President Biden’s March 2021 American Jobs Plan called on Congress to tie federal investments in infrastructure to prevailing wage regulations via the ABC- opposed 1930s era Davis-Bacon Act.
On Nov. 15, President Biden signed into law the Infrastructure Investment and Jobs Act (H.R. 3684) which includes an expansion of Davis-Bacon requirements. As the bill made its way through Congress, ABC continued to advocate for merit shop priorities in the legislation, ultimately remaining neutral on the passage of the IIJA.
In addition, ABC opposed the House-passed America COMPETES Act (H.R. 4521), as well as the Senate-passed version that includes prevailing wage expansion. ABC supported an amendment to remove the flawed and inflationary Davis-Bacon prevailing wage requirements from the Senate bill, but it unfortunately failed. As the bill made its way through conference, ABC advocated against anti-competitive provisions.
The partisan Inflation Reduction Act was signed into law on Aug. 16, 2022, and provides over $270 billion in tax credits for the construction of solar, wind, hydrogen, carbon sequestration, electric vehicle charging stations and other clean energy projects. However, a new policy in the IRA grants developers/taxpayers a bonus tax credit 500% greater than a baseline tax credit of 6%, but this is conditioned on requirements that project contractors pay Davis-Bacon prevailing wages and utilize apprentices enrolled in government-registered apprenticeship programs. This new policy is an unprecedented expansion of Davis-Bacon and government-registered apprenticeship requirements/enticements onto private construction projects via the federal tax code.
Further, the White House Task Force on Worker Organizing and Empowerment’s report and recommendations to President Biden urge the DOL to consider automating some of its enforcement of Davis-Bacon prevailing wage requirements, suggesting the agency use “bots” to review and compare prevailing wages to “actual weekly certified payroll data.”
On March 18, 2022, the DOL issued a proposed rule that would ”modernize” the Davis-Bacon Act and related regulations. Despite its stated purpose, the rulemaking would instead reverse course by undoing the Reagan administration reforms, making union rates more likely to be adopted as prevailing wages, and expanding prevailing wage requirements to cover certain prefabrication work, transportation and flaggers, among other concerns.
ABC filed a 60-day extension request to provide adequate time to thoroughly analyze the rulemaking and assist affected ABC members with their comment letters. The request was denied by the DOL.
ABC also surveyed contractor members to gather insights on the potentially harmful impacts of this proposal and utilized the data gathered in its comment letter, which was filed on May 17.
In nearly 70 pages of comments on the proposed rule, ABC opposed and provided feedback on many of the more than 50 significant changes in the proposed rule.
On Aug. 23, the U.S. Department of Labor officially published its final rule, Updating the Davis-Bacon and Related Acts Regulations, in the Federal Register. The regulation’s drastic revisions to existing rules regarding government-determined prevailing wage rates that must be paid to construction workers on federal and federally assisted construction projects funded by taxpayers will now take effect on Oct. 23.
ABC issued a statement opposing the new rule, which all contracts entered into after Oct. 23 will be subject to. Additionally, in certain situations the rule may apply to existing contracts. This includes if a contract is changed to include substantial Davis-Bacon-covered work not within the scope of the original contract, if an option to extend a contract’s term is exercised and for ongoing contracts not tied to completion of a particular project.
ABC continues to consider options for a potential legal challenge to the final rule. For more information on the final rule, see ABC’s previous Newsline article, ABC general counsel Littler Mendelson’s analysis and ABC’s online resources at abc.org/davisbacon.
ABC also held a members-only webinar on the final rule on Aug. 21, and the recording is now available on ABC’s Academy.
ABC supports the full repeal of the Davis-Bacon Act (H.R. 720 ) as well as any state and local prevailing wage laws that mandate wage and benefit rates. In the absence of full repeal of the Davis-Bacon Act and state prevailing wage laws, ABC also continues to support legislative and regulatory reform efforts designed to mitigate its negative effects on industry and taxpayer stakeholders and failure to reflect the current market rate. ABC opposes expansion of Davis-Bacon and state and local prevailing wage laws into areas of public and private projects in which it has not been previously mandated.