Federal construction and service contractors are eagerly awaiting the opportunity to participate in the infrastructure projects being promised by the new Administration. Recipients of public works projects with Federal dollars attached to them must pay prevailing wages to workers under laws commonly called the Davis-Bacon Act and the Service Contract Act. This article provides a few introductory tips to general or prime contractors and subcontractors seeking infrastructure work who may only be familiar with the minimum wage and overtime requirements of the Fair Labor Standards Act.
The most important of these laws are commonly known as the Davis-Bacon and Related Acts and the Service Contract Act. Most prime contractors on direct construction contracts with federal agencies are familiar with the Davis-Bacon Act and its weekly certified payroll requirements. It may surprise contractors to learn that many federal laws that authorize assistance for construction through grants, loans, loan guarantees, and insurance are Davis-Bacon “related Acts.”
https://www.dol.gov/whd/regs/compliance/whdfs66.pdf
In fact, there are 60 listed in the Code of Federal Regulations, Title 29, Part 5.1.
Remember those “shovel-ready” projects that were funded in The American Recovery and Reinvestment Act of 2009? Those were public works funded with federal dollars. The Department of Labor, Wage and Hour Division, responsible for enforcing the labor standards for all that work, developed many useful training materials and scheduled regular informative seminars on the prevailing wage laws. Those materials can be found on the website at https://www.dol.gov/whd/recovery/. The Trump Administration is also reviewing “shovel-ready” projects. It seems that the primary projects may be airports, highways and bridges, water and inland waterways, mass transit, cybersecurity and technology improvements. http://www.mcclatchydc.com/news/politics-government/white-house/article128492164.html
The funding mechanisms under these many acts are complex and varied. Federal dollars may flow through state and local governments such as transportation agencies, school districts, housing authorities or community councils. The funds may come from the DOT, FHWA, HUD, EPA, FAA, and so on.
The contractors who are awarded the projects must be careful when they bid to understand those funding streams and what responsibilities they entail. They should look for a wage determination in the bid documents and assure that it is appropriate for the work being performed in the location where the job will take place. If the wage determination is missing or doesn’t look suitable, for example, a building or residential wage determination is provided when the work is a highway project or the work is performed in Texas but the wage determination is for Kansas, Florida, or Georgia, then the bidding contractors must seek answers from the agency responsible for administrating the grant or loan funding. Moreover, contractors are required to “flow-down” the wage determination requirements to subcontractors at all tiers and monitor their compliance.
This article has focused primarily on construction project work, but service contracts also have prevailing wage requirements. Service contractors must, likewise, make sure that the contracting agency and/or fiduciary authority inserts a wage determination into the contract and flow down the prevailing wage requirements to their subcontractors. So, if you decide to bid on a cybersecurity or technology infrastructure project, for example, you need to be aware of prevailing wage law requirements.
Almost everyone who is working as a laborer, mechanic or service employee on a project that has Federal funding, whether full-time, part-time, temporary, employed by a contract house or staffing firm or working as an independent contractor, must be paid in accordance with prevailing wage laws such as the Davis- Bacon Act and Service Contract Act.
For more information, contact me at 512-461-0954.