If you bid public works — federal, state, or local — Davis-Bacon and state prevailing wage laws decide what you can pay your crew, how you document it, and what you owe in back wages plus penalties if you get it wrong. The Department of Labor recovered $36M in back wages from construction contractors in 2023 alone. This is your end-to-end guide.
Federal Davis-Bacon Act (DBA) sets prevailing wages on federal contracts ≥ $2,000. Most states have their own "little Davis-Bacon" statutes — some stricter than federal. Union projects layer collective bargaining agreement (CBA) rates on top. When a job is funded with federal dollars on a state project with a CBA workforce, all three apply and you owe the highest of the three on every classification.
| Regime | Coverage | Trigger | Where to find rates | Penalty for non-compliance |
|---|---|---|---|---|
| DAVIS-BACON | Federal construction contracts of $2,000+. Includes "Davis-Bacon Related Acts" — federally-funded state/local projects. | Direct federal contract OR project receiving federal funding (HUD, FHWA, USDA, EPA grants). | SAM.gov / Wage Determinations Online (WDOL) — by county + construction type. | Back wages, debarment up to 3 years, contract termination. |
| STATE | State-funded public works. 26 states have prevailing wage laws ranging stricter than DBA (CA, NY, NJ) to threshold-only (KY, MO). | Varies by state. CA triggers at $1,000; NY has no threshold; KY only on projects $250K+. | State DOL websites. California: DIR.ca.gov. New York: labor.ny.gov. Each state issues its own determinations. | Civil penalties ($50-$200/day per worker), debarment (1-3 years), state contract bans. |
| CBA | Union signatory contractors. Wages, fringes, work rules from the collective bargaining agreement. | Project requires union labor (project labor agreement) OR your firm is a CBA signatory. | Local union hall / IBEW / UA / Carpenters / etc. Rates are public per local. | Grievance proceedings, contract back-charges, NLRB action for unfair labor practices. |
Rule of thumb: when in doubt, ask the awarding agency in writing for the applicable wage determination(s). Get the answer in your bid file. "I didn't know" isn't a defense the DOL accepts.
Solicitation should list applicable wage determinations as exhibits. If absent — ASK before bid day. Document the response.
The determination in effect on bid opening (or 10 days before, for some procurements) is the rate locked for the project's duration. Updates to determinations do not apply mid-project.
Use the higher of federal, state, or CBA rate for each classification. Account for fringe benefits — payable in cash or as bona fide benefit contributions.
Tradesman vs apprentice vs trainee vs laborer — wrong classification is the #1 audit finding. Apprenticeship ratios are enforced (usually 1:3 apprentice-to-journey).
Federal projects: WH-1321 (Davis-Bacon poster) and the applicable wage determination must be posted on-site, visible to all workers, in English + relevant languages.
Form WH-347 (or state equivalent — CA uses DAS-140/142) due within 7 days of payday. One submission per pay period for every covered worker on every covered project.
Timecards, payroll registers, classifications, apprentice ratios. DOL audits can come 2-3 years post-completion. Cloud storage with version history beats a banker's box.
The federal Statement of Compliance (WH-347) is the single most-audited document in public works. Get the form right and most DOL investigations close at the file review. Get it wrong and they pull worker interviews.
"Helper" is not a wage classification on federal Davis-Bacon (eliminated 1991). Anyone doing trade work is at journeyman rate. Cost when caught: 6-18 months of back wages × everyone who worked under that class.
If fringe is paid in cash, it must be on every check, every week, at the fringe rate — not as a year-end bonus. "Annualization" rules apply to defined benefits but cash fringes must flow through current payroll. Common back-wage trigger.
Davis-Bacon covers work at the "site of the work" — usually the project site plus dedicated batch plants. A regular concrete plant supplying multiple projects is NOT covered. Don't pay prevailing on the wrong workers — and don't UNDERPAY the right ones.
Most determinations allow apprentices at reduced rate only when paired with journeymen at a specified ratio (typically 1:3 to 1:5). Exceed the ratio and excess apprentices must be paid full journey rate retroactively.
Travel from home to job site = not covered. Travel from a staging area or shop to the actual site = potentially covered work. Per diem can offset fringes only under specific bona-fide-benefit rules — most attempts fail audit.
If the wage determination doesn't list the classification you need (e.g. specialty trade), you must file SF-1444 to add it via conformance process — BEFORE the worker starts. After-the-fact conformances rarely succeed.
Beyond direct penalties: insurance premiums spike, bonding capacity gets pulled, and the firm name lands on debarment lists searchable by every contracting officer for the next 3 years. State debarment can run longer. One prevailing-wage finding on a federal HUD project in 2019 took a midsize GC's bonding from $50M to $0 overnight.
Most prevailing wage findings come from document inconsistency, not deliberate underpayment. Worker classified as carpenter on Tuesday and laborer on Thursday. Apprentice paired with journeyman one week, alone the next. Fringe paid in cash on some payrolls and as a benefit contribution on others.
Trueleveler's Contract Review engine reads the wage determination, flags classification mismatches in your draft bid, and surfaces the apprentice ratio you committed to. The Pay App Review engine cross-references certified payrolls submitted to date against the contract wage determination — same way an auditor would, before they ever arrive. The PM Handoff engine compiles every wage determination, certified payroll file, and posting-compliance check into one closeout package the awarding agency signs off on.
You still need a compliance officer. But the documents they're defending are clean from week one.
See Trueleveler pricing — Founding 25 · $99/mo →Compliance isn't the place to wing it. Bring your wage determination + one certified payroll to a 15-minute call. We'll show you how Trueleveler flags the classifications + fringe issues before they become DOL findings.
Book a 15-minute walkthrough →