Davis-Bacon Update: Recordkeeping Requirements
We’ve been blogging about various aspects of the new Davis-Bacon rules that went into effect last month. Click here for our discussion of the final rule, here for comments on administrative costs, and here for information on the treatment of secondary sites. We turn now to changes in the recordkeeping requirements applicable to all prime contractors and subcontractors.
In the grand scheme of life, the changes to what records must be maintained are not particularly onerous. Essentially, the only records expressly called out that hadn’t been required before are the email addresses for all personnel who perform Davis-Bacon covered work. While there aren’t whole categories of new information to maintain, it’s worth mentioning what records must be created and retained during the life of a Davis-Bacon covered project.
Importantly, almost all Davis-Bacon records must be retained for a period of three years following the conclusion of work on the relevant prime contract. See, e.g., 29 C.F.R. § 5.5(a)(3)(i)(A). This 3-year obligation may be troublesome for subcontractors that perform discrete tasks for a short period of an otherwise lengthy project. Hence, subcontractors should ensure that they’re informed about the completion of the projects to ensure they don’t dispose of records prematurely.
Basic Records.
These records must contain:
the name; Social Security number; last known address, telephone number, and email address of each such worker; each worker's correct classification(s) of work actually performed; hourly rates of wages paid (including rates of contributions or costs anticipated for bona fide fringe benefits or cash equivalents thereof of the types described in 40 U.S.C. 3141(2)(B) of the Davis-Bacon Act); daily and weekly number of hours actually worked in total and on each covered contract; deductions made; and actual wages paid.
In addition, primes and subs are required to maintain records regarding their compliance with Davis-Bacon fringe benefits requirements. Specifically, they must maintain records of their fringe benefits plans or programs that:
show that the commitment to provide such benefits is enforceable, that the plan or program is financially responsible, and that the plan or program has been communicated in writing to the laborers or mechanics affected, and records which show the costs anticipated or the actual cost incurred in providing such benefits.
The last “basic records” relate to workers who are apprentices. If a contractor uses apprentices under “approved programs,” the contractor must “maintain written evidence of the registration of apprenticeship programs, the registration of the apprentices, and the ratios and wage rates prescribed in the applicable programs.” 29 C.F.R. § 5.5(a)(3)(i)(D).
Certified Payrolls and Certificates of Compliance
For every week in which Davis-Bacon covered work is performed, contractors and subcontractors must submit weekly certified payrolls and a statement of compliance to the relevant agency or such other entity that is responsible for receiving the records. 29 C.F.R. § 5.5(a)(3)(ii). Prime contractors are “responsible for the submission of all certified payrolls by all subcontractors.” 29 C.F.R. § 5.5(a)(3)(ii)(A). The information that is required essentially is the same as the payroll information that must be maintained under the basic requirements but with social security numbers and contact information excluded. Contractors may use DOL’s Optional Form WH-347 to ensure that all required information is gathered and submitted.
Contracting agencies or prime contractors “may permit or require contractors” to use electronic systems for the submission and maintenance of certified payroll records. The systems must require a legally valid electronic signature (not a scan of a signature) and allow access to the records for the full duration of the recordkeeping obligation (i.e., three years following the completion of the prime contract).
To my mind, contractors that perform an extensive number of Davis-Bacon contracts should use one of the commercially available electronic systems that are in widespread use.
Contracts, Subcontracts and Related Documents
All primes and subs must maintain a copy of their prime contract or subcontract (as the case may be) and other “related documents including, without limitation, bids, proposals, amendments, modifications, and extensions.” 29 C.F.R. § 5.5(a)(3)(iii). These records must be retained throughout the duration of the prime contract and for three years after all of the prime contract work is finished.
Sanctions for noncompliance
29 C.F.R. § 5.5(a)(3)(iv)(B) provides that, if a contractor fails to submit records or make them available for review by DOL or the applicable federal agency, they may face a suspension of payments, advances, or guarantees of funds. And if the request for records comes from the Wage and Hour Division (“WHD”), the contractor may also be precluded from using the records in an administrative proceeding. While a records request usually comes with a short fuse, DOL investigators can grant reasonable requests for additional time to gather records, particularly if the contractor is being otherwise responsive and cooperative.