On Aug. 8, 2023, the U.S. Department of Labor released a final rule, Updating the Davis-Bacon and Related Act Regulations, which makes drastic revisions to the Davis-Bacon Act and Related Acts regulations that apply to federal and federally assisted construction projects funded by taxpayers.

The DOL’s final rule mostly disregards the feedback of ABC contractors, construction industry stakeholders and thousands of small businesses urging the withdrawal of this unnecessary, costly and burdensome regulation.

Instead, the DOL is moving forward with dramatic changes to prevailing wage regulations, reversing much-needed reforms that were established by the Reagan administration, and unlawfully increasing the regulatory burden on small businesses, new industries and public works projects. 

Key changes in the final rule include:

  • Lowering the definition of “prevailing wage” to a wage paid to at least 30% of workers in a locality, down from 50%
  • Allowing the DOL to adopt state or local prevailing wage rates as DBA wage rates
  • Making DBA requirements effective by “operation of law,” meaning even if a federal agency fails to include DBA clauses in a contract, contractors are still required to pay prevailing wages
  • Adds new anti-retaliation provisions to DBA contracts

The final rule is scheduled for publication in the Federal Register on Aug. 23, and will take effect 60 days later. Therefore, contracts entered into after this date will be impacted, and the DOL will be implementing the final rule’s changes to the wage determination process to WDs completed after the effective date.

ABC will be offering a members-only webinar on Aug. 21 and providing additional resources to assist contractors in complying with these new regulations.

The 1931 Davis-Bacon Act and related regulations require contractors and subcontractors that perform work on federal and federally funded construction projects to pay a government-determined prevailing wage and benefit rate on an hourly basis to on-site construction workers. According to the DOL rulemaking, the Davis-Bacon Act and 71 active Related Acts collectively apply to an estimated $217 billion in federal and federally assisted construction spending per year—about 63% of all government construction put in place—and provide government-determined wage rates for an estimated 1.2 million U.S. construction workers.

Resources:

 

May 17, 2022, ABC submitted a comment letter urging the U.S. Department of Labor to withdraw its proposed rule, Updating the Davis-Bacon and Related Acts Regulations:

“The DOL’s proposed rule does little to improve or modernize Davis-Bacon Act regulations in the face of decades of complaints by government officials, taxpayer watchdogs and industry stakeholders critical of this regulatory boondoggle well-known for increasing the cost of construction, discouraging competition from small businesses and diminishing the value of taxpayer investment in government infrastructure projects,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “Instead, the proposed rule fails to fix the DOL’s unscientific wage determination process, rescinds modest pro-taxpayer reforms made by the Reagan administration and illegally increases regulatory burdens on small businesses, new industries and more public works projects.

“For years, ABC has called for reforms to confusing DOL red tape and unclear policies which—coupled with a dysfunctional wage determination process—have resulted in a broken system rigged by special interests and sympathetic bureaucrats to help make unionized contractors and union labor more competitive on public works projects,” said Brubeck. “With the Biden administration promoting itself as the most pro-union administration in history, it is little surprise that the DOL missed an opportunity for meaningful regulatory reform and actively made Davis-Bacon Act regulations worse.

“Voters should know this proposed rule could not come at a worse time, as it will exacerbate the inflationary headwinds facing the construction industry—supply chain disruptions, high materials costs and a skilled labor shortage of 650,000—and fail to improve the timeliness and quality of taxpayer-funded construction projects,“ said Brubeck. “This proposal will ultimately result in less value and job creation from taxpayer investment in infrastructure––including the $550 billion of new infrastructure funding via the Infrastructure Investment and Jobs Act.”

A final rule imminently. Stay tuned for additional updates.

Resources:

Access ABC’s state prevailing wage law research database (Updated June 1, 2021) 
 State Prevailing Wage Law Research Database

 

DAVIS-BACON ACT COMPLIANCE INFORMATION

Visit the U.S. Department of Labor’s Wage and Hour Division website on Davis-Bacon and Related Acts  for guidance, fact sheets, e-tools, posters, forms, guidance and additional resources.

 

The DOL’s Final Rule: Updating the Davis-Bacon and Related Acts Regulations page provides compliance information including FAQs and a comparison chart on the August 2023 final rule.

 

The Prevailing Wage Resource Book was developed by the U.S. Department of Labor Wage and Hour Division as a training tool for use in prevailing wage conferences.

 

The U.S. Department of Labor Wage and Hour Division’s Field Operations Handbook includes a chapter with helpful language on  the Davis-Bacon Act and Related Acts, the Contract Work Hours and Safety Standards Act .

 

The DOL provides Prevailing Wage Seminars to provide training on the Davis-Bacon Act and other prevailing wage requirements.

 

The DOL’s Labor Advisors list provides contacts at each federal agency responsible for implementation and compliance with labor law requirements for federal contractors, including Davis-Bacon regulations.

 

Wage Determinations

Visit Sam.gov, the government website where contractors can obtain government-determined prevailing wage determination (WDs) for contracts subject to the Davis-Bacon Act.

 

The DOL’s Sept. 2021 Conformance Request Guide provides information on requesting conformances where wage determinations do not contain an appropriate labor classification.

 

Wage Surveys

The DOL’s Construction Survey Status page provides the status of ongoing and upcoming Davis-Bacon wage surveys, providing opportunities for contractors to participate in the wage determination process.

 

The electronic WD-10 form can be used to participate in relevant surveys.

 

The Branch of Construction Wage Determinations provides contact information for the DOL staff responsible for wage determinations in different regions.

 

The federal Davis-Bacon and Related Acts govern wage requirements for contractors and subcontractors performing federally funded or assisted contracts in excess of $2,000. Administered through an unscientific and fundamentally flawed survey process by the U.S. Department of Labor (DOL), these so-called “prevailing” wages hinder economic growth, increase the federal deficit, and impose enormous burdens. Davis-Bacon stifles contractor productivity by raising project costs, and imposes rigid craft work rules that ignore skill differences.

ABC supports full repeal of the Davis-Bacon Act, as well as any state and local prevailing wage laws that mandate wage and benefit rates that do not reflect the current construction market. In the absence of full repeal, ABC also continues to support legislative and regulatory efforts designed to mitigate the Act’s negative effects. ABC opposes expansion of Davis-Bacon into areas of public and private projects in which it has not been previously mandated.

For a summary of studies on the impact of prevailing wage, click here.