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December 10, 2025
What happens if a subcontractor misrepresents the employer-employee relationship on a Davis-Bacon Act (DBA) covered project (e.g., classifying workers as independent contractors instead of employees), the implications can be serious for both the prime contractor and the project owner, especially if the project involves federal funding or federally assisted funds. In my opinion, these actions raise significant compliance concerns under the Davis-Bacon Act and related regulations.
Key Issues and Analysis:
1. Responsibility for Compliance:
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Under the Davis-Bacon Act, all laborers and mechanics employed on federally funded or assisted construction projects must be paid prevailing wages as determined by the Secretary of Labor. This obligation applies to contractors and subcontractors [2],[5].
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The prime contractor is ultimately responsible for ensuring compliance with Davis-Bacon requirements, including the proper payment of prevailing wages and the submission of certified payroll records for all workers on the project, whether employed by the prime contractor or subcontractors [3].
2. Certified Payroll Records:
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Contractors and subcontractors are required to maintain and submit certified payroll records weekly, detailing the wages paid to each worker, hours worked, and other relevant information. These records must be accurate and reflect the actual employer-employee relationship [3].
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By directly paying the subcontractor's employees and reporting them as their own, the prime contractor may have created inaccurate certified payroll records, which could be considered a violation of Davis-Bacon regulations [3].
3. Improper Delegation of Responsibilities:
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The subcontractor's refusal to handle prevailing wage paperwork does not absolve them of their obligations under the Davis-Bacon Act. The subcontractor remains responsible for compliance with labor standards, and the prime contractor must ensure that all subcontractors meet these requirements [2],[3].
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The prime contractor's decision to bypass the subcontractor's responsibilities by directly paying their employees could be seen as an attempt to circumvent proper compliance procedures.
4. Potential Consequences:
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Noncompliance with Davis-Bacon requirements, including inaccurate payroll reporting or failure to pay prevailing wages, can result in penalties, withholding of payments, or debarment from future federal contracts [3].
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The Department of Labor has the authority to investigate and enforce compliance, and any discrepancies discovered during an audit could lead to significant liabilities for the prime contractor [3].
5. Steps to Address the Issue:
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Audit Preparation: The owner/entity should review all payroll records and ensure they accurately reflect the wages paid and the employer-employee relationship. Any discrepancies should be corrected before the audit.
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Consultation with the Department of Labor: If there are questions about compliance or the creditability of specific actions, the owner/entity should seek guidance from the Department of Labor as outlined in 29 C.F.R. § 5.33(c) [1].
Conclusion:
The described actions likely violate Davis-Bacon regulations because the subcontractor misrepresented the employer-employee relationship and failed to ensure proper compliance. The owner/entity and prime contractor should immediately correct any inaccuracies in payroll records, ensure that all workers are paid prevailing wages, and consult with the Department of Labor to address compliance concerns.
References
[1] Section 5.33 - Administrative expenses of a contractor or subcontractor, 29 C.F.R. 5.33
[2] Section 266.225 - Labor standards, 24 C.F.R. 266.225
[3] Section 5.5 - Contract provisions and related matters, 29 C.F.R. 5.5
[5] Section 18851 - Wage rate requirements, 42 U.S.C. 18851 
Related:
[4] Section 3141 - Definitions, 40 U.S.C. 3141
[6] Section 5.22 - Effect of the Davis-Bacon fringe benefits provisions, 29 C.F.R. 5.22
[7] Section 262 - Definitions, 29 U.S.C. 262
The implications can be serious for both the prime contractor and the project owner.
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Agency Discretion
Kirk Buffington
