Prevailing Wage and Davis-Bacon Compliance in Texas
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.
Legislative Evolution and Its Impact
The most significant change to the Texas prevailing wage law came with House Bill 2625 in 2007. Before that amendment, political subdivisions could not adopt federal Davis-Bacon wage determinations if the underlying wage survey was more than three years old. HB 2625 removed those restrictions, letting cities, counties, school districts, and other public bodies adopt Davis-Bacon rates without conducting their own surveys. Most Texas public bodies now use that pathway, which means contractors typically work from federal Davis-Bacon determinations on Texas state and local projects in addition to federally funded work.
Compliance for Contractors and Subcontractors
Contractors and subcontractors working on federally funded public works projects in Texas must:
Determine Applicable Wage Rates
Determine Applicable Wage Rates
Use the wage determination set by the public body in the bid documents for state and local projects, and the U.S. Department of Labor's Davis-Bacon wage determinations on SAM.gov for federal projects.
Submit Certified Payroll Reports
Submit Certified Payroll Reports
File weekly Form WH-347 with the contracting agency on federally funded projects. Many Texas local governments use the LCPTracker portal for federal-aid certified payroll, which TxDOT requires on federal-aid highway projects.
Handle Fringe Benefits
Handle Fringe Benefits
Provide bona fide fringe benefits or pay the equivalent value as additional cash on top of the basic wage.
Post Wage Rates On-Site
Post Wage Rates On-Site
Maintain Proper Documentation
Maintain Proper Documentation
Keep payroll, hours, classifications, and worker contact information (telephone and email must be produced on DOL request) for at least three years after project completion.
Penalties for Non-Compliance
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Criminal Penalties under § 2258.058 for willful violations, including fines up to $500, imprisonment up to six months, or both
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Disqualification from bidding on future public works contracts
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Withholding of contract payments to satisfy unpaid wages
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Civil Penalty of $60 per underpaid worker per calendar day, or part of the day, that the worker is paid less than the contract wage rate, payable to the state or political subdivision on whose behalf the contract was made
Unique Aspects of Texas's Public Works System
- Local Wage Determination by Public Body: Unlike many states that rely on a central state agency, Texas allows each public body, including cities, counties, and school districts, to set its own prevailing wage rates for public works projects. There is no standardized statewide rate schedule.
- No State Threshold: Texas prevailing wage rules apply regardless of contract value at the state level.
- Davis-Bacon Adoption Pathway: HB 2625 (2007) removed restrictions on adopting federal Davis-Bacon rates, and most Texas public bodies now use that pathway rather than conducting independent surveys.
- Statutory Penalty Amount: Texas Government Code § 2258.023 sets a flat $60 per underpaid worker per day civil penalty, more specific than the variable amounts used in many states.
Relevant Resources
Davis-Bacon Wage Determinations: Wage Determinations On SAM.gov
Updating the Davis-Bacon and Related Acts Regulations - DOL Final Rule
- Texas Government Code Chapter 2258 - Prevailing Wages Rates
- TxDOT - Prevailing Minimum Wage (Davis-Bacon Act)
- DOL Form WH-347
For the most accurate and current information on prevailing wage requirements, consult the U.S. Department of Labor or your state's official labor website.
Texas Prevailing Wage FAQs
What is prevailing wage?
Prevailing wage is the hourly pay rate plus fringe benefits required by state and federal law for construction workers on public works projects. In Texas, the rate is set by the public body awarding the contract under Government Code Chapter 2258, either through a local wage survey or by adopting federal Davis-Bacon rates. Paying the prevailing wage helps ensure that public works projects are staffed by qualified workers at compensation reflective of local labor market conditions.
Who is subject to receiving prevailing wages?
Every laborer, mechanic, or other construction worker performing work on a publicly funded project in Texas must receive at least the applicable prevailing wage. Coverage applies under Texas Government Code Chapter 2258 for state and local projects, and under the federal Davis-Bacon Act when contract value reaches $2,000 in federal funding.
What about apprentices?
Apprentices may be employed on Texas public works projects when an approved apprenticeship program applies. Apprentices must be in a state-approved program, or a federally approved program if the project receives federal funds, and must work in an appropriate ratio to the journey workers present. If no apprentices are available or the craft is not apprenticeable, contractors must document the exception. Texas's state prevailing wage law does not require apprentice utilization on every project.
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 Texas public works projects can lead to serious consequences. Texas Government Code § 2258.023 imposes a statutory civil penalty of $60 per worker for each calendar day that a worker is underpaid. Contractors and subcontractors may also face withholding of contract payments, contract termination, and disqualification from bidding on future public projects. Willful violations under § 2258.058 carry criminal penalties, including fines up to $500, imprisonment up to six months, or both. Federal Davis-Bacon enforcement layers on top when federal funds are involved, including back wages, withholding and cross-withholding, three-year federal debarment, CWHSSA liquidated damages, and prime liability for subcontractor wages under the 2023 final rule.