Legal Definitions - Davis-Bacon Act

The Davis-Bacon Act is a federal law in the United States that requires contractors and subcontractors working on federally funded construction projects to pay their laborers and mechanics no less than the local "prevailing wage." This prevailing wage is determined by the U.S. Department of Labor and includes not only the basic hourly wage but also fringe benefits, reflecting the average compensation paid to similar workers in the geographic area where the project is located. The primary goal of the Act is to protect local wage standards and prevent contractors from undercutting them by bringing in cheaper labor from other regions when performing government work.

Here are some examples illustrating the Davis-Bacon Act:

• Example 1: New Interstate Highway Construction

  Imagine a state Department of Transportation receives significant federal funding to build a new segment of an interstate highway. The construction company awarded the contract for this project must comply with the Davis-Bacon Act. This means that all workers involved in the construction, such as heavy equipment operators, electricians, and general laborers, must be paid at least the prevailing wage rates for their specific occupations in that particular region, as determined by the Department of Labor. This ensures that local construction workers are compensated fairly, consistent with what is standard for similar private projects in the area, rather than being paid lower wages due to federal involvement.

• Example 2: Renovation of a Federal Office Building

  Consider a scenario where the General Services Administration (GSA) hires a private contractor to undertake a major renovation of a federal office building in a large city. Under the Davis-Bacon Act, every plumber, carpenter, painter, and other skilled tradesperson working on this renovation project must receive wages and benefits that meet or exceed the prevailing rates established by the Department of Labor for that specific metropolitan area. This prevents the government's contracting practices from inadvertently driving down local construction wages or creating an unfair competitive advantage for contractors who might otherwise pay less than the local standard.

• Example 3: Construction of New Housing on a Military Base

  Suppose the Department of Defense contracts with a private developer to construct new family housing units on a military base using federal funds. The Davis-Bacon Act applies to this project. Consequently, the developer and any subcontractors involved must ensure that all construction workers, from roofers and masons to HVAC technicians, are paid the prevailing wages and fringe benefits established for the area surrounding the military installation. This guarantees fair compensation for the workforce contributing to projects that serve the federal government and its personnel.