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Legal Memorandum: Responsibility for Back Wages

Issue: Who is ultimately responsible for back wages if a subcontractor on a federally-funded construction project does not pay its employees the prevailing wage?

Area of Law: Construction Law, Employee Law
Keywords: Back wages; Federally-funded construction project
Jurisdiction: Federal
Cited Cases: 135 F.3d 891; 347 U.S. 171
Cited Statutes: 40 U.S.C. § 276a; 40 U.S.C. § 3142; 29 C.F.R. § 5.5(a)(6); 29 C.F.R. § 5.5(a)(1);
Date: 03/01/2007

It is well settled federal law that “[t]he Davis-Bacon Act [40 U.S.C. § 276a, et seq.] requires that the wages of work[ers] on a Government construction project shall be ‘not less’ than the ‘minimum wages’ specified in a schedule furnished by the Secretary of Labor.”  Sheet Metal Workers v. Dep’t of Veterans Affairs, 135 F.3d 891, 894 (3d Cir. 1998) (quoting United States v. Binghamton Constr. Co., 347 U.S. 171, 172 (1954)).  See 40 U.S.C. § 276a.  Contractors that pay less than the prevailing wage for corresponding work on similar projects in the geographical area may be subject to penalties.  Binghamton Constr., 347 U.S. at 173.

Congress has required that every contract between a government agency and contractor subject to the Davis-Bacon act contain a stipulation that prevailing wages will be paid both to the contractor’s employees and the employees of its subcontractors.  40 U.S.C. § 3142.  The DOL has made plain that the general contractor is responsible for the subcontractor’s compliance with Davis-Bacon.  29 C.F.R. § 5.5(a)(6).  See United States ex rel. M.L. Young Constr. Corp. v. The Austin Co., No. CIV-04-0078 (W.D. Okla. Sept. 28, 2005) (“[I]f it is determined that workers were paid less than the prevailing wage rate, the contractor is statutorily liable to pay the amount attributable to the deficiency in wage rates.”).

Thus, if back wages at the prevailing wage rates are found owing a subcontractor’s employees, the general contractor is liable for paying the back wages.  See In […]

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