Prevailing wage, and how it relates to federal contractors, has been a hot topic since the US Department of Labor (DOL) proposed changes to the regulations in 2023. Now with the changes in effect, the DOL’s Wage and Hour Division (WHD) has updated its Prevailing Wage Resource Book (PWRB) to include the new final rule. 

 

The PWRB is intended to give contractors, unions, associations and workers a better understanding of the labor standards on certain federal and federally funded contracts including the Davis-Bacon and Related Acts, according to the Associated General Contractors of America (AGC). The updated version intends to provide simplified language, a restructured, more intuitive format and additional guidance and examples of where stakeholders routinely request clarification.  

The PWRB gives contractors a better understanding of prevailing wage and how the new final rule affects them. 

Prevailing Wage Updated Final Rule 

The US Department of Labor’s final rule that updates the Davis-Bacon and Related Acts (DBRA) went into effect on Oct. 23, 2023.  

The DOL’s new rule updates the Davis-Bacon prevailing wage regulations by: 

  • Creating new efficiencies in the prevailing wage update system and making sure prevailing wage rates keep up with actual wages, which over time could mean higher wages for workers. 
  • Returning to the “prevailing wage” definition used from 1935 to 1983 to make sure prevailing wages reflect actual wages paid to workers in the local community. 
  • Periodically updating prevailing wage rates to address out-of-date wage determinations. 
  • Providing broader authority to adopt state or local wage determinations when certain criteria are met. 
  • Issuing supplemental rates for key job classifications when no survey data exists. 
  • Updating the regulatory language to better reflect modern construction practices. 
  • Strengthening worker protections and enforcement, including debarment and anti-retaliation provisions. 

How Does Prevailing Wage Work? 

Prevailing wage is a condition that’s part of the requirements for businesses that win government construction contracts. The prevailing wage rate is determined by the WHD and depends on where the work is being done, i.e., a specific geographic area for a certain type of construction. It’s required to be posted by the contractor at the site of the work in a prominent and accessible place where it can be easily seen by the workers. Prevailing wages, including fringe benefits, must be paid on all hours worked on the site of the work and employers must submit weekly certified payroll records. Prevailing wage is a requirement of the DBA. 

The Davis-Bacon and Related Acts 

The DBA was created in 1931 to protect workers from receiving low pay while competing for federally funded construction projects during the Great Depression. DBA requirements have been extended by Congress through numerous statutes, collectively known as the Davis-Bacon “Related Acts.” The Related Acts extend DBA requirements to projects that receive assistance from the federal government through a variety of financial instruments (e.g., grants, loans, loan guarantees, insurance). 

The act, as currently amended, requires that any federal contractor who takes on a job over $2,000 on public buildings or public works must pay their workers no less than the prevailing wage and fringe benefits as on similar projects. Types of work include construction, alteration or repair (including painting and decorating). 

The DBA covers these employees: 

  • Laborers and mechanics. These employees perform work that’s manual or physical in nature including tradespeople and apprentices. 
  • Working forepersons. Forepersons or supervisors who work in construction and spend more than 20% of their time as a laborer or mechanic. 

Those in construction NOT covered by the DBA are workers that primarily perform administrative, managerial or clerical duties. 

Error-Free Recordkeeping is Key 

For contractors that choose to work for the US government, adhering to prevailing wage standards is not an option. One way to help maintain compliance is by keeping accurate employment records. Submitting certified payroll reports is a stipulation of prevailing wage.  

Federal contractors must submit Federal Form WH-347 for certified weekly payrolls on contracts subject to the DBA and make sure each of the form’s fields are filled out correctly, including: Name of Contractor, Name and ID Number of Worker, Work Classification, Total Hours, Rate of Pay and Deductions. Current Davis Bacon wage rates for each state can be found online by filling in a few fields or providing the wage determination (WD) number. 

The certified payroll reports also require that federal contractors clearly document employee names, addresses, correct job classification, rate of pay, daily and weekly hours worked and amount actually paid in payroll. Once WH-347 form is completely filled out, submission is certified by signing the statement of compliance included in the form. 

Arcoro’s ExakTime solution helps construction companies gather and maintain accurate data about their employees the first time, so employees are classified correctly from day one and certified payroll information is lined up and ready for Form WH-347. 

ExakTime’s mobile time clock app records every hour your employees work, including lunches and overtime, all in real-time. This eliminates inaccurate time sheets, which can slow down payroll.  

The ExakTime solution supports certified payroll compliance with: 

  • A drop-down menu so you can simply choose “certified payroll” for a job site, automatically classifying all hours worked at the site 
  • A certified payroll report that lets you review the hours worked at those sites by employee 
  • The option to create customized “certified payroll” cost codes for every certified payroll site, so employees can clock in under the correct code for their “contract action”, or job 
  • ExakTime also automatically saves records of all your employee timesheets. That means no matter if you need to check on payment from two weeks ago or two years, it can be securely accessed with just a couple of clicks.  

Learn more about certified payroll and how ExakTime can help by downloading this datasheet.