The Davis-Bacon Act requires contractors and subcontractors on federally funded or assisted construction contracts over $2,000 to pay laborers and mechanics at least the prevailing wage and fringe benefits set by the US Department of Labor (DOL). Rates come from a wage determination for the county and type of construction, incorporated into the contract. The “Related Acts” extend the same rules to many federally assisted programs, such as some highway, housing and water projects.
Why it matters
Getting it wrong is expensive: back wages, withheld contract payments, and in serious cases debarment from federal work. Contractors must submit certified payroll weekly (commonly on form WH-347 or an equivalent) showing each worker’s classification, hours, rate and fringes.
Worked example
Illustrative: a wage determination lists Electrician at $48.10/hr base plus $22.35/hr fringe. A worker who logs 40 hours must receive at least $1,924.00 in base wages and $894.00 in fringe value, either paid as cash or contributed to bona fide benefit plans. If the contractor’s plans only contribute $15.00/hr, the $7.35/hr gap ($294.00 for the week) is paid as cash on the check.
Common mistakes
- Classifying workers by title instead of the work actually performed.
- Using an outdated wage determination instead of the one in the contract.
- Forgetting that subs’ payroll compliance is the prime’s problem too.
How os.construction handles it
We’re building payroll classes, wage determinations and certified payroll on the same labor record as job cost, so compliance reports come from the hours already entered. This is in design with founding contractors and is not available yet.