Prevailing wages, wage determinations, fringe benefits, and weekly certified payroll on federal and federally assisted construction — including what the 2023 DBRA rule changed and what the courts have since struck down.
Last reviewed on September 28, 2026 by the Government.biz editorial team against 29 CFR Parts 1, 3 and 5, the FAR construction wage clauses, and the June 2026 court decision on the 2023 rule.
The Davis-Bacon Act (40 U.S.C. 3141–3148) requires contractors and subcontractors on federal construction contracts to pay their laborers and mechanics no less than the locally prevailing wages and fringe benefits set by the Department of Labor (DOL). It applies to every contract in excess of $2,000 to which the United States or the District of Columbia is a party for the construction, alteration, or repair — including painting and decorating — of public buildings or public works.
Around the Act sit roughly seventy "Related Acts" that attach the same prevailing wage requirements to construction financed or assisted with federal money: highway funds, HUD programs, water infrastructure loans, and many grant programs. Together they are called the Davis-Bacon and Related Acts, or DBRA. DOL's Wage and Hour Division (WHD) administers the rules, which live in 29 CFR Part 1 (wage determinations), Part 3 (the Copeland Act anti-kickback and payroll rules), and Part 5 (contract clauses and enforcement). On direct federal contracts, the obligations reach you through FAR clauses — principally 52.222-6, Construction Wage Rate Requirements, together with 52.222-7 through 52.222-15.
Coverage turns on three questions: is it a covered contract, is the work "construction," and is the worker a laborer or mechanic working on the site of the work?
The line between Davis-Bacon and the Service Contract Act matters on facilities contracts. A base operations contract is governed by SCA, but a discrete renovation task order issued under it can trigger Davis-Bacon for that work. Read each task order's wage determination, not just the base contract's. For how construction procurements are structured more generally, see government construction contracts.
A wage determination (WD) is DOL's list of minimum hourly rates and fringe benefits, by job classification, for a specific county (or group of counties) and type of construction. General WDs are published on SAM.gov and remain valid until modified or superseded. There are four construction types, and a project that mixes them may carry more than one WD.
| Construction type | Typical work |
|---|---|
| Building | Sheltered enclosures with walk-in access: offices, hangars, barracks, hospitals, and residential structures of five or more stories |
| Residential | Single-family homes and apartment buildings of no more than four stories |
| Highway | Roads, streets, runways, bridges, parking areas, and related paving |
| Heavy | Everything else: dams, levees, water and sewer lines, dredging, utility and energy projects |
Under the definition in 29 CFR 1.2, the prevailing wage for a classification is (1) the rate paid to a majority of workers surveyed; if none, (2) the rate paid to the greatest number, provided that number is at least 30% of workers; and if neither, (3) a weighted average. The 2023 rule restored this "30 percent" step, which had been removed in 1983. Because collectively bargained rates are often paid uniformly, the change tends to make union rates prevail in more areas. The rate identifiers printed on each WD (union identifiers, "UAVG," or "SU," for example) tell you how each rate was derived.
Because WDs are modified frequently, the version in your contract matters. Under 29 CFR 1.6, for sealed bids a modification published before bid opening generally applies (unless published fewer than 10 days before opening and the agency finds there is not enough time to notify bidders). For negotiated contracts, the WD in effect at award governs. Once incorporated, the WD generally stays for the life of the contract — but under the 2023 rule, the exercise of an option that extends the term of performance requires the agency to incorporate the then-current WD. Price your options with that in mind; see pricing strategies and contract modifications for recovering the cost of a new WD.
If you employ a worker whose trade is not listed on the WD, you cannot pay whatever you like. The contracting officer must submit a conformance request (Standard Form 1444) to WHD proposing a classification and rate that bears a reasonable relationship to the rates on the WD. The approved rate is retroactive to the first day the worker performed that work, so under-paying while the request is pending just creates back wages.
Every classification on a WD has a basic hourly rate and, usually, a fringe benefit rate. You can satisfy the total obligation by paying the fringe amount into bona fide plans (health, retirement, life insurance, vacation, apprenticeship), by paying it as cash on the paycheck, or by a combination. What you cannot do is take credit for benefits required by other law (Social Security, unemployment insurance, workers' compensation) or for plans that are not bona fide.
Annualization. Since the 2023 rule, 29 CFR 5.25(c) codifies the annualization principle: plan contributions are credited per hour by dividing the annual cost by all hours the worker works — private and Davis-Bacon alike. You cannot load a year's health premium onto the few weeks spent on a federal job. Defined contribution plans with immediate participation and vesting can qualify for an exception, but only if they meet the rule's conditions.
Suppose the WD lists a carpenter at $32.50 per hour plus $14.20 in fringes, for a total package of $46.70. Your carpenter earns $35.00 per hour, and your health plan costs $12,480 a year for a worker who works 2,080 total hours — an annualized credit of $6.00 per hour.
For overtime under the Contract Work Hours and Safety Standards Act (contracts over $100,000, FAR 52.222-4), time-and-a-half is computed on the basic hourly rate; fringe amounts, whether paid to a plan or in cash, are owed at straight time for each hour and are not multiplied.
