Published date: 11/20/2025
Across the country, agencies at the federal, state, and local levels are placing renewed emphasis on labor standards enforcement. For contractors working on public works and infrastructure projects, this means heightened scrutiny around certified payroll accuracy, worker classifications, and prevailing wage requirements. While the core regulations haven’t changed overnight, the intensity and frequency of enforcement actions have.
This shift is being driven by a combination of factors: historic levels of federal infrastructure investment, updated regulatory frameworks, and growing public pressure to ensure fair labor practices. Below is a high-level look at the trends shaping the compliance landscape today, and what organizations can do to stay prepared.
Federal Focus: Updated Davis-Bacon Rules and More Oversight
The U.S. Department of Labor (DOL) enacted the most significant update to Davis-Bacon regulations in over four decades. Effective October 2023, these revisions refined how wage determinations are issued, reinstated the “30% rule” for setting wage rates, and expanded the DOL’s enforcement authority. The changes are designed to close loopholes and ensure workers on federally funded projects receive the wages and benefits they’re entitled to.
With billions of dollars flowing into infrastructure projects under the Infrastructure Investment and Jobs Act and other federal programs, agencies are conducting more frequent:
- Certified payroll reviews
- Worker interviews on active job sites
- Requests for documentation to verify classifications, hours worked, and fringe benefit calculations
For contractors, this means that even minor inconsistencies (such as misclassifications, missing fringe payments, or late submissions) are more likely to be flagged. The DOL has also signaled a willingness to refer egregious or repeat violations for criminal prosecution, a notable shift from past practices.
State-Level Trends: Stronger Penalties for Wage Violations
States are not waiting for federal action, they’re stepping up their own enforcement efforts. In recent years, several states have passed legislation that reclassifies wage theft as a criminal offense, with recent years marking a turning point in how these laws are being applied.
In states like California, New York, Connecticut, and Colorado, intentional wage underpayments or falsified payroll records can now result in felony charges. For example:
- In New York, a contractor was indicted for stealing $67,000 in wages from workers on a high-rise project. The case was prosecuted under a new law that treats unpaid wages as stolen property.
- In California, a framing company faced 31 felony counts for wage theft and insurance fraud, marking one of the state’s most aggressive enforcement actions to date.
These cases reflect a broader trend: construction is a top priority for enforcement due to its prevalence in publicly funded work and its history of wage disputes. Contractors operating across multiple states should be especially vigilant, as definitions, thresholds, and penalties vary widely.
Local Governments: Contract Eligibility and Transparency
Cities and counties are also advancing their own worker-protection efforts, often going beyond state and federal requirements.
For example:
- Saint Paul, MN enacted a wage theft ordinance effective January 1, 2025, giving the city authority to investigate and penalize violations independently of state agencies.
- San Antonio, TX proposed a policy to bar contractors with wage violations from receiving city contracts and to create a local wage theft offender database.
Additionally, jurisdictions like New York are rolling out public databases for certified payroll submissions, increasing transparency and enabling third-party oversight. These initiatives reflect a growing belief that local governments have a role to play in enforcing labor laws on the projects they fund.
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What Contractors Can Do Now
Even with enforcement increasing, contractors can take practical steps to strengthen their compliance and reduce the risk of issues down the line.
Address questions early
If a worker raises a concern or an issue is discovered internally, resolving it promptly can help prevent delays, investigations, or reputational damage.
Review payroll practices frequently
Conduct regular internal audits to catch inconsistencies before they appear in certified payroll reports or during agency reviews.
Use tools that support accurate reporting
Electronic certified payroll systems can help flag potential issues early, standardize entries across subcontractors, and maintain clean records.
Train staff and subcontractors
From project managers to payroll teams, everyone plays a role in compliance. Clear expectations and periodic training go a long way in preventing unintentional errors.
Keep organized records
Accurate, accessible documentation is critical. Storing wage determinations, apprenticeship certificates, and correspondence in one place can streamline responses to agency requests.
Final Thoughts
The elevated focus on labor standards isn’t likely to fade. As federal, state, and local agencies continue to emphasize fair pay and proper documentation, contractors who prioritize strong compliance practices will be better positioned for success. Clear processes, reliable tools, and regular training not only support compliance—they help build trust with agencies, workers, and project partners.
If you’re evaluating your current processes or looking for resources to support certified payroll and prevailing wage reporting, LCPtracker provides tools and educational content to help teams navigate an evolving regulatory landscape.
