Key takeaways
- Prevailing wage and Davis-Bacon rules require workers on covered projects to be paid at least the wage and fringe rates in the project's wage determination.
- Federal wage determinations are published on SAM.gov and are attached to the contract for each covered project.
- Contractors on federal projects submit certified payroll every week, commonly on form WH-347 or an equivalent.
- Texas public works projects follow state prevailing wage law in Texas Government Code Chapter 2258, with rates set by the public body.
Prevailing wage and Davis-Bacon rules change how a construction job is priced, staffed and documented. On a covered project, every laborer and mechanic must be paid at least the wage and fringe benefit rates set for that trade and that area, and the contractor must prove it with payroll records. For an electrical contractor, that means knowing which classification each worker falls under, pricing the job at those rates, and filing accurate certified payroll on time.
What the Davis-Bacon Act covers
The Davis-Bacon Act applies to federal and federally funded construction contracts above a set threshold for building, altering or repairing public buildings and public works. Related laws extend the same requirements to many projects funded through federal grants and loans, even when a city, county or school district is the owner. The contract documents say whether the rules apply, and the wage determination attached to the contract sets the rates.
Wage determinations
A wage determination lists the minimum hourly wage and fringe benefits for each trade classification on a project, such as electrician, laborer or equipment operator. Federal wage determinations are published on SAM.gov by county and type of construction: building, residential, heavy or highway. The determination in the contract at bid time generally governs the project, so the electrical contractor prices its labor from that document, not from its usual rates.
- Find the wage determination in the contract documents.
- Match each worker to the correct classification.
- Pay at least the listed wage, plus fringes in cash or bona fide benefits.
- Post the wage determination and the required notice at the site.
Certified payroll
On federal projects, each contractor and subcontractor submits payroll records every week the work is performed. The Department of Labor's form WH-347 is the common format, though an equivalent that shows the same information is accepted. Each report lists the workers, their classifications, hours worked each day, rates paid, deductions and net pay, and it is signed with a statement of compliance. The prime collects the reports from its subcontractors and passes them to the agency.
Accurate payroll starts with accurate time records. If your project also sets small business goals, our guide to SDVOSB subcontracting goals covers how primes plan and report veteran participation.
Texas prevailing wage on public works
Texas has its own prevailing wage law for public works, in Texas Government Code Chapter 2258. It applies to construction of public works paid for by a public body such as a city, county or school district. The public body determines the general prevailing rate of per diem wages for the work, either by its own survey or by using federal rates, and states the rates in the bid documents. Contractors must pay at least those rates and keep records that show it.
Apprentices and classifications
Apprentices can be paid at apprentice rates on a covered project only when they are registered in an approved apprenticeship program and the ratio of apprentices to journeymen follows the program's rules. A worker who is not registered must be paid the journeyman rate for the work performed. Getting the classification right matters as much as the rate, because a misclassified worker is underpaid even when the paycheck looks correct for the title on it.
We keep our own pay and time records in one system, which makes certified payroll a report rather than a reconstruction. For more about how we work on public jobs, see our government page and our insurance and licensing page.
What a prime or an agency should check
A prime is responsible for its subcontractors' compliance, so it should confirm before award that each subcontractor understands the rules and can report weekly. During the job, reviewing each certified payroll for missing workers, wrong classifications and rates below the determination catches problems while they are small. At closeout, the payroll records are part of the project file, along with the inspections and as-built changes.
Our commercial electrical services page covers the work we bid on public and private projects, and our page on government and military buildings covers facility work on public sites.
Fringe benefits
A wage determination usually lists two figures for each classification: the base hourly rate and the fringe benefit rate. A contractor can meet the fringe portion by paying it in cash on the paycheck, by contributing to bona fide benefit plans such as health insurance or retirement, or by a combination of both. The certified payroll shows which method was used. Benefits that are not bona fide, or contributions that do not reach the plan, do not count toward the fringe requirement.
Overtime on covered work
Prevailing wage rules set the minimum rates, and federal overtime law still applies on top of them. Hours over forty in a workweek on covered federal construction are generally paid at time and a half of the basic rate, and the certified payroll shows straight time and overtime hours separately. Getting overtime right on a prevailing wage job means tracking hours by day and by classification, not just by week.
Workers who change classifications
On many jobs a worker spends part of the day on one kind of work and part on another. When classifications on the wage determination differ, the contractor either pays the higher rate for all hours or keeps accurate daily records of the time spent in each classification and pays each at its own rate. Daily time records that show the work performed are what make the second option defensible if the payroll is reviewed.
When the payroll is reviewed
Agencies and primes review certified payrolls for missing workers, classifications that do not match the work, rates below the determination and missing signatures. When an error is found, the usual fix is restitution: paying the worker the difference and correcting the report. Catching errors in the first weeks of a job is far simpler than reconstructing months of payroll at closeout, which is why the first few weekly reports deserve the closest review.
Subcontractors and lower tiers
Prevailing wage obligations follow the work down the contract chain. Every subcontractor that performs covered work, at any tier, pays the determination's rates and submits its own certified payroll, and the prime is responsible for collecting the reports and for the compliance of the firms below it. A subcontract on a covered project should include the required contract clauses, name the wage determination, and set the schedule for submitting payroll to the prime each week.
Electrical subcontractors that price prevailing wage work regularly build the determination into their estimating from the first takeoff, rather than adjusting a normal bid at the end. That habit catches classification questions, such as which tasks belong to an electrician and which to a laborer, while there is still time to ask the agency or the prime for an answer in writing.
Pricing a prevailing wage job
Because the wage determination sets labor rates for the project, two bids on the same prevailing wage job are compared mostly on productivity, planning and materials. A clear bid states that it was priced to the determination in the contract, lists the classifications used, and says how changes will be priced under the same rates. That keeps the bid comparable and the change orders clean.
Related services: generator installation for standby power, and electrical repair for building service calls.