By the MassBid Estimation team · Reviewed by a senior estimator with 10+ years of experience · Published · Updated
In short
Davis-Bacon wages are the minimum hourly pay, a base rate plus a fringe benefit, that the US Department of Labor sets for each trade in each county on federal and federally funded construction. On a Davis-Bacon project, every laborer and mechanic must be paid at least the hourly rate and the fringe benefit listed for their classification in the wage determination attached to the contract. To price it, find the determination for the project's county and type of construction, match each crew to a classification, and use the base rate plus the fringe as the hourly labor cost before payroll taxes and insurance. The Act applies to federal and federally assisted construction contracts over $2,000.
- Applies to
- Federal and federally assisted construction contracts over $2,000
- Sets
- A minimum base hourly rate and fringe benefit for each classification
- Where to find rates
- The wage determination in the bid documents, published on SAM.gov
- Varies by
- County and type of construction: building, residential, heavy or highway
- Overtime
- Time and a half on the base rate after 40 hours on most contracts
- Paperwork
- Certified payroll, submitted weekly
What Davis-Bacon requires
The Davis-Bacon Act requires contractors and subcontractors on federal construction contracts over $2,000 to pay laborers and mechanics no less than the wages and fringe benefits that prevail locally for the same kind of work. Related laws extend the same rule to many projects built with federal funding, such as highways, housing and water systems.
Many states have their own prevailing wage laws for state and local public works, often called little Davis-Bacon acts. The mechanics are similar, but the rates, thresholds and paperwork are set by the state.
Reading the wage determination
The wage determination is the table of rates that governs the job. It is included in the bid documents and published by the US Department of Labor on SAM.gov. Four things on it matter to an estimator:
- The county. Rates are set by county, so two projects in one state can carry different rates.
- The type of construction. Building, residential, heavy and highway each have their own schedule. A site-work scope on a building project can fall under a different schedule from the building.
- The classification. Carpenter, electrician, laborer, operator and so on, sometimes split further by task or equipment size.
- The two numbers. Each classification lists a base hourly rate and a fringe benefit amount.
Use the determination and modification named in the contract documents. Determinations are updated, and the one that applies is fixed by the solicitation, not by today's date.
How to look up a Davis-Bacon wage rate
If the bid documents name the wage determination, use that one. If you need to look a rate up, for a budget or to check the documents, the determinations are free on SAM.gov:
- Open the wage determination search on SAM.gov and choose Davis-Bacon Act determinations.
- Filter by state and county where the project is built, not where your office is.
- Pick the construction type: building, residential, heavy or highway. The contract documents say which applies; a project can carry more than one.
- Note the general decision number and modification number at the top of the determination. That is what the contract will cite.
- Find each classification you need, such as carpenter, electrician, laborer or operator, and copy its base rate and fringe.
Each rate line carries an identifier showing where it came from: a union agreement, or a survey of wages paid in the area. It does not change the arithmetic. Base plus fringe is the minimum either way.
Pricing the labor, step by step
- Take off the quantities as on any other job. Davis-Bacon does not change how much there is to build.
- For each line, decide which classification does the work, and in what crew mix.
- Take the base rate and the fringe for that classification from the determination.
- Add them: base plus fringe is the minimum hourly cost of that worker.
- Add payroll taxes and workers' compensation insurance. These are calculated on wages paid in cash.
- Multiply by the labor hours on the line.
This illustration shows the arithmetic. The rates are made up for the example and are not from any determination:
| Step | Amount per hour |
|---|---|
| Base rate from the determination | $32.00 |
| Fringe benefit from the determination | $14.50 |
| Minimum total compensation | $46.50 |
| Payroll taxes and insurance on the cash wage (your own rates) | added on top |
Fringes and overtime
The fringe can be paid into bona fide benefit plans, such as health insurance and retirement, or paid to the worker in cash, or a mix of the two. It matters for the estimate: fringes paid in cash become wages, and payroll taxes and insurance are then charged on them.
Overtime on most federal contracts over $100,000 is time and a half after 40 hours in a week. The premium is calculated on the base rate. The fringe is owed for every hour worked, including overtime hours, but it is not multiplied by one and a half.
Mistakes that cost money
- Using the company's usual private-work rate. It is almost always lower than base plus fringe.
- Using the wrong schedule, for example building rates for heavy or highway work on the same site.
- Pricing everyone as a laborer when the work belongs to a higher-paid classification.
- Leaving out the fringe, or forgetting payroll costs on fringes paid in cash.
- Ignoring subcontractors. The prime contractor is responsible for their compliance too.
- Forgetting the office time for weekly certified payroll.
How we price wage-determination work
Labor in our estimates is priced as union, open shop, or prevailing wage with fringes, whichever the project calls for. On federal work we use the wage determination in your bid documents and match each line to its classification. Tell us which determination applies when you send the drawings, or include the specifications and we will find it.
Recent federal and public work includes roof repair on a military base dormitory in Texas, door and access control replacement at a federal medical center in Massachusetts and site work for a county fire station in Virginia. Send your drawings for a free quote.
Common questions
The minimum wages, a base hourly rate plus a fringe benefit, that contractors must pay laborers and mechanics on federal and federally funded construction over $2,000. The Department of Labor sets them for each classification, county and type of construction.
It depends on the county, the type of construction and the trade. Look it up in the wage determination on SAM.gov, or use the one in your bid documents, which is the one that legally applies to the contract.
Neither alone. The determination lists a base rate and a fringe, and the worker must receive both. Your cost is base plus fringe, plus payroll taxes and insurance on the cash wage, plus overtime where it applies.
The Davis-Bacon Act applies to federal construction contracts over $2,000, and through related laws to many federally assisted projects. State prevailing wage laws set their own thresholds.
In the wage determination included in the bid documents. Wage determinations are published by the US Department of Labor on SAM.gov, by county and by type of construction.
Yes. Each classification has a base hourly rate and a fringe amount, and the worker must receive both. The fringe can be paid into bona fide benefit plans, in cash, or a combination.
On most federal contracts over $100,000, overtime is one and a half times the base rate after 40 hours in a week. The fringe is paid for each overtime hour but is not multiplied.
Not necessarily. Prevailing wage is the rate the Department of Labor or a state agency finds to be prevailing in the area. In some areas and trades it matches the union rate; in others it does not.
No. Quantities are the same on any job. It changes the labor rate applied to them, and adds administrative time for certified payroll.