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Prevailing Wage and Davis-Bacon Compliance in Colorado

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Colorado's Public Works Regulations

Colorado has both state and federal regulations governing prevailing wages for public works projects:

State Law: The Colorado Quality Apprenticeship Training Act of 2019, effective July 1, 2021, states that contractors and subcontractors working on state-funded public projects valued at $500,000 or more are required to pay workers the prevailing wage rates as determined by the Colorado Department of Labor and Employment (CDLE). These rates are based on local labor market conditions and union agreements.
Federal Law: The Davis-Bacon Act (DBA) applies to public works projects that receive federal funding.

Definition of "Public Works" in Colorado

In Colorado, "public project" is defined explicitly in C.R.S. § 24-92-201(5) as:

"Any construction, alteration, repair, demolition, or improvement of any land, building, structure, facility, road, highway, bridge, or other public improvement suitable for and intended for use in the promotion of the public health, welfare, or safety and any maintenance programs for the upkeep of such projects."

This definition encompasses projects financed by public funds, including roads, bridges, schools, government buildings, and other infrastructure.

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Prevailing Wage Determinations: Federal (Davis-Bacon) and State-Specific Requirements

Federal Davis-Bacon Act (DBA)

The Davis-Bacon Act applies to federally funded public works projects in Colorado. This act mandates that contractors and subcontractors pay workers no less than the locally prevailing wages (including fringe benefits) for similar work on comparable projects. The U.S. Department of Labor determines these prevailing wages.

Colorado State-Specific Requirements

Colorado's prevailing wage law applies only to state-funded construction projects with a total cost of $500,000 or more. Key points include:

The Colorado Department of Labor and Employment (CDLE) director determines prevailing wages.
CDLE conducts annual surveys to determine prevailing wage rates for various job classifications in different regions of Colorado.
Rates are typically published on July 1 yearly and remain in effect for 12 months.

Components of Wage Determinations

Both federal and state wage determinations include:

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

Unique to Colorado, wage determinations often include per diem, a daily expense allowance (if applicable), and Zone Pay, which is Additional compensation based on the distance of the work site from a specified city center.

For example, if the basic hourly rate is $22, fringe benefits are $5, and zone pay is $2, the total hourly rate would be $29. If the contractor does not provide fringe benefits, the worker must receive the entire amount as wages.

Compliance for Contractors and Subcontractors

Contractors and subcontractors working on applicable public works projects in Colorado must:

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Determine Applicable Wage Rates

Use the U.S. Department of Labor's Wage Determinations Online (WDOL) portal via SAM.gov for federal projects. Refer to the Colorado Department of Labor and Employment (CDLE) website for state projects.

Submit Certified Payroll Reports

For federal projects, use the U.S. Department of Labor's WH-347 form. For state projects, submit monthly certified payroll records to the contracting state agency.

Handle Fringe Benefits

Either provide the fringe benefits as specified or pay workers the equivalent value in cash.

Post Wage Rates On-Site

Display the current prevailing wage rates in a prominent location at the job site.

Maintain Proper Documentation

Keep all relevant documents for three years following the completion of the project.

Penalties for Non-Compliance

Colorado law (C.R.S. § 24-92-209) imposes specific penalties for non-compliance, including:

Fines of $250 per violation
Potential debarment from future state contracts
The requirement to pay back wages

Unique Aspects of Colorado's Prevailing Wage System

Limited Scope: Applies only to larger state-funded projects ($500,000+).
Zone Pay: Including zone pay in wage determinations is a distinctive feature.
Annual Updates: Prevailing wage rates are updated yearly, more frequently than in some states.
Local Government Exemption: This does not apply to projects funded solely by local entities.

Relevant Resources

U.S. Department of Labor Wage Determinations Online (WDOL): SAM.gov - Wage Determinations
Colorado Department of Labor and Employment (CDLE) Prevailing Wage Page: https://cdle.colorado.gov/prevailing-wage

For the most current and detailed information, always refer to the CDLE website and consult with legal counsel familiar with Colorado labor laws.

Does Colorado have a state-specific prevailing wage law?

Yes, Colorado has its own state-specific prevailing wage law that applies to state-funded public works projects. The Colorado Department of Labor and Employment (CDLE) is responsible for setting and enforcing prevailing wage rates on these projects. For federally funded projects, the federal Davis-Bacon Act applies.

How are prevailing wage rates determined in Colorado?

The U.S. Department of Labor determines prevailing wage rates for federally funded projects based on local wage surveys. For state-funded projects, the Colorado Department of Labor and Employment (CDLE) uses local wage data to determine prevailing wages and publishes them for various job classifications and geographic areas.

What are the penalties for non-compliance with prevailing wage laws in Colorado?

Penalties for non-compliance can include:

Fines: Contractors may face financial penalties for failing to pay the correct wage rates.
Back pay: Contractors may be required to pay back wages to workers if they are underpaid.
Debarment: Contractors may be disqualified from bidding on future public works projects.
Contract termination: Persistent non-compliance could result in contract termination.

How are fringe benefits handled under the prevailing wage laws in Colorado?

Fringe benefits are a required component of the total prevailing wage. Contractors must provide fringe benefits, such as health insurance or pension contributions, as the wage determination specifies. If fringe benefits are not provided, the contractor must pay the equivalent value in cash directly to the workers.