Nonprofit Accounting Basics

Davis–Bacon Act

Author: 

John Meriscko

National Association of County and City Health Officials

The Davis-Bacon Act requires that wages for "laborers and mechanics" employed by contractors (including subcontractors) of federally-funded construction in excess of $2,000 be paid in accordance with the prevailing local wage established by the Secretary of Labor.

The federal government does this to guarantee that funds from federal grant and contract agreements will be used for construction projects to hire workers at or above the wage levels established by the Department of Labor.

This requirement extends to contracts issued by the federal grant or contract recipient that are funded by the federal grant or contract. A-133 requires non-federal entities to include in their construction contracts subject to the Davis-Bacon Act a requirement that the contractor or subcontractor comply with the requirements of the Davis-Bacon Act and the DOL regulations (29 CFR part 5, “Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction”). This includes a requirement for the contractor or subcontractor to submit to the non-federal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6). This reporting is often done using Optional Form WH-347, which includes the required statement of compliance (OMB No. 1215-0149).