DOL Back Wage Orders: 2026 Guide for Contractors

What is a Back Wage Order

A back wage order is a Department of Labor enforcement action requiring an employer to pay wages owed to workers. The Wage and Hour Division (WHD) issues these orders after investigations find violations of federal wage laws, primarily the Fair Labor Standards Act (FLSA) and the Davis-Bacon Act.

Back wage orders are public record. The DOL publishes enforcement data at enforcedata.dol.gov, including the employer name, violation type, back wages recovered, number of workers affected, and civil money penalties assessed.

Why Back Wage Orders Matter for GCs

When evaluating subcontractors, back wage orders reveal critical information:

• Pattern of non-compliance: Multiple violations suggest systemic issues with payroll practices
• Financial stability risk: Large back wage liabilities can strain a contractor's finances mid-project
• Prime contractor liability: On federal projects, GCs can be held financially responsible for subcontractor Davis-Bacon violations
• Debarment risk: Willful violators face up to 3-year exclusion from federal contracts

FLSA Violations

The Fair Labor Standards Act (29 U.S.C. 201 et seq.) establishes federal minimum wage, overtime pay, recordkeeping, and child labor standards. Common FLSA violations in construction include:

Overtime Violations

The FLSA requires employers to pay non-exempt employees time-and-a-half (1.5x) their regular rate for all hours worked over 40 in a workweek. Violations occur when employers:

• Pay straight time for all hours regardless of total worked
• Calculate overtime incorrectly for piece-rate workers
• Cap overtime hours while expecting additional work
• Use improper rounding methods that reduce recorded hours
• Fail to include bonuses or incentive pay in the regular rate calculation
• Issue "bonus" checks at regular rates instead of proper overtime

Misclassification

Employers sometimes misclassify workers as independent contractors to avoid FLSA obligations. The DOL identifies this as "one of the most common problems" in the construction industry. Frequently misclassified roles include:

• Framers, drywallers, and other trade crews
• Laborers and helpers
• Piece-rate workers

Recordkeeping Violations

Under 29 CFR 516, employers must maintain accurate records of hours worked, wages paid, and other employment conditions. Common recordkeeping failures include:

• Not tracking pre-shift and post-shift work time
• Failing to record travel time between job sites
• Not capturing weekend or after-hours work
• Falsifying time records

Falsifying time records or failing to keep required records can result in both back wage orders and civil penalties.

Davis-Bacon Violations

The Davis-Bacon Act (40 U.S.C. 3141-3148) requires contractors on federal construction contracts over $2,000 to pay workers no less than the locally prevailing wages and fringe benefits. The "prevailing wage" is determined by the DOL for each classification of worker in each geographic area.

Common Davis-Bacon Violations

• Misclassification of work: Paying workers at a lower classification rate than the work they perform (e.g., paying laborer rates to workers doing carpenter work, or classifying electricians as "jobbers")
• Failure to pay fringe benefits: Not paying the required fringe benefit portion, either as cash or bona fide benefits
• Falsifying certified payroll: Submitting false weekly payroll certifications showing compliance while actually underpaying workers
• Improper apprentice ratios: Using more apprentices than permitted under registered apprenticeship programs

Certified Payroll Requirements

Contractors must submit weekly certified payroll reports (DOL Form WH-347 or equivalent) showing each worker's classification, hours worked, and wages paid. The contractor certifies under penalty of perjury that the information is accurate and that workers were paid the required wages.

Recent Enforcement Examples

The DOL actively pursues Davis-Bacon violations on federal projects:

• California Naval Base (2023): $1.5 million recovered for 413 workers across 35 contractors for Davis-Bacon, CWHSSA, and SCA violations
• Florida VA Project (2023): $224,113 recovered for 37 electricians denied full prevailing wages and fringe benefits
• Long Island Contractors (2021): Nearly $1 million in back wages and damages for FLSA and Davis-Bacon violations

Enforcement Process

The Wage and Hour Division enforces federal wage laws through investigations. Understanding this process helps contractors prepare for and respond to potential audits.

