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In most states, private contractors working on public projects must pay construction workers a standard minimum wage known as a prevailing wage. Prevailing wages consist of a base wage rate and fringe benefits like healthcare, retirement benefits, and life insurance, among others. Wages vary depending on the workers’ craft, project type, and location. Contractors must pay no less than this prevailing wage or face legal liability.
Florida enacted its original prevailing wage law in 1933, only to repeal it later in 1979. Currently, Florida doesn’t have its own prevailing wage but is still subject to laws like the Davis-Bacon Act and the McNamara-O’Hara Service Contract Act (SCA). Congress passed the Davis-Bacon Act in 1931, making prevailing wages mandatory for all federally funded projects. Conversely, the SCA applies to contractors entering into service contracts like food, security, janitorial services, and the like.
Both contractors and construction workers have a critical role in ensuring prevailing wage compliance. The former are required to pay the current wage rate, while workers must receive no less than their rightful prevailing wage or pursue legal action.
In today’s post, we’ll examine the fine points of Florida’s Prevailing Wage Law, starting from the basics to how these wages are determined and enforced. If you stick around until the end, we’ll let you in on some amazing tips for ensuring compliance and avoiding legal ramifications.
Understanding Prevailing Wage Laws in Florida
Prevailing wage laws in Florida are stipulated under s. 215.19 of Florida Statutes. Under this statute, all private contractors and subcontractors working on public works projects in excess of $5,000 must pay the minimum prevailing wage. This applies to all contracts by the state, county, municipality, or any other political subdivision.
These contracts must contain provisions for prevailing wage payment to laborers, mechanics, apprentices, and other construction workers. Contractors must pay their workers nothing less than the prevailing wage for comparable work in that region. However, there has been much contention about what “prevailing wage” means.
Despite the prevailing wage statute, a concrete definition of prevailing wage is yet to be cited in these codes. The bone of contention is whether prevailing wages should include fringe benefits by definition.
Besides, s. 215.19 of Florida Statutes, Federally funded contracts exceeding $2,000 are subject to prevailing wage requirements per Sec. 3142. of the Davis Bacon and Related Acts. Under this act, all contractors and subcontractors on such projects must pay the minimum prevailing wage for comparable work within the same locality. These requirements are applicable to all public and construction work, including:
- Construction
- Repairs
- Alterations
- Painting and decorations
The Department of Labor will determine the prevailing wage rates and make them available to contractors and subcontractors. Contractors and subcontractors must then post the wage scale in a visible and accessible location on the job site. That way, all workers can compare their prevailing wage rates to what they receive, as seen on their pay stubs.
After, the contractor must pay this prevailing wage at least once a week, including fringe benefits and overtime. Contractors and subcontractors must pay this prevailing wage regardless of any previous written employment agreements. Workers are also barred from taking anything less than the prevailing wage as compensation for work done.
Contractors and subcontractors must also pay all eligible workers overtime at one and a half times the standard rates for all work hours exceeding 40 per week. They must also furnish the awarding authority with certified payrolls showing the amount they paid each worker during the project. Certified payroll for the previous week should be submitted no more than seven days from the payment date.
The Davis Bacon Act allows contractors to hire apprentices but only from apprenticeship programs recognized by:
- The US Department of Labor
- Bureau of Apprenticeship and Training
- Employment and Training Association
The law also permits contractors and subcontractors to pay apprentices less than the prevailing wage for their craft, but they must maintain an appropriate apprentice-to-journeyman ratio. Apprentice wage rates must follow a wage schedule approved by a recognized apprenticeship program. It’s also worth noting that misclassifying workers as apprentices to underpay them is illegal and can have severe legal consequences.
Purpose and Goals of Prevailing Wage Laws in Florida
Despite repealing its prevailing wage law in 1979, Florida still follows the stipulations of the Davis Bacon and Related Acts and the SCA. Like other states, many interested parties were initially skeptical of these requirements since they would inflate wages, shifting the payment burden to the contractors and the general public.
However, prevailing ages are crucial in protecting Florida’s blue-collar workforce and uplifting the state’s economy. Some main reasons for prevailing wages in Florida include:
- PROMOTING FAIR WAGES: Prevailing wage laws ensure hardworking employers in the construction industry receive fair compensation. Most prevailing wages are higher than the industry standard minimum, meaning construction workers and mechanics can earn a decent living and support their families. These laws also prevent unscrupulous contractors and subcontractors from exploiting and underpaying construction workers to boost profit margins.
- PREVENTING WAGE UNDERCUTTING: Prevailing wages help prevent contractors from undercutting to win contracts. In Florida, contracts are awarded to the lowest qualifying bids, meaning contractors with the lowest quotes have the upper hand. However, it's not uncommon for contractors to lower their bids at the expense of paying workers below the market rate. A prevailing wage rate helps prevent this type of undercutting.
