The Davis Bacon Act requires contractors and subcontractors performing work on federally funded or assisted construction projects to pay workers prevailing wages and fringe benefits. These wages are based on what the local wages are for workers performing similar work on similar projects. This makes classifying workers critical in complying with the law, but it’s not as simple as you might think. Workers performing similar, but slightly different work are often classified differently. For example, low-voltage electrical work is different than high-voltage work, with different wage and fringe benefit rates.
The Department of Labor (DOL) is responsible for creating the various work classifications, but contractors and subcontractors are responsible for making sure they select the correct work classifications and pay workers accordingly. Let’s take a closer look at what work classifications are under Davis Bacon and talk about how to be sure you understand how to select the right work classifications for workers on your next public works project.
What are work classifications under Davis Bacon?
Work classifications are the different categories of work that laborers and mechanics may perform, such as electricians or painters. These start off as broad classifications, but often include more specific roles under each classification. For instance, electrician is a work classification and within it there are different types of electrical work, such as low-voltage, and high-voltage. This allows the work classification to more closely match the type of work being performed.
You must select the correct work classification to match the work being done, including the broad and more specific classification. It’s not enough to select electrician or low-voltage if they are doing high-voltage work as well. This applies to all work, including work in an entirely different classification. For example, if a painter does drywall work, both work classifications must be tracked in their payroll records and their pay must reflect each different rate.
Selecting and tracking the correct work classification is important to comply with the law because each one has its own hourly and fringe rate. So if you don’t closely track the type of work being performed, you will not pay the correct prevailing wage. Regardless of how minor the difference seems, it can create a significant compliance problem. For instance, an electrical subcontractor was cited for $94,000 in back wages and fringe for classifying workers as low-voltage electricians when their work actually included high-voltage work.
Types of Prevailing Wage Work Classifications
- Construction Trades: This category includes a wide range of trades, including carpenters, electricians, plumbers, and bricklayers, among others. The prevailing wage rates for construction trades are determined based on the type of work performed, the location of the project, and the type of construction project.
- Service Trades: This category includes work performed by janitors, security guards, and other service personnel. The prevailing wage rates for service trades are determined based on the type of work performed and the location of the project. These fall under the McNamara-O’Hara Service Contract Act or SCA, which is similar to Davis Bacon but covers non-construction work.
- Laborers: This category includes manual workers engaged in construction, alterations, and repairs. The prevailing wage rates for laborers are determined based on the type of work performed and the location of the project.
- Mechanics: This category includes workers who perform maintenance and repair work on construction equipment and machinery. The prevailing wage rates for mechanics are determined based on the type of work performed, the type of machinery or equipment being maintained, and the location of the project.
- Other Classifications: In addition to the construction trades, service trades, laborers, and mechanics, the Davis Bacon Act also covers other work classifications, including supervisors, foremen, and engineers. The prevailing wage rates for these classifications are determined based on the type of work performed and the location of the project.
Importance of Correct Work Classifications
Understanding and using the correct work classifications is important to comply with prevailing wage law. If a worker is misclassified, the contractor or subcontractor may be required to pay back wages and may be subject to penalties. If someone feels they have not been paid right, they may file a complaint with the DOL. This can result in an investigation which can result in financial and legal trouble.
It’s easy to see the why, but let’s look at how you can make sure you select the correct work classifications for your team.
Tips for Selecting Work Classifications
- Review the Prevailing Wage Determinations: Before starting a construction project, it is important to review the prevailing wage determinations for the specific location and type of work being performed. This will help to ensure that workers are classified and paid correctly.
- Location of the Project: The location of the project can also be a factor in determining a worker’s classification. The prevailing wage rates for certain work classifications may be higher in certain locations. This is especially important for companies that have projects in multiple states or municipalities.
- Consider the Type of Work Performed: The type of work performed by a worker is the most important factor in determining their classification under the Davis Bacon Act. Workers who perform similar types of work should be classified in the same manner, regardless of the specific job or project they are working on.
- Review Job Descriptions: A worker’s job description is an important factor in determining their classification. Reviewing job descriptions and comparing them to the prevailing wage determinations can help to ensure that workers are properly classified.
- Seek Professional Advice: If there is any uncertainty about a worker’s classification, it may be helpful to seek the advice of a professional who is familiar with the Davis Bacon Act and prevailing wage determinations. This can help to avoid any mistakes and ensure compliance with the act’s requirements. You can even reach out to your local DOL for guidance.
- Keep Detailed Records: It is important to keep detailed records of each worker’s classification and the prevailing wage rate being paid. This will help to ensure that the correct prevailing wage rates are being paid and will provide evidence in the event of an audit or investigation.
- Stay Current with Changes: The prevailing wage determinations can change over time, so it is important to stay current with any changes. Contractors and subcontractors should regularly review the prevailing wage determinations to ensure that they are up-to-date and that workers are being classified and paid correctly.
Understanding and properly applying the prevailing wage work classifications is crucial to ensure workers get the correct pay and comply with prevailing wage law. By carefully reviewing the prevailing wage determinations, seeking professional advice if something is not clear and keeping detailed records, you can minimize the risk of misclassification and stay out of hot water.
Helpful Davis Bacon resources:
Wage determinations simplified
How to fill out form WH-347
Understanding the fringe trust
DOL Prevailing wage seminar
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.