 Today's video, we are discussing bacon. Yeah, that's right, bacon. You don't know bacon? Davis bacon? All right, some of you out there have probably already heard or have had experience with Davis Bacon Wages or the Davis Bacon Act. You've heard of that, right? Department of Labor, Certified Payrolls. All right, in today's video, we're discussing when does that apply, who should be doing it and all the information that you need to know pertaining to the Davis Bacon Act. And moreover, we've got examples of certified payroll and the reporting that's required to do so. And I'm gonna explain all of that in today's video coming up right now. I received this question a couple times and I thought I'd talk about it just touch base a little bit today. Davis Bacon Wage Act. You might have also heard of prevailing wages or you might have heard of certified payroll. There's a couple of things that they call it and then there's the Wage Determination Act. So what is it, what does it mean? Essentially, whenever you have a project that's got federal dollars, the government has created these particular acts that says you have to pay your workers based on a certain wage amount that's issued in the contract. One of the things that's important when you're actually putting together the bid for a contract is to know what is the actual wages in which the minimum wages in which you have to pay the employees because what they're going to require is at the very end of the contract or depending upon, let me rephrase that, if it's a contract that is, let's say, over a steward print of time, whether you're prime or a sub, right? The company is going to require that you do what's called weekly certified payroll reports. And so these weekly certified payroll reports, let me see if I can pull one up. They look like this document here on the screen, right? And so on these particular certified payroll reports, you're going to put in the name of the person, last for the social, their work classification, which is based on these categories, right? So whenever you get issued a contract, they're going to give you these classifications, right? Accounting, court, secretary, whatever the case may be, they're going to tell you the minimum rates at which you have to pay the person. And then you're going to take, and depending upon that person's particular job, you're going to put in here, right? Their work classification. Nope, do, do, do, do, do. All right, you're going to put in their work classification, and then you put in their rate of pay, gross amount, FICA withholding, other deductions. Now, straightforward, right? Maybe not. What happens, Eric, in the case that I want to pay the people more than a rate of pay? That's fine. We can pay them more than a rate of pay. The issue that we run into is when people want to pay or are paying employees less than that particular rate, that's where you're going to run into an issue. So a lot of times we'll have people who say, hey, this guy worked for me, he makes $22 an hour, let's say, and so he makes $22 an hour, that's his regular salary. Well, on this particular job, on this particular job, let's say he or she is a production control clerk, then that job requires $26.42 an hour. So if you're only paying them $22 an hour, you're going to be $4.42 an hour short. And unless you have, and we'll talk about that here, unless you have some fringe benefits that offset the difference, then you're going to have to pay him on this particular contract the higher rate. What does that mean? That means that essentially on this particular contract, you're going to have to pay them more money than you typically normally would pay them. Otherwise, what will happen is the government will come back and they can penalize you because again, this is the Department of Labor, they can penalize you, they can find you, they will create a problem in your life. They may not end up, they may not disperse the funds for the particular contract. And so if you're a sub, that means that the prime contract and all the other subs, they may withhold their funds based on your certified payroll not being accurate. So again, it is a really important thing. Now, going over here, so again, it applies to, if there's a contract that has federal dollars, then this is going to apply. The other thing is they have, like I said before, they've got the prevailing wages and from my research here, it says that essentially for the Federal Difference Bacon Act, the prevailing wage, there's 32 states that have state prevailing wage laws, which again, is the same thing. And most of these, let me pull you over here, and most of these, this is another way that you may see it in your actual contract documents. So another thing is that you may find is that they may not have your particular classification on here. So again, there's a list of classifications and codes they may not have on there, what it is that you do, right? So for example, you say, look, my guy does not do, and I've had this happen to me before, they do not do this particular category or your category is not on there. At that point, you would have to speak to the person on the contract vehicle who's in charge of the certified payroll and ask them, right, which classification should you use? Or they may end up issuing you another particular classification code that