What are Federal Davis-Bacon Prevaling Wages?
What are Federal Davis-Bacon Prevaling Wages?
- Coverage is extended to construction contracts awarded directly by the federal government or financially assisted under any statute referencing DBA labor standards, including but not limited to those listed in 29 CFR 1 and 29 CFR 5. However, if a statute authorizes assistance but does not include either directly or by reference a DBA labor standards clause, the DBRA does not apply. See FOH 15b00(b).
- In situations where a project is funded under a number of federal statutes, DBRA applies to the project if any one of the statutes authorizing a portion of the financial assistance requires payment of DBA wages. To verify coverage under various DBRA contracts, contact the regional wage specialist (RWS).
- The Surface Transportation Assistance Act of 1982 (Pub. L. No. 97-424), effective January 6, 1983, expanded DBA coverage to all federal-aid highway construction projects to include those involving resurfacing, restoration, rehabilitation, and reconstruction (4-R work). Previously, 23 USC 113, the Federal-Aid Highway Act, had been construed to exclude 4-R work from initial construction.
- The $2,000 threshold for coverage pertains to the amount of the prime contract, not to the amount of individual subcontracts. If the prime contract exceeds $2,000, all work on the project is covered.
The scope of the DBA is limited, by its terms, to the fifty states and DC and the Commonwealth of Northern Mariana Islands. The scope of each of the related acts is determined by the terms of the particular statute under which the federal assistance is provided. For example, DBRA would apply to a construction contract funded under the Housing and Community Development Act of 1974 located in Guam or the Virgin Islands. However, although direct DBA would not apply in places such as Guam or the Virgin Islands, CWHSSA would apply. See FOH 15g00.
Statute of limitations.
- The Portal-to-Portal Act applies to the DBA. It prevents the commencement of any court suit for unpaid straight-time wages more than 2 years after performance of the work (3 years in the case of willful violations), where such actions are judicially determined to be permissible under the law. However, it is DOL’s position that the Portal-to-Portal Act does not apply to administrative actions initiated through the administrative law judge (ALJ) hearing procedures, and thus, the Portal-to-Portal Act does not preclude such corrective administrative action after 2 (or 3) years.
- Failure to pay the minimum rates specified in a DBA contract is a breach of the contract, and the contracting agency may withhold funds sufficient to pay the unpaid employees. Such funds may be withheld from the contractor without regard to the statute of limitations in the Portal-to-Portal Act and may be transferred to the comptroller general and paid to the underpaid employee without regard to such time limit.
- The Portal-to-Portal Act does not apply to federally-assisted projects (the related acts) on which DBA wage rates are required to be paid. The various state statutes of limitations would apply to such projects in private actions where they are judicially determined to be permissible under the law. The federal 6-year statute of limitations would apply in government enforcement actions (see 28 USC 2415(a)).
Definition of public building or public work.
The term “public building” or “public work” includes building or work, the construction, prosecution, completion, or repair of which is carried on directly by authority of or with funds of a federal agency to serve the interest of the general public regardless of whether title thereof is in a federal agency. See 29 CFR 5.2(k).
Site of the work: definition.
- The DBA provides that every covered contract must contain a stipulation that the contractor or subcontractor must pay all mechanics and laborers “employed directly upon the site of the work” at wage rates not less than those stated in the advertised specifications. The related acts which provide for federal construction assistance contain no reference to site of the work. However, 29 CFR 5.5(a)(1)(i) prescribes a contract clause which in effect extends the site of the work concept to the related acts. Certain U.S. Department of Housing and Urban Development (HUD) related acts, including the U.S. Housing Act of 1937 and the Housing Act of 1949, however, specifically require payment of not less than the wage rates prescribed to all mechanics and laborers employed “in the construction and development of the project.” In short there is no site of the work concept with respect to the U.S. Housing Act of 1937 or the Housing Act of 1949. (It should be noted that the overtime requirements of CWHSSA apply to all laborers and mechanics performing contract work, regardless of the site of their employment. See FOH 15g03.)
- The DBA limits coverage to laborers and mechanics employed on the site of the work but does not define this term. “Site of the work” is defined in 29 CFR 5.2(l). The description below provides general guidance used by the Wage and Hour Division (WH or WHD) in DBA and DBRA investigations:
- The “site of the work” is the physical place or places where the building or work called for in the contract will remain and any other site where a significant portion of the building or work is constructed, provided that such site is established specifically for the performance of the contract or project. See 29 CFR 5.2(l)(1). For example:
- If a small office building is being erected, the site of work will normally include no more than the building itself and its grounds.
- In the case of larger contracts, such as for airports, highways, or dams, the site of the work is necessarily more extensive and may include the whole area in which the construction activity will take place.
- Where a very large segment of the dam is constructed up-river and floated downstream to be affixed onto a support structure, the secondary construction site would be within the meaning of site of the work for DBA purposes if it was established for and dedicated to the dam construction project.
- Except as provided in paragraph 29 CFR 5.2(l)(3), batch plants, borrow pits, job headquarters, tool yards, etc., are part of the site of work provided they are dedicated exclusively or nearly so to the contract or project, and are adjacent or virtually adjacent to the site of the work as defined in 29 CFR 5.2(l)(1).
