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Payroll Tip – Davis Bacon Wages & Holiday Pay

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complex payroll davis bacon wagesPayroll which involves the payment of Davis Bacon or prevailing wage can be quite complex, especially for non-union or open shop contractors, who work on both private and prevailing wage jobs.

When a contractor works on both prevailing wage and non-prevailing or private jobs there is often times two different sets of hourly wage rates that an employee might be paid; one for when he works on a Davis Bacon project and another, usually lower rate, for when the company works on a non-prevailing wage job.

One specific and complex issues involves the question of whether or not the contractor is required to pay his/her employees the Davis Bacon wage scale rate for the holidays that they are eligible for OR if they can pay them their normal non-scale rate that they are paid on private or non-prevailing wage jobs.

Unfortunately, this is one of those “gray areas” that many contractors and their payroll clerks run into.

Davis Bacon rules clearly state that an employee must be paid the appropriate prevailing wage rate PLUS applicable hourly fringe benefit rate, based on the type of work he or she is preforming, for each hour that they spend on the job site.

In some cases, it is a safe assumption then, that the employee can be paid his normal non-prevailing rate of pay for any paid holidays. 

However, I have sometimes seen in the Labor Standard clause (a section of the actual contract that spells out the contractors responsibilities regarding payment of prevailing wages) a section that specifically states that employees must be paid the higher wage rate for specific holidays.

The bottom line about Davis Bacon Wages & Holiday Pay:

  • Read the Labor Standards clause of the contract carefully when you receive the bid package AND again when you receive the final contract.
  • Make sure that you give the person responsible for processing payroll a copy of the Labor Standards clause AND the prevailing wage determination, so they will pay the employees appropriately.

If in doubt about your liability to pay prevailing wage PLUS applicable fringe benefits for Holidays, follow the appropriate protocol; and send a letter to whoever awarded you the contract – be it the General Contractor or the Contract Administrator.  Always leave a paper trail.

If you’ve found this article to be helpful, please consider taking a moment of your time to leave a comment.

About Your Host:

Nancy Smyth, Certified QuickBooks ProAdvisor

Nancy Smyth, Sunburst Software Solutions, Inc.
QuickBooks Construction & Payroll Expert

I've been using and supporting QuickBooks products since the early 1990's. I've worked with thousands of contractors, assisting them with QuickBooks setup, Certified Payroll Reporting requirements, AIA Billing and Weighted-Average Overtime.

QuickBooks is a powerful product, but learning how to use it in your construction business can be difficult. I hope you find resources available here to be helpful.

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