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Davis Bacon Act
Prevailing Wage Rates
| Davis Bacon Wages
Davis Bacon Act was passed by the Republican Congress of
1931 and signed by President Herbert Hoover.
The general intent of a
prevailing wage law is to stabilize local wages and industry
standards by preventing unfair and/or unregulated bidding
Prevailing wage laws were
originally intended to encourage the development of a high
skill, high wage growth path for the labor market in general,
and the construction labor market in particular.
law the Davis Bacon Act created requires that construction
workers on public projects be paid the wages and benefits that
are found by the Department of Labor to be “prevailing” for
similar work in or near the locality in which the construction
project is to be performed.
Because the U.S. Constitution
prohibits the federal government from dictating contract terms
for the states in construction, the Davis Bacon Act does not
cover construction work funded entirely by state and local
governments. State prevailing wage laws set a minimum pay for
construction workers on state and local projects, and the terms
of the respective prevailing wage statutes among the states
The fact that prevailing wage
laws and adherence to the Davis Bacon Act tend to stabilize and
support local economies and labor markets has earned them
bipartisan favor among legislators.
Davis Bacon Act Rules:
1) Davis Bacon Act Prevailing
wage compensation has two parts:
d) the prevailing hourly wage --- a minimum basic hourly rate of
cash payment,paid at least weekly, and
e) the prevailing wage fringe benefit --- which may be paid in
the form of either
a) contributions to a fringe benefit plan, or as
b) additional cash wages.
2) Fringe benefits include benefits payable due to medical
needs, disability, death, retirement, injury, illness,
unemployment, vacation or holiday pay.
3) The “prevailing” wage is a function of geographic location
and class of laborer.
4) There is no safe-harbor definition of ‘compensation’ that
allows a qualified plan to ignore the part of compensation that
represents the “prevailing hourly wage” if it is paid through
5) Davis Bacon wages dollars contributed to a retirement
plan must be deposited at least quarterly.