Prevailing Wage and Davis-Bacon Compliance in Montana

Montana's Public Works Regulations

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

• State Law: The Montana Prevailing Wage Law (Montana Code Annotated §§ 18-2-401 through 18-2-432) applies to public works projects funded by state or local governments. It mandates that contractors and subcontractors pay workers no less than the prevailing wage rates set by the Montana Department of Labor and Industry (DLI).
• Federal Law: For federally funded or federally assisted public works projects, contractors must also comply with the federal Davis-Bacon Act, which requires them to pay prevailing wages as determined by the U.S. Department of Labor.

Definition of "Public Works" in Montana

In Montana, public works include the construction, reconstruction, repair, or maintenance of public buildings, roads, highways, or other infrastructure funded with public money. This encompasses:

• Schools and government buildings
• Roads, highways, and bridges
• Water and sewer systems
• Public infrastructure projects

Key Points:

• The Montana Prevailing Wage Law applies to state-funded projects with a contract value of $25,000 or more.
• The Davis-Bacon Act applies to federally funded projects with a contract value exceeding $2,000.

Montana Prevailing Wage Determinations: State and Federal Requirements

Montana Prevailing Wage Law

The Montana Department of Labor and Industry (DLI) sets the prevailing wage rates for state-funded projects based on collective bargaining agreements, local wage data, and wage surveys. These rates are updated annually and must be paid to workers on state—and locally-funded public works projects.

Federal Davis-Bacon Act (DBA)

Under the Davis-Bacon Act, the U.S. Department of Labor sets prevailing wages for federally funded projects. These rates are based on local wage surveys and cover basic hourly wages and fringe benefits for various job classifications.

Components of Wage Determinations

Both state and federal wage determinations in Montana include:

• Basic Hourly Rate: The minimum wage paid directly to workers for every hour worked. For federal and Montana state projects, this wage is determined by wage surveys conducted by the U.S. Department of Labor or the Montana DLI.
• Fringe Benefits: Non-cash benefits such as 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 $5, the total hourly rate would be $35. The contractor must pay the full $35 in cash wages if no fringe benefits are provided.

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:

1. Determine Applicable Wage Rates:

• For federal projects: Use the U.S. Department of Labor's Wage Determinations Online (WDOL) portal via SAM.gov.
• For state projects, the Montana Department of Labor and Industry (DLI) website provides prevailing wage rates.

2. Submit Certified Payroll Reports:

• For federal projects: Utilize the U.S. Department of Labor's Form WH-347.
• Contractors must also submit payroll reports to the Montana Department of Labor and Industry for state projects.

3. Handle Fringe Benefits:

• Ensure workers are paid at least the applicable prevailing wage for their job classification, including the basic hourly rate and fringe benefits.

4. Post Wage Rates On-Site:

• Contractors must prominently post the prevailing wage determinations at the job site where workers can see them.

5. Maintain Accurate Records:

• Contractors must maintain detailed records of hours worked, wages paid, and any fringe benefits provided. These records should be available for inspection by the Montana DLI or the U.S. Department of Labor.

Penalties for Non-Compliance

Failure to comply with prevailing wage laws in Montana may result in:

• Fines
• Back pay for underpaid workers.
• Disqualification from bidding on future public works projects

Unique Aspects of Montana's Prevailing Wage System

• Project-Based Wage Determination: In Montana, prevailing wage rates are determined based on the specific type of public works project (e.g., building construction or heavy and highway construction) rather than a single, unified rate across all projects. This approach ensures that wages align with the specific demands of each project type.
• Biennial Wage Surveys: Montana conducts wage surveys yearly to update the prevailing wage rates. This biennial approach helps maintain current wage standards while balancing the need for accurate rates with administrative efficiency.
• 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.

Relevant Resources

• U.S. Department of Labor: Wage Determinations Online (WDOL): SAM.gov - Wage Determinations
• Montana Department of Labor and Industry (DLI) - Prevailing Wage Information: Montana Prevailing Wage Information

• Certified Payroll Form WH-347: U.S. Department of Labor Certified Payroll Form