XL EagleDavis-Bacon Act (Davis-Bacon Act (Construction Wage Rate Requirements))
Davis-Bacon Act stands for Davis-Bacon Act (Construction Wage Rate Requirements). The Davis-Bacon Act requires contractors and subcontractors on federal construction, alteration, and repair contracts over $2,000 to pay laborers and mechanics at least the prevailing wages and fringe benefits for the area. The FAR now calls these the Construction Wage Rate Requirements.
The required rates come from a wage determination issued by the Department of Labor and attached to the contract. Contractors must submit weekly certified payrolls, post the wage rates on site, and correctly classify each worker by trade.
Why it matters to a small contractor
On a federal construction job, your labor costs are set by the wage determination, not by what you normally pay. Price your bid using those rates and fringes, and be ready to file a certified payroll every week. Underpayment can lead to withheld payments and back wages.
Example
A small painting contractor wins a subcontract to repaint a federal building. The wage determination lists a painter rate plus fringe, so they pay their crew at least that amount and submit weekly certified payrolls to the prime.
Davis-Bacon Act: common questions
What is the Davis-Bacon threshold?
It applies to federal construction contracts over $2,000. This threshold is set by statute and was not changed by the October 2025 inflation adjustment.
Do I have to pay fringe benefits under Davis-Bacon?
Yes. You can provide the fringe through bona fide benefit plans, pay it as extra cash wages, or combine both.
What is certified payroll?
It is a weekly payroll report, often on Form WH-347, signed under penalty of law, showing each worker's classification, hours, and pay.
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