Prevailing Wage and Davis-Bacon Compliance in Virginia
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Virginia's Public Works Regulations
Virginia has a dual system of prevailing wage laws:
- State Law: Under Virginia's prevailing wage rules, all mechanics, laborers, and workers are covered on state public works projects financed entirely or partially with public funds and cost over $250,000. These requirements also extend to local governments that have enacted ordinances applying the prevailing wage law to their own public works projects.
- Federal Law: The Davis-Bacon Act (DBA) applies to Virginia's federally funded or assisted construction projects.
Key point: The Virginia Prevailing Wage Law recently became effective May 1, 2021.
Definition of "Public Works" in Virginia
According to the official webpage of the Virginia Department of Labor and Industry, "Public works means the operation, erection, construction, alteration, improvement, maintenance, or repair of any public facility or immovable property owned, used, or leased by a state agency or locality."
Prevailing Wage Determinations: Federal and State Requirements
Federal Davis-Bacon Act
- This applies to federally funded or assisted projects
- U.S. Department of Labor sets wage rates
- Includes basic hourly wage and fringe benefits
Virginia's Prevailing Wage Law
- The Virginia Department of Labor and Industry does not generate custom wage determinations for individual projects.
- All undertakings subject to Virginia's Prevailing Wage Act rely on a single, standard wage determination.
- The Virginia Department of Labor incorporates additional job classifications into this general determination when needed.
Components of Wage Determinations
Both federal and state wage determinations in Virginia 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.
Contractors can satisfy fringe benefit requirements by providing benefits or paying the equivalent amount in cash on top of the basic wage.
Compliance for Contractors and Subcontractors
Contractors and subcontractors working on public works projects in Virginia must:
- Determine Applicable Wage Rates:
- For federal projects: Use the U.S. Department of Labor's Wage Determinations Online (WDOL) portal via SAM.gov
- For state projects, Refer to the Virginia Department of Labor and Industry.
- Submit Certified Payroll Reports:
- For federal projects: Use U.S. Department of Labor's Form WH-347
- For state projects: Submit to the Virginia Department of Labor and Industry
- Handle Fringe Benefits:
- Ensure every worker (including subcontractors' employees) in each job classification is paid at least the prevailing wage plus any required fringe benefits.
- Post Wage Rates On-Site:
- Display the prevailing wage determinations in a conspicuous place on the job site
- Maintain Accurate Records:
- Keep thorough records (hours, wages, classifications, and benefits) for the duration specified by the governing law or contract (commonly three years).
Penalties for Non-Compliance
Failure to comply with prevailing wage laws in Virginia can result in:
- Back Pay: Contractors must pay any shortfall to affected workers.
- Civil Penalties: Fines or other enforcement actions levied by the locality, DOLI, or the U.S. Department of Labor.
- Debarment: Repeated or egregious violations can result in being barred from future public contracts.
- Criminal Penalties: More severe penalties may apply in cases involving fraud or intentional falsification of payroll records.
Unique Aspects of Virginia's Prevailing Wage System
- Dual System: Virginia maintains its own prevailing wage law alongside federal Davis-Bacon requirements
- Newly Enacted Legislation: Virginia's prevailing wage framework took effect in 2021, marking a recent shift in state policy.
- Reliance on General Wage Determinations: Projects subject to Virginia's Prevailing Wage Act use one overarching or "general" wage determination. If the need arises, specific job classifications may be added to this general determination, eliminating the need for project-specific determinations.
Relevant Resources
- U.S. Department of Labor Wage Determinations Online (WDOL): SAM.gov - Wage Determinations
- U.S. Department of Labor Certified Payroll Form: Form WH-347
- Virginia Department of Labor and Industry: Prevailing Wage Law
For the most current and detailed information, always refer to the Virginia Department of Labor website and consult with legal counsel familiar with Virginia labor laws and federal Davis-Bacon requirements.
Virginia Prevailing Wage FAQs
Q Who does Virginia's Prevailing Wage Law apply to?
Virginia's Prevailing Wage law applies to public works contracts of $250,000 or more financed wholly or partially by state funds if the contracting public body is a state entity with any state funding or a locality that has adopted a prevailing wage ordinance for its projects.
Q What are Virginia’s “General Wage Determinations”?
They are the standard, statewide wage rates published by the Virginia Department of Labor and Industry (DOLI). Instead of issuing customized rates for each project, DOLI maintains a single set of prevailing wage rates that cover common job classifications.
Q What if a job classification isn’t listed in the general wage determinations?
When a required trade or occupation is not included, DOLI can add a new classification to the general wage determination. Contractors should contact DOLI to request a new classification and associated rate.
Q How are fringe benefits handled under prevailing wage laws in Virginia?
Under Virginia's prevailing wage framework, fringe benefits generally follow the same model used by federal Davis-Bacon regulations. Contractors can either provide benefit plans (e.g., health insurance, retirement contributions) to meet or exceed the required fringe benefit amount or pay that amount in cash on top of the worker's basic hourly wage.