Do you work on federal, state or other government contracts? Do you understand what it means to pay employees according to Davis-Bacon or Colorado prevailing wage scales?
Many small business owners bid — often as subcontractors — on projects on which one or the other of the wage scales, or both, apply. However, business owners often aren’t aware, or really understand, these wage scales must often be used. In many cases, although not all, these wage scales are higher than what workers are normally paid.
While it’s tempting to pay employees less to make a bid more competitive, the risks and resulting costs and penalties aren’t worth it. Business owners should consult with an employment law lawyer or an organization such as the Employers Council for guidance.
How do you know if these wage scales apply to you?
Davis-Bacon wages generally apply to nearly every construction, alteration or repair of public buildings or public works project that receives public funds.
There are two components: wages and fringe benefits. The wages component is determined based on federal government surveys to determine prevailing wages for workers in commercial, heavy, highway and residential construction. The scale determines the minimum hourly rates paid workers during the duration of the contract.
According to the U.S. Department of Labor, the wage rates for bona fide supervisory employees aren’t regulated under the Davis-Bacon and related acts because their duties are primarily administrative...
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