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Prevailing Wage and Davis-Bacon Compliance in Hawaii

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Hawaii's Public Works Regulations

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

State Law: The Hawaii Little Davis-Bacon Act applies to state-funded public works projects.
Federal Law: The Davis-Bacon Act mandates federally funded or assisted construction projects in Hawaii.

Definition of "Public Works" in Hawaii

In Hawaii, "public works" refers to the construction, alteration, or repair of public buildings, roads, bridges, or any other type of infrastructure funded by public money. Public works can include:

Schools and educational buildings
Government buildings
Utility infrastructure (e.g., water treatment, power plants)
Highways and roads

Key Point:

Hawaii's prevailing wage law applies to public works projects where the contract is valued at $2,000 or more.

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Hawaii Prevailing Wage Determinations: State and Federal Requirements

Hawaii Little Davis-Bacon Act

Hawaii's prevailing wage law requires that contractors on state-funded public works projects pay workers no less than the prevailing wage determined by the Hawaii Department of Labor and Industrial Relations (DLIR).
These rates are based on surveys of wages paid to workers in similar job classifications within the state. Hawaii's wage determinations generally align closely with federal Davis-Bacon rates but may vary depending on the specific job and region.

Federal Davis-Bacon Act (DBA)

The Davis-Bacon Act applies to all federally funded or assisted public works projects in Hawaii.
Under this act, contractors and subcontractors must pay laborers and mechanics no less than the prevailing wage rates for their job classification in the local area where the project is located.

Components of Wage Determinations

Both state and federal wage determinations in Hawaii include:

Basic Hourly Rate: The minimum wage rate paid directly to workers for every hour worked.
Fringe Benefits: Non-cash benefits include health insurance, retirement plans, and vacation pay.
Total Hourly Rate: The sum of the basic hourly rate and fringe benefits.

For example, if the basic hourly wage is $30 and fringe benefits are valued at $10, the total hourly rate is $40. If fringe benefits are not provided, the contractor must pay the full $40 in cash wages.

Compliance for Contractors and Subcontractors

Contractors and subcontractors working on public works projects in Hawaii must:

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Determine Applicable Wage Rates

Must identify the prevailing wage rates set by the Hawaii Department of Labor and Industrial Relations (DLIR) for the specific job classifications involved in the project. These rates include both the basic hourly wage and fringe benefits, as determined by state law or collective bargaining agreements.

Submit Certified Payroll Reports

Contractors must submit certified payroll records weekly to the contracting agency. For federal projects, contractors use the U.S. Department of Labor's Form WH-347. For state projects, contractors must follow the DLIR's certified payroll submission requirements.

Handle Fringe Benefits

Contractors must ensure that workers are paid the appropriate prevailing wage for their classification, including both the basic hourly wage and fringe benefits.

Post Wage Rates On-Site

Contractors must post prevailing wage determinations in a visible location at the job site where workers can see them.

Maintain Accurate Records

Must maintain accurate records of wages, hours worked, and any fringe benefits provided to workers. These records should be available for inspection by the DLIR or U.S. Department of Labor.

Penalties for Non-Compliance

Violations of the Hawaii LDBA or federal Davis-Bacon Act can result in severe penalties, including:

Back pay
Fines
Debarment from bidding on future public works projects if they repeatedly violate wage laws

Unique Aspects of Hawaii's Prevailing Wage System

Hawaii's Little Davis-Bacon Act: Hawaii has its own prevailing wage law, which applies to state and local public works projects. This law operates in conjunction with the federal Davis-Bacon Act when federal funds are involved, ensuring that workers receive fair wages based on local determinations.

Wage Determination by Collective Bargaining: Hawaii's prevailing wage rates are often determined through collective bargaining agreements in the construction industry, which can result in higher wages and better benefits for workers compared to other states.
Fringe Benefit Requirements: Hawaii places a strong emphasis on fringe benefits, requiring that employers either provide these benefits (such as health insurance, retirement plans, and vacation pay) or pay an equivalent amount as part of the workers' wages, ensuring comprehensive compensation packages.

Relevant Resources

U.S. Department of Labor: Wage Determinations Online (WDOL): SAM.gov - Wage Determinations
Hawaii Department of Labor and Industrial Relations (DLIR): Hawaii Prevailing Wage Information
Certified Payroll Form WH-347: U.S. Department of Labor Certified Payroll Form

Does Hawaii have its own prevailing wage law?

Yes, Hawaii has its own prevailing wage law, commonly referred to as the Little Davis-Bacon Act. This law applies to state-funded public works projects and is overseen by the Hawaii Department of Labor and Industrial Relations (DLIR). It requires contractors to pay prevailing wages similar to those required by the federal Davis-Bacon Act for federally funded projects.

How are prevailing wage rates determined in Hawaii?

For federally funded projects, prevailing wage rates are determined by the U.S. Department of Labor through local wage surveys. For state-funded projects, the Hawaii Department of Labor and Industrial Relations (DLIR) determines prevailing wage rates through surveys of wages paid for similar job classifications within the state. Both rates include a basic hourly wage and fringe benefits.

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

Contractors may be required to pay workers back pay if they were underpaid, covering the difference in wages owed. Additionally, contractors can face financial penalties for failing to meet the correct prevailing wage requirements. In cases of repeated violations, contractors may be disqualified from bidding on future public works projects through debarment.

How are fringe benefits handled under prevailing wage laws in Hawaii?

Fringe benefits are part of the total prevailing wage. Contractors can provide workers with fringe benefits such as health insurance and retirement contributions, or they can pay the equivalent value in cash. If no fringe benefits are provided, the contractor must pay the full wage (basic hourly wage plus fringe benefits) directly to the worker in cash.