The world of construction is always a buzz with new legislation, trends, and talking points in the industry. Keeping up with it can feel like a full-time job, which is why we’re here to roundup the biggest stories you might’ve missed in the last month.
Perhaps the most pertinent news in federal construction contracting is the new contractor minimum wage set to take effect on May 11th. This policy change stems from Executive Order 13658, which established baseline pay for federal contract workers with provisions for annual updates reflecting economic conditions.
The updated wage will have a direct impact on how contractors manage payroll, job costing, and compliance reporting. Construction contractors must also consider how the updated wage will interact with the Davis-Bacon act and its prevailing wage requirements.
The takeaway: Federal wage policies are always evolving, and it’s important to stay up to date to avoid compliance risks.
On April 20th, the Nevada Office of Labor Commissioner announced that the Department of Labor (DOL) accepted the state’s proposal to adopt new prevailing wage rates for federal Davis-Bacon projects. This comes after two years of collaborative work between the state and the federal government to align wage standards.
The new, unified prevailing wage rates are expected to simplify compliance and reduce administrative burden, particularly for contractors working on projects with mixed funding.
The takeaway: If you perform prevailing wage work in Nevada, your payroll reporting just got easier.
An investigation by the Department of Labor Wage and Hour Division (DOL WHD) recently found that a subcontractor in Washington, DC, violated the Davis-Bacon act by failing to pay workers the correct prevailing wage and misclassifying specialized workers as lower-skilled laborers.
The company was ordered to pay nearly $600,000 in back pay and fringe benefits, and it was officially barred from bidding on federal construction contracts for three years.
The takeaway: The costs of non-compliance are real, and this case highlights the importance of ensuring workers are paid correctly and receive the fringe benefits they’re entitled to.
A Newport Beach construction company found itself on the wrong side of the law after the DOL ordered them to pay nearly 470k in back pay and damages for 137 employees that were denied minimum wage and overtime pay. The DOL investigation revealed that the company repeatedly missed payroll, failed to pay workers minimum wage, did not pay required overtime, and retaliated against employees that raised the issue of missing pay.
The takeaway: Employers will always be held accountable for committing wage violations. If your construction payroll has become unmanageable, eBacon can help get you back on track.
A new report from the Washington DC-based Economic Policy Institute found that misclassifying employees in construction carries significant financial consequences that impact the entire industry. Whether it’s unpaid overtime, misapplied fringe benefits, or missed employer contributions, the costs of getting it wrong are high—approximately $20,000 annually for every misclassified employee.
Along with the impact on employees, worker misclassification is also an issue for project bidding. Less-than-upstanding firms may misclassify their workers on purpose to undercut their competitors with lower bids. This creates a “race to the bottom” where other firms may feel the need to break the law to stay competitive, at the expensive of worker safety and fair compensation.
The takeaway: Turning a blind eye to worker misclassification may seem tempting, but the risks aren’t worth it— disputes over classification lead to audits, large fines, and potential disbarment.
A new report found that the sun belt is in a major construction growth surge. Texas accounts for nearly $90 billion in annual commercial construction spending, more than double any other state. Not to be outdone, Arizona ranked #1 in per-capita commercial construction spending.
The surge is tied to large investments in clean energy, semiconductor production, and manufacturing projects. After a nationwide downturn during the COVID-19 pandemic, these sectors are enjoying a strong rebound. Total US commercial construction is expected to exceed $740 billion this year, one of the highest levels in over two decades.
The takeaway: Contractors working in high-growth states like Arizona and Texas should strike while the iron is hot—but not without ensuring that your certified payroll capabilities can keep up.
Whether you’re new to the world of government construction projects or you’re a seasoned pro, eBacon’s newsletter is your source for the latest news and updates you can’t afford to miss. From prevailing wage updates and upcoming legislation to expert tips to simplify compliance, there’s something for everyone—and the best part is, it’s free! Sign up today.
In addition to federal Davis-Bacon requirements, many states have so-called "Little Davis-Bacon" laws that affect wage determinations, overtime rules, and reporting requirements . The best approach for contractors working across multiple states is to monitor state labor department updates regularly and verify wage determinations before every project. A certified payroll software can also help automate the process and eliminate hours of legwork for payroll teams.
Worker misclassification happens when an employee is paid under the wrong prevailing wage classification for the work they actually perform.
Under Davis-Bacon, classifications are based on duties — not job titles. For example, a worker performing electrician duties can’t simply be paid as a laborer.
During a Department of Labor prevailing wage audit, investigators typically review certified payroll reports, worker classification records, fringe benefit documentation, overtime calculations, and more, depending on the case. The investigators will also conduct employee interviews. If violations are found, contractors may be required to pay back wages or fringe deficiencies to the affected employees. In more serious cases, contractors can face litigation or be debarred from future federal projects.
eBacon helps contractors simplify certified payroll reporting by automating prevailing wage compliance tasks, managing wage determinations, tracking fringe benefits, and generating certified payroll reports faster and more accurately. That means you'll spend less time buried in spreadsheets and more time in stress-free, audit-ready payroll world.