You are here:   Politics & Policy > Issues > Davis-Bacon Act


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.

 

Davis-Bacon Act/Prevailing Wage

The Davis-Bacon Act is an 85-year-old wage subsidy law administered and enforced by the U.S. Department of Labor (DOL) that mandates so-called “prevailing” wages for work performed on federally-financed construction projects. Davis-Bacon hinders economic growth, increases the federal deficit, imposes enormous burdens that stifle contractor productivity, ignores skill differences for different jobs and imposes rigid craft work rules.

Read More


Senate HELP Committee Holds Confirmation Hearing on Secretary of Labor Nominee R. Alexander Acosta

On March 22, the U.S. Senate Committee on Health, Education, Labor and Pensions (HELP) held a confirmation hearing on the nomination of R. Alexander Acosta to serve as United States Secretary of labor. President Trump nominated Acosta to head the U.S. Department of Labor On Feb. 16. Acosta’s nomination must be approved by the HELP Committee before the full Senate can vote on his nomination. 

Read More

R. Alexander Acosta Nominated to Serve as Secretary of Labor After Puzder Withdraws

On Feb. 15, President Trump’s nominee for Secretary of Labor, former CKE Restaurants CEO Andrew Puzder, withdrew from consideration of the position. Prior to his withdrawal, Puzder was slated to appear before the U.S. Senate Committee on Health, Education, Labor, and Pensions for a hearing on Thursday Feb. 16. 

Read More

Legislation Introduced in the House to Repeal the Davis-Bacon Act

Legislation was introduced in the U.S. House of Representatives to repeal the prevailing wage requirements of the Davis-Bacon Act on Jan. 30 by Rep. Steve King (R-Iowa). The bill, H.R. 743, was referred to the House Committee on Education and the Workforce.

Read More

Click here to read more articles on the Davis-Bacon Act

West Virginia Enacts Prevailing Wage Repeal and Right to Work

On Feb. 12, the West Virginia Legislature voted to override Gov. Earl Ray Tomblin’s vetoes of  a prevailing wage repeal bill and the West Virginia Workplace Freedom Act, making West Virginia the 26th Right to Work state in the country and the fourth state to pass Right to Work since 2012. 

Both bills will take effect on July 1, 2016. The actions come nearly a year after West Virginia passed ABC’s government neutrality in contracting legislation, which prohibits government-mandated PLAs and PLA preferences on state and state assisted projects. In signing the Establishing Fair and Open Competition in Governmental Construction Act, Gov. Tomblin became the first Democratic governor to sign legislation outlawing PLA mandates on public construction projects. A total of 22 states have adopted measures ensuring fair and open competition on taxpayer funded construction contracts. 

New Hampshire Rejects Prevailing Wage Bill

Last week, the New Hampshire House rejected a bill (House Bill 1641) that would have required prevailing wage be paid on all state construction projects. Citing a union-backed study, proponents of the bill argued the legislation would create jobs, spur economic activity, and raise workers’ wages without increasing the cost of projects. Opponents rejected those assertions and insisted the state would pay more for construction projects under the provisions of the bill. 

Rep. Jack Flanagan (R-Brookline) claimed the bill would increase construction costs and a fiscal note estimated it would cost the state at least $2.6 million per year to administer the law. In opposing the bill Rep. Flanagan argued that the bill would not “solve the problems it wants to solve” and that New Hampshire “can’t afford to spend more money on these construction projects when we are barely fixing the roads and bridges we have now.” The bill was rejected by a vote of 181-138. New Hampshire repealed its prevailing wage law in 1985.

Wisconsin Reforms Prevailing Wage Laws

During a controversial budget session, Wisconsin significantly reformed its prevailing wage laws with the help of the ABC Wisconsin Chapter which organized a coalition of local chambers of commerce, school districts, small businesses, and municipal utilities to repeal prevailing wage requirements on all Wisconsin public works projects except those built by the state of Wisconsin and state highway projects. 

When this change takes effect on January 1, 2017, it is estimated that between 80-90 percent of public construction projects in Wisconsin will be exempt from prevailing wage. 

In addition, employees that transport mineral aggregate to a project site or transport excavated material or spoil away from a project site will be exempt from prevailing wage laws. Federal “Davis-Bacon” rates will replace any state determination and will be used to set prevailing wage rates on state projects.     

Wisconsin prevailing wage still will not apply to private/local entities that receive tax breaks. Local governments are also prohibited from creating their own prevailing wage laws. The new law also includes some much needed regulatory reforms of third party prevailing wage complaints.  

The $48,000 single trade and $100,000 multi-trade thresholds triggering prevailing wage requirements on state projects was not changed by the reforms.

