Skip to main content

Human Resources

Updated Davis-Bacon Wages Rules Apply 10/23/23

Member for

2 years 6 months
Submitted by bwaninger@vlct.org on
Woodcut block letters reading "New Rules" on teal background

Is your municipality working on a federally funded public building or infrastructure project, or planning to in the future? If so, the Davis-Bacon Act applies to your project. Updated Davis-Bacon regulations became effective on October 23, 2023.

What Is the Davis-Bacon Act?

The Davis-Bacon Act requires contractors and subcontractors working on federally funded projects that cost more than $2,000 to pay certain workers the “prevailing” wage. Davis-Bacon requirements may be extended to federal financial assistance programs by the terms of other statutes (collectively referred to as Davis-Bacon and Related Acts). For instance, the Contract Work Hours and Safety Standards Act is a Related Act that requires overtime pay to employees on most Davis-Bacon Act covered contracts.

The DBA applies to work:

  • on public buildings or public works (for example, a town office or town garage building with USDA Rural Development grants or loans, or water, wastewater, or transportation project with federal funding).
  • involving construction, prosecution, completion, or repair.
  • performed at the site of the work.

Davis-Bacon Act requirements apply to:

  • laborers and mechanics.
  • people who guard property (ex. watchperson or guards) (under certain conditions).
  • working foreperson (under certain conditions).

The US Environmental Protection Agency's Davis Bacon Act Overview summarizes the requirements. This overview was published prior to the updated regulation.

What Has Changed?

The DOL worked to streamline and standardize Davis-Bacon compliance, but contractors and contracting agencies, such as municipalities, will carry more risk. The DOL summarized the changes in a comparison chart. Below are the main changes.

Prevailing Wages

  • The methods for how the DOL determines prevailing wages and whether payment of fringe benefits prevails over not paying benefits have both changed. This may have changed the wage or benefit rate for your project.
  • The updates allow DOL to define a wage rate for multi-county projects (“areas”) and geographic subdivisions, such as state highway districts, not just for counties. Mixing rural and metropolitan county data is no longer banned.

Wage Determinations

  • Wage determinations for substantial activities must be incorporated into the Request for Bids and the awarded contract.
  • Wage determinations must be updated after a contract is awarded if the contract’s construction scope of work or its period of performance changes, or if a new subcontract is signed. Contracts not tied to completion of a specific project (retainer contracts, pre-qualified consultant contracts, etc.) must have wage determinations updated annually.

Definitions

The updated regulations clarify existing definitions and define terms that previously did not have definitions.

  • Agency was clarified to include state and local agencies or other entities that provide assistance for Davis-Bacon projects.
  • Building and work were modernized to include energy generation, broadband, and electric vehicle charger installations.
  • Construction, completion, or repair includes demolition work and future construction on a demolition site if that construction will be subject to Davis-Bacon.
  • There are new definitions for contractor, subcontractor, and prime contractor.
  • Site of work has a revised definition that expands its scope.
  • Flaggers are covered under Davis-Bacon if they are associated with the construction project. They do not have to be physically on the construction site.
  • Material suppliers are not considered contractors for Davis-Bacon purposes. Contractor workers who move materials within a site or off site may be covered.
  • Davis-Bacon applies to truck drivers employed by contractors and subcontractors when they are engaged in certain activities.
  • Surveyors are considered laborers or mechanics in certain circumstances, and therefore are covered by Davis-Bacon.

Compliance

Record Keeping – Contractors and subcontractors are required to keep certain documentation to prove they tried to comply with Davis-Bacon; to maintain a list of workers with telephone numbers and email addresses; and to retain all documents for at least three years after the work on the prime contract is completed. They also must certify payroll (by signature) and submit it on a weekly basis to the contracting agency. The contracting agency (you!) must retain these records too, and you are responsible for ensuring that the signature on the certified payroll is valid.

