Federally Funded Construction and the Payment of Locally Prevailing Wages

Federally Funded Construction and the Payment of Locally Prevailing Wages

Updated November 13, 2023
Federally Funded Construction and the Payment of
Locally Prevailing Wages
Introduction
Federal agencies may not award a contract to persons or
Since the 1930s, numerous statutes have been enacted that
firms appearing on the list or to any firm, corporation,
establish minimum labor standards for various classes of
partnership, or association in which such persons or firms
workers. Some of these standards apply broadly to most
have an interest until three years after the date of
employers (e.g., the Fair Labor Standards Act and the
publication of the list.
National Labor Relations Act), while others apply more
narrowly to private employers that enter into contracts with
Davis-Bacon Related Acts
the federal government for construction work or for the
CRS has identified 49 statutes that authorize financial
purchase of goods or other types of services. This In Focus
assistance for construction projects through grants, loans,
examines the federal law that prescribes labor standards for
and other funding mechanisms to which Congress has
federal construction contracts—the Davis-Bacon Act—and
added prevailing wage provisions. These laws, described as
a series of related statutes that incorporate the Davis-Bacon
Davis-Bacon related acts because of their prevailing wage
Act standards into their provisions.
requirements, involve construction in areas such as
transportation, housing, pollution reduction, and health. The
The Davis-Bacon Act
related acts’ prevailing wage requirements apply when
The Davis-Bacon Act (DBA), 40 U.S.C. §§3141-3148,
federal financial assistance is provided for construction,
requires government contractors to pay locally prevailing
even if the federal government is not a contracting party or
wages to laborers and/or mechanics employed on certain
no public building or public work is involved.
federally funded construction projects. Enacted in 1931, the
DBA reflects Congress’s interest in giving the government
In general, the prevailing wage provisions of the various
“the power to require its contractors to pay their employees
related acts are phrased similarly and refer to the wages
the prevailing wage scales in the vicinity of the building
prescribed by the Secretary of Labor under the DBA. For
projects.” S. Rept. 71-1445, at 1-2 (1931). Pursuant to the
example, Section 1702(k) of the Energy Policy Act of 2005,
DBA, the Secretary of Labor calculates prevailing wages by
42 U.S.C. §16512(k), states, in relevant part: “All laborers
reviewing wages paid to laborers and mechanics employed
and mechanics employed by contractors and subcontractors
on projects of a similar character to the contract work in the
in the performance of construction work financed in whole
area in which the work is performed. The DBA defines
or in part by a loan guaranteed under this subchapter shall
wages to include not only a basic hourly rate of pay, but
be paid wages at rates not less than those prevailing on
also health, retirement, and other fringe benefits.
projects of a character similar in the locality as determined
by the Secretary of Labor in accordance with subchapter IV
The DBA requires government contractors to pay locally
of chapter 31 of Title 40.” The following lists Davis-Bacon
prevailing wages when (1) there is a contract in excess of
related acts, at present (ordered by U.S. Code citations):
$2,000; (2) the United States or the District of Columbia is
a party to the contract; and (3) the contract is for
1. Farm Security and Rural Investment Act, §9003(f); 7
construction, alteration, and/or repair of public buildings or
U.S.C. §8103(f)
public works of the United States or the District of
Columbia within the geographical limits of the United
2. Housing Act of 1959, §401(f); 12 U.S.C. §1701q(c)(3)
States or District of Columbia. Contractors are generally
3. National Housing Act, §212; 12 U.S.C. §1715c
required to pay locally prevailing wages to laborers and
mechanics when a construction project satisfies these three
4. Tennessee Valley Authority Act, §3(b); 16 U.S.C.
conditions.
§831b(b)
The contracting agency may terminate a contract if it
5. National Foundation on the Arts and the Humanities Act,
discovers that a contractor has not paid the required
