Plain-English Guide

Davis-Bacon Act: Complete Guide for Contractors

If you touch federal construction, Davis-Bacon touches you. Here's what the law actually says, without the legalese.

14-day free trial · 3 free reports · $0 setup · No credit card required

Or use the free wage lookup first →

The Davis-Bacon Act is the law that sets minimum wages on federal construction. If you're bidding, working on, or subcontracted to a federally funded project, you're subject to it. There's no small-contractor exemption. There's no "I didn't know" defense.

Here's what it is, when it applies, what it requires, and what happens when you don't follow it.

The short version

Davis-Bacon says: On any federal construction contract over $2,000, you must pay workers at least the local prevailing wage the DOL has set for their craft. You also have to submit weekly certified payroll reports (WH-347) proving you did it. If you don't, you owe back wages, can be debarred for 3 years, and in serious cases face criminal charges.

That's the whole thing in one paragraph. The rest of this page is the details.

A quick history

The Davis-Bacon Act was signed in 1931 by Herbert Hoover. It's named after Senator James Davis (PA) and Representative Robert Bacon (NY).

The backstory: during the Depression, contractors would underbid each other on federal projects by bringing in cheaper out-of-state labor. Local workers got priced out of work in their own communities. The law was designed to stop that — contractors have to pay local prevailing wages, so they can't win bids by importing underpaid workers.

The law has been amended several times since 1931, most significantly with the Copeland "Anti-Kickback" Act (1934), the Contract Work Hours and Safety Standards Act (1962), and the major 2023 DOL regulatory overhaul that updated how prevailing wages are calculated.

Whether you agree with the policy or not, it's been the law for nearly a century. Federal construction doesn't happen without it.

When Davis-Bacon applies

Three conditions trigger Davis-Bacon. If all three are met, you're in.

1. Federal or federally-assisted project

Direct federal construction (GSA building, military base, federal courthouse) or projects funded in part by federal grants/loans/guarantees (HUD housing, DOT highway, EPA water). If federal dollars are in it, check.

2. Contract value over $2,000

The threshold is $2,000 — unchanged since 1935. Basically every real construction contract meets this. If it doesn't, you probably aren't doing real construction.

3. Construction, alteration, or repair

Includes new construction, renovation, demolition, painting, decorating, and manufacturing/furnishing materials on-site. Doesn't include pure supply contracts, professional services, or software.

Watch out for pass-through subs

If you're a sub to a sub to a sub on a federal project, Davis-Bacon still applies to you. Coverage flows down the contract chain. Check your subcontract for the Davis-Bacon clause — it's always there on federal work.

The main requirements

Four things you have to do on every Davis-Bacon project.

1. Pay prevailing wages

Every worker gets at least the base rate from the wage determination for their classification. Site rate, not their home-state rate. Apprentices can earn less only if they're in a registered apprenticeship program.

2. Pay fringe benefits

Fringe benefits are on top of the base wage. You can pay them as cash in wages or into bona fide plans (health, pension, vacation, apprenticeship training). The total has to meet or exceed the WD's combined base + fringe amount.

3. Submit weekly WH-347 certified payroll

Every week, file a WH-347 for each project. List every worker, their classification, hours, pay rate, deductions, and net pay. Sign the Statement of Compliance under penalty of perjury. Due within 7 days of the pay period ending.

4. Keep records for 3 years

Retain timecards, paystubs, certified payrolls, wage determinations, and sub records for at least 3 years after project completion. DOL audits typically go back 2 years, 3 for willful violations.

How prevailing wages are set

The DOL's Wage and Hour Division conducts wage surveys by county and project type. Contractors and unions submit data showing what they actually paid on recent projects. DOL analyzes it and publishes the prevailing rate for each classification.

Here's the methodology in brief:

  • If 50%+ of workers in a classification earn the same rate, that's prevailing
  • If not, DOL uses the weighted average (the 2023 rule restored this method)
  • Rates are by county, project type (building/heavy/highway/residential), and classification
  • Wage determinations are published and searchable on SAM.gov
  • WDs are incorporated into contracts by reference — your contract says which WD applies

Davis-Bacon Related Acts (DBRAs)

The original Davis-Bacon Act covers direct federal contracts. But Congress has passed 60+ other statutes that extend prevailing wage requirements to federally-assisted projects — things Congress wanted built with federal money but administered through grants, loans, or guarantees rather than direct contracts.

These are the Davis-Bacon Related Acts. If you're on any of these, the same prevailing wage, certified payroll, and recordkeeping rules apply.

Common DBRAs you'll see:

Housing Act (HUD)

Federal housing construction

Federal-Aid Highway Acts

DOT highway projects

Federal Water Pollution Control Act

EPA water/sewer projects

National Housing Act

HUD-insured housing

Clean Water Act

EPA treatment facilities

Airport Improvement Program

FAA airport construction

Energy Policy Act

DOE energy projects

Urban Mass Transportation Act

FTA transit construction

If your contract references 40 U.S.C. Chapter 31 or includes a "Davis-Bacon clause," DBRA applies. When in doubt, ask your contracting officer.

