Yes, there are penalties for not meeting prevailing wage requirements in various jurisdictions and under different laws.
Federal Penalties
- Inflation Reduction Act (IRA): Under the final regulations of the IRA, if a taxpayer fails to meet prevailing wage requirements, they must pay a penalty of $5,000 to the IRS for each laborer or mechanic underpaid in the year. Additionally, they must pay the affected workers the difference between what they were paid and the prevailing wage rate, plus interest at a specified rate.
- Intentional Disregard: If the failure is deemed intentional, the penalty increases to $10,000 per laborer or mechanic, and the correction payment is tripled.
State and Local Penalties
- New York: Contractors violating prevailing wage laws may face disbarment from future contracts for up to three years and interest penalties of up to 16% on underpayments.
Federal Contract Penalties
- Davis-Bacon and Related Acts (DBRA): Contractors found violating DBRA may face debarment for three years, withholding of contract payments to satisfy unpaid wages, and potential termination of contracts. Falsification of payrolls can lead to civil or criminal prosecution.
In summary, penalties vary by jurisdiction but typically involve monetary fines, potential debarment, and restitution to underpaid workers.
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