Contracting – Contractors and upper-tier contractors now may be liable for lower-tier subcontractor violations. This means they are required to pay back wages on behalf of their lower-tier subcontractors and may be subject to debarment for subcontractor violations. Intent doesn’t matter. Prime contractors must follow up and ensure compliance. Upper-tier subcontractors must have some degree of intent to incur liability.

Contract clauses must be inserted in full. Anti-retaliation provisions are included in the contract clauses and include remedies.

Fringe Benefits – Fringe benefit contributions must be annualized, and an hourly equivalent rate must be calculated if a contractor’s worker performs work on both Davis-Bacon and non-Davis-Bacon projects. There are some exceptions to annualization calculations, and they have nuances!

Apprenticeships – Specific requirements must be met for a contractor to claim a fringe benefit credit for the costs of an apprenticeship program.

Enforcement –

  • Interest will be due on back wages, calculated per an IRS standard, and compounded daily. Back wages and interest can be withheld from the prime contractor’s other federal contracts.
  • Certain Davis-Bacon requirements have been aligned with requirements of related acts (e.g., one standard for debarment, its mandatory period, etc.).
  • If wage determinations and contract clauses are missing from executed (signed) contracts, they must be incorporated retroactively. This may require an increase in the contract amount for cover wages even if the contract has closed.
What Should Municipalities Do Now?

Review your Davis-Bacon compliance program.

  • Are the required contract clauses in all contracts subject to Davis-Bacon?
  • Do you have a mechanism or procedure to ensure contractors and subcontractors are following Davis-Bacon requirements?
  • Are you collecting records (including the newly required records) and certified payrolls from your contractors? How do you ensure that the certification signature is valid?
  • Do you have a system to verify Davis-Bacon compliance with your contractors and subcontractors?
  • Do you have any project wage determinations that are nearing expiration?

Conduct a risk assessment of your Davis-Bacon compliance program. Even if your “program” is informal, take the time to identify gaps and create controls to close them.

Revisit training. Do you have clear guidance for contractors and subcontractors to comply with Davis-Bacon? Is your staff receiving regular training on Davis-Bacon compliance?

Need Resources?

To learn more about the updated Davis-Bacon and related acts regulations, visit https://www.dol.gov/agencies/whd/government-contracts/construction/. The webpage includes a Small Entity Compliance Guide that is useful for understanding the updates.

Need current Davis-Bacon Wages? Our Project Management Tip of the Week includes our Guide to Obtaining Davis-Bacon Wage Determinations.

First Amendment Rights for Public Sector Employees

The topic of free speech rights for employees can be tricky. For instance, under the National Labor Relations Act (NLRA), even non-union employees have the right to discuss the terms and conditions of their employment, including wages, with other employees. But free speech rights go further for governmental employees, who have rights under the First Amendment of the U.S. Constitution that their counterparts in the private sector do not.   

In a modern society grappling with opinions and viewpoints that seem polarized to an extreme, it may be difficult for a municipality to discern whether an employee’s speech is protected — or has crossed a line that calls for a response.

A recent example is the lawsuit by Tiffany Riley against Windsor Southeast Supervisory Union et al. Sparking the dispute was a June 10, 2020, Facebook post by Ms. Riley — who at the time was the principal of Windsor School, the PK-12 public school in Windsor, Vermont — regarding Black Lives Matter. Two days later, after a meeting of the Mount Ascutney School Board, the superintendent sent Ms. Riley a letter stating that at the meeting the Board “indicated no confidence in your leadership ...” and placing Ms. Riley on paid administrative leave. The superintendent was then quoted by a local newspaper as stating that the members of the Board did not see any way that she is “going to go forward as the principal of that building given those comments and that statement.” The Board, additionally, issued a public statement that concluded by saying, “we have voted unanimously to place Ms. Riley on paid leave, effective immediately, and we are resolved that she will no longer lead our school.” Subsequently, after a formal hearing, the Board issued a decision terminating Ms. Riley’s employment. A lawsuit followed that included alleged violations of First Amendment and due process rights. The lawsuit was eventually resolved, according to media reports, for a total of $650,000, of which $191,250 was allocated to wages, $233,750 to alleged free speech and due process allegations, and $225,000 to legal fees.   

