Prevailing Wage Act Qui Tam Cases
An actionable qui tam lawsuit may arise out of noncompliance with federal law (Davis-Bacon Act and Service Contract Act) and state law.
The purpose of prevailing wage laws is to prevent contractors and subcontractors from landing profitable government projects, by bidding lower than their competitors at the expense of their employees. Under the federal prevailing wage laws, contractors and subcontractors must pay local prevailing wages to their employees who work under federal government contracts of certain dollar amounts. There are two applicable federal statutes:
(1) Davis-Bacon Act (40 U.S.C. § 3141 et seq.) – “construction”
- The Davis-Bacon and Related Acts, apply to contractors and subcontractors performing on federally funded or assisted contracts in excess of $2,000 for the construction, alteration, or repair (including painting and decorating) of public buildings or public works. 40 U.S.C. § 3142(a). Davis-Bacon Act and Related Act contractors and subcontractors must pay their laborers and mechanics employed under the contract no less than the locally prevailing wages and fringe benefits for corresponding work on similar projects in the area. 40 U.S.C. § 3142(b). The Davis-Bacon Act directs the Department of Labor to determine such locally prevailing wage rates. 40 U.S.C. § 3142(b). The Davis-Bacon Act applies to contractors and subcontractors performing work on federal or District of Columbia contracts. 40 U.S.C. § 3142(a). The Davis-Bacon Act prevailing wage provisions apply to the “Related Acts,” under which federal agencies assist construction projects through grants, loans, loan guarantees, and insurance. See 29 CFR § 5.
(2) Service Contract Act (41 U.S.C. § 351 et seq.) – “services”
- The McNamara-O’Hara Service Contract Act requires contractors and subcontractors performing services on prime contracts in excess of $2,500 to pay service employees in various classes no less than the wage rates and fringe benefits found prevailing in the locality, or the rates (including prospective increases) contained in a predecessor contractor’s collective bargaining agreement. 41 U.S.C. § 351(a). The Department of Labor issues wage determinations on a contract-by-contract basis in response to specific requests from contracting agencies and these determinations are incorporated into the contract. 41 U.S.C. § 351(a).
- For contracts equal to or less than $2,500, contractors are required to pay the federal minimum wage as provided in Section 6(a)(1) of the Fair Labor Standards Act. 41 U.S.C. § 351(b)(1).
Most States have Prevailing Wage Act claims.
For more information and case citations, please see Androphy “Federal False Claims Act and Qui Tam Litigation,” published by Law Journal Press (2010).
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You should be aware that qui tam claims are subject to a Statute of Limitations. The area of limitations periods is complex. There are also first to file rules, public disclosure bars, original source issues, and varying limitations in pursuing retaliation claims. If you wish to pursue your claims, you should promptly seek the opinion of an attorney regarding the merits of your qui tam claim and the applicable statute of limitations.