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Prevailing Wage and Davis-Bacon Compliance in North Carolina

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North Carolina's Public Works Regulations

Unlike some states, North Carolina does not have a state-specific prevailing wage law. However, public works projects in North Carolina are subject to federal regulations when federal funding is involved:

  • Federal Law: The Davis-Bacon and Related Acts (DBRA) apply to federally funded or assisted construction projects in North Carolina.
  • State Law: North Carolina does not have a "Little Davis-Bacon Act" or state-specific prevailing wage law.

Definition of "Public Works" in North Carolina

In North Carolina, public works generally refer to constructing, repairing, or maintaining public buildings, roads, highways, and other state-owned infrastructure. These projects may involve construction contracts at the state or local government level, and when federal funding is involved, federal wage regulations apply.
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Prevailing Wage Determinations: Federal (Davis-Bacon) Requirements

Since North Carolina does not have its own state prevailing wage law, federal prevailing wage laws such as the Davis-Bacon Act apply to federally funded or assisted contracts for construction projects. The U.S. Department of Labor determines prevailing wage rates for different labor categories based on location and type of work.

    • Davis-Bacon Act: This act requires contractors and subcontractors working on federally funded construction projects to pay laborers and mechanics no less than the locally prevailing wages and fringe benefits for similar projects in the area.

    • Federal Wage Determinations: The U.S. Department of Labor's Wage and Hour Division establishes prevailing wage rates, which can be found on the DOL's Wage Determinations Online System (SAM.gov).

Components of Wage Determinations

Federal wage determinations for North Carolina include:

  1. Basic Hourly Rate: This is the hourly wage rate that must be paid to workers before considering fringe benefits.
  2. Fringe Benefits: Non-cash benefits include health insurance, retirement plans, and vacation/holiday pay.
  3. Total Hourly Rate: The total rate includes the basic hourly wage plus fringe benefits. Contractors can either pay fringe benefits directly to workers or contribute to an approved fringe benefit plan, such as health insurance, pensions, or vacation pay.

The total hourly rate must be paid in cash if the contractor does not provide fringe benefits.

Compliance for Contractors and Subcontractors

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

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Determine if the project is federally funded

Determine if the project is federally funded

Prevailing wages apply if federal funds are used for the project.

Obtain the wage determination

Obtain the wage determination

The wage determination for the project's location and type of work can be found on SAM.gov. Ensure that both the basic hourly rate and fringe benefits are met.

Post wage determinations

Post wage determinations

Contractors must post the applicable wage rates at the job site for workers to see.

Submit certified payrolls

Submit certified payrolls

Contractors must submit certified payrolls each week showing wages paid to each worker. This includes detailing the basic hourly rate, fringe benefits, and hours worked.

Maintain accurate records

Maintain accurate records

Records of wages, hours worked, and fringe benefits must be kept for at least three years after the project's completion.

Penalties for Non-Compliance

While North Carolina doesn't have state-specific penalties, federal law imposes strict consequences for Davis-Bacon Act violations, including:

  • Withholding of contract funds

  • Termination of contracts

  • Debarment from future government contracts

  • Payment of back wages to affected employees

Unique Aspects of North Carolina's Public Works System

  • Decentralized Wage Determination: Unlike states with statewide prevailing wage systems, North Carolina often allows local governments to set wage standards for public works projects.

  • Focus on Cost Efficiency: The public works system emphasizes competitive bidding, aiming to balance fair labor practices with cost-effective project management.
  • Limited Prevailing Wage Mandates: North Carolina does not have a statewide prevailing wage law, meaning public works wage requirements are primarily influenced by project-specific contracts and federal Davis-Bacon Act standards.

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North Carolina Prevailing Wage FAQs

Are there state-specific prevailing wage laws in North Carolina?
No, North Carolina does not have its own state-specific prevailing wage laws. However, federal Davis-Bacon prevailing wage regulations apply to federally funded or assisted public works projects in the state.
How are prevailing wage rates determined for public works projects in North Carolina?
Prevailing wage rates are determined by the U.S. Department of Labor under the Davis-Bacon Act for federally funded projects. These rates are based on surveys of wages paid to workers in similar job classifications within the region.
What are the penalties for non-compliance with prevailing wage requirements in North Carolina?

Non-compliance can lead to penalties, including withholding of contract funds, termination of contracts, debarment from future government contracts, and payment of back wages to affected employees.

How are fringe benefits handled under prevailing wage regulations?

Contractors can meet fringe benefit requirements by either paying the fringe benefits directly to workers in cash or contributing to a qualified fringe benefit plan, such as health insurance or pension funds. If no fringe benefits are provided, the full total hourly rate must be paid in cash.

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