To work for the federal government, one must be aware of the rules and regulations set up to protect workers. One of these rules is the Davis-Bacon Act (DBA). The federal contractors must comply with DBA and its related acts or be subject to penalties such as enforced payment of back wages and fringe benefits for withholding funds on:
- federal contracts
- termination of contracts
- three-year debarment from all government contracts
What is the Davis-Bacon Act?
In 1931, the Davis-Bacon Act (DBA) was created to protect workers from getting low pay while competing for federally funded construction projects during the Great Depression. The DBA requires federal contractors to pay their employees no less than the prevailing wage and fringe benefits for similar projects who take on a job over $2,000 on public works or public buildings. Types of work include:
The DBA prevailing wage is the basic hourly rate and fringe benefits listed in a Davis-Bacon wage determination. The DBA prevailing wage must be paid for all hours worked on the site. The DBA Rule is defined in conjunction with related acts due to several federal laws that authorize federal aid for construction through:
- Loan guarantees
The Related Acts Of Davis-Bacon Act
- Executive Order 13658
Executive Order 13658 determines the minimum wage for contractors. On August 31, 2020, DOL issued a notice increasing the rate to $10.95 per hour, effective January 1, 2021. President Obama signed Executive Order 13658 in 2014.
- Executive Order 13706
Executive Order 13706 determines paid sick leave for federal contractors. The order signed on September 7, 2015, requires federal contractors to grant employees a maximum of seven days of paid sick leave per year, including paid leave for family care.
- Copeland Anti-Kickback Act
Copeland Anti-Kickback Act forbids a contractor or subcontractor from convincing an employee to give up any or part of their entitled compensation on federal contracts over $2,000. Federal employment contracts contain repair, completion, construction, or prosecution of public works or public buildings.
- Walsh-Healey Public Contracts Act (PCA)
Walsh-Healey Public Contracts Act determines the maximum hours, minimum wage, and safety and health standards for federal contracts over $15,000 to manufacture or provide articles, supplies, materials, or equipment to the United States government or District of Columbia.
- McNamara-O'Hara Service Contract Act (SCA)
The McNamara-O'Hara Service Contract Act is like DBA as the contractors and subcontractors are required to pay employees the wage rates and fringe benefits that prevail locally. It differs from the Davis-Bacon Act as it relates to prime contracts over $2,500. The employer should adhere to collective bargaining agreements.
Certified Payroll Reporting
Workers protected under the Davis-Bacon Act should receive the same prevailing wage and fringe benefits as workers doing similar work are receiving in the region. The prevailing wage is guaranteed by completing a certified payroll report for these employees. The certified payroll reporting contains:
- Weekly paying certified payroll employees.
- Certifying the payroll submission by signing a statement of compliance on Form WH-347.
- Submitting Federal Form WH-347 for certified weekly payrolls for contracts subject to the DBA. Make sure that all fields on the form are filled out correctly.
- Documenting worker's name, address, rate of pay, correct job classification, the actual amount paid in payroll, and daily and weekly hours worked.
The Bottom Line
Complying with DBA and its related acts requires tracking employee-time correctly and classifying this time under the correct prevailing wage designation. For federal contractors, choosing the correct job classification and making the correct wage determination for employees is critical for compliance with the Davis-Bacon Act.
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