Federal Prevailing Wage

federal Prevailing Wage

The Davis-Bacon Act, passed in 1931, is a key federal law that ensures construction workers on government-funded projects receive fair wages. It requires contractors and subcontractors working on federally funded or assisted construction projects worth $2,000 or more to pay their employees the prevailing local wage for similar work in the area. These wage rates, set and enforced by the U.S. Department of Labor, help maintain fair labor standards, prevent wage undercutting, and promote stability in the construction industry by ensuring workers receive appropriate compensation for their skills and labor.

Companies awarded a federally funded project must:

1. Make sure all contractors and sub-contractors comply with Davis-Bacon requirements.

2. Pay prevailing wages to all workers.

3. Accurately classify workers according to the work they perform.

4. Submit copies of certified payroll records to contracting agencies weekly.

5. Attach a “Statement of Compliance” to each certified payroll record submitted.

Common Davis-Bacon Act Violations:

Underpayment of Prevailing Wages
- Failing to pay workers the locally prevailing wage rates as determined by the Department of Labor (DOL) for specific job classifications.

Misclassification of Workers
- Assigning workers to incorrect job classifications to pay lower wage rates than required.

Failure to Pay Overtime
- Not compensating workers at one and a half times their regular rate for hours worked over 40 in a workweek, as mandated by the Contract Work Hours and Safety Standards Act (CWHSSA).

Incomplete or Falsified Certified Payroll Records
- Submitting inaccurate or fraudulent certified payroll reports, which are required weekly to demonstrate compliance with wage and hour laws.

Improper Fringe Benefit Payments
- Not providing the required fringe benefits or equivalent cash payments as part of the prevailing wage.

Retaliation Against Workers
- Taking adverse actions against employees who report violations or cooperate with investigations, which is prohibited under DOL regulations.

violations can result
in:

Withholding of Contract Funds
- Federal agencies may withhold payments to contractors to cover back wages and damages owed to workers.

Debarment
- Contractors found in violation may be barred from receiving federal contracts for up to three years.

Civil and Criminal Penalties
- Willful violations can lead to civil penalties and, in severe cases, criminal prosecution.

False Claims Act Liability
- Submitting false certified payrolls can result in liability under the False Claims Act, leading to substantial fines and damages.