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

The U.S. Department of Labor (DOL) plays a crucial role in overseeing federal worker wages, safety, and utilization for contracts receiving federal funding. Among its many responsibilities, the Davis-Bacon and Related Acts (DBRA) stand out as a cornerstone for fair labor practices in public works.

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. 

This act is essential because it guarantees that laborers working on public contracts receive fair pay according to local wage rates. This prevents exploitation, helps workers contribute fairly to their communities, and ensures a level playing field. Non-compliant contractors may face penalties and fines for not following prevailing wage requirements. eComply Labor Compliance solution offers 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 main goal of the Davis-Bacon Act is to establish clear rules for public agencies and their contractors about worker wages on public infrastructure projects. Passed during the Great Depression, it aimed to stop contractors from hiring out-of-town workers at lower wages, which lowered local wage levels. By safeguarding workers, promoting fair competition, and supporting skilled labor, the act continues to play an important role.

The Davis-Bacon Act is enforced by the US Department of Labor’s Wage and Hour Division (WHD). The WHD conducts routine audits and investigates complaints filed against contractors to identify violations. In states with “Little Davis-Bacon” acts, the equivalent state department, such as California’s Department of Industrial Relations (DIR), handles enforcement.

The Department of Labor’s Wage and Hour Division continuously reviews and monitors wages across the country. They maintain the SAM.gov website, a valuable resource where agencies and contractors can search for wage information. Several factors, including average wages in the region, craft and work classifications, job titles, and historical local wages, determine prevailing wages.

Yes, Davis-Bacon wages are adjusted for inflation. Typically, these wages are updated twice a year. However, in instances of significant changes in labor market conditions, updates can occur more frequently to accommodate those shifts.

Navigating the complexities of the Davis-Bacon Act and ensuring compliance can be a major challenge for organizations and their contractors. B2Gnow’s eComply Labor Compliance solution provides a digital platform for tracking and managing contracts, subcontractors, workforce utilization, and project-specific wages. This automation ensures accurate and consistent reporting that meets regulatory standards, while also keeping wage rates up-to-date with real-time updates, reducing the risk of a Department of Labor audit.

To learn how eComply can streamline your labor compliance processes and help your organization stay audit-ready, request a demo today.