Prevailing Wage and Davis-Bacon Compliance in Montana
eMars provides certified payroll and compliance solutions tailored primarily for federal projects and select state jurisdictions. While many agencies accept the standard WH-347 form, some states will require their own form. For questions about supported jurisdictions, please contact our team directly.
Components of Wage Determinations
Both state and federal wage determinations in Montana include:
- Basic Hourly Rate: The minimum wage rate paid directly to workers in a specific job classification, set by DLI for state work or DOL for federal work.
- Fringe Benefits: Health insurance, retirement, paid leave, or other benefits paid on top of the basic rate.
- Total Hourly Rate: The sum of the basic hourly rate and fringe benefits. For example, if the basic hourly rate is $30 and fringes are $5, the total is $35. Workers must receive the full $35 in cash wages if the contractor does not provide fringe benefits, or a combination of basic wage and bona fide benefits totaling $35 per hour worked.
Compliance for Contractors and Subcontractors
To comply with both the Montana Prevailing Wage Law and the federal Davis-Bacon Act, contractors and subcontractors must follow these guidelines:
Determine Applicable Wage Rates
Determine Applicable Wage Rates
For state and local projects, use the DLI-issued Montana prevailing wage determination for the project type (building, heavy, highway, or nonconstruction). For federally funded projects, use the DOL wage determination on SAM.gov, applying the determination in effect ten days before bid opening.
Submit Certified Payroll Reports
Submit Certified Payroll Reports
For federally funded projects, file Form WH-347 weekly with the contracting agency. For Montana public works, contractors must keep certified payroll records and provide them to DLI's Compliance and Investigations Bureau or the contracting agent on request.
Handle Fringe Benefits
Handle Fringe Benefits
Provide bona fide fringe benefits or pay the equivalent value as additional cash on top of the basic hourly rate. Hourly fringe benefits paid as cash must be identified separately from the hourly base wage on certified payroll.
Post Wage Rates On-Site
Post Wage Rates On-Site
Post a legible statement of all wages, fringe benefits, travel, zone pay, and per diem in a prominent and accessible site on the project or staging area, beginning no later than the first day of work and continuing for the full duration of the project.
Maintain Accurate Records
Maintain Accurate Records
Keep all required payroll records, including hours, classifications, wages, and fringe benefits, for three years after completion of the project, and make them available for inspection by DLI or DOL. Federal Davis-Bacon recordkeeping under the 2023 rule also requires worker telephone and email contact information on DOL request.
Penalties for Non-Compliance
Failure to comply with prevailing wage laws in Montana may result in
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Back Wages owed to each underpaid worker, plus $25.00 per day for each day the employee was underpaid
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Department Penalty of up to 20% of the delinquent wages and fringe benefits, plus attorney fees, audit fees, and court costs
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Additional Fines of $1,000 for other violations of the Act and $10,000 for gross negligence
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Debarment from bidding on future Montana public works contracts
Unique Aspects of Montana's Prevailing Wage System
- Project-Based Wage Determination: Montana sets separate prevailing wage schedules for building construction, heavy construction, highway construction, and nonconstruction services rather than a single unified rate, so wages reflect the demands of each project type.
- Annual Wage Surveys: DLI's Compliance and Investigations Bureau conducts wage surveys every year and adopts revised prevailing wage rates yearly. Preliminary rates are published, comment periods follow, and final rates are then issued.
- Cost-of-Living Adjustment (COLA): Montana applies a cost-of-living adjustment to the prevailing wage rates in non-survey years. This ensures that wages keep pace with inflation and cost-of-living changes without requiring a yearly wage survey, thus providing stability for workers and contractors.
- 50 Percent Montana Resident Requirement: At least half of each contractor's employees working on a covered job must be bona fide Montana residents (MCA § 18-2-409).
- 3 Percent Adjustment for Multiyear Contracts: For public works contracts with an initial term of 30 months or longer, the prevailing wage rate is adjusted 12 months after the contract's effective date and every 12 months thereafter, at a 3 percent increase each time. The contractor pays the increase, not the contracting agency (MCA § 18-2-417).
Relevant Resources
- Davis-Bacon Wage Determinations: SAM.gov
- Montana Department of Labor and Industry (DLI) - Prevailing Wage Information: Montana Prevailing Wage Information
DOL Form WH-347 (Revised January 2025)
- U.S. Department of Labor Wage and Hour Division: Davis-Bacon and Related Acts
- Updating the Davis-Bacon and Related Acts Regulations - DOL Final Rule
For the most accurate and current information on prevailing wage requirements, consult the U.S. Department of Labor or your state's official labor website.
Montana Prevailing Wage FAQs
Does Montana have a state-specific prevailing wage law?
Yes. Montana's Prevailing Wage Law, codified at MCA §§ 18-2-401 through 18-2-432 and often called Montana's Little Davis-Bacon Law, applies to state and local public works contracts of $25,000 or more. Contractors must pay the prevailing wage rates set by the Montana Department of Labor and Industry (DLI) and ensure that at least 50 percent of their employees on the job are bona fide Montana residents. For federally funded projects, the Davis-Bacon Act also applies.
How are prevailing wage rates determined in Montana?
For state-funded projects, DLI's Compliance and Investigations Bureau conducts annual surveys of actual hours worked by occupational classification and adopts revised prevailing wage rates each year by craft and locality. For federally funded projects, the U.S. Department of Labor sets rates published on SAM.gov, and contractors apply the determination in effect ten days before bid opening.
What are the penalties for non-compliance with prevailing wage laws in Montana?
Penalties include back wages owed to each underpaid worker plus $25.00 per day for each day the employee was underpaid, a department penalty of up to 20 percent of the delinquent wages and fringe benefits, attorney fees, audit fees, and court costs. Additional fines of $1,000 apply for other violations of the Act, and $10,000 for gross negligence. Repeated or willful violations can also result in debarment from bidding on future public works contracts. Federal Davis-Bacon penalties layer on top when federal funds are involved.
How are fringe benefits handled under prevailing wage laws in Montana?
Contractors must provide bona fide fringe benefits such as health insurance, retirement, or paid leave, or pay the equivalent value as additional cash on top of the basic hourly rate. Total compensation must equal at least the basic rate plus the fringe rate listed on the applicable DLI or SAM.gov wage determination. If no fringe benefits are provided, the full total hourly rate must be paid as cash directly to the worker, and the cash fringe amount must be identified separately from the base wage on certified payroll.