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Reporting and Avoiding Davis Bacon Act Violations

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Davis-Bacon Violations

           The Davis-Bacon Act established in 1931 requires contractors and subcontractors performing on contracts pay local prevailing wages on public works projects for laborers and mechanics.  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 excluded from the Davis-Bacon Act 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 Davis-Bacon Act fraud and violation is if a contractor misrepresents or lies about the actual wages paid to employees. 

Prevailing Wages

The Act ensures that all workers of government-contracted projects are paid fairly.  Prevailing wage is the average or majority hourly rate 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 of the Davis-Bacon Act.  The contractor or administrator of projects are 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 (WH-347) that are submitted to the agency in charge of the government contract.  It lists all employees, their wage, benefits, type of work they did, and hours worked each week.  It also includes withholdings such as taxes and child support.

How to Report Davis-Bacon Violations

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

Penalties

            The penalty for not complying can be costly.  Falsification of certified payroll record or kickback of wages may be subject to prosecution, the penalty of which could be either 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 future 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 violations and debarment before an Administrative Law Judge. Determinations by the 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 reach 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 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 site 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 sites that provide information on compliance with the prevailing laws that apply to federal contracts.  To contact your Wage and Hour Division call 1-866-4USWAGE.

For more information or assistance to comply with the Davis-Bacon Act or to report a complaint, contact Whitcomb Selinsky PC at (866) 476-4558.

About the AuthorRaymundo Ribota

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