Earlier this month a Louisiana contractor was sued by the United States Labor Department for not ensuring that subcontractors were properly paying their employees on a federally funded contract in New Orleans. In the article, it was noted that this contractor could be blocked from obtaining government contractors for three years as a result of seven subcontractors not paying prevailing wages of nearly $100,000.
How does this impact your Construction Company?
If you are a construction contractor that is awarded a federally funded construction contract you must ensure that your company, as well as your subcontractors, are in compliance with federally mandated labor laws. Construction contractors should become familiar with the Davis Bacon Act, and ensure that they are in compliance with this act.
As you can see, the government can have very harsh penalties for non-compliance with federal laws, specifically labor laws. If your construction company relies on being awarded federally funded contracts, or you are looking to start doing more government work it is imperative that you ensure wages are paid in accordance with what the prevailing wages are. If not, the consequences could be detrimental to the company.