Davis-Bacon Act Requirements: What Contractors Need to Know
The Davis-Bacon Act has been on the books since 1931. It applies to billions of dollars of federal construction every year. Contractors who work on covered projects must pay federally determined wage rates, keep certified payroll records, and submit them weekly. The consequences of getting it wrong range from back wages owed to debarment from federal contracts.
Before you price
What Davis-Bacon requires
The Davis-Bacon Act requires that workers on covered federal construction contracts be paid not less than the locally prevailing wages and fringe benefits for corresponding work in the same area.
Prevailing wage rates are set by the Department of Labor through surveys of wages paid in the area. They are published as wage determinations and are incorporated into covered contracts by the contracting agency.
The wage determination lists a base rate and a fringe rate for each job classification. You must pay at least the base rate in wages. You must also provide fringe benefits equivalent to the fringe rate, either through a bona fide plan or in cash.
Which projects are covered
Davis-Bacon applies to contracts with the federal government for construction, alteration, or repair of public buildings and public works where the contract exceeds $2,000.
Related Acts extend Davis-Bacon prevailing wage requirements to federally assisted construction. If a project receives federal funds, whether through grants, loans, or loan guarantees, Davis-Bacon may apply even if the contracting party is a state or local government.
Common federally assisted programs that trigger Davis-Bacon: federal highway funds (FHWA), Community Development Block Grants (CDBG), HUD-funded housing programs, EPA water infrastructure funding.
The contracting agency is responsible for including the Davis-Bacon clause and wage determination in the contract. But the contractor is responsible for compliance. Do not assume the agency has it right.
Finding the right wage determination
Wage determinations are published on SAM.gov. Search by state, county, and construction type (building, heavy, highway, or residential).
The applicable wage determination should be attached to or referenced in the RFP. If it is not, request it before bidding. Using the wrong wage determination is not a defense to underpayment.
Wage determinations are updated periodically. If the project spans more than one contract year, updated wage determinations may apply to later periods.
Certified payroll: what you have to submit
Davis-Bacon covered projects require weekly submission of certified payroll records. The standard form is WH-347, available from the Department of Labor.
The certified payroll lists every employee by name, shows their job classification, the hours they worked each day, the total hours, the hourly wage, all deductions, and the net pay.
You certify that the payroll is correct and complete and that each worker is classified correctly. Submitting false certified payrolls is a federal crime.
Subcontractors on Davis-Bacon projects must submit their own certified payrolls. The prime contractor is responsible for collecting them and ensuring compliance throughout the project.
Common violations and their consequences
Misclassification: paying a skilled tradesperson at a lower classification rate to reduce labor cost. This is the most common violation and the most scrutinized.
Cash payments off the books: paying workers in cash to avoid payroll records. This eliminates your certified payroll documentation and creates personal liability for owners and supervisors.
Fringe benefit underpayment: not providing required fringes and not paying them in cash as a supplement.
Consequences range from back wage assessments and contract withholding to debarment from federal contracting for up to three years. The Department of Labor investigates Davis-Bacon complaints actively.