Every contractor and subcontractor must submit a certified payroll for each week in which it performs covered work, within 7 days after the regular pay date for that period (29 CFR 3.4 and 5.5(a)(3)). Subcontractors submit through the prime, and the prime is responsible for collecting and forwarding them. The payroll is signed with a Statement of Compliance certifying that everyone was paid the full wages owed, with no rebates or kickbacks — a signature that carries criminal exposure under 18 U.S.C. 1001 and civil exposure under the False Claims Act if it is false.
DOL's optional Form WH-347 was revised in January 2025. The new version asks for more detail on how fringe benefits are paid and whether each apprentice is individually registered in a registered apprenticeship program, and DOL has published a fillable online version. The prior version is being phased out in 2026, so switch to the current form if you have not already. Any format is acceptable as long as it contains all the required information; many contractors generate it from payroll software, and agencies may require electronic submission with a valid e-signature.
Pre-built checklists for payroll review are in our compliance checklists, and the templates library covers the documents a subcontractor packet should include.
DOL's final rule "Updating the Davis-Bacon and Related Acts Regulations" (88 FR 57526) took effect October 23, 2023 — the first comprehensive rewrite in roughly 40 years. Most of it is in force today, but three provisions have been vacated.
| Change | Status (September 2026) |
|---|---|
| Restored the 30 percent rule for setting prevailing wages | In effect (a separate challenge by ABC remains pending in the Eastern District of Texas) |
| Periodic updates of non-union weighted-average rates using the Employment Cost Index, no more than once every 3 years | In effect |
| Current WD must be incorporated when options extending performance are exercised | In effect |
| Cross-withholding from other contracts held by the same prime to cover a subcontractor's back wages; express prime liability for lower-tier violations | In effect |
| Anti-retaliation clause protecting workers who raise wage complaints | In effect |
| Expanded recordkeeping (phone and email) and codified fringe annualization | In effect |
| Single "disregard of obligations" debarment standard for both the Act and the Related Acts (3-year debarment) | In effect |
| Coverage of certain material suppliers operated by contractors | Vacated nationwide, June 2026 |
| Coverage of truck drivers' onsite time during deliveries | Vacated nationwide, June 2026 |
| Clauses and WDs effective "by operation of law" even when omitted from the contract | Vacated nationwide, June 2026 |
The three vacated provisions had been preliminarily enjoined in 2024. In June 2026 the U.S. District Court for the Northern District of Texas entered final judgment in the AGC-led challenge vacating them, and DOL did not oppose. Note that the eCFR text may still display the vacated language until DOL publishes a conforming rule — rely on DOL's rulemaking page for current enforcement positions.
Labor compliance also feeds your CPARS ratings, which evaluators weigh on future awards. For broader regulatory context see FAR and DFARS compliance; if your project also carries domestic-content rules, pair this page with Buy American requirements.
The Davis-Bacon Act applies to federal contracts in excess of $2,000 for the construction, alteration, or repair of public buildings or public works. The threshold is measured at the prime contract level, so once the prime contract exceeds $2,000, all covered subcontractors must pay prevailing wages no matter how small their subcontracts are. Federally assisted projects under the Related Acts can have their own coverage triggers set by the funding statute.
Use the wage determination incorporated in your contract or solicitation. General wage determinations are published on SAM.gov by state, county, and construction type (building, residential, highway, or heavy). The version in the contract controls, so check the modification number and date rather than simply pulling the latest version from SAM.gov.
No. WH-347 is an optional DOL form. You may submit certified payroll in any format, including payroll software output or an agency electronic system, as long as it contains all the information required by 29 CFR 5.5(a)(3) and is signed with the Statement of Compliance. DOL revised WH-347 in January 2025 to capture more fringe benefit and apprenticeship detail.
Yes. You can meet the fringe benefit obligation by contributing to bona fide benefit plans, by paying the fringe amount in cash as part of wages, or by a combination. Plan contributions must be annualized across all hours worked, and legally required benefits such as Social Security or workers' compensation cannot be credited. Cash fringe amounts are paid at straight time and are not included when computing overtime.
The rule, effective October 23, 2023, restored the 30 percent rule for setting prevailing wages, allowed periodic updates of non-union rates, required current wage determinations when options are exercised, added cross-withholding, anti-retaliation protections, and expanded recordkeeping, and codified fringe annualization. In June 2026 a federal court vacated three provisions: coverage of certain material suppliers, coverage of truck drivers' onsite delivery time, and incorporation of the clauses by operation of law.
Davis-Bacon covers laborers and mechanics performing construction, alteration, or repair on contracts over $2,000. The Service Contract Act covers service employees on federal service contracts over $2,500, such as maintenance, janitorial, and support services. A single facilities contract can involve both when it includes discrete construction work, and each task order's wage determination tells you which applies.
The contracting agency can withhold payments to cover unpaid wages, including cross-withholding from other contracts held by the same prime. Contractors owe back wages with interest, can be terminated, and face a 3-year debarment for disregarding their obligations to workers. Falsified certified payrolls can also bring criminal charges and False Claims Act liability.