Prevailing Wage and Davis-Bacon Compliance in Tennessee

Tennessee's Public Works Regulations

Tennessee requires prevailing wages for highway construction projects through the Tennessee Prevailing Wage Act (TCA 12-4-401 to 12-4-415).

• State Law: The Tennessee Prevailing Wage Act requires contractors working on state-funded highway construction projects to pay their workers prevailing wage rates as determined by the Tennessee Department of Labor and Workforce Development.
  
• Federal Law: Contractors must comply with the federal Davis-Bacon Act, which requires workers to be paid the prevailing wage rates determined by the U.S. Department of Labor.

Definition of "Public Works" in Tennessee

In Tennessee, public works generally refers to the construction, improvement, repair, or maintenance of public infrastructure or facilities funded by public funds. This can include:

• Roads, highways, and bridges

• Public buildings, schools, and government offices

• Public water and sewage systems

State-funded highway construction projects are subject to Tennessee's prevailing wage requirements, while federally funded public works projects must comply with the Davis-Bacon Act.

Prevailing Wage Determinations: Federal and State Requirements

Federal Davis-Bacon Act

• This applies to federally funded or assisted projects in Tennessee
• U.S. Department of Labor sets wage rates, which are based on surveys of wages paid to similar workers in the area
• Includes basic hourly wage and fringe benefits

Tennessee's Prevailing Wage Act

• Applies specifically to state-funded highway construction projects.
• The Tennessee Department of Labor and Workforce Development sets prevailing wage rates based on local wage data for different job classifications.
• These rates must be paid by contractors working on state highway projects.

Components of Wage Determinations

Both federal and state wage determinations in Tennessee 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, pensions, and vacation pay.
• Total Hourly Rate: The sum of the basic hourly rate and fringe benefits.

For example, if the basic hourly rate is $25 and fringe benefits are $10, the total hourly rate would be $35. If the contractor does not provide fringe benefits, the worker must receive the entire $35 as wages.

Compliance for Contractors and Subcontractors

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

1. Determine Applicable Wage Rates:
   • For federal projects, wage rates are available on the Wage Determinations Online (WDOL) portal, accessed via SAM.gov.
   • For state-funded highway projects, wage rates are available through the Tennessee Department of Labor and Workforce Development.
2. Submit Certified Payroll Reports:
   • For federal projects, use The U.S. Department of Labor's Form WH-347
   • For state-funded highway projects, contractors must submit payroll reports to the Tennessee Department of Labor.
3. Handle Fringe Benefits:
   • Contractors must ensure workers are paid at least the prevailing wage rate, including the basic hourly wage and applicable fringe benefits.
4. Post Wage Rates On-Site:
   • Display the prevailing wage determinations in a conspicuous place on the job site
5. Maintain Accurate Records:
   • Contractors must maintain detailed payroll records, including hours worked, wages paid, and fringe benefits provided. These records must be kept for at least three years after the project's completion and made available for inspection upon request.

Penalties for Non-Compliance

Failure to comply with prevailing wage laws in Connecticut can result in:

• Back pay for underpaid workers
• Fines

• Disqualification from future public works contracts.

Unique Aspects of Tennessee's Prevailing Wage System

• State-Regulated Highway Construction Wages: Tennessee has specific wage requirements for highway construction under state law. The Tennessee Department of Transportation (TDOT) determines prevailing wages for highway construction workers, separate from federal Davis-Bacon Act requirements, creating a unique dual compliance structure for these projects.
• Emphasis on Local Workforce Development: Tennessee prioritizes using local labor for public works projects. The state encourages hiring Tennessee residents through partnerships with local agencies, ensuring prevailing wage compliance aligns with broader workforce development goals.

Relevant Resources

• U.S. Department of Labor Wage Determinations Online (WDOL): SAM.gov - Wage Determinations
• Tennessee Department of Labor and Workforce Development: Prevailing Wage Information: Tennessee Prevailing Wage Information
• U.S. Department of Labor Certified Payroll Form: Form WH-347