Prevailing Wage and Davis-Bacon Compliance in Tennessee
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 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: 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 $25 and fringe benefits are $10, the total hourly rate 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
Contractors and subcontractors working on public works projects in Tennessee must:
Determine Applicable Wage Rates
Determine Applicable Wage Rates
For federal projects, use the U.S. Department of Labor's wage determinations on SAM.gov.
For state-funded highway projects, use the rates published by the Tennessee Prevailing Wage Commission through the Department of Labor and Workforce Development.
Submit Certified Payroll Reports
Submit Certified Payroll Reports
For federal projects, file the revised Form WH-347, effective January 6, 2025, weekly with the contracting agency.
For state-funded highway projects, file weekly certified payroll with the contracting state agency, certifying that wages paid equal or exceed Commission determinations.
Handle Fringe Benefits
Handle Fringe Benefits
Post Wage Rates On-Site
Post Wage Rates On-Site
Display the applicable wage determination at the job site where workers can see it. Failure to post can be a violation even when wages are paid correctly.
Maintain Accurate Records
Maintain Accurate Records
Keep payroll, hours worked, classifications, and fringe benefit documentation for at least three years after project completion. Federal Davis-Bacon recordkeeping under the 2023 rule also runs three years and now includes workers' telephone and email on DOL request.
Penalties for Non-Compliance
Failure to comply with prevailing wage laws in Tennessee can result in:
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Back Wages owed to underpaid workers
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Disqualification from future state highway construction contracts
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Withholding of Contract Payments to satisfy unpaid wages
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Civil Fines assessed for violations under the Tennessee Prevailing Wage Act
Unique Aspects of Tennessee's Prevailing Wage System
- Highway-Only State Coverage: Tennessee is among the few states that limit state prevailing wage to highway, road, and bridge construction rather than all public works.
- Prevailing Wage Commission Authority: Rates are set by the Tennessee Prevailing Wage Commission under TCA § 12-4-405, not directly by the Department of Labor and Workforce Development or TDOT. TDOT awards and administers state highway contracts but does not set rates.
- $50,000 Threshold: State coverage applies only to state-funded highway construction contracts of more than $50,000.
- April 2026 Expansion Pending: House Bill 2541 and Senate Bill 2229 passed both chambers in April 2026, extending coverage to non-state highway construction contracts funded by federal or state highway funds.
- 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
- Davis-Bacon Wage Determinations on SAM.gov
- Tennessee Department of Labor and Workforce Development: Prevailing Wage Information: Tennessee Prevailing Wage Information
- DOL Form WH-347
- 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 and workforce development website.
Tennessee Prevailing Wage FAQs
Does Tennessee have its own prevailing wage law?
Yes. The Tennessee Prevailing Wage Act for State Highway Construction Projects, Tennessee Code §§ 12-4-401 through 12-4-415, requires prevailing wages on state-funded highway, road, and bridge construction contracts of more than $50,000. Rates are set by the Tennessee Prevailing Wage Commission, which sits within the 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 set by the Tennessee Prevailing Wage Commission under TCA § 12-4-405 based on local wage data by craft. For federally funded projects, rates are determined by the U.S. Department of Labor based on local wage surveys, 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 Tennessee?
Penalties for non-compliance can include back wages for underpaid workers, civil fines, withholding of contract payments, and disqualification from future state highway construction contracts. Federal Davis-Bacon penalties layer on top when federal funds are involved, including up to three years of federal debarment, cross-withholding of contract payments from any other federal contract held by the same contractor, and CWHSSA liquidated damages of $33 per worker per day for overtime violations.
How are fringe benefits handled under Tennessee’s prevailing wage laws?
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 wage determination. If no fringe benefits are provided, the full total hourly rate must be paid as cash directly to the worker.