You're Probably Paying Prevailing Wage on Drive Time. You Don't Have To.

The question nobody asks until it costs them

Here is a scenario that plays out every day on job sites across the country.

Your crew shows up at the yard at 6:30. They load the truck, grab their gear, and drive 45 minutes to a prevailing wage job site. They work until noon, then drive 30 minutes to a private job for the afternoon. At the end of the day, they drive home.

How much of that time gets paid at the prevailing wage rate?

Most contractors answer this one of two ways. Either they pay the prevailing rate for the entire day because they do not want to deal with the math. Or they only pay the prevailing rate for the hours on site and skip the drive time entirely. Both of those are wrong, and both cost money.

What the law actually says about drive time

The rules come from the Davis-Bacon Act at the federal level and from state prevailing wage laws in 28 states plus DC. The details vary, but the core principle is the same everywhere.

Yard to job site: prevailing wage. If your employee reports to a company yard or office and then travels to a prevailing wage job site under your direction, that travel time is compensable at the prevailing wage rate. They are under your control. You told them where to go. That time is prevailing wage time.

Job site to job site: it depends. If a worker drives from a prevailing wage job to a private job, that travel time is compensable but generally at the regular rate, not the prevailing rate. The worker is no longer on the prevailing wage site and is not performing covered work. If they drive between two prevailing wage jobs, the rules get more specific to the jurisdiction.

Home to job site: usually not compensable. If your crew drives directly from home to a prevailing wage site without stopping at the yard first, that is a normal commute. Most of the time, you do not owe prevailing wage for that. The Portal-to-Portal Act generally excludes ordinary commuting time.

Home from a private job: not compensable. The drive home at the end of the day from a non-covered site is a regular commute. No prevailing wage obligation.

This is where it gets expensive. If your timesheets do not distinguish between these categories, you are either paying the prevailing rate for time that does not require it, or you are not paying it for time that does.

The overpayment problem

This is the one contractors rarely think about because it feels like the "safe" option. You just pay prevailing wage for everything. If the crew was on a prevailing wage job at any point during the day, the whole day gets billed at the higher rate.

The math on this adds up fast.

Say the prevailing wage rate for your trade is $45 per hour and the regular rate is $30 per hour. That is a $15 per hour difference. If you have a crew of 15 and five of them are on prevailing wage jobs on any given day, and each of those five has 45 minutes of drive time that should be at the regular rate but gets paid at the prevailing rate, that is $56.25 per day in overpayment. Over 22 work days, that is $1,237 per month. Over a year, that is $14,850 walking out of your business.

You are not breaking any laws by overpaying. You are just leaving money on the table because your timesheets are not detailed enough to split the time correctly.

The underpayment problem

This is the one that can actually end your business.

The Department of Labor recovered $259 million in back wages in 2025. Not fines. Back wages. That is money contractors had to pay employees retroactively because their records did not show proper prevailing wage compliance.

Civil penalties start at $13,508 per violation. A "violation" can be a single employee on a single day where the rate was wrong. If you have 10 employees on a prevailing wage job for a month and your drive time was classified incorrectly for all of them, that is potentially 220 violations.

Then there is debarment. If the DOL finds willful violations, you can be banned from government contracts for three years. For a contractor who does 30 to 50 percent of their work on public projects, that is an existential threat.

The DOL looks at records going back three years. If your timesheets do not clearly break out where each employee was, when they clocked in and out of each location, and which hours were on covered work versus uncovered work, the default assumption is that you owe the highest applicable rate for all hours. That is the rule. Ambiguous records default to the worker's benefit.

Why this is hard to fix with a spreadsheet

The reason most contractors get this wrong is not because they do not care. It is because the tracking is genuinely complicated.

A single worker on a single day might have four different time categories. Drive from yard to prevailing wage site (PW rate). Work on the prevailing wage site (PW rate). Drive from PW site to private site (regular rate). Work on the private site (regular rate). That is four entries with two different rates for one person for one day.

Now multiply that by 15 employees and five work days. That is 300 individual time entries per week that need to be categorized correctly. If your foreman is writing this down on a clipboard and your office manager is re-entering it into a spreadsheet on Friday, the error rate is going to be high. Not because anyone is lazy, but because the system is not built for this level of detail.

The common workaround is to just round up. Pay the prevailing rate for everything and accept the overpayment as the cost of compliance. That works until you look at the annual cost and realize you have been giving away $15,000 per year that you did not have to.

What a real solution looks like

The fix is not a bigger spreadsheet or a better form. It is a system that knows which jobs are prevailing wage and which are not, and tracks where each worker is at each point during the day.

When a worker clocks in at the yard, the system records the time and location. When they arrive at the job site and check in, the system records that transition. The drive time between those two events is automatically tagged as prevailing wage travel. When they leave the PW site and check in at a private job, the system tags that drive as regular rate.

At the end of the week, instead of 300 manual entries, you have a clean export that shows every hour broken out by employee, job, rate type, and overtime calculation. Your payroll person plugs it in and it is done.

No guessing. No rounding up. No exposure to an audit because the records are incomplete.

The overtime complication

This is the part that most contractors do not realize until they get audited.

If a worker does four hours on a prevailing wage job and six hours on a private job in the same day, they have worked ten hours. They are owed overtime. But which rate applies to those two overtime hours?

The answer depends on the jurisdiction, but in most cases, the overtime calculation has to account for the blended rate across both types of work. You cannot just pay overtime at the regular rate and call it done. The prevailing wage hours affect the overtime rate calculation for the entire day.

If you are doing this by hand, this is where the math breaks. Most spreadsheet-based systems either ignore the blended calculation entirely or get it wrong. And getting it wrong in either direction creates either a cost problem (overpaying) or a compliance problem (underpaying).

Who needs to worry about this

If you are a contractor with 8 or more field employees and at least 20 percent of your work is prevailing wage or Davis-Bacon, this applies to you. The more employees and the higher the percentage of prevailing wage work, the bigger the number, in both directions.

If you do zero public or government work, this does not affect you. Keep doing what you are doing.

If you are somewhere in between, doing occasional prevailing wage jobs but not regularly, it is still worth understanding the rules. One incorrectly tracked project is enough to trigger an audit.

What to do next

If any of this sounds familiar, start by pulling your timesheets from the last month. Look at how drive time is being recorded. Is it broken out separately from job site time? Is it tagged to the correct rate? If the answer is "I'm not sure," that is the problem.

We built a time tracking system specifically for this. GPS-verified clock events at every transition point. Automatic drive time separation. Prevailing wage rate tagging per job. Clean payroll exports. One-time purchase, no monthly fees.

If you want to talk through whether it makes sense for your operation, book a call. We will look at your crew size, your prevailing wage mix, and your current tracking setup, and tell you exactly what the math looks like. Fifteen minutes.