Prevailing Wage and Davis-Bacon Compliance in Arizona

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Arizona's Public Works Regulations

Arizona's approach to public works regulations is unique compared to many other states:

  • State Law: Arizona does not have a state-specific prevailing wage law for public works projects.
  • Federal Law: The Davis-Bacon Act (DBA) applies to federally funded or assisted construction projects in Arizona exceeding $2,000.

Unlike some states, which have their own "Little Davis-Bacon Act," Arizona does not require contractors to follow state prevailing wage regulations on projects funded solely by the state.

Definition of "Public Works" in Arizona

Although Arizona doesn't have a state-specific prevailing wage law, "public works" generally refers to:

  • Construction, maintenance, repair, or improvement projects funded by public agencies
  • Projects including roads, schools, hospitals, bridges, and other infrastructure

Key point: If these projects involve federal funding, they are subject to federal Davis-Bacon prevailing wage requirements.

Prevailing Wage Determinations: Federal (Davis-Bacon) Requirements

Since Arizona doesn't have state-specific prevailing wage laws, only the federal Davis-Bacon Act applies to certain public works projects:

  • The U.S. Department of Labor (DOL) establishes prevailing wage rates for federally funded or assisted projects.
  • Rates are based on local wages for various construction classifications in the project's geographic area.
  • Contractors must pay at least the prevailing wage rate, including the basic hourly wage and any required fringe benefits.

Components of Wage Determinations

Federal wage determinations for Arizona include:

  • Basic Hourly Rate: The minimum wage rate paid directly to workers in a specific job classification.
  • Fringe Benefits: Non-cash benefits include health insurance, pensions, and paid vacation.
  • Total Hourly Rate: The sum of the basic hourly rate and fringe benefits.

For example, if the basic hourly rate is $20 and fringe benefits are $5, the total hourly rate would be $25. If the contractor does not provide fringe benefits, the worker must receive the entire $25 as wages.

Compliance for Contractors and Subcontractors

Contractors and subcontractors working on federally funded public works projects in Arizona must:

  1. Determine Applicable Wage Rates:
    • Use the U.S. Department of Labor's Wage Determinations Online (WDOL) portal, now available at SAM.gov.
    • Enter the state (Arizona), county, and type of project (e.g., building, heavy, highway) to determine the correct wage.
  2. Submit Certified Payroll Records:
    • Provide documentation proving that workers are paid the prevailing wage rates.
  3. Handle Fringe Benefits:
    • Either provide the fringe benefits as specified or pay the equivalent value in cash to workers.
    • Maintain proper documentation to demonstrate compliance.
  4. Post Wage Rates On-Site:
    • Display the applicable prevailing wage rates in an area accessible to workers.

Penalties for Non-Compliance

Failure to comply with the Davis-Bacon Act can result in severe consequences, including:

  • Penalties and fines
  • The requirement to pay back wages
  • Disqualification from future federal contracts

Unique Aspects of Arizona's Public Works System

  • No State Prevailing Wage Law: Unlike many states, Arizona relies solely on federal regulations for prevailing wages on public works projects.
  • Limited Scope: Davis-Bacon requirements only apply to federally funded projects, not all public works in the state.
  • Threshold: The Davis-Bacon Act applies to federal construction projects exceeding $2,000.

Relevant Resources

For the most current and detailed information, always refer to the U.S. Department of Labor website and consult with legal counsel familiar with federal labor laws and their application in Arizona.

Arizona Prevailing Wage FAQs

Q Does Arizona have a state-specific prevailing wage law?

A

No, Arizona does not have a state-specific prevailing wage law. However, public works projects that receive federal funding must comply with the federal Davis-Bacon Act, which mandates the payment of prevailing wages to workers.

Q How are fringe benefits handled under the Davis-Bacon Act in Arizona?

A

Fringe benefits are part of the total prevailing wage. Contractors can provide workers with fringe benefits such as health insurance, retirement contributions, and vacation time, or they can opt to pay the workers the equivalent of those benefits. The contractor must pay the total wage rate in cash if fringe benefits are not provided.

Q How are prevailing wage rates determined in Arizona?

A

For federally funded projects, the U.S. Department of Labor determines prevailing wage rates through wage surveys that assess wages paid to similarly skilled workers in the same geographic region. These rates are published on the SAM.gov website, where contractors can find wage determinations for various job classifications.

Q What are the penalties for non-compliance with Davis-Bacon regulations in Arizona?

A

Contractors who fail to comply with Davis-Bacon requirements can face severe penalties, including:

  • Back payment of wages: Contractors may be required to compensate workers for unpaid wages if they are found to have paid less than the prevailing wage.

  • Fines: Civil or criminal fines may be imposed.

  • Debarment: Non-compliant contractors can be disqualified from bidding on future federal contracts.

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