The 91-year-old Davis-Bacon Act is in need of reform, but a proposed rule issued by the U.S. Department of Labor on March 18, Updating the Davis-Bacon and Related Acts Regulations, misses the mark. 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. The DOL estimates the Davis-Bacon Act and 71 active related acts collectively apply to approximately $217 billion in federal and federally assisted construction spending per year and provide government-determined wage rates for an estimated 1.2 million U.S. construction workers.
“While ABC is still reviewing the 432-page rule, it appears the DOL missed an opportunity for meaningful Davis-Bacon reform. For example, the proposed rule reverts back to 1983 regulations that do not result in actual prevailing rates, as required by statute. Reversing course by 40 years is not modernization. Instead, it is even worse public policy catering to special interests embedded in the Biden administration that benefit from the broken status quo,” ABC said in a statement.
Throughout the rulemaking process, ABC will continue to advocate for commonsense reforms to Davis-Bacon regulations that will provide clarity for the regulated community and create accurate and timely prevailing wages. This approach will encourage quality contractors and their skilled workforce to compete to rebuild their communities and give taxpayers the best value for investments in public works projects.
ABC encourages its members, industry stakeholders and taxpayers to suggest additional improvements to the Davis-Bacon Act regulations within the 60-day comment period deadline. Comments are due on May 17. If you need assistance with comments, please reach out to Manager of Federal Regulatory Affairs Michael Altman.
Why the Davis-Bacon Act Needs Commonsense Reform:
- ABC recently surveyed its contractor members on the burdensome Davis-Bacon Act and related prevailing wage laws and their impact on member companies’ ability to develop their workforce; hire local, small, women-, minority-, veteran-owned and disadvantaged businesses and workers; win work; and deliver quality projects safely, on time and on budget. Nearly 90% of survey respondents did not support prevailing wage laws and the Davis-Bacon Act in its current form and 83% of respondents supported a full repeal of prevailing wage laws, while 82% supported prevailing wage law reform. In addition, 95% of respondents said prevailing wage laws make construction projects more expensive and 75% said prevailing wage regulations make them less likely to bid on taxpayer-funded public works projects.
- The Congressional Budget Office has estimated that repealing the Davis-Bacon Act would save the federal government $17.1 billion between 2021 and 2030.
- According to a study by the Heritage Foundation, 30,000 more construction jobs could be created on an annual basis if the DOL accurately calculated Davis-Bacon rates to find the true prevailing wage.
- For decades, watchdogs in the federal government have criticized the DOL’s convoluted method for determining prevailing wage and benefit rates through an outdated and unscientific survey process riddled with errors and inefficiencies.
- Davis-Bacon needlessly raises taxpayer-funded construction costs, stifles job creation, undermines productivity and discourages competition from small businesses interested in pursuing federal and federally assisted construction projects. For years, ABC has called for reforms to confusing DOL compliance rules and enforcement policies which, coupled with a dysfunctional wage determination process, have resulted in a broken system.
The DOL announced that it will offer online compliance seminars for contracting agencies, contractors, unions, workers and other stakeholders to provide information on the requirements governing payment of prevailing wages on federally funded construction. Q&A sessions for Davis-Bacon topics are available on March 29, June 14 and Sept. 13. Learn more about the free seminars and register today.
ABC will continue to inform members about new developments related to the Davis-Bacon Act in Newsline.