Rights of Prevailing Wage Contractors under the Davis Bacon Act
Prevailing wage contractors working for the government on public works projects can earn a lot of money, but only if certain conditions are met. Entering a contract with the government requires complying with a variety of existing laws and regulations relating to business operations and employee management.
There are two laws that primarily influence the employment wage policies of prevailing wage contractors: the Davis Bacon Act and the Service Contract Act. Failing to comply with the details of these two laws can merit penalties.
What is the Davis Bacon Act?
The Davis Bacon and Related Acts (DBRA) cover wages paid for federally-funded construction work on public buildings and projects. Contractors and subcontractors have to pay their laborers, mechanics and other employees an amount that is equal to or greater than the locally prevailing wages and fringe benefits applied to work on similar projects in the area, for any contract over $2000.
The local prevailing wage is set by the Department of Labor, following the different classes of labor, types of projects and geographic area.
The 1931 Davis-Bacon Act used to apply only to federal or District of Columbia contracts. Through the years, more than 60 related acts with similar provisions on prevailing wage and fringe benefits requirements have been passed. These related acts also cover construction projects that are federally-funded through grants, loans, loan guarantees and insurance.
What are your obligations under the Davis Bacon Act?
Under the DBRA, you have to strictly abide by certain record-keeping and reporting requirements, covering all laborers and mechanics. You have to maintain the following records during the course of the project and for three years after:
o Name, address and Social Security number of the employee
o Each employee’s classifications
o Hourly rates of pay, including rates of contributions or costs anticipated for fringe benefits or cash equivalents
o Daily and weekly number of hours worked
o Deductions made
o Actual wages paid
If applicable, you also have to provide a detailed report on fringe benefit plans and programs, as well as on information regarding approved apprenticeship or trainee programs.
A copy of this report has to be provided to the federal agency on a weekly basis. Each payroll submitted should be accompanied by a “Statement of Compliance” signed by the contractor or an authorized officer.
Allow Us to Ensure Your Compliance with ARCHER JORDAN
Non-compliance penalties can be steep. Contractors or subcontractors who have disregarded these obligations may face contract termination and debarment from future contracts for up to three years.
As a third-party administrator providing fringe benefits to government contractors and hourly hires, ARCHER JORDAN can help you meet your obligations to your employees under the Davis Bacon Act.
