Davis-Bacon Compliance Made Easy: A Step-by-Step Guide

While navigating through the intricacies of Davis-Bacon compliance, contractors must grasp key principles outlined by the U.S. Department of Labor (DOL) for the Davis-Bacon and Related Acts (DBA/DBRA). This overview sheds light on critical aspects for achieving prevailing wage success. Finding success with prevailing wage projects that are the heart of DBA can bring steady work, good money, and a foot in the door to future government projects. But it also means multiple strict rules that must be closely followed.

Davis-Bacon Compliance 101 – An Overview for Prevailing Wage Success

While the U.S. Department of Labor (DOL) provides scores of information breaking down individual components of the decades-old laws, the Prevailing Wage Resource Book is one of the most in-depth compilations of what is expected from contractors on federally-funded jobs. In particular, the section on DBA/DBRA Compliance Principles examines some of the key issues contractors should follow to ensure adherence and answers many Frequently Asked Questions. Below is a list of key categories featured in the compliance section.

Laborers, Mechanics and Truck Drivers

There’s a reason this section is the first and foremost topic of the Compliance Principles section. In essence, it breaks down the entire premise of the DBA – to require payment of prevailing wage rates according to wage determinations set forth by the DOL to all laborers, mechanics, and other classifications of workers on the project, including working foremen. Each prevailing wage project requires its own wage determination that lists base pay rates and fringes for all classifications. Learning to read and understand these wage determinations (https://www.ebacon.com/davis-bacon-compliance/how-to-read-a-wage-determination/) is the first key to success on a prevailing wage job.

Apprentices and Trainees

Apprentices and trainees are identified as individuals registered in a recognized bona fide apprenticeship program or are in the first 90 days of probationary employment in one of these programs. Employers must pay apprentices a percentage of the journeyman rate that is specified in the apprenticeship program commensurate to their level of progression.

To stay compliant, employers also must adhere to a strict ratio of apprentices to journeymen workers that is regulated by their apprenticeship program. In addition, fringe benefits for these workers must be paid according to their apprenticeship program or the employee.

Proper Classification of Workers

Worker classification is one of the most important – and confusing – issues with the DBA. There are no nationwide standard classification definitions, and the DOL cautions that the Dictionary of Occupational Titles from the Department’s Employment and Training Administration cannot be relied on for making Davis-Bacon determinations. So, contractors are often baffled and worried about which classification to label their employees.

According to the DOL, contractors should examine the “local area practice” classification of employees who work on similar construction projects, in the same area, during the preceding year. For further advice and guidance for those still concerned, contractors should consult with the WHD Regional Government Contracts Enforcement Coordinator.

Fringe Benefits and Davis-Bacon Compliance

The DOL states that “Davis-Bacon prevailing wage is made up of two interchangeable components – the basic hourly rate and fringe benefits found prevailing in an area and published in a Davis-Bacon wage determination.” They identify fringe benefits as a contribution made by the company to a bona fide fringe benefit fund, plan or program on behalf of the employee to meet Davis-Bacon compliance.

Fringe benefits can be paid towards these plans, or in cash to the employee, but must equal to at least the total prevailing wage rate when added to the basic hourly rate.

Certified Payroll and Use of Electronic Signatures

The Copland Act and the DOL require contractors to submit a weekly statement identifying the wages paid each employee on a prevailing wage project the previous week., known as a Certified Payroll Report (CPR). Along with this, each company must sign and submit a weekly “Statement of Compliance.” Contractors who typically pay their employees bi-weekly or semi-monthly must change their pay schedule to weekly on prevailing wage projects to comply with the DBA to meet reporting requirements.

Sign Posting Requirements for Davis-Bacon Compliance

The DOL requires contractors working on prevailing wage jobs to post a copy of the Davis-Bacon Compliance Poster WH-1321. Here is the poster in English and another poster in Spanish. Companies should also have a copy of the applicable wage decision, at the jobsite of every project subject to Davis-Bacon requirements. It must be displayed in a prominent area where it can be seen by all employees and protected by the elements.

Inclement weather on job sites means these postings should be examined periodically to ensure they’re still legible. It’s a compliance issue that’s often missed, but investigators often nitpick during an audit. It is important to keep signage current.

Department of Labor Final Rule

Following wage regulations is a crucial aspect, and the Department of Labor (DOL) made things clearer in its October 2023 Final Rule. This rule, titled “Updating the Davis-Bacon and Related Acts Regulations,” covers various topics, including Compliance Principles such as:

• In addition to CPRs, contractors must maintain DBRA contracts, subcontracts, related documents, and worker phone numbers and email addresses for 3 years after the completion of the project.
• If requested by the DOL, CPRs must be produced regardless of an investigation or other compliance action.
• Contractors working outside the locality in which their apprenticeship was registered must follow the ratio and wage standards of the area where the project is taking place.
• Upper-tier contractors may be responsible for violations made by lower-tier subcontractors.
• Contractor administrative costs are not creditable as fringe benefits. However, costs incurred by third parties directly related to the administration and delivery of bona fide fringe benefits, such as apprenticeship programs, are creditable.
• Anti-retaliation provisions were added to the contract clauses, as well as corresponding remedies.

List of Common Davis-Bacon Compliance Rule Violations

In short, contractors with employees working under the DBA rule have specific requirements they must meet to continue working on prevailing wage jobs. While there are many rules, the most common compliance violations according to the DOL are below, and contractors should resolve to follow them strictly to keep their status clean:

• Misclassification of laborers and mechanics.
• Failure to pay full prevailing wage, including fringe benefits, for all hours worked (including overtime hours).
• Incomplete or inaccurate recordkeeping, such as not counting all hours worked or not recording hours worked in each classification by an individual who worked in two or more classifications during a day.
• Failure to maintain a copy of the bona fide apprenticeship program and individual registration documents for apprentices.
• Submission failure for weekly CPRs.
• Failure to post the Davis-Bacon poster and applicable wage determination at the work site.

FAQ for Davis-Bacon Act Basics

The material presented here is educational in nature and is not intended to be, nor should be relied upon, as legal or financial advice. Please consult with an attorney or financial professional for advice.