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Prevailing Wage and Davis-Bacon Compliance in Texas

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Texas's Public Works Regulations

Texas has a long-standing commitment to ensuring fair wages for workers involved in public works projects. This commitment is reflected in the state's prevailing wage regulations, outlined in Texas Government Code Chapter 2258. These laws apply to the construction of public buildings or roads that are funded in whole or in part by state or local public funds.

Under Chapter 2258, contractors and subcontractors working on these publicly funded projects are required to pay their workers a wage rate that is not less than the general prevailing wage in the locality where the work is performed. These wage rates are typically determined based on similar construction projects in the area and help promote fair competition while protecting workers from being underpaid.

By enforcing these standards, Texas aims to ensure that public funds are used responsibly and that construction workers receive compensation that reflects the value of their labor and skills.

Definition of "Public Works" in Texas

In Texas, the term "public works" encompasses an extensive range of construction activities. This includes not only the construction of buildings and roads but also excavations, repair works, and other developmental projects. These projects, whether under direct public supervision or not, if funded wholly or partially by public funds, fall under the purview of prevailing wage laws. This broad definition ensures that a wide spectrum of construction activities is covered, promoting fair labor practices across the state.

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Determining the Prevailing Wages

The process of determining prevailing wages in Texas is unique and flexible. Unlike some states, Texas does not publish annual prevailing wage determinations. Instead, the prevailing wage is determined by either conducting a local wage survey or by adopting the wage rates under the federal Davis-Bacon Act. This method ensures that the wages reflect the current market trends and are fair to the workers involved in these projects.

Legislative Evolution and Its Impact

One of the most significant legislative changes to the Texas prevailing wage laws came with the enactment of HB 2625 in 2007. This amendment allowed for greater flexibility in adopting federal wage determinations. Prior to this amendment, there were restrictions on using Federal Davis/Bacon Wage Determinations if the wage survey used for their determination was older than three years. HB 2625 removed these constraints, allowing political subdivisions in Texas to use the Federal Davis/Bacon Wage Determinations without needing to conduct new, potentially costly wage surveys.

Compliance for Contractors and Subcontractors

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

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Determine Applicable Wage Rates

Use the U.S. Department of Labor's Davis-Bacon Wage Determinations site to find the correct rates based on the project's location and worker classifications.

Submit Certified Payroll Reports

Use the U.S. Department of Labor's WH-347 form or equivalent to ensure appropriate wages and fringe benefits are paid to workers.

Handle Fringe Benefits

Either provide the fringe benefits as specified or pay workers the equivalent value in cash.

Post Wage Rates On-Site

Display the applicable wage rates at the worksite for transparency and worker awareness.

Maintain Proper Documentation

Keep records of all wages paid to employees for inspection in case of audits or investigations.

Penalties for Non-Compliance

Financial penalties
Imprisonment for a term not exceeding six months
Disqualification from bidding on future public works contracts

Unique Aspects of Texas's Public Works System

Local Wage Determination by Public Body: Unlike many states that rely on a central state agency to determine prevailing wage rates, Texas allows local governmental entities (cities, counties, school districts, etc.) to set their own prevailing wage rates for public works projects. These rates must reflect wages paid for similar work in the same locality, but there is no standardized statewide schedule.
Penalty Structure Specified by Statute: Texas has a specific, statutorily defined penalty for non-compliance: $60 per day per underpaid worker (Texas Government Code § 2258.023). This is unique compared to many states where penalty amounts are variable or left to agency discretion. Texas's flat-rate fine provides clear expectations and consequences for violations.

Relevant Resources

U.S. Department of Labor Davis-Bacon Wage Determinations: Wage Determinations Online
Texas Workforce Commission (TWC): https://www.twc.texas.gov
U.S. Department of Labor Wage and Hour Division - Davis-Bacon and Related Acts

For the most current and detailed information, always refer to the U.S. Department of Labor website and consult with legal counsel familiar with federal and state labor laws as they apply in Texas.

What is prevailing wage?

The prevailing wage is a base pay rate established by State and Federal law to ensure that all construction workers engaged in public works projects are paid adequately for the craft they are working in. It is a combination of an hourly pay rate plus fringe benefits. Payment of the prevailing wage ensures that contractors will hire qualified workers and the City will therefore receive quality work.

Who is subject to receiving prevailing wages?

All construction personnel working on a publicly-funded project must receive prevailing wages.

What about apprentices?

State law requires that apprentices be employed on all public works projects. If no apprentices are available or the work is not in an apprenticeable craft, proper documentation must be submitted to indicate this. All apprentices must be in a State approved program and must be in an appropriate ratio to the hours worked by the of journeymen present. If the project has federal funding, apprentices must be in a federally approved program.

What are the consequences of not complying with prevailing wage requirements on public works projects in Texas?

Failure to comply with prevailing wage requirements on public works projects in Texas can lead to serious consequences, including a statutory penalty of $60 per worker for each calendar day that a worker is underpaid. Contractors and subcontractors may also face withholding of contract payments, termination of contracts, and disqualification from bidding on future public projects. In cases of willful violation, criminal penalties may apply, including fines up to $500, imprisonment for up to six months, or both. These penalties underscore the importance of adhering to wage laws outlined in the Texas Government Code Chapter 2258 to ensure fair compensation for workers and avoid legal and financial repercussions.