Davis-Bacon Act Explained for Federal Contractors
— WH347.io Team
The Davis-Bacon Act has governed federal construction wages since 1931. Here's what prevailing wage requirements actually mean for your business and how to stay compliant.
Winning a federal construction contract is a significant milestone for any contractor. But it also comes with a set of wage and reporting obligations that don't exist on private-sector work. Chief among them is the Davis-Bacon Act — a federal law that sets the floor for worker pay on government-funded projects.
What Is the Davis-Bacon Act?
Enacted in 1931, the Davis-Bacon Act requires contractors and subcontractors on federally funded construction projects to pay workers no less than the locally prevailing wages and fringe benefits for corresponding work on similar projects in the area. The Department of Labor (DOL) determines these prevailing wages through wage surveys and publishes them as 'wage determinations' tied to specific counties and types of construction.
The law applies to contracts exceeding $2,000 for construction, alteration, or repair of federal buildings or public works. It also applies to projects funded in whole or in part by federal assistance — meaning it covers a wide range of state and local projects that receive federal grants.
What Is a Prevailing Wage?
A prevailing wage is not a minimum wage — it's the wage rate that is predominant for a particular trade or craft in a given geographic area. It includes both a basic hourly rate and an hourly fringe benefit rate. The fringe component can be satisfied by providing bona fide benefits (health insurance, pension contributions, vacation pay) or by paying the equivalent amount in cash on top of the base hourly rate.
Who Does It Cover?
- All laborers and mechanics working on the covered project site.
- Both prime contractors and any subcontractors at any tier.
- Workers regardless of immigration status — wage protections apply to all.
- Apprentices and trainees at approved rates (their ratio must comply with DOL standards).
Certified Payroll: The Reporting Requirement
Compliance with Davis-Bacon isn't self-reported on an honor system. Every week, contractors must submit a certified payroll report — typically using Form WH-347 — to the contracting agency. This report lists every worker on the project, their classification, hours worked each day, hourly rate, gross wages, deductions, and net pay. A signed Statement of Compliance accompanies each report.
Frequently Asked Questions
What is the Davis-Bacon Act?
The Davis-Bacon Act is a federal law enacted in 1931 that requires contractors and subcontractors on federally funded construction projects to pay workers no less than the locally prevailing wages and fringe benefits for comparable work in the area. The Department of Labor publishes these prevailing wage rates as 'wage determinations' by county and type of construction.
What is a prevailing wage under Davis-Bacon?
A prevailing wage is the wage rate predominant for a particular trade or craft in a given geographic area. It includes both a basic hourly rate and an hourly fringe benefit rate. The fringe component can be satisfied by providing bona fide benefits such as health insurance and pension contributions, or by paying the cash equivalent on top of the base rate.
Who does the Davis-Bacon Act cover?
The Davis-Bacon Act covers all laborers and mechanics working on covered project sites, including workers employed by prime contractors and any subcontractors at any tier. Apprentices and trainees are also covered at DOL-approved rates. The law applies regardless of immigration status — wage protections extend to all workers on site.
What are the consequences of Davis-Bacon non-compliance?
Violations can result in back wage liability requiring full repayment to affected workers, contract termination, and debarment from future federal contracts for up to three years. Knowingly falsifying certified payroll records can result in criminal penalties, and if federal funds were involved, exposure under the civil False Claims Act.