Prevailing Wage & Davis-Bacon — Plain English

The Davis-Bacon Act of 1931 and the 70+ Davis-Bacon Related Acts (DBRA) require contractors and subs on federally funded/assisted construction over $2,000 to pay at least the locally prevailing wage and fringe benefits for each labor classification.

• Pay the wage determination rate. Hourly base + fringe = WD total. You can pay all-cash or split base/fringe — your call.
• Classify workers correctly. A laborer doing electrical rough-in must be paid as electrician for those hours. Misclassification is the #1 violation found in audits.
• Submit weekly certified payroll (WH-347). Every contractor and sub. Signed under penalty of perjury. Late or missing payrolls hold contract payment.
• Post the WD at the job site in a place accessible to workers.
• Pay overtime at 1.5× base wage (not 1.5× total WD) for hours over 40/week. Fringe is not increased for OT.
• Apprentices must be registered with USDOL/OA or a state apprenticeship agency to be paid at the apprentice rate. Otherwise pay the full journey-level rate.

DOL publishes a separate wage determination for each construction type. Picking the wrong one is a common audit finding. The four types:

• Building — sheltered enclosures with walk-in access. Schools, hospitals, offices, retail.
• Residential — single-family or multi-family up to 4 stories.
• Highway — alteration/repair of roads, streets, alleys, parking areas not incidental to building construction.
• Heavy — projects not properly classified as Building, Residential, or Highway. Sewers, water mains, dams, dredging, antennas, treatment plants.

Mixed projects (e.g., a building plus parking lot resurfacing) may require multiple WDs — split the work and the payroll accordingly.

About 30 states have their own prevailing wage statutes for state-funded construction. Coverage thresholds and enforcement vary widely. High-enforcement states include California, New York, New Jersey, Massachusetts, Illinois, Washington, Oregon, Minnesota, Hawaii, and Connecticut — most use rates set by the state DOL based on union CBA agreements, often higher than federal Davis-Bacon for the same area.

A handful of states (FL, GA, AL, MS, LA, SC, NC, TN, VA, ID, UT, AZ, KS, OK, AR, ND, KY, IA, IN, WV, NH) have no state prevailing wage law. Federal Davis-Bacon still applies on federally funded projects regardless of state law.

1. Pay workers weekly at WD rate or above.
2. Complete WH-347 (or your state equivalent) — name, last 4 SSN, classification, hours per day, total weekly hours, gross pay, deductions, net pay, fringe breakdown.
3. Sign the WH-348 Statement of Compliance attached to each WH-347. False certification can be a federal felony (18 U.S.C. § 1001).
4. Submit to the prime/contracting officer within 7 days of pay date.
5. Keep all underlying timesheets, fringe contribution records, and payroll registers for 3 years after project completion.

Most contractors use payroll software (LCPtracker, ComplianceX, eMars, Foundation, Sage) — manual WH-347 prep on more than 2–3 workers eats hours per week and creates audit risk.

• Misclassification (paying laborer rate for electrician work).
• Underpayment of fringe benefits (counting only health, missing pension/vacation).
• Off-the-clock hours, especially travel and pre-/post-shift work.
• Unregistered apprentices paid at apprentice rate.
• Cash payments not run through payroll.
• Late, missing, or falsified WH-347 forms.

Penalties: back-wage restitution (with interest), contract payment withhold, debarment from federal contracting for 3 years (mandatory for willful violations), and potential criminal exposure for falsified payroll certifications.

If you're new to public-works contracting, also read the Federal Procurement guide (SAM.gov + PSC codes) and the Insurance & Bonding glossary — Miller Act payment and performance bonds are required on every federal construction contract above $150K.