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Prevailing Wage and Davis-Bacon Compliance in Kentucky

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Kentucky's Public Works Regulations

Kentucky has a unique situation regarding public works regulations:

State Law: As of 2017, Kentucky has no 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 Kentucky.

Key point: The Kentucky General Assembly repealed the state's prevailing wage law in 2017, which previously required contractors to pay specific wage rates for state-funded public works projects. As a result, public works projects that are funded solely by the state or local governments in Kentucky are not subject to prevailing wage requirements unless specified by the project's contract.

Definition of "Public Works" in Kentucky

In Kentucky, "public works" generally refers to construction, alteration, or repair projects funded by government entities such as federal, state, or local governments. Public works projects include:

Building or repairing roads and highways
Construction and maintenance of public schools and government buildings
Infrastructure projects such as water treatment facilities, utilities, and bridges

Important note: For federally funded projects, the Davis-Bacon Act applies, and prevailing wage rates must be adhered to. For state-funded projects, there are no prevailing wage requirements unless specified by local regulations or project contracts.

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Prevailing Wage Determinations: Federal (Davis-Bacon) Requirements

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

The Davis-Bacon Act applies to all federally funded or federally assisted public works projects in Kentucky.
Under the Act, contractors and subcontractors must pay laborers and mechanics no less than the locally prevailing wages for similar work in the geographic area.
These rates are determined by the U.S. Department of Labor and include both a basic hourly wage and fringe benefits.

Components of Wage Determinations

Federal wage determinations for Kentucky 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, retirement plans, and paid leave.
Total Hourly Rate: The sum of the basic hourly rate and fringe benefits.

For example, if the basic hourly wage is $25 and fringe benefits are valued at $8, the total hourly rate is $33. If fringe benefits are not provided, the contractor must pay the full $33 in wages.

Compliance for Contractors and Subcontractors

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

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Determine Applicable Wage Rates

Contractors need to identify the prevailing wage rates for their project location and job classifications through the Wage Determinations Online (WDOL) portal via SAM.gov.

Submit Certified Payroll Records

Contractors are required to submit certified payroll reports weekly to the contracting agency. For federal projects, contractors typically use Form WH-347 from the U.S. Department of Labor.

Handle Fringe Benefits

Contractors must ensure that all workers are paid at least the prevailing wage for their specific job classification, which includes both the basic hourly rate 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 easily access the information.

Maintain Records

Contractors must maintain accurate payroll records of wages paid, hours worked, and fringe benefits provided. These records should be made available for inspection by the U.S. Department of Labor or the contracting agency upon request.

Penalties for Non-Compliance

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

Fines
Back pay for underpaid workers
Disqualification from future federally funded projects

Unique Aspects of Kentucky's Public Works System

Recent Repeal of State Law: In 2017, Kentucky repealed its state prevailing wage law, making it one of the few states without such regulations.
No State Prevailing Wage Requirements: State-funded projects are not subject to prevailing wage requirements, allowing contractors more flexibility in setting wages (while still complying with general labor laws like minimum wage).
Limited Scope: Davis-Bacon requirements only apply to federally funded projects, not all public works in the state.

Relevant Resources

U.S. Department of Labor: Wage Determinations Online (WDOL): SAM.gov - Wage Determinations
Certified Payroll Form WH-347: U.S. Department of Labor Certified Payroll Form

Does Kentucky have a state-specific prevailing wage law?

No, Kentucky repealed its state-specific prevailing wage law in 2017. Public works projects funded solely by state or local governments are not required to comply with prevailing wage regulations. However, federally funded projects in Kentucky must follow the federal Davis-Bacon Act.

How are prevailing wage rates determined in Kentucky?

For federally funded projects, prevailing wage rates are determined by the U.S. Department of Labor based on wage surveys conducted in the local area. These rates include both a basic hourly wage and fringe benefits, and they are published in the Wage Determinations Online (WDOL) portal on SAM.gov.

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

Contractors may be required to compensate workers for any underpayment through back pay. Additionally, contractors can face monetary penalties for failing to pay the prevailing wage. In cases of non-compliance, contractors may be disqualified from bidding on future federally funded public works projects through debarment.

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

Fringe benefits are a required component of the total prevailing wage. Contractors can provide fringe benefits such as health insurance, pension contributions, or vacation pay, or they can pay the equivalent value in cash. If no fringe benefits are provided, the total wage (basic hourly wage + fringe benefits) must be paid directly to the worker in cash.