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The Davis-Bacon Act and the prevailing wage provisions of the related statutes gave the Secretary of Labor the authority to predetermine, as minimum wages, those wage rates found to be prevailing for corresponding classes of laborers and mechanics employed on projects of a character similar to the contract work in the area in which the work is to be performed. These additional wages are called “fringe benefits.”
Scope
Fringe benefits apply to all employees, including contractors and business partners.
Regulatory citations
- None
Key definitions
- None
Summary of requirements
The 1964 amendments to the Davis-Bacon Act require, among other things, that the prevailing wage determined for Federal and federally-assisted construction include:
- The basic hourly rate of pay; and
- The amount contributed by the contractor or subcontractor for certain fringe benefits (or the cost to them of such benefits).
The Act lists all types of fringe benefits that the Congress considered to be common in the construction industry as a whole. These include the following:
- Medical or hospital care;
- Pensions on retirement or death;
- Compensation for injuries or illness resulting from occupational activity, or insurance to provide any of the foregoing;
- Unemployment benefits;
- Life insurance, disability and sickness insurance, or accident insurance;
- Vacation and holiday pay;
- Defrayment of costs of apprenticeship or other similar programs; or
- Other bona fide fringe benefits.
The term “other bona fide fringe benefits” is the so-called “open end” provision. This was included so that new fringe benefits may be recognized by the Secretary of Labor as they become prevailing. It was pointed out that a particular fringe benefit need not be recognized beyond a particular area in order for the Secretary to find that it is prevailing in that area.