Davis-Bacon Wage Restitution

When underpayments of wages have occurred, the employer must pay wage restitution due to the affected workers. Wage restitution must be made promptly and in the full amounts due, less permissible and authorized deductions.

If a violation of labor standards requirements results in an underpayment of wages to employees, the LCA should notify the prime contractor to either make wage restitution, or direct its subcontractor to do so. Where restitution amounts are in excess of $10 per worker, the employer must attest to wage restitution paid on a correction certified payroll.

Computing wage restitution for laborers and mechanics. Prevailing wages earned are based upon the wage rate for the classification of work actually performed, multiplied by the total number of covered hours worked. Wage restitution may be computed as follows:

1. Total hours worked times (x) adjustment rate (DB rate – rate paid) = wage restitution due; or
2. Total wages earned minus total wages paid = wage restitution due.

Correction CPRs. The employer shall be required to report the restitution on a correction CPR. The correction CPR shall reflect the previous CPRs or period of time for which restitution is due (e.g., Payrolls #1 through #6; or a beginning and ending date). The correction CPR shall list each employee to whom restitution was paid, and their work classification; the total number of work hours involved; the adjustment wage rate (the difference between the required wage rate and the wage rate paid); the gross amount of restitution due; deductions; and the net amount paid. A properly executed Statement of Compliance shall accompany the correction CPR.

1. Note: In the course of basic enforcement and corrections, the employer need only submit a correction CPR to evidence wage restitution paid. Other documentation such as copies of checks; copies of cancelled checks; receipts signed by the employees; employee signatures on the correction CPR; etc., is not required.

Review of correction CPRs. The LCA must compute the amounts of restitution due and compare his/her computations to the correction CPR to ensure that full restitution was made. The employer must be notified of any discrepancies, and required to make additional payments, if needed, evidenced on a correction CPR, within 30 days.

Withholding from payments due the contractor. If wage violations are not corrected within 30 days after notification to the prime contractor, the LCA may cause withholding from payments due to the contractor in the amount needed to ensure the full payment of restitution and, if applicable, liquidated damages computed for CWHSSA overtime violations. Only the amounts necessary to meet the potential back wage and CWHSSA liquidated damages liabilities should be withheld.

Unfound/unpaid workers. The gross amount of wages due to any employee who is entitled to wage restitution and is not paid for any reason must be placed in a labor standards escrow account as a condition for final closing/close-out.

The LCA holds the funds on behalf of the underpaid worker(s) and attempts to locate and pay the amounts due to them. After reasonable efforts to locate the workers are exhausted, the LCA must turn over the gross amount due to any unfound workers to HUD. Contact the HUD Labor Relations Specialist for your area if you encounter this situation.