What Is the Davis-Bacon Act?
The Davis-Bacon Act (40 U.S.C. §§ 3141–3148) requires contractors and subcontractors working on federally funded construction contracts worth $2,000 or more to pay all laborers and mechanics the locally prevailing wages and fringe benefits for the type of work they perform.
Who Must Comply?
Davis-Bacon requirements apply to:
- All prime contractors working on direct federal contracts worth $2,000 or more
- All subcontractors on covered prime contracts, regardless of subcontract dollar amount
- Contracts for construction, alteration, or repair of buildings, roads, and other public works
- Federally assisted contracts where federal funding is used (under Davis-Bacon Related Acts)
What Construction Is Covered?
Davis-Bacon covers four types of construction, each with separate wage determinations:
Office buildings, schools, hospitals, warehouses, and other structures.
Dams, bridges, water treatment plants, sewer lines, and large utility projects.
Roads, highways, runways, and paving projects.
Single-family homes, apartment buildings up to 4 stories.
Wage Determinations
Prevailing wages are established through wage determinations (WDs) issued by the Department of Labor Wage and Hour Division. Each WD specifies:
- The minimum base hourly rate for each trade classification
- Required fringe benefit payments (health & welfare, pension, vacation, training)
- The geographic area (county) covered
- The type of construction
The contracting agency is required to incorporate the applicable wage determination into the contract. Contractors must use the WD in effect at the time of contract award.
Fringe Benefits
The Davis-Bacon Act requires contractors to pay the total package — base wage plus fringe benefits. Required fringe benefits include:
- Health & Welfare — medical insurance, dental, vision
- Pension — retirement contributions
- Vacation — paid time off accrual
- Training — apprenticeship and apprenticeship-related instruction
Employers may satisfy fringe requirements by making equivalent cash payments to employees, contributing to bona fide benefit plans, or a combination. The total hourly fringe rate must be met or exceeded.
Compliance Requirements
- Post the applicable wage determination at the job site where it can be seen by workers
- Submit weekly certified payroll records using Form WH-347
- Pay workers at least weekly
- Keep payroll records for 3 years after project completion
- Ensure subcontractors comply with the same wage requirements
- Apprentices must be enrolled in a DOL-registered apprenticeship program
Enforcement & Consequences
The Department of Labor Wage and Hour Division enforces Davis-Bacon. Violations can result in:
- Contract termination
- Debarment from future federal contracts (typically 3 years)
- Liability for back wages owed to workers
- Withholding of contract payments until violations are corrected