As utilities seek to retire outdated fossil fuel assets and increase their investment in renewable energy assets, they depend on federal grant funding to help pay for those projects. Their eligibility for grants – as well as their ability to maintain funding for the long term – hinges on their compliance with complex operational and reporting requirements, including those of the Davis-Bacon and Related Acts (DBRA).
The primary purpose of the DBRA is to ensure that workers employed on government-funded construction projects receive fair wages and benefits in line with those prevailing in the local area. In addition to setting wage standards, the DBRA also requires contractors and subcontractors to maintain accurate payroll records and submit certified payroll reports to demonstrate compliance with the prevailing wage requirements. Failure to comply with the provisions of the act can result in penalties, contract termination, and debarment from future government contracts.
At Plexos Group, our grant management experts perform Gap analyses for clients looking to maximize federal grant funding from sources including the Infrastructure Investment and Jobs Act (IIJA). Here’s a breakdown of the top compliance issues they find, and the strategies they help clients implement to avoid them:
Issue: Incorrectly classifying workers in roles that do not accurately reflect the work performed, often resulting in incorrect wage payments.
Prevention: Carefully review the definitions of classifications provided by the Department of Labor and ensure each worker is classified according to the actual duties performed.
Issue: Not compensating laborers and mechanics at the required prevailing wage rate for all hours worked, including overtime.
Prevention: Implement a robust system to regularly update wage rates and monitor compliance with wage requirements. Ensure fringe benefits are also included as per regulations. Create a form that includes details such as the date of determination, sources consulted, wage rates identified, and rationale for selecting specific rates.
Issue: Not documenting all hours worked or failing to record hours worked in each classification accurately when an individual works in multiple classifications.
Prevention: Use detailed timesheets that require workers to log their hours by classification daily. Regular audits of timesheets and payroll records can also help maintain accuracy.
Issue: Not having accessible records of the apprenticeship program or the apprentices’ registration documents on-site or in company files.
Prevention: Keep organized and updated records readily available for all apprentices enrolled in bona fide apprenticeship programs, including their individual registration documents.
Issue: Not submitting payroll records that are certified as correct and complete, which is required on a weekly basis.
Prevention: Establish routine payroll procedures that include certification to ensure timely and accurate submission of payroll records each week. Implement a standardized form for contractors and subcontractors to use that can be easily reviewed during audits. (WH 347 is recommended)
Issue: Not displaying required information about workers' rights and wage rates prominently at the job site.
Prevention: Always post the most current Davis-Bacon poster and applicable wage determination in a conspicuous place accessible to all workers on the site.
Addressing these issues proactively through training, monitoring, and strict adherence to DBRA requirements can help utilities close compliance gaps, ensure accountability and responsibility of internal teams, and facilitate continuous operational improvement across an organization. Regular consultations with DBRA compliance experts can help your organization stay current with evolving labor standards and regulations and remove barriers to future funding opportunities.