Contractors for Federal Government Projects – Know the Wage Rules

1967 NOVEMBER  HOURLY PAYROLL (84)Contractors who win jobs performing work for the US federal government or certain jobs funded by the federal government need to be aware of unique wage rules for their workers. Even prime contractors who engage subcontractors are responsible for assuring that their subcontractors are meeting the appropriate wage rules. For certain government contracts, The Davis-Bacon Act (DBA) requires contractors and their subcontractors to pay workers no less than prevailing wages (in the job locality) including fringe benefits. Contractors must also comply with provision of the Contract Work Hours and Safety Standards Act (CWHSSA).

DOL Penalties can be severe

Fines for non-complaince with these DOL rules can be expensive as this NASA contractor found out:

Florida Contractor Pays $123,650 In Back Wages, Benefits After U.S. Department of Labor Investigation

How to be compliant with the Department of Labor (DOL) rules

Before bidding on any government contract subject to these rules, contractors should familiarize themselves with the relevant DOL wage laws for the Davis-Bacon Act and the Contract Work Hours and Safety Standards Act. To assist government contractors, the DOL provides a Wage determination web resource and also conducts prevailing wage seminars at select locations in the USA.

Current PEO Clients

Business owners currently engaging a Professional Employer Organization (PEO) should consult with their PEO prior to bidding on contracts subject to DBA and CWHSSA rule compliance. Your PEO can assist with ensuring that wage and other worker compensation meets the compliance terms of the contract.

Payroll Service Clients

Businesses using a basic payroll company rather than a PEO are on their own to ensure wage compliance.

Find the right PEO

Companies not currently using a PEO need to be aware that a select group of PEOs in the USA specialize in working with contractors that are subject to prevailing wage and other government job requirements. If your company needs to find a PEO that specializes in compliance for these situations, contact StaffMarket for assistance.