What happens when you don't comply

Davis-Bacon enforcement is serious. The DOL Wage and Hour Division has broad investigative authority and works closely with contracting agencies. Consequences scale with the violation.

Back wages

You pay every dollar you underpaid, going back to when the violation started. DOL can demand interest. On a mid-sized crew over a year, this can run into six figures.

Contract payment withholding

The contracting agency can withhold progress payments to cover estimated back wages. Your cash flow stops until the dispute is resolved.

Liquidated damages

For Contract Work Hours and Safety Standards Act violations (overtime issues), $31/day per worker in liquidated damages on top of back wages.

Debarment (3 years)

For disregard of obligations or repeated violations, you and your officers can be barred from all federal contracts and DBRA work for 3 years. For most contractors, this is company-ending.

Criminal referral

Falsifying certified payroll is federal fraud. DOL can refer willful cases to DOJ. Penalties include fines and prison time. It's rare but it happens.

The modern Davis-Bacon compliance stack

Ten years ago, Davis-Bacon compliance meant spreadsheets, binders, and calling the DOL to ask questions. Today, most mid-sized contractors use a stack of tools to stay compliant without burning out their office staff.

1. Payroll system (ADP, Gusto, Paychex, QuickBooks)

Runs regular payroll, cuts checks, handles taxes. Most modern systems export hours by project.

2. Time tracking (mobile app or digital timecards)

Captures daily hours per worker per project per classification. GPS-tagged timecards are ideal for Davis-Bacon audits.

3. Certified payroll software (like CPP)

Pulls hours from payroll + time tracking, validates against wage determinations, generates WH-347 PDFs, handles state reports.

4. Document storage (G-Drive, Dropbox, or inside the CP tool)

Keeps wage determinations, signed certified payrolls, and subcontractor submissions for the 3-year retention period.

CertifiedPayrollPro integrates with common payroll providers, validates wage rates automatically, stores everything for audit retrieval, and uses Lydia (our AI compliance assistant) to catch issues before submission. That's the modern stack.

Davis-Bacon FAQ

What is the Davis-Bacon Act in simple terms?

It's a federal law that requires contractors on federally funded construction projects to pay workers a minimum wage rate set by the DOL for that area. The goal is to stop contractors from winning bids by underpaying local workers.

What's the dollar threshold for Davis-Bacon?

Davis-Bacon applies to federal construction contracts over $2,000. That threshold hasn't changed since 1935. Basically every real federal construction project triggers it.

Who enforces the Davis-Bacon Act?

The U.S. Department of Labor's Wage and Hour Division (WHD). They investigate complaints, conduct audits, and can assess back wages, penalties, and debarment. Contracting agencies (GSA, Army Corps, HUD, etc.) also monitor compliance on their projects.

What's the difference between Davis-Bacon and Davis-Bacon Related Acts?

The original Davis-Bacon Act covers direct federal construction. Davis-Bacon Related Acts (DBRAs) are 60+ separate federal statutes that extend prevailing wage requirements to federally-assisted projects — things funded by federal grants, loans, or guarantees. HUD, DOT, EPA, and others all administer DBRAs.

Do I have to pay the full prevailing wage in cash?

No. You can pay the base hourly rate in cash plus fringe benefits into approved plans (health insurance, pension, apprenticeship). Or you can pay everything in cash. As long as the total meets the wage determination, you're compliant.

What's a wage determination?

A DOL-published list of minimum wage rates for each labor classification (Carpenter, Electrician, Laborer, etc.) in a specific county and project type (building, heavy, highway, residential). Your contract is tied to a specific WD number. You can look them up on SAM.gov.

What happens if I pay below the prevailing wage?

The DOL assesses back wages for every hour underpaid. They can also withhold contract payments to cover it, assess liquidated damages for overtime violations, and debar you from federal work for 3 years. Willful violations can trigger criminal referral.

Is certified payroll required on every Davis-Bacon project?

Yes. Weekly WH-347 certified payroll reports are mandatory on every federal construction contract subject to Davis-Bacon. No exceptions. Miss the weekly deadline and the contracting agency can withhold progress payments.

Do state prevailing wage laws use Davis-Bacon rates?

No. State prevailing wage laws (sometimes called 'little Davis-Bacon' laws) are separate. California DIR, New York DOL, Illinois IDOL, and others publish their own rates — often higher than federal. If a project is both federal and state, you pay the higher of the two for each classification.

How long do I have to keep Davis-Bacon payroll records?

Minimum 3 years after the project is completed. That includes timecards, certified payrolls, paystubs, wage determinations, and subcontractor payroll records. Some states require longer — California requires 3 years from project acceptance.

Related Resources

Stay Davis-Bacon compliant without the headache

CertifiedPayrollPro validates every worker's pay against the wage determination, generates compliant WH-347s, and keeps a 3-year audit trail automatically.

Start Free Trial

14-day free trial · 3 free reports · $0 setup · No credit card required

Davis-Bacon Act — What Contractors Need to Know | CertifiedPayrollPro | CertifiedPayrollPro