Center for Labor Education & Research
University of Hawai‘i - West O‘ahu
91-1001 Farrington Highway, Kapolei, HI 96707
(808) 689-2760 - FAX (808) 689-2761
Click here for access to a helpful Glossary of Labor and Legal Terminology
Davis-Bacon Laws (Chapter 3
of 40 U.S.C. §276 and HRS 104)|
Davis-Bacon refers generally to laws which require contractors who bid for public works projects to pay their laborers the "prevailing wages." Originally a federal law, it was named after its sponsors, Rep. Robert L. Bacon (a Republican from New York), and Sen. James J. Davis (a Republican from Pennsylvania and former Secretary of Labor). It was first signed into law in 1931 by President Herbert Hoover.
In 1955 Hawai'i enacted its own "little Davis-Bacon" (HRS 104) extending coverage of the act to state and county construction projects as well. Its purpose then, as now, was to prevent unscrupulous contractors from unfairly underbidding public projects, thereby doing violence to the wages prevailing in a geographical area. Such contractors usually employed unskilled, underpaid and imported (often non-union) labor. As the state's Report of the Senate's Labor Committee declared,
This bill, like the Federal Davis-Bacon Act, has as its guiding principle that bids for construction of public works should be based on the relative skill and efficiency of the contractors concerned and not on a difference in wages paid. To state the principle another way, government money, coming from the taxes of all of us, should not be used to subsidize contractors who are depressing the wages of some of us. (SCRep 318)In Hawai'i it covers public construction projects costing more than $2000.00 and non-profit bidders on experimental and demonstration housing projects over $500,000. It requires that prevailing wage rates be paid. The prevailing wage is the basic hourly wage including the cost of fringe benefits commonly paid by employers in a local area. For example, in Hawai'i the Director of Labor surveys unions and contractors throughout the state to calculate how much carpenters, painters and other classes of laborers are being paid. Periodically a list of these determinations is published, and contractors are then required to base their bids on these wages for their workers.
The laws, then, actually protect whatever is the prevailing rate of wages, whether union or non-union. Any time the unions in an area end up with less than the minimum 30% of their jurisdiction organized, the law will work against them. The state law also requires contractors: (1) to submit weekly payrolls and records; (2) to maintain their own records for a period of at least three years; (3) and to give copies of the wage rates to each of their workers.
(for Service Contract & Davis-Bacon Contracts)
The state law is enforced by the Enforcement Division of the Department of Labor and Industrial Relations. A contractor found in second violation of the law can be levied a penalty of 10% of the contract amount, and for a third violation the contractor can be suspended from doing any work on any public work for a period of three years. Workers who question whether they are receiving the prevailing wages as set by law should contact the Enforcement Division of the Department of Labor and Industrial Relations for State and County projects or the Wage and Hour Division of the DOL.
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The Walsh-Healey Public Contracts Act (41 U.S.C. § 35-41)
Along the same lines as the Davis-Bacon Law, Walsh-Healey requires employers who have contracted with a government agency to manufacture or supply articles in any amount exceeding $10,000 to pay prevailing wages to the employees engaged in producing or finishing the contract articles. The law also requires the contractors to maintain sanitary and nonhazardous working conditions and submit complete payroll records. The government may sue contractors for liquidated damages or deduct amounts due from their contractual payments. Serious and willful violators of the act are subject to a "blacklist penalty" under which they are barred from receipt of federal contracts for a fixed period.
The Service Contracts Act of 1965 (41 U.S.C. §351 et seq.)
Also known as the McNamara-O'Hara Service Contracts Act, like Davis-Bacon and Walsh-Healey it is a prevailing wage law that applies to federally funded programs. This act requires employers with service contracts for government agencies valued at more than $2,500 to pay prevailing wages and fringe benefits to the employees engaged in those contracts. The government may sue contractors to recover unpaid wages or deduct amounts due from their contractual payments, and willful violators of the act are subject to a "blacklist penalty" under which they are barred from receipt of federal contracts for a fixed period.
(for Service Contract & Davis-Bacon Contracts)
Hawaii's version of the federal Service Contracts Act is HRS-103-55. This State law provides State and County governmental contracts to perform services in excess of $25,000 must certify that the services to be rendered shall be performed by employees paid at wages or salaries not less than the wages paid to public officers and employees for similar work, and that the contractors be in compliance with all applicable laws of the federal and state governments relating to workers' compensation, unemployment compensation, payment of wages, and safety.
This section is not enforced by the Department of labor, but by the contractng agency, which has the authority to cancel the contract or withhold final payment of a contract or release of bonds or both, unless noncompliance is corrected within a reasonable period as determined by the procurement officer.