What Is the Davis-Bacon Act? Federal Prevailing Wage Law Explained

The U.S. Department of Labor (DOL) oversees federal worker wages, safety, and utilization for contracts receiving federal funding. The Davis-Bacon and Related Acts (DBRA) applies to contractors and subcontractors working on construction, alteration, or repair (including painting and decorating) of public buildings or public works and says that contractors must pay their laborers and mechanics employed no less than the local prevailing wages and fringe benefits for corresponding work on similar projects in the area. The DBRA applies to wages, fringe benefits, and overtime. Most states have implemented their own version of the Davis-Bacon Act, which are often referred to as Little Davis-Bacon. 

The Davis-Bacon Act is important because it ensures that laborers working on a public contract are paid according to the local pay rates in the community. This assures that laborers aren’t taken advantage of and can contribute to their community on an equal level. Contractors can be penalized and fined for failing to comply with prevailing wages. eComply Labor Compliance solutions provide a digitized approach for organizations and their prime contractors to track and manage contracts, subcontractors, workforce utilization, and wages by project, providing a consistent and accurate way to deliver reports as required by regulations.

The purpose of the Davis-Bacon Act is to establish standards for public agencies and the contractors they hire for public infrastructure projects regarding worker pay. This is to prevent the practice of contractors hiring laborers at lower wages. This act was introduced during the Great Depression when contractors on these projects often hired workers from out of town for lower wages, thus driving down the local wage rate. To circumvent this, the Davis-Bacon Act was introduced to protect laborers, create a fair and competitive environment, and support skilled labor. 

The Davis-Bacon Act is enforced by the US Department of Labor’s Wage and Hour Division (WHD). The WDH will conduct routine audits and also investigate complaints filed against contractors to determine if a violation has occurred. If a state has a Little Davis Bacon Act, that state’s equivalent department, such as California’s Department of Industrial Relations (DIR), enforces the law. eComply can help agencies and prime contractors match workers’ wages as reported in the system to real-time wages, and if a discrepancy is found, the system will send notifications to the related parties. This gives them a chance to resolve the discrepancy before the DOL audits them.

The Department of Labor’s Wage and Hour Division reviews and monitors wages across the country and maintains the Sam.gov website, where agencies and contractors can search for wage information. Prevailing wages are determined by several factors, including the average wages in the region, craft and work classifications, job titles, and historical local wages.

Need help navigating Davis-Bacon Act compliance? Contact us today for expert support with certified payroll and prevailing wage requirements.