There are significant penalties for any employer who does not comply with the Davis Bacon Act. Generally, but with some exceptions, persons employed or working on federal construction contracts are covered by the Davis–Bacon Act, a federal law which established the requirement for paying prevailing wages on public works projects. All federal government construction contracts, and most contracts for federally assisted construction over $2,000, must include provisions for paying workers on-site no less than the locally prevailing wages and benefits paid on similar projects. Contractors or subcontractors found to have disregarded their obligations to employees, or to have committed aggravated or willful violations while performing work on Davis-Bacon covered projects, may be subject to contract termination and debarment from future contracts for up to three years. In addition, contract payments may be withheld in sufficient amounts to satisfy liabilities for unpaid wages and liquidated damages that result from overtime violations of the Contract Work Hours and Safety Standards Act (CWHSSA). Falsification of certified payroll records or the required kickback of wages may subject a contractor or subcontractor to civil or criminal prosecution, the penalty for which may be fines and/or imprisonment. This week, the Sixth Circuit Court of Appeals, in U.S. ex rel. Wall v. Circle C Construction, LLC ruled that a an employee of federal construction contractor who was not paid proper the prevailing rate could maintain a separate action under the federal False Claims Act. The false claims allegation stemmed from Circle C’s agreement with the Army to construct buildings on Fort Campbell, a military base. The district court found that Circle C submitted inaccurate or false payroll certifications that did not properly describe work done by its subcontractors, and that its certifications also contained hourly wages for subcontractor employees that did not meet federal guidelines for prevailing wages under the Davis-Bacon Act. The trial court awarded the employee more than $1.6 million. The Court of Appeals sent the case back to the trial court to recalculate the damage award.
