DAVIS BACON ACT PRIMER

I recently put on a presentation regarding the Davis Bacon Act.  A portion of the presentation is below. 

 

The Davis Bacon Act is a federal act that governs prevailing (or minimum) wages on federally funded or federally assisted construction projects.  The Act requires laborers and mechanics (those performing physical or manual labor directly on site) to be paid a minimum cash wage plus fringe benefit based on the class of labor, type of project, and the geographic locale of the project.   

 

Any contractor or subcontractor that performs work for the federal government should be aware of the Davis Bacon Act.  Also, any contractor or subcontractor that does Florida public construction work should be familiar with the Davis Bacon Act since many public construction projects receive federal funds / assistance triggering the application of the Act.

 

The prevailing (or minimum) wages governing the labor classes for the project will be published in a wage determination.  The wage determination will be part of the prime contract and posted at the site.  It is typically an exhibit to subcontracts too. 

 

Weekly certified payroll is required to be submitted verifying the cash wages and fringe benefits paid to laborers and mechanics.

 

Make sure you understand the application of the Davis Bacon Act so that you know the “wage floor” to pay laborers and mechanics and any bona fide fringe benefits that may apply to ensure compliance with the Act.

 

Download (PDF, 2.45MB)

 

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.

 

VIOLATION OF DAVIS BACON ACT COULD SUPPORT FALSE CLAIMS ACT VIOLATION

UnknownThe Davis Bacon Act is a prevailing wage federal statute that applies to contractors and subcontractors performing work on federally assisted or federally funded projects in excess of $2,000 for the construction, alteration, or repair, including painting and decorating, of a public project.  40 U.S.C. s. 3142.   Contractors and subcontractors performing work on Davis Bacon projects must pay mechanics or laborers minimum wages / prevailing wages based on the class of labor and project determined for the locale of the project per a wage determination published by the United States Department of Labor.  40 U.S.C. s. 3142.  These rates must be certified through weekly certified payroll. For more information on the Davis Bacon Act, check out the United States Department of Labor’s website.     You can also check out wage determinations or prevailing wage rates to get an understanding of prevailing wage rates for the class of project and labor based on the locale of the project. 

 

Over the last few years, there have been federal decisions supporting the argument that a violation of the Davis Bacon Act can form the basis for a violation of the False Claims Act otherwise known as a qui tam action.

 

For instance, in United States ex rel. Brian K. Smith v.  Clark/Smoot/Russell, 796 F.3d 424 (4th Cir. 2015), a relator (private person) brought a qui tam action (violation of False Claim Act) against his employer, in particular, for failing to pay him locally prevailing wage rates as set forth by the Department of Labor. The Fourth Circuit reversed the dismissal of this claim by the trial court finding that a violation of Davis Bacon could support a violation of False Claims Act action

 

Here, the relator alleged that he was a labor or mechanic that worked on federal construction projects governed by the Davis Bacon Act. The relator claimed he was paid based on an improper, lower-paying labor classification and was never paid or provided fringe benefits required for his labor classification.   He lodged a complaint with the Department of Labor’s Wage and Hour Division that concluded he was not properly being paid.  Thereafter, he was temporarily reassigned to a non-Davis Bacon project, meaning there was no prevailing wage rates and he could be justifiably paid at a lower wage rate.  The reassignment also resulted in a substantially longer commute. He was then assigned to another federal project, but while it was a Davis Bacon project, he was only given limited hours to work.  Based on these facts, the relator filed a qui tam action (violation of False Claims Act) stating (1) the submission of false Davis Bacon certified payroll constituted a false claim because he was not paid prevailing wages based on any applicable Davis Bacon wage schedule / wage determination and (2) his reassignment and reduction in work hours violated the whistleblower (anti-retaliatory) provision of the False Claims Act because they were retaliatory in nature based on his complaint to the Department of Labor.

 

This case shows the dynamics of a project governed by Davis Bacon.  You need to know the prevailing wages inclusive of fringe benefits for labor classes.  Also, you know to understand that a wage determination for a project showing the prevailing wages is probably not going to touch upon every class of labor that a construction contract requires.  You need to recognize this and inquire as to the prevailing wage you think should apply so that the public agency can get a project-specific wage determination from the Wage and Hour Division of the Department of Labor.  What you do not want, however, is to have to deal with a violation of Davis Bacon or a potential qui tam action under the False Claims Act for violating the prevailing wage requirements of Davis Bacon.

 

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.

 

 

 

A DAVIS BACON SNACK – PREVAILING MINIMUM WAGE RATES ON CONSTRUCTION PROJECTS

UnknownContractors 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.