Kentucky’s prevailing wage law was repealed in 2017, which means construction projects paid for entirely with state or local tax dollars no longer carry a mandatory pay scale. Federal prevailing wage rules under the Davis-Bacon Act still apply in Kentucky whenever a project involves a federal contract over $2,000 or federal grant and loan money flowing through a covered program. The funding source decides the question, not where the job site sits.
What the 2017 Repeal Changed
Kentucky once required prevailing wages on state-funded construction under KRS 337.505 through 337.550, with a Prevailing Wage Review Board overseeing compliance. House Bill 3, passed by the General Assembly in 2017, repealed those statutes and also barred local governments from setting their own prevailing wage requirements on employers.1Kentucky Legislative Research Commission. House Bill 3
So on a project funded only by state appropriations or a city or county budget, no law dictates a particular wage floor above the ordinary minimum wage. Market rates set the pay. The only Kentucky construction work that still carries prevailing wage obligations is work with a federal funding connection.
When Federal Prevailing Wages Still Apply
The Davis-Bacon Act requires contractors to pay locally prevailing wages on every federal construction contract over $2,000 for work on public buildings or public works. The Secretary of Labor sets those rates based on what workers in similar trades earn for comparable work in the same part of the state.2Office of the Law Revision Counsel. 40 USC 3142 – Rate of Wages for Laborers and Mechanics
A separate group of statutes known as the Related Acts extends those requirements to projects that receive federal grants, loans, or other financial assistance. In Kentucky, the common triggers are Federal Highway Administration money for road and bridge work, HUD grants for housing and community development, and federal infrastructure dollars passed through state agencies. If federal money of a covered type touches any part of the project’s financing, the whole project typically falls under prevailing wage rules.
In practice, that pulls in highway resurfacing, federally assisted affordable housing, water and sewer upgrades funded through federal grants, and airport construction receiving FAA money. Ask about the funding, not how the project looks.
Finding the Right Wage Rate for a Kentucky Project
Every Davis-Bacon project carries a wage determination that lists the required pay for each trade. Determinations are published through the wage determinations portal on SAM.gov, the federal System for Award Management.3System for Award Management. Wage Determinations Start by selecting the Kentucky county where the work will take place. Rates vary noticeably between urban and rural counties because the underlying labor market data differs.
You also have to pick one of four construction categories, and the choice matters because the rates are not interchangeable:
- Building covers sheltered structures with walk-in access designed to house people, equipment, or supplies, along with related site work and utilities.
- Residential covers single-family homes, townhouses, and apartment buildings of four stories or fewer, with incidental site work and utilities.
- Highway covers roads, streets, runways, parking lots, and similar paving work that isn’t incidental to another project type.
- Heavy is the catch-all for what doesn’t fit the other three: dams, bridges, flood control, water and sewer lines, and dredging.
Each determination lists job classifications (carpenter, electrician, laborer, operating engineer, and so on) with an hourly base rate and a separate fringe benefit amount for each. The task the worker actually performs on-site has to match the classification description. If a contractor assigns electrician’s work to someone paid as a general laborer, the contractor owes the difference, and an investigator will catch the mismatch.
How the Fringe Benefit Portion Works
The required pay on a wage determination comes in two pieces: a base hourly rate and a fringe benefit rate. A contractor can satisfy the fringe portion through actual benefit plans, a cash payment to the worker, or a mix of the two.4U.S. Department of Labor. The Davis-Bacon and Related Acts – Compliance with Fringe Benefit Requirements
To count toward the fringe requirement, a plan must be legally enforceable and meet applicable ERISA, IRS, or state insurance standards. Health insurance, pension contributions, life insurance, and disability coverage are the usual qualifying benefits. For funded plans, the contractor makes irrevocable contributions to a trust or third-party insurer at least quarterly and cannot pull those funds back. Unfunded plans like vacation or sick leave paid from general assets have to be in writing, represent an enforceable commitment, and receive prior Department of Labor approval before the contractor can take credit for them.
The arithmetic is simple: divide the annual cost of a benefit by the worker’s total annual hours to get the hourly credit. If that credit comes in below the fringe rate on the determination, the contractor pays the difference as cash wages. Miscounting benefits that don’t qualify, or inflating their hourly value, is one of the more common compliance failures.
