An investigation by the Department of Labor reached a settlement with A & D General Contracting to pay back a total of $52,969 in wages to 16 workers.  The subcontractor hired by A & D contracting failed to pay the proper California prevailing wage rate for work it did with the Marine Corps.  The subcontractor declared bankruptcy leaving it up to the general contractor to pay the wages.

The Department of Labor’s Wage and Hour Division started the investigation into the wage payments.  The agency determined that the subcontractor violated the Davis-Bacon and Related Acts by not paying the correct fringe benefits to their employees.  The subcontractor failed to pay the legally required health and welfare rates.  In addition, the investigation found that the subcontractor incorrectly categorized some workers, resulting in those employees receiving lower wages and fringe benefits than they were entitled to.  Some workers were categorized as apprentices when they were not enrolled in apprenticeship programs.  As a result of California prevailing wage laws, the general contractor is responsible for verifying that the subcontractor is paying wages correctly.  According to prevailing wage and Davis-Bacon Act laws, noncompliance and falsifying certified payroll reports comes with serious penalties.

A better solution…

An important part of keeping compliant is having the proper information in one place.  Without accurate information, errors and inconsistencies can occur.  Using a powerful payroll and compliance software to handle all aspects of reporting, especially in states with local prevailing wage laws, allows your business to be on track with reporting requirements, and can even identify areas of significant savings.

eBacon streamlines all parts of the compliance process and allows general contractors to keep constant oversight on subcontractors, avoiding lapses in compliance.  In California, this is especially important because the prime contractor is responsible for the compliance of subcontractors. In a heavily regulated state like California, it is vital for construction contractors to make sure they are staying compliant to avoid fines and penalties.  Make sure you aren’t one of them and you are up to date on Davis Bacon wage rate!

Contractors shouldn’t shy away from government contracts.  They can be exciting and lucrative opportunities for your business.  Having a powerful compliance and payroll system is important to helping you stay out of trouble and be more competitive on bids.