- Not included in the site of the work are permanent home offices, branch plant establishments, fabrication plants, and tool yards, etc. of a contractor or subcontractor whose locations and continuance in operation are determined wholly without regard to a particular federal or federally-assisted contract or project.
- Once the limits of site of the work have been determined, the wage determination applies only to those mechanics and laborers employed by a contractor or subcontractor on the site of the work.
- In 2000 DOL revised the two related definitions in the regulations that set forth rules for the administration and enforcement of the DBA prevailing wage requirements. Revisions in the regulatory definitions of “site of the work” and “construction, prosecution, completion, or repair” were made to clarify the regulatory requirements in view of three U. S. appellate court decisions, which had concluded that DOL’s application of these related regulatory definitions was at odds with the language of the DBA that limits coverage to workers employed “directly upon the site of the work.”
- The Federal Acquisition Regulation (FAR) (48 CFR 52.222.5 -.11) has been revised to address the issue of secondary sites that may be considered to be within the regulatory definition of “site of the work.” Therefore, federal contract stipulations include provisions that address the possibility of a covered secondary site of work. Contracting agencies should consult the WHD when confronted with site of work issues.
- CWHSSA has no site of work limitation.
Also excluded from the site of the work are fabrication plants, batch plants, borrow pits, job headquarters, tool yards, etc, of a commercial or material supplier which are established by a supplier of materials for the project before opening of bids and not on the site of the work as stated in 29 CFR 5.2(l)(1), even where such operations for a period of time may be dedicated exclusively, or nearly so, to the performance of a contract.
For a full discussion of the revisions made to the regulatory definition of the “site of the work” in 2000, see the final rule published in the Federal Register on December 20, 2000, 65 FR 80268 -80278. Also, see Building andConstruction Trades Department,AFL-CIO v. United States Departmentof Labor Wage AppealsBoard, 932 F.2d 985(D.C. Cir 1991) (Midway),Ball, Ball and Brosamer v.Reich (D.C. Cir 1994), and Cavett Company v. U.S. Department of Labor 101 F. 3d 1111 (6th Cir. 1996).
Construction, prosecution, completion, or repair.
29 CFR 5.2(j) defines the terms “construction, prosecution, completion, or repair” to mean all types of work done on a particular building or work at the site thereof (including work at a facility deemed part of the site of the work) by laborers and mechanics of a construction contractor or construction subcontractor including without limitation:
- Altering, remodeling, and installation (where appropriate) on the site of the work of items fabricated off-site
- Painting and decorating
- The manufacturing or furnishing of material, articles, supplies or equipment on the site of the building or work
- Transportation between the site of the work (within the meaning of 29 CFR 5.2(l)) and a facility which is dedicated to the construction of the building or work and deemed a part of the site of the work (within the meaning of 29 CFR 5.2(l))
Force account construction work.
- In some instances a government agency (or a state or political subdivision thereof using federal money) may perform construction work under what is generally known as force account. In essence, this is a do-it-yourself type of construction – the governmental agency receiving the grant decides not to contract out the work but actually performs it in-house with its own employees. Such work is not generally subject to DBRA/CWHSSA because governmental agencies and states or their political subdivisions are not considered contractors or subcontractors within the meaning of the DBA. However, any part of the work not done under force account but contracted out is subject to DBRA/CWHSSA in the usual manner.
- Certain related acts require payment of prevailing wages to all laborers and mechanics “employed in the construction (or development) of the project” (e.g., the U.S. Housing Act of 1937 and the Housing Act of 1949). See FOH 15e13. State and local government agencies receiving federal assistance under statutes containing this or similar wording not restricting coverage to employees of contractors or subcontractors, which perform construction with their own employees, must pay such employees according to DBRA/CWHSSA.
- Where the government enters into a lease/purchase agreement DBA applies, because the cost of the construction is eventually paid for by the government. DBA also applies to a lease option or to a term lease agreement where there is substantial and segregable construction activity, and where the structure is a public building or public work. This may be true, for example, where the building is built at the request of the government pursuant to government specifications for government use or purpose for the period of the lease.
- AAM No. 176 identifies the following factors as among those to be considered in determining whether a lease/construction contract is construction for the DBA:
- “Length of Lease”
- Extent of government involvement in the construction project (such as whether the building is being built to government requirements and whether the government has the right to inspect the progress of the work)
- The extent to which the construction will be used for private rather than public purposes
- The extent to which the costs of construction will be fully paid for by the lease payments
- Whether the contract is written as a lease solely to evade the requirements of the DBA
- Postal Service lease agreements are governed by the Postal Reorganization Act (39 USC 410(d)). Under the terms of that act, Postal Service lease agreements for rent of net interior space in excess of 6,500 square feet are required to include DBA labor standards for any construction, modification, alteration, repair, painting, decoration, or other improvement of the facility covered by the agreement.
Post exchange contracts.
The DBA applies to Post exchange contracts for construction, alteration or repair of buildings regardless of whether such contracts are paid for with appropriated or nonappropriated funds.
Consulting Services We Provide
- Review public works preconstruction contracts
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- Audit labor classification for each worker employed
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- Monitor DIR wage determinations
- Audit fringe benefits allowances
- Review DIR holiday payment requirements
- Audit DIR travel & subsistence requirements
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