Overtime on Covered Federal Contracts
The Contract Work Hours and Safety Standards Act requires at least one and a half times the base hourly rate for every hour worked beyond 40 in a workweek on covered federal contracts. It applies to Davis-Bacon contracts over $100,000, or $150,000 for contracts subject to the Federal Acquisition Regulation.5U.S. Department of Labor. Overtime Pay on Government Contracts
Overtime is calculated on the straight-time rate from the wage determination only. The fringe amount is excluded from the overtime base. Contractors who shortchange overtime face liquidated damages of $10 per worker for each calendar day the violation occurred, on top of the back wages owed.6Office of the Law Revision Counsel. 40 USC 3702 – Overtime Requirement
Apprentice Rates and the Ratio Trap
Apprentices enrolled in a federally registered or state-approved apprenticeship program can be paid less than the full journeyworker rate. The reduced rate has to match what the apprenticeship program specifies for the worker’s current level.7U.S. Department of Labor. Davis-Bacon Compliance Principles
Here’s where contractors get burned. The ratio of apprentices to journeyworkers on-site cannot exceed the ratio allowed by the registered program, and compliance is measured daily, not weekly. If too many apprentices show up on a given day, every apprentice beyond the allowed ratio must be paid the full prevailing wage rate for that classification. Workers who aren’t enrolled in a registered program cannot be paid apprentice rates at all, no matter their skill or job title.
Certified Payroll and Record-Keeping
Contractors on Davis-Bacon projects must submit certified payroll records every week to the contracting agency.8U.S. Department of Labor. Instructions For Completing Davis-Bacon and Related Acts Weekly Certified Payroll Form, WH-347 The specific WH-347 form is optional, but the weekly reporting itself is not. The Copeland Act and the DOL regulations at 29 CFR 5.5(a)(3)(ii) make it a binding contract requirement, and a missed submission can result in the agency withholding progress payments until the records come in.
Each weekly payroll has to include the worker’s name, job classification, hours worked each day, hourly rate, fringe benefit payments, and gross and net pay. A signed Statement of Compliance has to accompany the report, certifying that the information is accurate and that every worker received at least the required prevailing wage. The person signing that statement faces potential criminal penalties under 18 U.S.C. § 1001 for willful falsification: a fine, up to five years in prison, or both.9Office of the Law Revision Counsel. 18 USC 1001 – Statements or Entries Generally
Payroll records and basic employment documentation have to be kept for at least three years after the project is completed.10eCFR. 29 CFR 5.5 – Contract Provisions and Related Matters Agency officials audit these records and interview workers on-site to confirm that reported hours, classifications, and pay reflect what actually happened.
Penalties for Violations
Davis-Bacon enforcement has real consequences, and they escalate with the severity and intent of the violation.
- Wage withholding. The contracting agency can withhold enough from the contractor’s payments to cover back wages owed to underpaid workers, and the Secretary of Labor then pays those workers directly from the withheld funds.11Office of the Law Revision Counsel. 40 USC 3144 – Authority of Comptroller General
- Contract termination. A federal agency can terminate the contract for cause when a contractor refuses to comply.
- Debarment. Contractors found to have disregarded their obligations to workers can be barred from bidding on any federal contract for three years.
- Criminal prosecution. Falsifying certified payroll records is a federal crime under 18 U.S.C. § 1001, carrying fines and up to five years’ imprisonment.
When withheld contract funds don’t cover what workers are owed, those workers can sue the contractor and the contractor’s sureties directly, and the contractor cannot defend by arguing the workers accepted lower pay voluntarily.
Filing a Complaint as a Worker
Workers on Kentucky projects who believe they’re being underpaid can file a complaint with the U.S. Department of Labor’s Wage and Hour Division by calling 1-866-487-9243 or submitting an inquiry online.12U.S. Department of Labor. How to File a Complaint The agency keeps complainant identities confidential. Pay stubs, your own records of hours worked, and details about the project and employer all strengthen the investigation.
Investigators compare that evidence against the contractor’s certified payroll and the applicable wage determination. If violations are confirmed, the agency directs the contractor to pay back wages. If the contractor can’t or won’t, the government pays workers from withheld contract funds.
Time matters. Back wage recovery generally follows a two-year statute of limitations, extended to three years for willful violations.13U.S. Department of Labor. Back Pay Waiting too long can mean forfeiting wages you’re owed.
Protection Against Retaliation
Employers cannot retaliate against workers for filing a complaint, cooperating with an investigation, asking about pay rights, or refusing to return back wages to the contractor. Protected activity also covers telling coworkers about their rights and having a third party file on your behalf.14U.S. Department of Labor. The Davis-Bacon and Related Acts If retaliation is found, the Wage and Hour Division will direct the contractor to provide relief to the affected worker, and the retaliation can itself be grounds for debarment from future federal contracts.