Click Fraud Protection Davis-Bacon Act Violations | Report Fraud | Whistleblower Lawyers
TZ Legal – Fraud Fighters Logo
HomeNewsDavis-Bacon Act Violations

Davis-Bacon Act Violations

Date Published
Jul 28, 2023

If you are doing work for a government contractor and suspect that you are being underpaid for your work, you should know about the Davis-Bacon Act. Likewise, if you or your employer has bid on a public works project, you must ensure that your estimates account for fair wage rates under this federal statute.

If you have information about Davis-Bacon Act violations, you may be eligible to become a whistleblower. Whistleblowers can receive substantial compensation in exchange for their honesty when their information helps recover stolen public funds. Coming forward protects workers and employees, taxpayer money, the safety and efficiency of public works projects, as well your own integrity.

Ask the qui tam attorneys at Tycko & Zavareei LLP about blowing the whistle on Davis-Bacon Act violations.

What is the Davis-Bacon Act?

The Davis-Bacon Act is a federal statute that governs public works projects with contracts of $2,000 or more. According to this law, government contractors and subcontractors must pay certain employees no less than the locally prevailing wages and benefits on similar projects being done in the area.

Furthermore, Davis-Bacon Act overtime rules state that for contracts above $100,000, contractors must pay at least one and a half the regular wage in overtime to all laborers, mechanics, guards, and watchmen for every hour clocked past 40 hours in the work week.

Locally prevailing wage rates are tracked by the Department of Labor and are available online. Compliance with the Davis-Bacon Act must also be illustrated to the Department of Labor on a regular basis by sharing payroll records.

Why Was the Davis-Bacon Act Passed?

The history of the Davis-Bacon Act dates back to the Great Depression. During this era, competition for work and wages was particularly fierce. Unemployment rates skyrocketed to nearly 20% after the stock market crash, run on the banks, and environmental disaster of the Dust Bowl. Companies sought to profit off of this desperation by offering the lowest possible wages on the projects that were still available. As a consequence, many local or unionized groups saw their jobs displaced by migrant workers who were willing to take on the work for less.

Migrant laborers, often recent immigrants to the United States or African Americans segregated under Jim Crow laws, may have found themselves employed by the remaining construction projects, but their working conditions were brutal. Dangerous labor practices and living conditions for the migrant workers led to concerns about safety, the quality of work being accomplished, and a general lack of accountability from the companies whose investments were so far removed from local interests.

The Davis-Bacon Act emerged as an attempt to address these concerns and prevent disruptions to local economies when government-funded projects are awarded. The statute was signed into law by Herbert Hoover in 1931.

Employee Rights under the Davis-Bacon Act

According to the Davis-Bacon Act, if you are employed on a covered construction project, you have certain rights. You must:

  • Be paid at least the wage rate posted in the Davis-Bacon Wage Decision for your project; and
  • Receive no less than one and a half overtime pay for all hours worked over a 40 hour week (with some exceptions).

Who Does the Davis-Bacon Act Apply To?

The Davis-Bacon Act governs construction projects that receive federal funding, either in part or in whole. Alteration and repair projects, as well as decorating and painting, also fall under the Davis-Bacon Act umbrella. Funding may come in the form of direct assistance, government grants, loans, loan guarantees, or insurance.

The Department of Labor estimates that the Davis-Bacon Act currently provides minimum wage protections to about 1.2 million construction workers across nearly 10 million work sites throughout the US. This federal wage law, and other closely related statutes, govern approximately $217 billion in federal and federally assisted construction spending annually.

According to the Department of Labor, examples of industries and construction projects covered by the Davis-Bacon Act include:

  • Roads
  • Bridges
  • Public transit, including buses, ferries, trains, and more
  • Airports
  • Seaports
  • Waterways
  • Drinking water infrastructure
  • Power grids
  • Environmental disaster protection
  • Electric vehicle charging stations
  • Superfund cleanup sites
  • Orphaned gas and oil well cleanup

The Davis-Bacon Act largely covers physical construction workers, or those who perform manual labor on the worksite. Examples of jobs covered under the Davis-Bacon Act include:

  • Carpenters
  • Electricians
  • Plumbers
  • Welders
  • Flaggers
  • Mechanics
  • Owner-operators of drilling, earthmoving, and similar construction equipment
  • Apprentices of covered roles

Davis-Bacon Act Exemptions

In general, administrative work, or non-physical labor, is excluded from Davis-Bacon Act protections. The assumption is that excluded groups and employees on public works projects are governed by other, more applicable wage determination statutes, or that certain roles already receive higher pay.

Jobs that are exempt from the Davis-Bacon Act include:

  • Architects
  • Engineers
  • Foremen
  • Public agency employees
  • Inspectors
  • Truck drivers, under certain circumstances
  • Material men and suppliers
  • Timekeepers
  • Railroad workers

However, exceptions are made for workers who spend more than 20% of their time doing manual labor, such as foremen. Such workers may be included under Davis-Bacon wage determination.

