Davis-Bacon general guidance

    If you have been referred to this web page then all work on the construction project is subject to both the Wage Payment and Certified Payroll Reporting requirements of the federal Davis-Bacon Act.    

    WAGE PAYMENT REQUIREMENTS: minimum rates of pay must be paid to all construction workers on the project.  The minimum rates for each trade (laborer, carpenter, plumber, etc.) are listed in the "wage determination" (also known as "wage decision") that is part of the contract.  Some large projects have 2 or 3 wage determinations that apply to different parts of the project.   It's OK to pay higher wage rates but not lower.   Separate minimum rates apply for each trade classification: carpenter, electrician, plumber, etc.  The minimum wage rates are shown on an hourly basis.  Additional fringe benefit costs may also be listed;  if fringe benefits are listed those costs are also required.   Contact James Smith at James@SmithWageHour.com if you don't have the minimum wage schedule(s) for the project.  Also contact James Smith if any trade classification you'll be using is not listed in the wage determination.  Missing trades and associated minimum rates can be added pending approval by HUD and by U.S. Department of Labor.   Newly added trade classifications and rates are retroactive to the beginning of the project once approved by DOL.  

    All laborers and trade workers working on site must be paid unconditionally and not less often than once a week the full of wages computed at rates not less than shown in the wage determination in the contract, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers or mechanics.  In other words, all construction workers on the site are subject to Davis-Bacon requirements regardless of whether the workers are called employees, subcontractors, 1099 workers or independent contractors.  

    Most construction workers are paid hourly.  But piece rates are OK.   It's the rate that counts ... the arithmetic result of dividing gross weekly earnings by the actual hours worked must at least equal the minimum rate required in the wage decision for that work on that project.  

    Full compliance with Davis-Bacon wage and certified payroll reporting is required from all contractors and all lower tiers.  Contractors are responsible for compliance by their lower tiers.  Payment will be withheld or contract terminated of any contractor who fails to comply with their prevailing wage or certified payroll reporting.  

    HUD conducts random interviews of workers on site to verify work classifications and rates of pay.  And HUD can request supporting documents.   DOL has authority to  conduct full in-depth investigations of all workers.  DOL examines original company records and interviews workers both on and off the work site to determine compliance with all related federal Wage & Hour laws.   

    CERTIFIED PAYROLL REPORTING REQUIREMENTS: Form WH-347 certified payroll reports (CPRs) or equivalent online reports must be submitted by each subcontractor each week once they perform their first work on site.   Every non-supervisory worker must be individually reported.  The CPRs must report the hours worked  by each worker every day on the project, the wage rate paid for that work, and the total wages for the project that week.  Also total pay for the worker that entire week counting all projects, all deductions, and net pay.  "No work" reports are submitted in weeks when no work is performed on site.  A "final" report is submitted when the last work on the project is performed.   Supervisors who do no construction need not be reported.  The law provides both civil and criminal penalties for willful falsification of certified payrolls.

Web-based online CPR reporting such as in Elation Systems is now required on many projects including HUD  Davis-Bacon jobs.  Smith Summerset & Associates are experts in Elation Systems online CPR reporting for HUD jobs.   We stand ready to assist our customers in all regards.  Contact Smith Summerset at James@SmithWageHour.com. 

Be aware of the following:

·        Davis-Bacon rates are minimum wage rates for the project.  That means they are the lowest allowable rate that can be paid for at work in that trade classification at the project.   Many employers pay higher rates.

·        Davis-Bacon wages are stated as basic hourly wage rate plus bona fide fringe benefit amount if any.  Any combination of cash wages plus bona fide creditable fringe benefit expenses borne by the employer may be used to satisfy Davis-Bacon minimum wage requirement.  Cash wages and bona fide fringe benefit expenses both count toward meeting Davis-Bacon minimum wages.  "Bona fide" fringe benefits are defined by DOL regulations.   

·        Your first certified payroll is Number #1.  Then number your payrolls in sequence each week.   Submit "No Work" reports in weeks when no work occurs on site.  Enter the both the payroll number and “Final” on your last certified payroll.  

An example of the old paper old paper WH-347 certified payroll form is shown below for example purposes only.  The old paper form is now rarely used.  It can be downloaded free of charge from http://www.dol.gov/whd/forms/wh347.pdf.    The official Department of Labor instructions for completing WH-347 paper forms are at http://www.dol.gov/whd/forms/wh347instr.htm.