- IMPROVING QUALITY OF WORK: Fair wages are a financial incentive for skilled talent to join the construction industry. This leads to a general improvement in the quality of work and better workmanship across the board. This also means taxpayers get better value for money, and construction workers can take pride in their work.
- PROMOTING ECONOMIC STABILITY: Prevailing wages also help stabilize Florida's economy. The better wage rates allow construction workers to afford better lives and buy from local businesses. This increased purchasing power means more money enters the state circulation, stabilizing the economy.
Determining Prevailing Wages in Florida
In Florida, prevailing wage rates for construction projects are typically determined based on prevailing wage surveys conducted by the U.S. Department of Labor or the Florida Department of Economic Opportunity (DEO). Here’s how the process generally works:
- PREVAILING WAGE SURVEYS: The U.S. Department of Labor periodically conducts surveys to collect wage data for various construction occupations in different geographic areas. These surveys gather information on the wages paid to workers performing comparable construction work in the local area.
- WAGE RATE DETERMINATIONS: Based on the data collected from prevailing wage surveys, the Department of Labor determines the prevailing wage rates for different construction occupations in specific political subdivisions within the state. These wage rate determinations typically include hourly wage rates for various job classifications, such as carpenters, electricians, plumbers, and other construction trades.
Florida uses three main criteria to calculate and determine the prevailing wage rate for a specific region. The criteria include:
- THE LARGEST WAGE PAID IN THE COUNTY'S LARGEST CITY: The secretary of the Department of Labor will survey different contractors to know how much they pay in wages to construction workers. If more than 50% of the largest city in the county is one wage, then the county will adopt it as its prevailing wage.
- THE AVERAGE WAGE OF THE COUNTY'S LARGEST CITY: If the Department of Labor can't find a common wage for at least 50% of the work hours, it will use the average wage of the largest city in a county as the prevailing wage.
- THE COUNTY'S AVERAGE WAGE: When data from the county's largest city is insufficient, the Department of Labor will use the county's average wage as the prevailing wage. It's worth noting that the Department of Labor may sometimes decide to retain the existing prevailing wages. The DOL will publish these prevailing rates on the first business day of February and August and become effective 30 days after publishing.
- UPDATES AND REVISIONS: The DOL usually updates prevailing wage rates at least once in three years. These wages are updated periodically to reflect changes in local labor markets, economic conditions, and prevailing wage standards. Contractors and subcontractors are required to pay workers the prevailing wage rates in effect at the time the work is performed.
- SPECIAL WAGE DETERMINATIONS: In some cases, special prevailing wage determinations may be issued for specific construction projects or types of work that are not covered by standard wage determinations. These special wage determinations may be based on industry standards, collective bargaining agreements, or other relevant factors.
- COMPLIANCE AND ENFORCEMENT: Contractors and subcontractors working on public construction projects in Florida are required to comply with prevailing wage rate determinations issued by the Department of Labor or the Florida DEO. These agencies ensure workers are paid the prevailing wage rates and fringe benefits required by law.
The Wage and Hour Division (WHD) under the U.S. Department of Labor is responsible for enforcing prevailing wage requirements in Florida. Some key responsibilities of the WHD under prevailing wage law include:
- COMPLIANCE ASSISTANCE: The WHD helps contractors, subcontractors, workers, and other stakeholders to comply with every aspect of prevailing wage law. It helps these workers understand their rights and obligations under the DBRA. On request, the WHD will furnish interested parties with information on recordkeeping requirements, apprenticeship programs, and prevailing wage rates. The WHD will also organize seminars, training sessions, and webinars to educate contractors and subcontractors on their rights and responsibilities under the Davis-Bacon Act. It will also provide written material on the same.
- INVESTIGATIONS: The WHD will also conduct investigations into worker complaints and violations. Investigations typically involve conducting interviews, reviewing certified payrolls, and inspecting worksites. It's also responsible for taking enforcement actions against contractors who breach prevailing wage law. These enforcement actions may include requesting back wages and imposing monetary fines.
Compliance With Prevailing Wage Laws
Contractors must ensure full compliance with Florida’s prevailing wage laws or face legal liability. The key responsibilities of contractors and subcontractors under the Davis-Bacon and McNamara-O’Hara Service Contract Act include:
- PAYING THE PREVAILING WAGE: The primary role of contractors and subcontractors under Florida's prevailing wage law is paying the current prevailing wage to all eligible workers involved in the project. Contractors are allowed to pay wages higher than the prevailing wage rate but never lower. Contractors must pay the base wage plus all applicable fringe benefits and overtime for workers exceeding 40 work hours in a work week.
