Contractors working on federal projects should be familiar with the Davis Bacon Act (40 USC s. 3142 and formerly cited as 40 U.S.C. 276a). This Act requires contractors to pay, at a minimum, prevailing wage rates including fringe benefits for labor as determined by the Secretary of Labor. The wage rate for select workers is oftentimes an exhibit to the contract. To confirm parties are complying with the Act and paying prevailing wage rates including fringe benefits, parties are responsible for submitting certified payroll certifying the rates they are paying labor. For more information on the Davis Bacon Act and submitting certified payroll, please click here and here.
Violations of the Davis Bacon Act are bad! Violations can include contract termination, fines in the form of liquidated damages, debarment from federal projects for a period of time, claims by improperly paid laborers, potential violations of the False Claims Act, and potential criminal prosecution.
Many local jurisdictions also have their form of prevailing wage rates that they require for the labor working on their projects.
By way of example, Miami-Dade County has what it refers to as “Responsible Wages and Benefits” embodied in Section 2-11.16 of its Code. You will see minimum wage rates for labor (e.g., glazers, carpenters, drywall finishers, electrical workers, plumbers, roofers, etc.). Any failure to pay these minimum rates can result in fines/ penalties and the County withholding payment to cover the required payment and penalties/ fines.
In Broward County, Section 26-5 of the County’s Code contains “Rate of Wages, fringe benefits on county construction contracts.” It requires minimum wages pursuant to the wages promulgated by the United States Department of Labor in the Federal Register.
If you are working on a federal or state or local government public construction project, make sure you know what the minimum prevailing wage rates are for labor. Not only will this help you in accurately projecting the costs of the work, but will help to avoid harsh consequences if that labor is not paid the minimum wage rates or, worse, there is a false certification of wage rates.
Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.