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- Employment Law Guide A Companion to the FirstStep Employment Law Advisor |
Federal Contracts-Working Conditions: Prevailing Wages in Construction Contracts
Updated: September 2009 Davis-Bacon and Related Acts Who is CoveredThe Davis-Bacon and Related Acts (DBRA) are administered by the Wage and Hour Division. These Acts apply to contractors and subcontractors performing on federally funded or assisted contracts in excess of $2,000 for the construction, alteration, or repair (including painting and decorating) of public buildings or public works. Basic Provisions/RequirementsThe Davis-Bacon Act requires that all contractors and subcontractors performing on federal contracts (and contractors or subcontractors performing on federally assisted contracts under the related Acts) in excess of $2,000 pay their laborers and mechanics not less than the prevailing wage rates and fringe benefits listed in the contract’s Davis-Bacon wage determination for corresponding classes of laborers and mechanics employed on similar projects in the area. Davis-Bacon labor standards clauses must be included in covered contracts. Apprentices may be employed at less than predetermined rates if they are in an apprenticeship program registered with the Department of Labor or with a state apprenticeship agency recognized by the Department. Trainees may be employed at less than predetermined rates if they are in a training program certified by the Department. Contractors and subcontractors on prime contracts in excess of $100,000 are required, pursuant to the Contract Work Hours and Safety Standards Act, to pay employees one and one-half times their basic rates of pay for all hours over 40 worked on covered contract work in a workweek. Covered contractors and subcontractors are also required to pay employees weekly and to submit weekly certified payroll records to the contracting agency. Employee RightsThe Davis-Bacon and Related Acts provide laborers and mechanics on covered federally financed or assisted construction contracts the right to receive at least the locally prevailing wage rate and fringe benefits, as determined by the Department of Labor, for the type of work performed. The Wage and Hour Division(http://www.dol.gov/whd/) and respective federal contracting agencies accept complaints of alleged Davis-Bacon violations. Recordkeeping, Reporting, Notices and PostersNotices and PostersEvery employer performing work covered by the labor standards of the DBRA must post the WH-1321 “Employee Rights Under the Davis-Bacon Act” poster(http://www.dol.gov/whd/programs/dbra/wh1321.htm) at the site of the work in a prominent and accessible place where it may be easily seen by employees. There is no particular size requirement. The wage determination must be similarly posted. RecordkeepingUnder the DBRA, covered contractors must maintain payroll and basic records for all laborers and mechanics during the course of the work and for a period of three years thereafter. Records to be maintained include:
Some of the records required to be kept under the law are also required under the Fair Labor Standards Act. See Wage and Hour Division Fact sheet #21: Recordkeeping Requirements under the Fair Labor Standards Act (FLSA)(http://www.dol.gov/whd/regs/compliance/whdfs21.pdf). ReportingEach covered contractor and subcontractor must, on a weekly basis, provide the federal agency a copy of all payrolls providing the information listed above under “Recordkeeping” for the preceding weekly payroll period. Each payroll submitted must be accompanied by a “Statement of Compliance.” The contractor, subcontractor or the authorized officer or employee of the contractor or subcontractor who supervises the payment of wages must sign the weekly statement. Statements of Compliance are to be made on the form WH-347 "Payroll (For Contractors Optional Use)"(http://www.dol.gov/whd/forms/wh347instr.htm) or on any form with identical wording. This must be completed within seven days after the regular pay date for the pay period. Contractors may also be asked to submit, via survey, wage data that may be used by the Wage and Hour Division to determine the locally prevailing wage rates that will apply to workers on Davis-Bacon and DBRA-covered projects. The submission of wage data is encouraged, but voluntary. Contractors and others may use the WD-10 Form, Report of Construction Contractor’s Wage Rates(http://www.dol.gov/whd/programs/dbra/wd10/index.htm). Penalties/SanctionsContractors or subcontractors found to have disregarded their obligations to employees, or to have committed aggravated or willful violations while performing work on Davis-Bacon covered projects, may be subject to contract termination and debarment from future contracts for up to three years. In addition, contract payments may be withheld in sufficient amounts to satisfy liabilities for unpaid wages and liquidated damages that result from overtime violations of the Contract Work Hours and Safety Standards Act (CWHSSA). Contractors and subcontractors may challenge determinations of violations and debarment before an Administrative Law Judge. Contractors and subcontractors may appeal decisions by Administrative Law Judge's with the Department's Administrative Review Board. Final Board determinations on violations may be appealed to and are enforceable through the federal courts. Falsification of certified payroll records or the required kickback of wages may subject a contractor or subcontractor to civil or criminal prosecution, the penalty for which may be fines and/or imprisonment. Relation to State, Local, and Other Federal LawsSince 1931, Congress has extended the Davis-Bacon prevailing wage requirements to some 60 related Acts which provide federal assistance for construction through loans, grants, loan guarantees, and insurance. These Acts include by reference the requirements for payment of the prevailing wages in accordance with the Davis-Bacon Act. Examples of the related Acts are the American Recovery and Reinvestment Act of 2009, the Federal-Aid Highway Acts, the Housing and Community Development Act of 1974, and the Federal Water Pollution Control Act. The Copeland "Anti-Kickback" Act(http://www.dol.gov/whd/regs/statutes/copeland.htm) prohibits contractors from in any way inducing an employee to give up any part of the compensation to which he or she is entitled under his or her contract of employment, and requires contractors to submit a weekly statement of the wages paid to each employee performing DBRA covered work. Contractors on projects subject to DBRA labor standards may also be subject to additional prevailing wage and overtime pay requirements under State and local laws. Also, overtime work pay requirements under CWHSSA and the Fair Labor Standards Act(http://www.dol.gov/whd/flsa/index.htm) may apply. Compliance Assistance AvailableThe Department of Labor provides employers, workers, and others with clear and easy-to-access information and assistance on how to comply with the Davis-Bacon and Related Acts, such as the DBRA Forms page(http://www.dol.gov/whd/programs/dbra/forms.htm). Other compliance assistance related to the Act — including the Davis-Bacon and Related Acts (DBRA) Web Page(http://www.dol.gov/whd/programs/dbra/index.htm) and regulatory and interpretive materials — is available on the Compliance Assistance "By Law"(http://www.dol.gov/compliance/laws/comp-dbra.htm) Web page. Also, the Wage Determinations OnLine(http://www.wdol.gov/) (WDOL) Web site provides a single location for federal contracting officers to obtain Davis-Bacon wage determinations for use in covered contracts. The WDOL Web site library provides a variety of links that relate to compliance with the prevailing wage laws that apply to federal and federally assisted contracts. DOL ContactsWage and Hour Division(http://www.dol.gov/whd/)
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