whitcomb, Selinsky, PC can assist contractors with Davis-Bacon Act compliance, ensuring that you understand and meet all the necessary requirements.

Understanding the Davis-Bacon Act

The Davis-Bacon Act was enacted in 1931 and mandates that contractors and subcontractors working on federal construction projects exceeding $2,000 must pay their employees in accordance with the act. This applies to various types of public construction, such as roads, bridges, and public buildings.

The law was designed to prevent contractors from underbidding federal projects by paying their workers less than the local wage rates. Wage determinations by the Department of Labor (DOL) are based on the wages and benefits of similarly classified workers in the area.

Davis-Bacon Act Wages and Prevailing Wages

Under the Davis-Bacon Act, prevailing wages represent the minimum hourly rate that contractors must pay their workers. This rate includes typical benefits and overtime pay, and is determined by the DOL through surveys and local collective bargaining agreements.

When determining Davis-Bacon wages, the DOL considers factors such as:

• The type of construction (e.g., building, highway, residential)
• The specific classification of workers (e.g., carpenters, electricians)
• Local wage standards, including both union and non-union rates.

For example, wage determinations are made by labor category for federal contracts. You can find more details on wage determinations on the DOL’s Government Contracts Construction page.

Davis-Bacon Act Requirements for Contractors

Contractors working on federal projects must meet several Davis-Bacon Act requirements, including:

• Posting Wage Determinations: Contractors must post DOL wage determinations at job sites where workers can easily access them.
• Paying Davis-Bacon Wages: All workers must be paid at least the Davis-Bacon prevailing wage for their job classification. Misclassifying workers to pay lower wages is a direct violation of the DBA.
• Payroll Records Keeping: Contractors are required to submit certified payroll records that document hours worked, wages paid, and worker classifications. These records must be available for DOL inspection if requested.

By adhering to these requirements, contractors can avoid the legal and financial consequences of non-compliance.

Consequences of Non-Compliance

Failure to comply with the Davis-Bacon Act can lead to serious penalties, including:

• Legal Penalties: The DOL can withhold payment from non-compliant contractors, impose fines, and require restitution of unpaid wages to affected workers.
• Debarment: Contractors who violate the Davis-Bacon wage rules may be debarred from bidding on federal contracts for up to three years.
• Financial Restitution: Contractors found guilty of underpaying workers may be required to compensate them for wage differences, resulting in significant financial liabilities.

The Abhe & Svoboda Case: An Example of Non-Compliance

An example of non-compliance with the Davis-Bacon Act involves the case of Abhe & Svoboda, Inc. v. Department of Labor. The case arose when contractors performing bridge painting projects in Connecticut misclassified workers and underpaid them for tasks associated with bridge painting, such as erecting containments and cleaning lead debris.

The Department of Labor (DOL) found that Abhe & Svoboda, along with other subcontractors, violated the DBA by paying workers carpenters' and laborers' rates instead of the prevailing painter rates, as required for all tasks related to bridge painting. The investigation revealed over $2 million in unpaid wages, and the DOL proposed debarment for several contractors involved. After multiple hearings, the DOL’s findings were upheld.

For more details, you can review the full court opinion here.

Best Practices for Contractors

To avoid penalties and stay compliant with Davis-Bacon Act requirements, contractors should follow these best practices:

• Review Wage Determinations Regularly: The DOL updates wage determinations periodically. Contractors should check for updates to ensure they apply the correct wages.
• Educate Staff: Ensure that HR and payroll staff are knowledgeable about the Davis-Bacon Act and can properly classify workers and handle payroll inquiries.
• Seek Legal Guidance: Navigating prevailing wage laws can be complex. Contractors should consult legal experts, such as Whitcomb, Selinsky, PC, who specialize in government contracting to help interpret regulations and maintain compliance.

Conclusion

The Davis-Bacon Act guarantees that workers on federally funded or assisted construction projects are paid the prevailing wage for their classification. Compliance is essential, as violations can result in legal penalties, financial restitution, and even debarment from future federal contracts.

If you’re unsure whether your business is compliant with Davis-Bacon Act requirements or have questions about wage determinations, contact Whitcomb, Selinsky, PC for a free consultation. We can help your business with all matters related to government contracting, wage classifications, and federal law compliance.

By staying informed and seeking expert legal advice, contractors can ensure compliance with the Davis-Bacon Act, protecting both their business and workers from unnecessary legal and financial risks. For more details on compliance, visit our Davis-Bacon Act page.