Information for TN Government Contractors

Tennessee is yet another state that determines its own prevailing wage rates compliant to the standards of the Davis Bacon Act.  Called the Tennessee Prevailing Wage Act (TPWA), it makes sure that all workers of government contractors and subcontractors are paid accordingly as stipulated in the act.  Failure to do so would mean sanctions as specified by the TPWA.

Recent Changes in the Tennessee Prevailing Wage Act

The Tennessee Prevailing Wage recently underwent a couple of amendments.  These include the following:

• The definition of “state contract” has been updated.  Initially, it was known as “any contractual agreement (written or oral) entered into by any person, firm, or corporation with the State of Tennessee for the performance of work on a state construction project.”  At present, it means “any contractual agreement (written or oral) entered into by any person, firm, or corporation with the State of Tennessee for the performance of work on a state highway construction project.”
• Another thing that was amended was clarifying that the Labor Standards Division has neither the authority to regular nor inspect state building projects.

Implications of Changes to Prevailing Wage Contractors

There are some things the prevailing wage contractors should know when it comes to adherence to the Tennessee Prevailing Wage Act.

• Amendments took effect on January 1, 2014.  All disputes before that are not covered by the current act.
• If the project has nothing to do with highway construction (i.e. buildings), the employer is not bound by the rates stipulated by the prevailing wage rates of the state. 
• Workers of non-highway projects can still file wage dispute and use the Davis-Bacon Act as reference.  However, it is not the state’s Department of Labor and Workforce Department that handles these cases. These complaints will be coursed through the Davidson County Chancery Court.

Salient Points of the Tennessee Prevailing Wage Act

Take note that the Tennessee Prevailing Wage Act is ONLY applicable to state highway construction. Everything else if fair game. However, prevailing wage contractors must still follow the minimum hourly wage standards of the Davis-Bacon Act. Here are some other points about the TPWA that you should take note of:

• Giving of fringe benefits including travel and food allowances is not a requirement.  Employers can give them but on their discretion.
• Overtime is not found anywhere in the provisions of the Tennessee Prevailing Wage Act.  However, state law requires overtime payment for any work that goes beyond forty hours each week.  The same goes for work on weekends and holidays.
• There is also no provision regarding shift differentials.  This means whether a worker works in the morning or the evening, the same prevailing wage rates apply.
• Contractors must be licensed before they can engage in any project with the state of Tennessee.

For the entire Tennessee Prevailing Wage Act, click here.

Penalties

Once it can be proven that government contractors and subcontractors did not pay their workers accordingly, they are required to pay the workers the difference.  If violations continue, employers are placed on notice and if things still do not improve, they can face debarment.  The duration of the debarment will depend on the gravity of the offense.

Let ARCHER JORDAN Help You with Compliance

ARCHER JORDAN can assist you to make sure that you are compliant with the Tennessee Prevailing Wage Act. Work your way through the tricky amendments when you hire us. Compliance is our number one expertise so call us today and feel the difference!