Correcting failures to meet prevailing wage requirements is crucial to avoid penalties and ensure compliance with relevant laws, such as the Davis-Bacon and Related Acts (DBRA). Here are steps a contractor can take to correct such failures:
Steps to Correct Prevailing Wage Violations
- Identify the Violation: Recognize where the error occurred, whether it was due to incorrect wage rates, misclassification of workers, or lack of required documentation.
- Pay Back Wages: Calculate and pay the affected laborers the difference between what they were paid and the prevailing wage rates they should have received. Include interest at the federal short-term rate plus 6 percentage points, as applicable.
- Address Fringe Benefits: Ensure any missing fringe benefits are provided or compensated for according to prevailing wage requirements.
- Correct Documentation: Update payroll records and submit corrected certified payroll reports to the contracting agency. Ensure all required postings and notices are properly displayed at the jobsite.
- Notify Contractors/Subcontractors: If violations occurred due to subcontractor errors, notify them of the need to correct their practices. Amend subcontracts to ensure compliance and include provisions for indemnification in case of future violations.
- Cooperate with Investigations: If noticed by the Wage and Hour Division (WHD), cooperate fully with investigations and audits to demonstrate corrective actions taken.
- Prevent Future Violations: Implement internal controls to monitor and ensure compliance, such as regular audits of payroll practices and ensuring that all workers are correctly classified and paid prevailing wages.
- Penalty Payments (If Required): In certain situations, such as those under the Inflation Reduction Act, make penalty payments to the IRS for each laborer not paid at the prevailing wage rate.
- Training and Compliance Education: Ensure that staff and subcontractors are educated on prevailing wage laws to prevent future errors.
By following these steps, contractors can rectify prevailing wage violations, mitigate risks, and maintain compliance with federal and state labor laws.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-can-a-contractor-correct-a-failure-to-meet-prevailing-wage-requirements/
