Published date: 05/14/2025
As federal infrastructure funding ramps up, large-scale public works projects spanning state lines—highways, rail expansions, utility corridors, broadband, and renewable energy installations—are becoming more common. For contractors, this growth brings opportunity but also more complexity, especially when navigating prevailing wage laws.
Why Multistate Projects Add Complexity
Multistate projects often combine federal and state funding, each with its own labor standards. The Davis-Bacon and Related Acts (DBRA) governs federally funded projects, while many states (e.g., California, New York, Illinois) have their own prevailing wage laws—sometimes with stricter requirements.
This means:
- Different wage determinations may apply to different project segments.
- Fringe benefit rules vary.
- For example, some states require specific allocations (like directing most fringe funds to health insurance), while others enforce policies wherein unused benefits must be paid out, and not retained by the employer.
- Certified payroll formats (e.g., federal WH-347 vs. California’s web-based CPR portal ) and submission deadlines don’t always align.
- The focus of audits can differ —federal agencies focus on DBRA compliance, while states may enforce additional rules.
Which Wage Rate Applies? Follow the Strictest Standard
When both federal and state prevailing wage laws apply, contractors must comply with the most stringent version of each requirement—not just the highest wage rate. This includes:
- Total compensation (wages + fringes).
- Overtime rules (e.g., California’s daily overtime after 8 hours).
- Apprenticeship/training fund mandates (required in some states).
Example:
A California project that is subject to both DBRA and DIR:
- Davis-Bacon Rate: $50.10/hour + $28.40 fringes
- CA DIR Rate (as of 7/1/24): $53.75/hour + $29.60 fringes
Result: Pay the higher CA DIR rate.
Data Consistency Across Jurisdictions
Ensuring data consistency across various jurisdictions is important for maintaining compliance and avoiding costly errors. Here are some strategies to avoid discrepancies:
- Standardize Classifications: Even if naming conventions differ, it’s essential to standardize classifications. For example, a DBRA “Laborer” might be referred to as a state “Construction Worker.” Creating a unified classification system, you can assist in tracking roles and properly compensated according to the correct standards.
- Track Hours by Location and Funding Source: To ensure the correct application of wage rates, it’s important to track hours worked by both location and funding source. This helps in applying the appropriate wage determinations and maintaining compliance with local, state, and federal regulations.
Manual tracking of these elements can lead to significant errors. However, cloud-based applications for tracking workforce data can offer several advantages:
- Pre-built Reporting Tools and Customizable Dashboards: These tools offer robust reporting capabilities, allowing users to generate detailed reports and customize dashboards to better illustrate specific data.
- Automate Wage Determinations: These applications can automatically enter and wage rates, reducing the risk of human error and ensuring that the correct rates are applied consistently.
- Flag Classification Mismatches: Through extensive validation checks, cloud-based systems can flag any mismatches in classifications.
Coordinating with Multiple Agencies
Multistate projects often involve coordination with various federal and state/local agencies, each with its own set of requirements:
- Federal Agencies: Projects may need to comply with regulations from agencies such as the United States Department of Labor (DOL) and the Department of Transportation (DOT).
- State/Local Entities: Compliance may also be required with state and local entities, such as the New York Department of Labor (NY DOL) and Caltrans.
Each of these agencies may have unique requirements, including:
- Certified Payrolls: While the WH-347 form is often accepted, it may need to be supplemented with additional information to meet specific agency requirements.
- eCompliance Portals: Different agencies require their own eCompliance portals for submitting certified payroll and labor compliance data.
- For example:
- California uses the California uses the DIR’s eCPR system
- New York requires data submissions through AASHTOWare Portal
- For example:
Contractors working across state lines must register for each system and follow unique submission rules—what works in one state may not apply in another.
Final Tips
- Map all laws early
- Identify federal, state, and local requirements at bidding. Note: Some states (e.g., Nevada) lack state prevailing laws; only DBRA applies.
- Get written clarification from agencies if rules conflict.
- Align classifications
- Use DBRA categories as a baseline, then adapt for state nuances.
- Invest in compliance tools
- Cloud-based compliance tracking software can be extremely helpful, but it’s even strong when paired it with expert consultant review.
- Train teams
- If possible, provide your team with the appropriate literature to better understand location-specific regulations.
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These materials are being issued with the understanding that LCPtracker is not engaged in rendering legal or other professional services and is providing these for informational purposes only. If legal, accounting, or tax expert assistance is required, the services of a competent legal, accounting or tax professional should be so