During the lawsuit, the plaintiff filed a motion for summary judgement. When deciding the plaintiff's motion for summary judgment, the legal standard applied by the court to the First Amendment retaliation claim was: “a public employee must prove that ‘(1) his speech addressed a matter of public concern, (2) he suffered an adverse employment action, and (3) a causal connection existed between the speech and the adverse employment action, so that it can be said that his speech was a motivating factor in the determination.’”  Riley v Windsor Southeast Supervisory Union, et al, slip op. at p. 9, Case No. 5:20-cv-108 (USDC VT March 15, 2021) (quoting Feingold v New York, 366 F.3d 138, 160 (2d Cir. 2004) and Mandell v Cnty. Of Suffolk, 316 F.3d 368, 382 (2d Cir. 2003)) (internal quotation marks omitted).  

Particularly during this era of ubiquitous social media, in a modern society grappling with opinions and viewpoints that seem polarized to an extreme, it may be difficult for a municipality to discern whether an employee’s speech is protected — or has crossed a line that calls for a response. To reduce risk, we recommend that members conduct “Respectful Workplace Training” for employees and supervisors, to help communicate expectations around acceptable and inclusive workplace behaviors. (Note: PACIF members may apply for John Lawe Scholarship funding to use toward such training.) We also recommend adopting a personnel policy that has language addressing the use of computers and social media. But keep in mind that a policy can only go so far. Indeed, many offensive or questionable speech scenarios occur outside of the workplace but can be discovered by other employees, or members of the public, who find them disturbing or upsetting and complain. 

What should municipal officials do if they learn of questionable or unacceptable social media postings or other expressions of speech, whether they have occurred at work or during non-work time? As is so often the case with legal questions that involve employees, the initial answer tends to be “it depends.” The details matter. It is vital to confer with legal counsel to help you determine best next steps. PACIF members have access to the Employment Practices Liability (EPL) Referral Program, which provides up to three, and sometimes more, hours of legal assistance for each eligible employment-related issue. For situations that may involve employee termination, the EPL program covers up to eight hours of the attorney’s time.  

Freedom of speech issues are not going away: they will continue to challenge local governments, their officials, and their employees. But be assured that PACIF is happy to help provide the support and assistance you need to navigate this tricky legal arena. Please feel free to reach out to Jill Muhr, Senior HR Consultant, to discuss HR or employment matters; or request a legal referral by emailing EPLReferral@vlct.org. 

FLSA and Vermont Wage Rules and Regulations

The Fair Labor Standards Act (FLSA) is a complex federal law that was first enacted in 1938. Its main purposes include regulating overtime pay, establishing the federal minimum wage, and enacting child labor protections. Vermont’s wage laws and regulations are similar, except Vermont employers must pay the state’s minimum wage rate, since it is higher than the federal rate.

The US Department of Labor and the Vermont Department of Labor each have published comprehensive resources to assist employers in their compliance with these important laws. You can also contact PACIF's Human Resources Consultation Program, contact  info@vlct.org. To request an EPL Referral, email us at EPLReferral@vlct.org.

Publication Date
03/20/2024

Compensation and Benefits

Employee compensation and employment benefits, sometimes referred to as “total rewards,” are key to attracting and retaining a great team.

To measure your municipality's market competitiveness in “total rewards,” refer to the latest Vermont Municipal Compensation and Benefits Report. We aggregate this survey data every autumn from the responses to VLCT's Annual Compensation and Benefits Survey. Members that participate in the survey receive free access to the report, while non-participating members pay a reduced price. Non-VLCT members pay full price for this data.

Publication Date
08/26/2019
Subscribe to Human Resources