you can be used to submit your payroll reports. However, what I would say, and what I've seen in the past is that some people try to use classifications that are different than the actual responsibilities, just because they were a lower wage rate, I would strongly, strongly discourage you from doing that. This particular, and everything dealing with the government, do not try to cheat the system. Be upfront, be honest. Again, like I said, this is if on that particular project, there's a $10 an hour or $7 an hour more to the pay the person, please pay them. I have friends that have been audited by the Department of Labor, they have stopped their contracts. I have friends that, again, they paid a wage that was different or a classification that was different just so they could pay a lower wage, and the government has came back, audited them, and said that they have to pay that person the difference. So they had to write them a check for all of the hours that they worked on that contract for the difference and the hourly amount. So if they worked on that contract for six months and they worked 40 hours a week, six months, that's 160 hours a month, times six, what is that, six times six, three, 60, nine, 60. Yeah, 960, so 960 hours times seven bucks an hour, as you can see, that's a pretty sum of money, right? Wow, this is all sixes, that's 6,000 and change. Interesting. So that adds up, right? So again, you want to make sure that when you are doing these things, that you get clarification on the code that you're using because again, most of this ties back to union wages, and you could find out the actual definition of what it means to be an accounting clerk one, accounting clerk two versus accounting clerk three. So you could go back and they have brochures and pamphlets and documents that will explain to you exactly what the difference is between accounting clerk one, two, and three, so that you know, obviously, just from the rates, right? As you move up from one, two, and three, that shows more experience, but it also indicates more responsibility. So again, you don't want to be paying an accounting clerk one when the person is doing the accounting clerk three functions, and the government will check that. And specifically, I know on construction, we have people that go around and they'll actually go out and they'll interview the employees and ask the employees how much are they making? So again, you may try to be slick and say, okay, I'm paying this guy this amount, but because I'm just submitting a report, right, and not the actual checkstubs, you may be putting on the report, you're paying in one amount and then paying in a different amount. Well, the government will do periodic visits to the job sites and ask the person how much are you making out, what's your names, sir? Okay, my name is John Franklin. Okay, John Franklin, hey, what company you work for? Okay, I work for such and such, mechanical. Okay, and how much do you get paid? And they will ask them, and then they're gonna go back and check your reports to see what you wrote down versus what they were actually paid. And this stuff happens. This is not like something that may happen. This will happen. So again, I want to caution you and I encourage everyone out there to make sure that you're mindful of these things and always, always, always be upfront. Again, if you have any questions, a lot of times on all the contracts that I've seen, there's always a point person who's in charge of the actual, this particular certified payroll. And so that point person can give you clarification on any issues that you may have. But again, I've been asked this question several times. Another thing that I've done in the past is I actually created my own report because the forms that they have here, they don't allow you to basically continue to reproduce the form. So then you have to go in and retype them each time. And that's really, obviously, for anyone who's doing payroll on a weekend basis and you do it for months and months and then, you know, that can get really redundant because the guy's working 40 hours a week for you. Every week, he's making the same rate of pay, same hour, same withholding. You should be able to reduce that form. So what I did was I created the same form and Excel spreadsheet. And then that way, I was able to copy and paste the forms each week. And basically, I would just have to sign it and put the information in there. So again, I just wanted to touch base, give some guidance on certified payroll, prevailing wages, Davis Bacon, because I know a lot of people have questions related to that matter. But this is something that, it should not intimidate you, do not let it discourage you because again, most of the time, if you have a payroll company that's doing your payroll, they should be able to handle this. If not, the majority of, like for example, in this case, Miami-Dade County, the majority of the government entities have some sort of training on that. And Miami-Dade County looks like they're creating some sort of new web-based system to do your certified payrolls. I haven't tested it, so I can't really vouch for it, but I do know that this is not something that should discourage anyone for pursuing contracts in the federal arena. Thanks so much, have a great day. Good luck, and we'll talk to you soon.