Overcoming Difficulties in Prevailing Wage Compliance
Prevailing wage compliance can be difficult for even the most seasoned contractors and government agencies.
While prevailing wage law isn’t new, updates to the federal Davis-Bacon Act in 2023 – the first major update to the federal prevailing wage law in 40 years – created a need for heightened compliance requirements.
Under this new federal update, those working on government-funded construction projects face new requirements and stricter accountability to ensure workers on these projects receive a minimum prevailing wage.
These updates to the Davis-Bacon act include:
- Increased civil penalties for each violation
- Enhanced record-keeping requirements for a thorough examination into minimum prevailing wage for each worker
- New ways of calculating wages and fringe benefits
In addition, state-level Little Davis Bacon Acts also shifted to expand coverage to offsite work and increased penalties for violations.
What Makes Prevailing Wage Compliance Difficult?
Contractors and government agencies deal with prevailing wage compliance on a daily basis, yet face many difficulties due to the complexity of the law.
For contractors, some of these issues surround:
- Applying the wrong wage rate
- Worker misclassification (resulting in workers receiving a lower pay rate than required for the work performed)
- Underpayment
- Unlawful deductions
- Poor record keeping
These common errors can result in contractors experiencing back wages, liquidated damages, debarment, and sometimes criminal charges. Government agencies face risks by failing to catch contractor mistakes and not having enough staff to review Certified Payroll Reports (CPRs) resulting in delays in payments, potential audit failure, and loss of project funding.
Manage Compliance With Ease Using the Right Tools
Contractors and government agencies want to focus on the job at hand, not every nuance to prevailing wage compliance law. That’s why it’s important to look for prevailing wage tools to help manage these requirements.
When considering labor compliance software, it’s important to ask:
- Can this labor compliance software streamline and automate the collection, review, and management of CPRs?
- Does this prevailing wage software solution integrate with a contract compliance system for sharing contract and project information seamlessly?
- Does my labor compliance solution offer single sign-on (SSO) capabilities?
- Will my labor compliance solution allow for on-site employee interviews to validate pay rates and classifications against submitted CPRs?
- Is there an option for users to provide selfie and geolocation details to verify the identity and location of the worker?
- Can the system automate daily logs and compare data against the certified payroll before submission to prevent discrepancies?
If the answer to these questions is no, then taking the time to consider what labor compliance tools can help make prevailing wage compliance a non-issue.
Ready to learn more? Watch this on-demand webinar to hear how industry experts made compliance look easy.
