The Davis-Bacon Act requires contractors and subcontractors on federally funded or federally assisted construction projects over $2,000 to pay workers no less than the locally prevailing wages and fringe benefits for corresponding work on similar projects in the area. What sounds like a straightforward pay floor becomes one of the most complex compliance challenges in construction—with wage determinations that vary by county, trade, and project type, a fringe benefit calculation that trips up even experienced payroll shops, and certified payroll reporting that can trigger debarment if done wrong.
The stakes are high. DOL enforcement actions routinely result in six- and seven-figure back-wage assessments, and willful violations can lead to criminal prosecution and 3-year debarment from all federal contracts. This guide walks through the triggers, the math, the reporting requirements, and the mistakes that generate the biggest penalties.
What Triggers Prevailing Wage Requirements
Davis-Bacon applies to contracts over $2,000 for construction, alteration, or repair of public buildings and public works where the federal government or District of Columbia is a party. "Federally assisted" projects—those receiving federal grants, loans, or loan guarantees—are covered by related acts (commonly called "Davis-Bacon Related Acts") that extend the same requirements. This includes most highway projects (FHWA-funded), water/sewer infrastructure (EPA/USDA-funded), affordable housing (HUD-funded), and energy projects with federal tax credits or grants.
The $2,000 threshold applies to the total contract value, not individual task orders or subcontracts. A $500 subcontract on a $5 million federal project is still covered. Coverage follows the money—if any federal funding touches the project, all construction work on that project is typically covered, even portions funded entirely by state or local money. The prime contractor is responsible for ensuring all tiers of subcontractors comply.
Maintenance work, manufacturing/fabrication off-site, and non-construction professional services are generally not covered. However, the line between "construction" and "maintenance" is heavily litigated. Installing a new HVAC system is construction; replacing a filter is maintenance. Replacing a roof is construction; patching a leak may be maintenance. When in doubt, apply prevailing wages—the cost of compliance is far less than the cost of a back-wage determination.
Davis-Bacon Prevailing Wage Calculator
Calculate Davis-Bacon prevailing wage pay with correct overtime rules where fringe stays flat. Compare cash-vs-benefits tax savings, annualize fringe credits, and compute apprentice wage steps.
Reading a Wage Determination
Wage determinations (WDs) are published on sam.gov (formerly WDOL.gov) and specify the minimum hourly base rate and fringe benefit rate for each trade classification in a given county. There are four schedule types: Building, Heavy, Highway, and Residential. The correct schedule depends on the project type, not the work being performed. An electrician on a highway bridge project uses the Heavy/Highway WD, not the Building WD, even though the electrical work is identical.
Each classification shows two numbers: the base hourly rate and the fringe benefit rate. For example: "Electrician – $42.50 + $18.75." The $42.50 is the minimum cash wage. The $18.75 is the fringe benefit requirement that can be met through bona fide benefit plans (health insurance, pension, vacation fund) or paid in cash to the worker, or any combination. If your benefits plan provides $14.00/hr in qualifying benefits, you must pay the remaining $4.75/hr in cash as a fringe cash-out on top of the $42.50 base.
Classifications use specific DOL titles that may not match your company's job titles. A "pipefitter" on the WD may or may not include your "pipe welder" depending on the area practice survey. If your worker's duties don't cleanly fit a listed classification, you must request a conformance (additional classification) from the DOL before the work begins. Working under the wrong classification—even a higher-paid one—is technically a violation.
The Fringe-on-OT Trap
This is the single most expensive mistake in prevailing wage payroll. When a worker earns overtime, the base cash wage is paid at 1.5× (per FLSA), but the fringe benefit obligation remains at the straight-time rate for every hour worked, including overtime hours. The fringe is a flat hourly amount, not a multiplier. An electrician with a $42.50 base and $18.75 fringe working 50 hours gets: 40 hours × $42.50 = $1,700 base + 10 hours × $63.75 (1.5 × $42.50) = $637.50 OT base + 50 hours × $18.75 = $937.50 fringe. Total: $3,275.00.
The common error is applying the 1.5× multiplier to the combined rate ($42.50 + $18.75 = $61.25 × 1.5 = $91.875/hr for OT). This overpays OT hours by $9.375/hr ($91.875 − $63.75 − $18.75 = $9.375 overpayment per OT hour). While overpaying workers is not a violation in itself, it inflates project costs unnecessarily and, more importantly, the math error in the other direction (applying fringe at a reduced rate during OT) creates underpayments that trigger DOL enforcement.
The correct formula: OT hourly rate = (Base wage × 1.5) + (Fringe at straight-time rate). The fringe is always flat. If you pay fringe through benefit plans, the plan contributions are also flat per hour—you do not increase health insurance contributions by 50% for overtime hours. Cash fringe payments follow the same rule: flat rate per hour regardless of OT status.
Davis-Bacon Prevailing Wage Calculator
Calculate Davis-Bacon prevailing wage pay with correct overtime rules where fringe stays flat. Compare cash-vs-benefits tax savings, annualize fringe credits, and compute apprentice wage steps.
Certified Payroll Requirements
Contractors must submit weekly certified payroll reports (WH-347 form or equivalent) for each week any Davis-Bacon covered work is performed. The report lists every worker, their classification, hours worked each day, hourly rate, gross pay, deductions, and net pay. The "Statement of Compliance" on page 2 must be signed by an officer or authorized agent certifying that the information is correct and that all workers were paid at least the applicable prevailing wage.
Certified payrolls are submitted to the contracting officer (usually the general contractor, who forwards to the agency) and must be maintained for 3 years after project completion. They are public records subject to FOIA requests, though Social Security numbers and home addresses can be redacted. Workers' names, classifications, hours, and rates are not redactable—this is by design, to allow union representatives and compliance monitors to verify payments.
False certification is a federal crime under 18 U.S.C. §1001 (false statements) and can result in fines up to $500,000 and imprisonment. Even unintentional errors, if part of a pattern of underpayment, can lead to debarment (ineligibility for federal contracts for up to 3 years) under the Davis-Bacon Act's penalty provisions. Electronic reporting through LCPtracker, eMars, or similar platforms is increasingly required by contracting agencies and helps reduce clerical errors.
Apprentice Hours Tracker
Track OJT and classroom hours toward journeyman status for 15 trades. Shows wage step progression, projected completion date, and pace indicator.
Common Violations and Penalties
The top five Davis-Bacon violations are: (1) paying below the prevailing wage rate for the applicable classification, (2) misclassifying workers into lower-paid trades (paying a journeyman electrician at the laborer rate), (3) incorrect fringe benefit calculations (especially the OT fringe trap), (4) failure to submit certified payrolls, and (5) using apprentice rates without a registered apprenticeship program. Each of these can trigger withholding of contract payments, back-wage assessments, civil penalties, and debarment.
The DOL recovered $322 million in back wages for workers in fiscal year 2023 across all wage-and-hour programs, with Davis-Bacon investigations representing a significant portion. Penalties include back pay to affected workers, liquidated damages equal to the underpayment, contract termination, withholding of up to the full contract value to cover back wages, and debarment. Criminal penalties apply to willful violations and false certified payroll statements.
To protect yourself, conduct monthly self-audits of certified payrolls, verify classification accuracy against the WD, ensure fringe calculations are correct, and maintain documentation of apprenticeship program registrations. When the DOL investigates (and they will, on a sample basis), your first defense is demonstrating a good-faith compliance program with self-correction. Contractors who self-discover and voluntarily correct underpayments receive significantly lighter treatment than those caught by investigators.