Other exemptions to Davis-Bacon Act wage protections include programs that offer living allowances and pre-set compensation rates through government assistance, such as federal works programs like Americorps and the Public Land Corps.

Davis Bacon and Related Acts

There are approximately 60 additional prevailing wage statutes set by Congress in addition to the Davis-Bacon Act. These related acts extend the reach of Davis-Bacon to additional areas, such as transportation construction, building of new housing and repairs to existing government-funded housing, air and water pollution reduction projects, and some public health construction projects.

Was the Davis-Bacon Act Successful?

The Davis-Bacon Act sees its fair share of controversy from many different directions. Some criticize the law for being outdated now that federal minimum wage laws have been enacted. Others argue that it raises the cost of government construction, contributes to the federal deficit, and increases opportunities for so-called pork barrel projects. Others argue that the law protects workers’ rights, strengthens unions and American labor, and improves the safety of construction projects meant to provide local public services.

Regardless of critique, the federal Davis-Bacon Act has now been adopted by many states who offer similar state prevailing wage laws, or “Little Davis-Bacon Acts.”

Davis-Bacon Act Regulations

Contractors and subcontractors on projects that receive government funding have a legal responsibility to follow Davis-Bacon Act prevailing wage requirements. Failing to do so is a violation of the Davis-Bacon Act and may result in contract payments being withheld until workers have received their due wages and overtime pay. It may also result in fines, disqualification from future contracts, and even imprisonment.

Davis-Bacon Act Prevailing Wages

Davis-Bacon Act wage requirements are not set by federal, state, or local government decisions but instead by data collected by the Department of Labor. Using surveys of both union and non-union workers performing similar jobs in surrounding areas, the Department of Labor determines the prevailing wages and re-evaluates them every three years.

Prevailing wage is calculated by taking the average or majority hourly rate of pay, benefits, and overtime paid to the majority of workers, laborers, and mechanics in the largest city per county.

Davis-Bacon Act Fringe Benefits

Because prevailing wage includes benefits pay, understanding what you may receive under the Davis-Bacon Act as a worker is not as simple as knowing what another employee makes in your city or town. Davis-Bacon Act wages are a combination of both the hourly rate as well as hourly fringe benefits.

For instance, if the prevailing wage is $15/hour, with a basic hourly rate of $13.50 and fringe benefits of $1.50, then you may receive a monetary wage of $15/hour in order to be in compliance with Davis-Bacon. However, your company may provide a monetary wage of $12/hour, and fringe benefits of $3/hour, or match the average split of monetary wage of $13.50 and fringe benefits of $1.50 in order to meet prevailing wage standards.

Importantly, benefits that are already required by law, such as workers’ compensation, Social Security, or unemployment benefits cannot qualify as fringe benefits to make up your prevailing wage. Examples of qualifying fringe benefits include health plans, FSA, 401k, and cash payments.

Davis-Bacon Act Compliance

The contractor for the project is responsible for ensuring compliance with Davis-Bacon prevailing wage standards. Certified payroll reports must be submitted to the agency that has funded the project or which is in charge of enforcement. These federal reports (WH-347) include a list of all employees, their wages, benefits, hours, and roles. It should also list withholdings made for taxes, Social Security, child support, and any additional withheld pay.

Davis-Bacon Act and Collective Bargaining Agreements

Collective Bargaining Agreements (CBAs) are left largely intact by Davis-Bacon, at least for one year. If you are hired by a successor company who wins a government contract, your CBA salary rate will not drop in the first year. Under the Davis-Bacon Act, successor companies are obligated to provide the same prevailing wage as a previous company’s contract for at least one year after hiring. However, this does not apply to other areas of a CBA, such as seniority, work rules, grievances, and overtime.

Davis-Bacon Act Violations

Failing to pay correct Davis-Bacon Act prevailing wage rates and fringe benefits, shirking Davis-Bacon Act overtime payments, misclassifying workers, and misreporting compliance can all be reported as violations of the Davis-Bacon Act. The Act also requires contractors to post the prevailing wage determination alongside a poster explaining workers’ rights (WH-1321) in a place where it can be easily read and accessed by those on the job site.

Contractors can be held accountable when an individual with evidence of Davis-Bacon Act violations reports them under the False Claims Act.

How to Report Davis-Bacon Act Violations under the False Claims Act

Importantly, whistleblowers who reveal violations of the Davis-Bacon Act can file a qui tam lawsuit under the False Claims Act. Doing so can hold contractors accountable and ensure that employees are paid what is owed to them. Blowing the whistle on Davis-Bacon Act violations can also earn you anywhere from 15-30% of what is recovered in the settlement under a False Claims Act qui tam lawsuit.

