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Davis-Bacon Violations

Joe Whitcomb : March 02, 2020

Government Contracts

The Davis-Bacon Act, established in 1931, requires contractors and subcontractors that are performing contracts to pay local prevailing wages to laborers and mechanics that work on public works projects. The Davis-Bacon Act applies to federally-funded or assisted contracts in excess of $2,000 for construction, alteration, or repair of public buildings or public works. The work laborers and mechanics encompasses are far broader than what the names imply. These jobs include carpenters, electricians, plumbers, welders, flaggers, and many more. However, employees that are not covered by the Davis-Bacon Act do not include architects, engineers, foremen, public agency employees, and contracting agency inspectors.
Failure to pay prevailing wages is a violation of the Davis-Bacon Act. An example of a fraud that violates the Davis-Bacon Act would be a contractor that misrepresents or lies about the actual wages paid to employees.

Prevailing Wages

The Act ensures that all workers employed to work on U.S. government projects are paid fairly. Prevailing wages are the average or majority hourly rates of pay, benefits, and overtime paid to the majority of workers, laborers, and mechanics in the largest city of a given county.

Prevailing wages and benefits are determined every three years. Prevailing wages and benefits are reevaluated via surveys taken by contractors and unions in the largest city of each county.

How to Ensure Compliance

The contractor is responsible for the completion of the project and for compliance with the Davis-Bacon Act. The contractor is required to ensure wages are paid and reported accurately in payroll reports. Certified payroll reports help contractors accomplish this task. Certified payroll reports are comprehensive federal reports (form WH-347) that are submitted to the agency in charge of the government contract. These reports should list all of the employees who worked on the project, their wage rates, benefits, the type of work they did, and the hours that they worked each week. They should also include amounts withheld from employees’ paychecks such as taxes and child support.

How to Report Davis-Bacon Violation

In order to report a Davis-Bacon Act violation or fraud, it is recommended that you acquire an attorney to file a qui tam lawsuit under the False Claims Act and alleging Davis-Bacon Act violation(s). To be successful in this type of case it is important to provide specific and detailed information, because not all Davis-Bacon Act allegations are sustained by the courts. Contractors or subcontractors guilty of Davis-Bacon Act violations are subject to a judgment of three times the government’s damages and in a qui tam action can provide whistleblowers a reward of up to 30 percent of the amount received by the government.

Penalties

The penalty for not complying with the Davis Bacon Act can be costly. The government may prosecute cases of falsification of certified payroll records or accepting kickbacks of wages. The penalties for Davis Bacon violations include fines and/or imprisonment. Contractors or subcontractors found guilty of not complying with the Davis-Bacon Act or found to be “in aggravated or willful violation” may be subject to debarment from bidding on future government contracts for up to three years. Contract payments may also be withheld in sufficient amounts to satisfy liabilities for unpaid wages and liquidated damages due to overtime violations of the Contract Work Hours and Safety Standards Act (CWHSSA).

If You Are Found Guilty of Davis-Bacon Violation

Contractors and subcontractors may challenge violation convictions and debarment before an Administrative Law Judge. Determinations by the Department of Labor, Wage and Hour Division can be challenged before an Administrative Law Judge as well. Decisions by the Administrative Law Judge can also be appealed to the Department’s Administrative Review Board (ARB). ARB decisions on violations may be appealed and enforced through the federal court system.

Davis-Bacon Resources

There are multiple resources available to help protect employees and ensure contractors abide by the Davis-Bacon Act. The website http://beta.sam.gov/ provides the public information on wage determinations (WDs) for each contract action. Another government website provides access to Davis-Bacon information and helps users fill out Report of Construction Contractor’s Wage Rates (WD-10) Form.

Online training on the Davis-Bacon Act and Service Contract Act

The Department of Labor provides employers and workers with access to information and assistance on how to comply with the Davis-Bacon and related Acts. The department provides a resource book at https://www.dol.gov/agencies/whd/government-contracts/prevailing-wage-resource-book and the website https://www.dol.gov/whd/programs/dbra/forms.htm, provides information on wage rates, payroll submission forms, a “Request for Wage Determination and Response to Request,” and a Davis-Bacon Poster. The Wage Determinations Online (WDOL) website library, https://wdolhome.sam.gov/, provides information on compliance with the prevailing wage laws that apply to federal contracts. To contact the Wage and Hour Division call 1-866-4USWAGE.

For further information or assistance with Davis-Bacon compliance, or to discuss a possible violation, please contact Whitcomb, Selinsky PC at (866) 476-4558. Consultations are free.