The Davis Bacon Act & Prevailing Wage Fraud
WHAT ARE PREVAILING WAGE STANDARDS?
Each year the federal government spends more than 500 billion dollars on contracts, which includes tens of billions on Facilities, Equipment and Construction Projects. The government typically grants contracts through a bidding process; once they choose a contractor, they must treat them equally, and ensure such treatment extends to contract workers. If the federal government doesn’t regulate contracts and ensure fair wages, the playing field isn’t level for contractors and their workers.
Prevailing wage standards prevent contractors who use cheap labor from under-bidding on contracts, creating a fair bidding process that allows local contractors and employees to compete on federally funded construction projects. Fortunately, the Davis Bacon Act (DBA) of 1931 and related acts continue to enforce regulation of government contracts, contractors and subcontractors, and specifically grants the U.S. Department of Labor the authority to set a prevailing wage, leveling the playing field for contractors and their workers.
If you suspect or know your employer has committed DBA violations including paying wages below the prevailing wage set by the Department of Labor, contact the skilled legal team at Price Armstrong at (205) 208-9588 to schedule a free consultation and determine the best path forward for your individual situation.
WHAT IS THE DAVIS BACON ACT OF 1931?
The Davis Bacon Act (DBA) of 1931 was passed by Congress during the Great Depression and intended to protect all construction workers from abusive industry practices. This includes low wages on publicly funded projects. With Jim Crow Laws in the South, many African-Americans migrated North where they could find work because of the labor shortage after WWI. As the postwar economy began to drag, contractors working on public projects exploited migrant black workers from the South by using them as cheap labor.
DBA mandated contractors to pay local prevailing wages to all construction workers, regardless of race, which stabilized the cost of labor and implemented labor standards for contractors. Further, DBA put a stop to contractors exploiting African-American workers from the South and treating them like indentured servants. Some critics tout DBA was a racist action to keep low-wage black workers from competing with higher wage unionized workers on government projects. Regardless of whether this is true or not, DBA has evolved over the decades with amendments and changes reducing the discriminatory effects of associated policies.
Today’s iteration of Davis-Bacon and Related acts apply to all contractors and subcontractors working on contracts in excess of $2,000. Workers might be involved in construction, modification, or reparation of any public buildings or facilities. Additionally, DBA now applies to work on highways, bridges, and utilities. Contractors and subcontractors “must pay workers and mechanics no less than the locally prevailing wages and fringe benefits for corresponding work on similar projects in the area.”
WHAT ARE PREVAILING WAGE PROVISIONS?
Prevailing wages are rates of pay established by the Department of Labor, based upon a geographic location for a specific class of labor and type of project. The prevailing wage provisions were included in the DBA to ensure workers on public projects received fair pay.
The Department of Labor sets the prevailing wage for each area of the nation and provides a central website, Wage Determinations Online, for contracting officers to find the applicable wage determination for each contract action. The Department of Labor determines prevailing wages by examining local wages paid to various classes of workers and mechanics on specific types of construction projects.
Prevailing wages also include an amount for fringe benefits contractors must provide their workers. Fringe benefits do not include things required by the government such as social security, but other types of benefits such as:
- Life insurance
- Health insurance
- Paid vacation
- Paid holidays
- Paid sick leave
Congress has also authorized prevailing wage provisions in other laws, government agencies, and other types of government contract work. Examples include:
- Federal Highway Administration (FHWA)
- Copeland Act
- Emergency relief work by the National Guard and other agencies
- Federal-aid construction projects
- Transportation enhancement projects
- Utility work
- Railroad and rail work
VIOLATING THE DAVIS BACON ACT
Complying with DBA requires contractors to submit a special payroll report, called a certified payroll, to the Department of Labor when working on federally funded project. Contractors must pay employees weekly and include each employee’s:
- job classification
- rate of pay
- hours worked
- amount paid in the report
This above is certified when the contractor signs a statement of compliance. Under the Fair Labor Standards Act (FLSA), exemptions to following the provisions of DBA exist for executive, administrative, professional, computer, and outside sales employees, as well as highly compensated employees.
The Department of Labor does allow corrections for mistakes. Beyond a legitimate mistake, regularly providing false payroll reports is Davis Bacon Act Fraud. Unfortunately, prevailing wage fraud is one of the most common types of fraud under the umbrella of DBA violations. The Department of Labor actively investigates any suspected or reported violations. Those who violate the DBA might have to make back payment of wages and fringe benefits, experience a hold on contract funding, lose their contract, and/or lose the ability to bid on any contracts for three years. Violations might be an honest mistake on a company’s certified payroll.
WHISTLEBLOWER PROTECTION & BENEFITS
When a contractor commits fraud against the government by misreporting wages and benefits, it’s unfair to others who are complying with the law. Additionally, those who knowingly allow DBA violations to continue are complicit in the exploitation of low-wage workers. In order to maintain fairness in government funded contract work, employees who are aware of violations must report them.
Under the False Claims Act, employees who report workers who are committing fraud against the government have whistleblower protections. Additionally, those who hire an attorney to initiate a qui tam lawsuit under the False Claims Act might be eligible to receive a whistleblower reward. These awards might be anywhere from 10 to 25 percent of fraudulent money, depending on the case. Price Armstrong has recovered more than $12 million in whistleblower awards from fraud cases against government contractors.
WHY YOU NEED A DAVIS BACON ACT FRAUD WHISTLEBLOWER LAWYER
If you know or suspect your employer is violating DBA regulations, you need to contact a Davis Bacon Act fraud whistleblower attorney as soon as possible. Price Armstrong remains dedicated to holding companies accountable for fraud and protecting whistleblowers from negative consequences. Additionally, the skilled legal team at Price Armstrong includes diligent litigators who will aggressively pursue the best outcome in your case.
Contact Price Armstrong at (205) 208-9588 for a free consultation to discuss the details of your employer’s Davis Bacon violation and learn how we can assist you.
CONTACT US FOR A FREE CASE EVALUATION
If you have evidence of a violation of the Davis Bacon Act, contact the attorneys at Price Armstrong. We can help you seek justice and protect your rights throughout the process. We represent clients nationwide with offices in Birmingham, AL, Tallahassee, FL and Albany, GA. Call us today at (205) 208-9588 for a free initial consultation and review of your case. Let us fight for you – call now!