- PREPARING CERTIFIED PAYROLL REPORTS: Contractors and subcontractors must also prepare certified payroll records and submit them to the contracting agency weekly. All contractors must use the official certified payroll report form, also known as form WH-347. The information in the form must be accurate and reflect the content of workers' pay stubs.
- FULFILL POSTING REQUIREMENTS: As mentioned, contractors must also post the current wage schedules in at least one accessible location on the job site. These schedules must contain the base wage and fringe benefits for all occupations involved in the project, plus a breakdown of the prevailing wage laws and workers' rights. That way, workers can know their rightful wage rates and compare them with what they earn.
- MONITORING SUBCONTRACTORS: The law will hold contractors liable for any breach of prevailing wage laws by contractors under them. As such, they must oversee their subcontractors and ensure they pay the prevailing wages. Subcontractors must also submit weekly certified payrolls to their contractors to show compliance.
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What Are the Penalties for Non-Compliance?
Florida takes its prevailing wage laws seriously, and violating prevailing wage requirements attracts hefty legal ramifications under the DBRA and SCA. The penalties for non-compliance vary depending on the type of violation and whether the offense is repeated. These penalties include:
- BACK WAGES: Contractors found to have underpaid workers in violation of the Davis-Bacon Act may be required to pay back wages to affected employees. The back wages cover the difference between the wages actually paid and the prevailing wage rates required by the law.
- LIQUIDATED DAMAGES: In addition to back wages, contractors may be liable for liquidated damages, which are additional payments intended to compensate workers for any losses incurred due to underpayment of wages. Liquidated damages are typically equal to the amount of back wages owed.
- CIVIL MONETARY PENALTIES: Contractors found to have committed willful or repeated violations of the Davis-Bacon Act may be subject to civil monetary penalties imposed by the DOL. These penalties can range from hundreds to thousands of dollars per violation, depending on the severity of the violation and other factors.
- DEBARMENT: Contractors who engage in serious or repeated violations of the Davis-Bacon Act may be subject to debarment from bidding on or participating in future federal contracts. Debarment can result in significant financial losses and reputational damage for contractors and can last for a specified period or indefinitely.
- CONTRACT TERMINATION: In cases of egregious or repeated violations, the contracting agency may choose to terminate the contract with the non-compliant contractor. Contract termination can result in financial losses, legal disputes, and damage to the contractor's reputation.
- LEGAL ACTION: In addition to administrative penalties imposed by the DOL, contractors may also be subject to legal action, including lawsuits filed by affected workers or the government seeking damages, injunctive relief, or other remedies for violations of the Davis-Bacon Act.
Resources and Tools for Contractors to Ensure Compliance
Compliance with every aspect of prevailing wage laws is easier said than done, especially for first-time contractors. Fortunately, contractors can always utilize state and federal government tools and resources to ensure compliance. Some of the best resources to help contractors ensure compliance include:
- Florida's Official Employer Handbook
- The Davis Bacon Official Website
- The United States Department of Labor Website
Navigating Prevailing Wages
Compliance with prevailing wage requirements requires concerted efforts from both workers and contractors. Workers must understand their rights under prevailing wage law and report any violations by contractors without fear of retaliation. Workers can do the following to better understand and protect their rights under Florida’s prevailing wage law.
- UNDERSTANDING THEIR RIGHTS: Workers should familiarize themselves with the prevailing wage requirements applicable to their project. This includes understanding the prevailing wage rates for their occupation and geographic area, as well as any applicable fringe benefits.
- REVIEWING CONTRACTS AND NOTICES: Workers should review the contract documents and postings at the worksite to ensure that the contractor complies with prevailing wage requirements. Contractors are typically required to post notices informing workers of their rights under prevailing wage laws, including applicable wage rates and fringe benefits.
- KEEP RECORDS: Workers should keep detailed records of their hours worked, wages paid, and any fringe benefits received. This can help ensure that workers are paid correctly and can provide documentation in case of disputes or violations.
- REPORT VIOLATIONS: Workers who believe that their employer is not complying with prevailing wage laws should report the violations to the appropriate authorities. This may include filing a complaint with the U.S. Department of Labor's Wage and Hour Division or other relevant agencies responsible for enforcing prevailing wage laws.
- SEEK LEGAL ASSISTANCE: Workers who believe that their rights under prevailing wage laws have been violated may consider seeking legal assistance from an attorney specializing in labor and employment law. An attorney can provide guidance on legal options and help workers pursue claims for unpaid wages, back pay, and other remedies.
- PARTICIPATE IN TRAINING AND EDUCATION: Workers can participate in training and education programs offered by labor unions, community organizations, or government agencies to learn more about their rights and responsibilities under prevailing wage laws. These programs may provide information on wage rates, fringe benefits, recordkeeping requirements, and other relevant topics.
