Which contracts does the Davis-Bacon Act apply to?

The Davis-Bacon Act and Related Acts was set into motion by the United States Department of Labor (DOL). More specifically, the Wage and Hour Division of the DOL is responsible for amending and enforcing the Davis-Bacon Act (DBA). The DBA applies to all federally-funded contracts that are over $2,000, and have something to do with constructing, altering, or repairing public buildings. The two most relevant criteria for the Davis-Bacon Act are:

  • It only applies to contracts that deal with constructing, altering or repairing public buildings, which include: bridges, dams, plants, highways, streets, sewers, power lines, airports, piers, etc.
  • And, the type of work referred to as “construction, alteration, or repair” includes painting, altering, remodeling, demolition work, preparatory clean-up work, etc.

Contractors who meet this criteria should be aware that the Davis-Bacon Act and Related Acts apply specifically to the wages of laborers and mechanics on these types of federal contracting jobs.

The Davis-Bacon Act’s impact on the wages of your laborers and mechanics

If the Davis-Bacon Act applies to your contract, then you are required to pay certain wages to the laborers and mechanics working on your contract. Laborers and mechanics employed under these contracts include those who perform manual or physical labor, and excludes workers with primarily administrative, executive, or clerical duties. The Davis-Bacon Act (DBA) requires federal contractors to pay laborers and mechanics employed under the contract no less than the local wages for similar work.

Who administers the Davis-Bacon Act?

The Secretary of the Department of Labor determines the prevailing wage rates. These wage rates and benefits may be determined by analyzing the rates of similarly employed workers doing similar work in neighboring locations. The fringe benefits included usually refer to common benefits in the industry, which could include medical or hospital care, vacation and holiday pay, unemployment compensation, disability or sick pay, or life and accident insurance.

The Department of Labor oversees the administration and enforcement of these labor standards. However, many states have “Mini Davis-Bacon Acts” that are modeled after the federal law. These “mini” acts charge the specific state’s Department of Labor with the responsibility to enforce the appropriate wage rates for projects that receive state or local government funding.

Complying with the Davis-Bacon Act

The Davis-Bacon Act was established to protect the wages of general laborers and mechanics who are vital to the completion of construction jobs. For those companies that fail to comply with the government’s standards for employee wages, they can expect financial restitution in the form of back pay and fines to their underpaid employees. Instead of risking profitability and the contract itself, government contractors should be aware of these key steps that can protect themselves from Davis-Bacon violations:

  • First and foremost, take the time to evaluate whether the Davis-Bacon Act applies to your contract. If you are constructing, repairing, or remodeling any public buildings or public works, then most likely the Act applies to your contract.
  • Make sure that you properly classify and assign your employees based on the type of work that they perform.
  • Keep your payroll reports organized, and analyze them for any glaring wage or overtime discrepancies.
  • Display the appropriate federal posters, which promote fair wage and hour rates for all workers.