United States: Trucking Operations: A Taste of the Davis-Bacon Act

The Davis-Bacon Act (the Act) is a little-understood federal statute enacted to protect workers from receiving substandard wages on government projects. It requires payment of prevailing wages, as determined by the Secretary of Labor, to laborers and mechanics engaged in the construction, alteration, and/or repair of public buildings and public works belonging to the United States. The Act confers rights on laborers and mechanics. General contractors are responsible for paying prevailing wages to their employees, and also for ensuring that their covered subcontractors pay prevailing wage rates when Davis-Bacon applies.

The Davis-Bacon Act applies to contracts with the federal government that (1) involve the construction, alteration, or repair of public buildings or public works belonging to the federal government and located in the United States; (2) where mechanics or laborers perform the work; and (3) where the contract exceeds $2,000. A variety of employees may be "mechanics" or "laborers" for Davis-Bacon purposes, including traditional construction laborers, truck drivers, machinists, and mechanics. The common characteristic shared by employees covered by the Act is that they perform manual or physical labor whether or not their work is characterized as "trade" work. Executive, administrative, professional, and clerical employees are generally excluded from Davis-Bacon coverage, as are employees of materialmen and suppliers. But where a materialman performs some portion of the work subject to the government contract on behalf of the general contractor, he or she may be considered a subcontractor subject to the Act.

In order to be entitled to the prevailing wage, mechanics or laborers must be employed "on the site" of the federal construction project. Employers must closely scrutinize this "on the site" or "site of the work" requirement when determining whether Davis-Bacon applies to transportation on a federal construction project. This is important when considering whether truck drivers who load, transport, and unload materials associated with a federal construction project are entitled to Davis-Bacon wages.

In 2000 the Department of Labor (DOL) published final regulations at 65 Fed. Reg. 80268, which amend and clarify the regulatory requirements concerning the Davis-Bacon Act's "site of the work" language and its applicability to trucking operations associated with a federal construction project. Truck drivers employed by construction contractors and subcontractors must be paid Davis-Bacon wage rates for any time spent "on the site of the work" that is more than de minimis. For example, truck drivers who haul materials or supplies from one on-site location to another on-site location are "mechanics and laborers employed directly upon the site of the work" within the meaning of the Act and, therefore, are entitled to prevailing wages. Davis-Bacon does not apply to truck drivers who come onto the site of the work for only a few minutes at a time merely to drop off construction materials. Because the DOL has declined to specify what amount of time on-site constitutes more than de minimis, such a determination is a fact-specific inquiry judged on a case-by-case basis.

Truck drivers hauling materials or supplies from a facility dedicated to the federal construction project (such as a facility established almost exclusively to further performance of the Davis-Bacon Act-covered project) that is located "adjacent or virtually adjacent" to the site of the work are entitled to prevailing wages for all of their time spent performing such activities. Also, workers engaged in transporting a significant portion of the work between two covered sites are "employed directly upon the site of the work" and therefore, are entitled to prevailing wages provided they are "laborers and mechanics" under the Act. The DOL revised the federal regulations implementing the Act to include locations established specifically for the purpose of constructing a significant portion of a "public building or public work." These locations are independent work sites within the meaning of the Davis-Bacon Act, and employees performing construction work at these independent locations should receive prevailing wages, regardless of the distance between the location of their construction site and the final construction site.

Ordinary commercial production plants are not covered by the DOL's rule changes because they are not "established specifically for the performance of the contract or project." Similarly, ordinary material supply sites, even if dedicated to the project, would not involve the construction of a "significant portion" of the building or work being constructed pursuant to the government contract covered by Davis-Bacon. The Act reaches only those independent work sites where such a substantial amount of construction is taking place that it is fair and reasonable to view that location as another site where the public building or work is being constructed. In other words, workers who construct significant portions of a federal project at a location other than where the project will ultimately remain are entitled to receive prevailing wages.

Notably, the DOL did not define the various terms vital to its regulatory amendments, for example, "adjacent or virtually adjacent," "significant portion," and "de minimis." Whether a particular set of facts meets any one of these definitions must be determined on a case-by-case basis.

The Davis-Bacon Act applies to transportation activities on a covered work site in at least three instances:

• Truck drivers employed by construction contractors and subcontractors, materialmen, and bona fide owner-operators for any time spent on-site that is more than de minimis.
• Truck drivers and materialmen hauling materials or supplies from a dedicated site that is "adjacent or virtually adjacent" to the site of the work.
• Truckers and materialmen transporting a significant portion of the work between two covered sites regardless of the distance between the two locations. Although there are comments to the new federal regulation that suggest otherwise, these drivers are generally entitled to the prevailing rate for all their time spent performing their work, including transportation time between the two sites.

Because of the lack of guidance from the DOL regarding terms vital to determining the applicability of the Davis-Bacon Act to certain work being performed within a site of work, employers should consult with legal counsel for assistance in determining which employees are entitled to prevailing wages under the Act.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.