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Prevailing Wage and Davis-Bacon Compliance in Tennessee

Construction workers applying asphalt on a road surface with shovels and heavy machinery nearby.

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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.

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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:

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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.

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.

Handle Fringe Benefits

Contractors must ensure workers are paid at least the prevailing wage rate, including the basic hourly wage and applicable fringe benefits.

Post Wage Rates On-Site

Display the prevailing wage determinations in a conspicuous place on the job site.

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 Tennessee 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

Does Tennessee have its own prevailing wage law?

Yes, Tennessee has a state-specific prevailing wage law for highway construction projects under the Tennessee Prevailing Wage Act. Contractors working on state-funded highway projects must pay prevailing wages as determined by the Tennessee Department of Labor and Workforce Development.

How are prevailing wage rates determined for public works projects in Tennessee?

For state-funded highway projects, prevailing wage rates are determined by the Tennessee Department of Labor and Workforce Development. For federally funded projects, prevailing wage rates are determined by the U.S. Department of Labor based on local wage surveys.

What are the penalties for non-compliance with prevailing wage laws in Tennessee?

Penalties for non-compliance can include fines, the requirement to pay back wages to underpaid workers, and possible disqualification from bidding on future public works projects.

How are fringe benefits handled under Tennessee’s prevailing wage laws?

Contractors must either provide fringe benefits (e.g., health insurance, pensions, vacation pay) or pay the equivalent value in cash. If no fringe benefits are provided, the total hourly wage (basic wage + fringe benefits) must be paid in cash to the worker.