Davis-Bacon Act

The Davis-Bacon Act was created in 1931 to ensure that local public works contract laborers, mechanics and other workers get the compensation they deserve. Under the Act, it is illegal for a contractor or subcontractor to pay employees any amount below the standard local wages based on project type and employees job classifications. Wages include not only salary but benefits like health insurance. Any public works construction project of over $2,500 is subject to the enforcement of the Act.

In addition to the Davis Bacon Act itself, Congress added Davis-Bacon prevailing wage provisions to approximately 60 laws under which federal agencies assist construction projects through grants, loans, loan guarantees, and insurance. Generally, the application of prevailing wage requirements to projects receiving federal assistance under any particular "related" Act depends on the provisions of that law.

The U.S. Department of Labor (DOL) has oversight responsibilities to assure coordination of administration and consistency of enforcement of the labor standards provisions of the Davis Bacon and Related Acts. Under this authority, DOL has issued regulations establishing standards and procedures for the administration and enforcement of the Davis-Bacon labor standards provisions. Federal contracting agencies have day-to-day responsibility for administration and enforcement of the Davis-Bacon labor standards provisions in covered contracts for which they are responsible or to which they provide federal assistance under laws they administer.

What Does Davis-Bacon Mean for Contractors?

As a veteran contractor, it is especially important to be in compliance with the Act. Three initial steps to secure qualifying contracts are:

  1. Determine wages for your project. To get an official wage determination for your project, you need to submit a Notice of Intention to Make a Service Contract and Response to Notice (Standard Form 98). Wage determinations are made based on the classification of labor and county where the project is located. In cases when no wage determination has already been made, contractors can fill out the SF 308 to have their contract classified.

  2. Make sure you are in compliance. Make sure that your employees total wages (including health insurance and other benefits) are in compliance with the wage determination.

  3. Let your workers know. Both wage determinations and the Davis-Bacon poster (WH-1321) should be visibly displayed for employees to see. This gives your workers a sense of reassurance and confidence that they are being paid fairly.

By complying with the Act, you are taking the first step in winning new business and building a reputation as a good employer.

If you would like to discuss compliance with a VetUSA business consultant, please contact us today at 855-4VETUSA (option 2) or complete our online form.

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