Published date: 03/24/2021
If you’re a superintendent for a large prime contractor working on Davis-Bacon / prevailing wage projects, you know the stresses of managing a project from top to bottom – especially when you receive notice that your project is going to be the target of a US Department of Labor (USDOL) investigation. This means investigators digging through your prevailing wage certified payroll records (CPRs), daily logs, paycheck stubs, and other prevailing wage compliance documentation.
When a Project Takes a Turn for the Worse
When either daily logs or certified payrolls are errantly completed, it can cause very real consequences for the prime contractor. Picture this: You are the prime on a $700 million project and in charge of over seventy subcontractors. These subs are sending you separate certified payrolls and daily logs for well over five hundred workers, and they’re all using different delivery methods. Some choose to drop by the office to hand them in, or some email them. Others opt for good, old-fashioned postal mail as their preferred method of submission.
One day, you get hit with a notice from the USDOL of an impending investigation. You’re not told what triggered it (which is typically the case), but as with most investigations, it probably stemmed from an employee complaint.
As the investigation unfolds, you are told that some of the hours submitted on certified payrolls did not match those entered on daily logs. There are also instances of worker information not matching. And to top it off, workers appear on daily logs that are not accounted for on the corresponding CPRs and vice versa.
The investigators uncover hundreds of mistakes, many of them resulting in the underpayment of workers. And it turns out these missteps were committed by one of your subs. Consequently, the sub files for bankruptcy, and the now the auditors are saying that you, the prime contractor, are liable to cover these. And per the Davis-Bacon Act (or the Davis-Bacon Related Act), unfortunately, you can’t wiggle your way out of it. This is the law.
How to Avoid a Labor Compliance Nightmare
You may be thinking, this is just an overly dramatized version of what actually happens. But sorry to break it to you – a nightmare like this is entirely possible.
So, if that’s the case, then what exactly can you do to avoid a situation like this? Two major things come to mind:
- Have an efficient way of monitoring the compliance of subs: Most primes have transitioned to electronic systems that make it easier to collect, manage, and review certified payrolls. Some systems even have validation checks to make sure the data submitted is accurate and complete. And the best part – you as the prime can accept or reject the submission from within the system.
- Do not overlook the importance of daily logs: One of the missteps committed by primes is not reviewing daily logs and comparing them against certified payrolls – just like what we saw in the example above. In light of this, many primes are adopting solutions that allow construction site personnel to log and submit daily logs via a mobile app. Furthermore, when this data is captured electronically on an app that integrates with their labor compliance system, they can leverage technology to automatically cross check the hours and craft classifications between the dailies and CPRs to ensure everything matches up.
The Bottom Line
So bottom line: You will need a comprehensive and integrated system with checks and balances that helps ensure that you and your subs are both on track and in compliance.
LCPtracker offers a labor compliance management system for primes with an add-on module for the electronic submission and management of daily logs. For more information, please visit https://lcptracker.com/solutions/daily-reporter.