Contractors play the most important role in ensuring compliance with prevailing wage laws since they are responsible for paying their wages. Here are a couple of tips they can use to ensure maximum compliance.
- UNDERSTAND ALL APPLICABLE LAWS: Contractors should familiarize themselves with the prevailing wage requirements applicable to their project. This includes understanding whether federal prevailing wage laws, such as the Davis-Bacon Act, apply and which wage determinations and fringe benefit requirements apply to their project.
- REVIEW CONTRACT DOCUMENTS: Contractors should carefully review the contract documents for their project to ensure that they understand and comply with any prevailing wage requirements specified in the contract. This may include reviewing wage determinations, fringe benefit provisions, and reporting requirements.
- ESTABLISH RECORDKEEPING PROCEDURES: Contractors should establish and maintain accurate recordkeeping procedures to track employee hours worked, wages paid, and any fringe benefits provided. This can help ensure compliance with prevailing wage requirements and provide documentation in case of audits or disputes.
- TRAIN PERSONNEL: Contractors should train their personnel, including project managers, payroll administrators, and other relevant staff, on prevailing wage requirements and compliance procedures. This can help ensure that everyone involved in the project understands their responsibilities and follows proper procedures.
- MONITOR SUBCONTRACTORS: Contractors should ensure that their subcontractors are aware of and comply with prevailing wage requirements. This may include reviewing subcontractor contracts, providing guidance on compliance, and monitoring subcontractor payroll records to ensure accuracy.
- POST NOTICES: Contractors should post notices at the worksite informing workers of their rights under prevailing wage laws, including applicable wage rates, fringe benefits, and reporting procedures. These notices should be posted in a conspicuous location where they can be easily seen and accessed by workers.
- RESPOND TO COMPLAINTS AND CONCERNS: Contractors should promptly address any complaints or concerns raised by workers regarding prevailing wage compliance. This may involve conducting internal investigations, addressing issues identified, and taking corrective action as needed.
- SEEK LEGAL GUIDANCE: Contractors should consult with legal counsel experienced in prevailing wage laws to ensure compliance with applicable requirements. Legal counsel can provide guidance on the interpretation of wage determinations, reporting obligations, and other compliance matters.
Common Challenges and Solutions to Prevailing Wage Compliance
Prevailing wage compliance is a tricky business, and contractors will likely encounter challenges. Fortunately, these challenges have solutions to guide contractors:
- COMPLEXITY OF REGULATIONS: Prevailing wage laws can be complex, with numerous requirements and regulations that vary by jurisdiction and project type. Contractors should provide comprehensive training to project managers, payroll administrators, and other personnel involved in compliance to ensure they understand prevailing wage requirements and compliance procedures.
- DETERMINING PREVAILING WAGE RATES: Determining the correct prevailing wage rates for different occupations and geographic areas can be challenging, especially when multiple wage determinations apply to a project. Contractors should regularly monitor updates to prevailing wage rates and regulations issued by relevant authorities, such as the U.S. Department of Labor or state labor departments, and adjust compliance practices accordingly.
- RECORDKEEPING REQUIREMENTS: Contractors must maintain accurate records of hours worked, wages paid, and fringe benefits provided, which can be time-consuming and resource-intensive. To sidestep this challenge, contractors should try implementing payroll software and other digital tools to streamline recordkeeping processes and ensure accurate tracking of hours worked and wages paid.
- MONITORING SUBCONTRACTORS: Contractors are often responsible for ensuring that their subcontractors comply with prevailing wage requirements, which can be challenging to monitor and enforce. To avoid these hurdles, contractors should develop clear policies and procedures for prevailing wage compliance, including recordkeeping protocols, subcontractor monitoring procedures, and response mechanisms for addressing complaints or concerns.
- CHANGES IN WAGE RATES: Prevailing wage rates may change periodically based on prevailing market conditions, requiring contractors to stay up-to-date and adjust their payroll practices accordingly.
- POTENTIAL PENALTIES FOR NON-COMPLIANCE: Contractors face penalties, fines, and legal liabilities for non-compliance with prevailing wage laws, including back wages, liquidated damages, civil monetary penalties, and debarment from government contracts. The contractor should consult legal experts to help avoid legal liability for non-compliance.
Bottom Line on Prevailing Wage Laws in Florida
Understanding and complying with prevailing wage laws in Florida is essential for both contractors and workers involved in public construction projects. While Florida itself does not have its own prevailing wage law, contractors working on federally funded projects are subject to federal laws such as the Davis-Bacon Act and the McNamara-O’Hara Service Contract Act (SCA).
Compliance with prevailing wage laws entails paying the prevailing wage rates, preparing certified payroll reports, fulfilling posting requirements, and monitoring subcontractors. Non-compliance can result in penalties, such as back wages, liquidated damages, civil monetary penalties, debarment from government contracts, and legal action.
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