To report Davis-Bacon Act violations, contact a False Claims Act attorney. You must submit your claim, along with proof of the violation, to the Department of Justice through a reputable qui tam law firm. Your attorney can help advise you on what kinds of evidence will be most compelling, as well as what documents are better left out of your submission.

Examples of admissible evidence include:

  • Paystubs
  • Payroll records
  • Photographs
  • Text messages or email exchanges

If the government agency chooses to take on your case, your qui tam attorney can help you cooperate with and remain anonymous throughout the investigation. If federal investigators decline to follow up on your tip, you may still be able to pursue the case with the help of your federal whistleblower attorney. Doing so may net you the highest award percentage possible in the event that your case is successful.

Whistleblower Rewards for Reporting Davis-Bacon Act Violations

A False Claims Act whistleblower can collect anywhere from 15 to 30% of a successful FCA settlement. Violations of the False Claims Act are assessed at treble damages per false submission, with fines linked to inflation rates. If your employer has been ignoring Davis-Bacon wage guidelines for some time, blowing the whistle may lead to a much larger payout than you might have expected.

Unfortunately, many claims get ignored or forgotten without the support of a respected qui tam law firm behind them. Don’t let your own concerns fall by the wayside if you think your employer is not complying with federal wage laws. You may be able to recover what you are owed, as well as a substantial percentage of additional fines and fees assessed under the False Claims Act.

Davis-Bacon Act Qui Tam Cases

The following are some recent, notable cases involving Davis-Bacon Act violations:

  • United States ex rel. Wall v. Circle C Construction, L.L.C.: Employees of a subcontractor alleged that they were underpaid on a construction site, and the contractor attempted to use the Davis-Bacon Act as a defense against their False Claims Act lawsuit. The contractor’s defense alleged that under the doctrine of “primary jurisdiction,” the court should defer its decision to the Department of Labor, since they are the appropriate regulatory body for Davis-Bacon Act enforcement. The Sixth Circuit Court found, however, that the doctrine of primary jurisdiction did not apply here, and that an FCA case could still proceed. Central to the Court’s reasoning was the discovery that the underpaid employees were not simply misclassified under Davis-Bacon, but that the contractor misreported what he had paid to employees while claiming compliance. Because of this direct misrepresentation, FCA liability was induced. This case was especially notable because it allowed a more expansive interpretation of what kinds of FCA claims can be brought and blocked the potential of using “primary jurisdiction” as a shield against liability.
  • United States ex rel. CTA, I, LLC v. S.A. Taylor, LLC and Scott Taylor: This 2021 settlement involved a Virginia-based construction company, S.A. Taylor, that was awarded subcontracts for two VA-funded construction projects under the main contractor, CTA, I, LLC. The subcontractor, S.A. Taylor, allegedly paid its workers much less than the prevailing wage while submitting false payroll records to the contractor, CTA. CTA then certified compliance with the VA, which reimbursed the subcontractor. S.A. Taylor pocketed those funds while underpaying their own employees for their work. The fraud was discovered when it was revealed that the subcontractor kept two different sets of payroll records, one showing the actual, lower amounts paid out to employees, and one showing alleged compliance with prevailing wage laws. The whistleblower in this case was the main contractor, CTA, who discovered the discrepancy and was awarded $101,054.11 for their honesty.
  • U.S. ex rel. Int’l Bhd. of Elec. Workers Loc. Union No. 98 v. Farfield Co.: A labor union was the whistleblower in this case involving a Farfield construction company and the Davis-Bacon Act. The union alleged that the construction company misclassified work done by its members as less skilled labor, instead of the higher skilled (and higher paid) work that they performed. While a Department of Labor auditor was contacted, the DoL twice refused to take action. A qui tam lawsuit provided the way forward to Davis-Bacon Act enforcement.

Let Our Qui Tam Attorney Help You Report Davis-Bacon Act Violations

Reporting Davis-Bacon Act violations under the False Claims Act can open the door to compensation not usually allowable through labor law enforcement. Davis-Bacon Act violations deprive workers of correct pay, corrupt the integrity of public works projects, and move taxpayer funds into corporate pockets. As a worker on a publicly-funded construction project, you have the right to a prevailing wage under Davis-Bacon and its related laws. You can become a whistleblower if you have information about misreporting or failure to comply with the Davis-Bacon Act. Doing so can earn you a substantial reward for your honesty, as well as a recovery of the missing wages that you may already be owed.

If you have information about violations of the Davis-Bacon Act, contact our whistleblower law firm. Tycko & Zavareei LLP is one of the top whistleblower law firms operating in the United States today. Our experts are ready to assist you with all the details of your case, while keeping your identity as anonymous as possible. A consultation is free and confidential.

How can we help you?

Confidential Case Evaluation

Our experienced qui tam attorneys are available for a confidential, no-cost, no-commitment, initial evaluation of your case. Call us now at (202) 973-0900, or begin the process by completing our Confidential Case Evaluation Form.
Start The Process