LCPtracker Blog

School’s in Session: Davis-Bacon 101

First thing’s first. Davis-Bacon has absolutely nothing to do with the familiar breakfast food or some pig named Davis.

Then what is it?

The Davis-Bacon Act, established in 1931, has helped ensure that laborers in the construction industry get paid fairly for the work they perform for roughly 87 years now. It mandates that prevailing wages are used on all public works construction projects that use Federal funds. The one exception is for contracts below $2,000. The scope of work can include anything from construction to renovations and repairs. And yes, this includes painting or decorating if the work is being performed directly on the site of the project.

Prevailing Wages Defined

Prevailing wages, as per Davis-Bacon wage determinations, consist of hourly wage rates, as well as any fringe benefits that must be paid to workers, laborers, and mechanics within a specific area or region – usually broken down by state, county, or city. Each craft classification has its own designated rate, and they are typically updated once or twice a year.

The contractor must pay its employees no less than the prevailing wage designated in the contract wage determination. The only case in which an employee can be paid less than the prevailing wage is if he or she is registered to an apprenticeship program with the US Department of Labor.

Another important thing to note is that the correct prevailing wage rate is determined by the nature of the work performed rather than the worker’s job title. For example, if a worker is an electrician by trade, but spends a day painting on a renovation project, then the associated prevailing wage rate required for that day’s work would be specific to the craft classification of painting, not as an electrician. This is one of the more common (and potentially costly) mistakes that contractors make in paying their workers, whether intentional or not.

Wage determinations for associated craft classifications are published on the Wage Determinations Online website.

“Related Acts”

In addition to Davis-Bacon, there are a group of other “Related Acts” that act as an extension of Davis-Bacon laws for projects that receive federal assistance – that is, they receive funding acquired via grants, loans, and insurance through the federal government. Some of these Acts would include:

  • Federal Water Pollution Control Act
  • Housing and Community Development Act of 1974
  • Federal Water Pollution Control Act

For more information on these related Acts, check out the US DOL’s site.

Who’s Checking Anyway?

The US Department of Labor administers the responsibilities of the Davis-Bacon Act. They require contracting agencies to collect and monitor Certified Payroll Reports (CPRs) from contractors on federally funded projects. It’s important to note that each state is a little different and can have unique requirements.

More info can be found at the DOL’s Wage and Hour Division Website.

Streamlining Compliance Processes

With all these requirements, labor compliance can be a burden for both contractors and administrators alike. Everything nowadays is becoming digitized and streamlined, and the compliance industry is no different. In addition to the advantages of going green, utilizing a cloud-based software application can cut down the time, money, and filing space that it takes to ensure compliance.

Creating and submitting CPRs by pen and paper does not have to be the headache that it is for many contractors. Likewise, collecting and monitoring compliance does not need to be the inefficient process that it is for administrators. There are solutions out there for both that make life easier.

Check out www.lcptracker.com/solutions/lcptracker for more information on cloud-based solutions to streamline compliance.

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