This act provides wage protection to non-government workers by requiring businesses engaged in Federal construction projects to pay their employees prevailing wages and fringe benefits. Applicable types of Federal construction projects include airports, dams, highways, and sewer treatment plants involving either construction or repair work, and exceeding $2,000 in funding.
The types of employees covered include are of the “blue collar” variety, such as mechanics and laborers. Managerial, clerical, and administrative positions are not covered by the Act. If an employee is within the correct labor category but is a trainee or apprentice, then that person can receive less than prevailing pay rates if registered as such with the Department of Labor or with a state’s apprenticeship agency.
The “prevailing” wage rates and fringe benefits referred to in the Act are the wages and fringe benefits paid to a majority of workers in each labor classification in the geographic region. Alternatively, if there is no majority rate, then the average rate must be paid. These prevailing rates are based on labor information from similar private construction projects in the region, exclusive of other Davis-Bacon Federal projects (unless there are no comparable private projects). If a Federal project is based in a rural area, then the prevailing wage data must also be derived from rural regions, while wage data for projects in urban areas must similarly be derived from urban data.
If a contractor violates this Act, the agency funding the project can withhold enough funds to pay any underpaid employees of the contractor who fall within the labor categories of the Act, while the contractor can be prevented from bidding on Federal contracts for three years.