Definition
The Davis-Bacon Act requires that contractors and subs on federal construction contracts pay workers at least the locally prevailing wage and fringe benefits for the type of work performed. The Department of Labor issues wage determinations by locality and craft; contractors must comply and report via certified payroll.
Why It Matters
Noncompliance can lead to withholding of contract payments, back wages, debarment from federal work, and penalties. Contractors bidding and performing federal work must understand applicable wage determinations, classify workers correctly, and maintain certified payroll. State “little Davis-Bacon” laws extend similar rules to state-funded projects.
Field Example
A contractor wins a federal VA hospital project in Texas. The DOL wage determination for that county lists rates for Electrician, Plumber, Laborer, etc. The contractor pays and reports at those rates (or higher) and submits certified payroll; paying below the determination would violate Davis-Bacon.
Calculation / Formula (if applicable)
Rates and fringes come from the published wage determination, not from a formula. Total compensation must meet or exceed the determination for each classification and locality.
Software Application
Allow attaching or linking wage determinations to a project. When entering labor, validate or suggest classification and rate against the determination. Certified payroll output should align with Davis-Bacon reporting requirements (e.g., WH-347). Flag underpayment or misclassification.
Tooltip Version
Davis-Bacon requires federal construction contractors to pay at least the locally prevailing wage and to report via certified payroll; state laws often mirror this for state projects.
Related Objects
Related: