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. 

What Are Prevailing Wage Laws?

Prevailing wage laws require certain government contractors and subcontractors to pay workers at least the locally prevailing wage and fringe benefits set for their job classification and location. On covered projects, this prevailing wage essentially acts as a minimum pay rate for specific trades or service positions. 

These laws exist to:

• Prevent contractors from winning bids by underpaying workers
• Promote fair competition among responsible contractors
• Protect workers on publicly funded projects

Prevailing wage violations often overlap with False Claims Act liability when contractors certify that they are in compliance but secretly pay less than required.

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. 

Common Signs of Prevailing Wage Fraud

Potential red flags on a covered federal, state, or local project include:

• Workers paid significantly less than the posted or expected “prevailing wage”
• Two sets of payroll records – one internal and one “cleaned up” for the government
• Workers told to kick back part of their paycheck or overtime
• Skilled tradespeople (e.g., electricians, plumbers, operators) being recorded as “laborers” on certified payroll
• No fringe benefits being provided when the wage determination clearly requires them
• Foremen instructing workers not to record all hours worked on the job site

If you have witnessed any of these practices on a public project, it may be worth speaking with an attorney experienced in Prevailing Wage Act qui tam and other FCA cases.

Notice

This website is designed to provide general information only. This information is not and should not be construed to be legal advice. The transmission of the information found on this website also does not result in the formation of a lawyer-client relationship.

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.