§§5(k), 7(j); 20 U.S.C. §§954(n), 956(j)
prevailing wages. Following termination, it may contract to
complete the work and hold the original contractor liable
6. General Education Provisions Act, §439; 20 U.S.C.
for any excess costs incurred. The Comptroller General of
§1232b
the United States is required to distribute to all federal
7. Education of the Deaf Act, §§105(b)(4), 202(b)(5); 20
agencies a list of individuals or firms that have failed to pay
U.S.C. §§4305(b)(4), 4332(b)(5)
laborers and mechanics a prevailing wage under the DBA.
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Federally Funded Construction and the Payment of Locally Prevailing Wages
8. Federal-Aid Highway Act, §12(a); 23 U.S.C. §113(a)
30. Domestic Volunteer Service Act of 1973, §406; 42
U.S.C. §5046
9. Indian Health Care Improvement Act, §303(b); 25 U.S.C.
§1633(b)
31. Robert T. Stafford Disaster Relief and Emergency
Assistance Act, §611(j)(9); 42 U.S.C. §5196(j)(9)
10. Native American Housing Assistance and Self-
Determination Act, §104(b); 25 U.S.C. §4114
32. Energy Policy and Conservation Act, §399A(g)(4); 42
U.S.C. 6371h-1(g)(4)
11. Hawaiian Homelands Homeownership Act, §203; 25
U.S.C. §4225(b)
33. National Energy Conservation Policy Act, §312; 42
U.S.C. §6371j
12. Indian Self-Determination and Education Assistance
Act, §§7, 509(g); 25 U.S.C. §§5307, 5389(g)
34. Public Works Employment Act of 1976, §§109, 208; 42
U.S.C. §§6708, 6728
13. P.L. 117-169, commonly known as the Inflation
Reduction Act, §§13101(f), 13102(k), 13104(d), 13105(a),
35. Energy Conservation and Production Act, §45(h); 42
13204(a), 13303(a)(1), 13304(d), 13404(d), 13501(a),
U.S.C. §6881(h)
13702(a), 13704(a); 26 U.S.C. §§30C(g)(2), 45(b)(7),
45L(g)(2), 45Q(h)(3), 45U(d)(2), 45V(e)(3), 45Z(f)(6)(A),
36. Solid Waste Disposal Act, §2; 42 U.S.C. §6979
48(a)(10), 48C(e)(5), 48E(d)(3), 179D(b)(4)
37. Clean Air Act, §314; 42 U.S.C. §7614
14. Federal Water Pollution Control Act, §513; 33 U.S.C.
38. Cranston-Gonzalez National Affordable Housing Act,
§1372
§811(j)(5); 42 U.S.C. §8013(j)(5)
15. Save Our Seas 2.0 Act, §302(e), 33 U.S.C. §4282(e)
39. Comprehensive Environmental Response,
16. Veterans Nursing Home Care Act, §4(a); 38 U.S.C.
Compensation, and Liability Act, §104(g); 42 U.S.C.
§8135(a)(8)
§9604(g)
17. Postal Reorganization Act, §410(b)(4)(C); 39 U.S.C.
40. Head Start Act, §644(g)(3); 42 U.S.C. §9839(g)(3)
§410(b)(4)(C)
41. HOME Investment Partnerships Act, §286(a); 42 U.S.C.
18. Appalachian Regional Development Act of 1965, §402;
§12836(a)
40 U.S.C. §14701
42. Energy Policy Act, §§963(c)(4)(B), 1702(k); 42 U.S.C.
19. Hospital Survey and Construction Act, §605(a)(5); 42
§§16293(c)(4)(B), 16512(k)
U.S.C. §291e(a)(5)
43. Energy Independence and Security Act,
20. Safe Drinking Water Act, §2(a); 42 U.S.C. §300j-9(e)
§§136(d)(2)(A), 491(d), 545(a)(1), 803(b)(3), 1112(a); 42
U.S.C. §§17013(d)(2)(A), 17121(d), 17155(a)(1),
21. Public Health Service Act, §§1621(b)(1)(I),
17282(b)(3); 49 U.S.C. §22301(e)
1642(b)(1)(D); 42 U.S.C. §§300s-1(b)(1)(I), 300t-
12(b)(1)(D)
44. Infrastructure Investment and Jobs Act, §41101, 42
U.S.C. §18851
22. U.S. Housing Act of 1937, §12; 42 U.S.C. §1437j
45. Boulder Canyon Project Adjustment Act, §15; 43
23. Housing and Community Development Act of 1974,
U.S.C. §618n
§§110, 802(g); 42 U.S.C. §§1440(g), 5310
46. Urban Mass Transportation Act, §10(a); 49 U.S.C.
24. Housing Act of 1964 (farm housing), §516(f); 42 U.S.C.
§5333(a)
§1486(f)
47. Rail Passenger Service Act, §405; 49 U.S.C. §24312
25. Defense Housing and Community Facilities and
Services Act of 1951, §310; 42 U.S.C. §1592i
48. Airport and Airway Improvement Act, §515(b); 49
U.S.C. §47112(b)
26. Headstart, Economic Opportunity, and Community
Partnership Act of 1974, §11; 42 U.S.C. §2992a
49. Delaware River Basin Compact, P.L. 87-328, §15.1
27. Atomic Energy Act, §1804; 42 U.S.C. §2297g-3
Elizabeth Weber Handwerker, Analyst in Labor Policy
Jon O. Shimabukuro, Legislative Attorney
28. Housing and Urban Development Act of 1965, §707; 42
U.S.C. §3107
IF11927
29. Public Works and Economic Development Act, §602;
42 U.S.C. §3212
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Federally Funded Construction and the Payment of Locally Prevailing Wages

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https://crsreports.congress.gov | IF11927 · VERSION 3 · UPDATED