Are Prevailing Wages “Prevailing”? – GAO Report Finds Fault with Davis-Bacon Act Wage Determinations

By: Lawrence M. Prosen, Samson Y. Chen, K&L Gates, Washington DC

On March 22, 2011, the United States Government Accountability Office (“GAO”) released a report (the “Report”) raising several issues with how the U.S. Department of Labor (“DOL”) has been making Davis-Bacon Act wage determinations.  This is a significant report, in that the Davis-Bacon Act plays a substantial role in federal and federally funded construction projects throughout the United States.  The Davis-Bacon Act, located at 40 U.S.C. 3141 et seq., requires contractors on federally funded construction projects in excess of $100,000.00 to pay locally “prevailing wages” to their hourly paid field employees performing work on the project site.  In other words, in order to bid on federal construction projects, construction contractors and subcontractors alike must pay their field employees at least as much as other construction workers in the area earn as determined by the DOL’s Wage-Hour Division.  The Davis-Bacon Act’s stated purpose is to preserve local wage standards and promote local employment.  This alert briefly highlights DOL’s problems in determining wage rates and summarizes GAO’s recommendations for improvement.

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