Investigation Triggers

• Worker complaints (protected activity under the FLSA)
• Targeted enforcement in high-violation industries (construction is a priority)
• Referrals from other agencies
• Random audits of federal contract compliance

Investigation Scope

WHD investigators gather data on wages, hours, and employment practices. Investigations typically cover a two-year lookback period, though this can extend to three years for willful violations. Employers must provide:

• Payroll records
• Time and attendance records
• Employee information
• Contracts and subcontracts (for Davis-Bacon)
• Certified payroll reports (for federal projects)

Resolution Options

When violations are found, resolution may include:

• Back wages: The unpaid wages owed to workers
• Civil money penalties: Fines assessed against the employer
• Injunctive relief: Court orders requiring compliance

Penalties and Consequences

Beyond back wage payments, contractors face additional consequences for wage violations:

Debarment

Under the Davis-Bacon Act, contractors with aggravated or willful violations can be debarred from federal contracts for up to three years. This debarment appears on SAM.gov and affects the contractor's ability to work on any federal project. For more on federal debarment, see our guide on SAM.gov Debarment Explained.

Criminal Penalties

Willful violations of the FLSA can result in criminal prosecution, with fines up to $10,000 and imprisonment up to 6 months for first offenses. False statements on certified payroll (Davis-Bacon) can result in federal criminal charges for fraud.

Prime Contractor Liability

On federal projects, prime contractors are financially responsible for subcontractor Davis-Bacon violations. If a subcontractor underpays workers, the prime contractor may have funds withheld from their contract payments to cover the back wages. This "joint and several" liability makes subcontractor vetting critical for any GC working on federal projects.

Responding to DOL Investigation

If you receive notice of a DOL investigation or back wages claim, taking the right steps early can minimize liability and demonstrate good faith compliance.

Immediate Steps

1. Preserve all records: Do not alter or destroy any payroll, time, or employment records
2. Consult employment counsel: An experienced labor attorney can help navigate the investigation process
3. Cooperate with investigators: Provide requested documents within stated deadlines
4. Conduct internal review: Assess the scope of potential violations and affected workers

The PAID Program

The DOL's Payroll Audit Independent Determination (PAID) program allows employers to self-report wage violations and resolve them without litigation. Key features:

• Employers pay 100% of back wages owed (no liquidated damages)
• No civil money penalties assessed
• Available for FLSA minimum wage, overtime, and (as of 2025) FMLA violations
• Requires voluntary disclosure before DOL opens investigation

Settlement Considerations

Administrative settlements are typically faster and less expensive than litigation. When negotiating a settlement:

• Verify the calculation methodology for back wages owed
• Understand which workers are included and the time period covered
• Confirm whether civil money penalties are being assessed
• Request a compliance agreement rather than ongoing monitoring if possible

Checking Contractor Records

You can check a contractor's wage violation history before awarding work:

DOL Enforcement Data

The DOL publishes enforcement records at enforcedata.dol.gov. The database includes all concluded WHD compliance actions since FY 2005, showing:

• Employer name and address
• Back wages recovered
• Number of employees affected
• Civil money penalties assessed
• Violation types

Red Flags to Watch For

• Large back wage orders: Recoveries over $100,000 indicate widespread violations affecting many workers
• Repeat violations: Multiple enforcement actions against the same contractor show ongoing compliance failures
• Recent violations: Violations in the past 2-3 years are more relevant than older records
• Violation type: Misclassification and falsified records are more concerning than calculation errors
• High per-worker amount: Back wages exceeding $1,000 per worker suggests systematic underpayment, not isolated errors

Example Analysis

A search showing a drywall contractor with $824,276 in back wages for 680 workers (averaging $1,212 per worker) indicates systematic overtime violations across their workforce. This is a high-severity finding that should prompt additional due diligence or disqualification.

SiteVetter automatically checks the DOL enforcement database and flags back wage orders as part of the contractor verification report.

Additional Resources

• DOL Enforcement Data Search
• DOL Davis-Bacon Information
• SAM.gov Wage Determinations
• DOL Fact Sheet #13: Employment Relationship
• Contractor Red Flags in Federal Databases
• SAM.gov Debarment Explained