“Wisconsin’s prevailing wage reform is meaningful, significant and will provide Wisconsin taxpayers with relief for years to come,” ABC Wisconsin President John Mielke said. “Thanks to these reforms, opportunities for small, local businesses like ABC members will open up for them to compete to build public works projects. We commend the state legislature for passing this reform and applaud Governor Walker for signing it into law.”

Although this was a big win, the special interests groups that opposed this pro-taxpayer, pro-small business reform are not accustomed to losing. ABC Wisconsin is going to work over the next 18 months to make sure that the voters of Wisconsin and the public officials know how important it is for this change to become effective and remain in effect.

West Virginia Has No Prevailing Wage Due to Impasse

Associated Builders and Contractors of West Virginia (ABCWV) voiced its concerns over the newly presented methodology for the calculation of prevailing wage rates in West Virginia after Workforce West Virginia released a summary of its report on June 1. The report, a product of prevailing wage reform legislation (S.B. 361) signed  March 12 by West Virginia Gov. Earl Ray Tomblin (D), illustrates how new methodology will determine  forthcoming prevailing wage rates on state-funded public improvements.  However, because Workforce West Virginia failed to publish its new prevailing wage calculations by the July 1 deadline because lawmakers complained the methodology ran afoul of legislative intent, the state is currently without a prevailing wage for state-funded projects. 

Workforce West Virginia presented the newly created methodology to the Joint Committee on Government and Finance on June 8. The committee and lawmakers raised concerns that the implementation of this methodology was developed and executed in a manner inconsistent with the intent of the law itself. Lawmakers voted down a motion to extend the deadline to publish the new prevailing rate of wages to September 30 and extended their efforts by adding an internal review of how the methodology was created along with providing formal correspondence expressing lawmakers’ concerns that Workforce West Virginia is not complying with the statute. 

“ABCWV is disappointed in Workforce West Virginia’s omission of several integral components that were added to the new prevailing wage methodology to produce an accurate market wage rate,” said ABCWV President Bryan Hoylman in a June 9 statement. “The bill carefully crafted by the legislature during this year’s legislative session required the inclusion of essential U.S. Bureau of Labor Statistics (BLS) data and removed a government mandated fringe benefit from the prevailing wage methodology in order to calculate a true prevailing wage in West Virginia.  “Unfortunately, Workforce West Virginia has not included valuable BLS data and kept a mandated fringe benefit as a part of the calculation, contrary to the intent of the law. By directly ignoring key portions of the carefully balanced new methodology, Workforce West Virginia is threatening the hard work of the legislature and outside stakeholders, including ABCWV, in developing methodology to establish a true prevailing wage.”

ABC WV also stated that although they were pleased with the outcome of the committee meeting, they recognize that there is significant work yet to be done and will weigh every available option available to ensure that government doesn’t get in the way of this historic reform.

West Virginia is one of 32 states with a prevailing wage law in place for contractors who do business with the state. Indiana fully repealed its prevailing wage law earlier this year and several other states recently enacted or are currently considering significant reform or repeal to their existing prevailing wage law. 

Federal Compliance Information

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

Field Operations Handbook
The Field Operations Handbook includes the Davis-Bacon Act and Related acts, the Contract Work Hours and Safety Standards Act language.

Wisconsin Taxpayers Alliance Finds Flaws in State Survey Calculations to Determine Prevailing Wage Amounts

The Wisconsin Taxpayers Alliance found the survey method used to calculate prevailing wage led to wages that: "do not reflect varying county construction wages or regional labor markets; are more "costly" in low-wage, low-income counties, particularly those in northern Wisconsin; can fluctuate widely and unpredictably from year to year, rather than change slowly and consistently as market wages typically do; can require contractors to pay un-skilled workers more than skilled workers in some situations; and may cost state and local government hundreds of millions of dollars in excess costs."  

Read More

Anderson Economic Group Study finds Increase in Cost of Education Construction in Illinois due to Prevailing Wage Laws

A report by Anderson Economic Group, LLC found that an estimated $2.9 billion in education construction expenditures are subject to Illinois prevailing wage law and in the absence of the state's prevailing wage law, Illinois could have saved $158 million on average each of the past ten years. With an additional cost of $158 million per year due to prevailing wage laws, Illinois could have saved $1.6 billion dollars on school construction from 2002 to 2012.   

Read More

Anderson Economic Group: The Impact of Michigan’s Prevailing Wage Law Education Construction Expenditures

A study by East Lansing-based Anderson Economic Group (AEG) found that Michigan’s prevailing wage law is costing taxpayers and draining millions of dollars per year from the state’s public universities, community colleges and school districts by driving up the costs of construction projects. The study found the prevailing wage requirement increases construction costs by approximately $224 million annually. Additionally, the study found that with no additional taxpayer funding, more than 315 additionally elementary buildings could have been built in the previous decade with the money lost because of the state’s prevailing wage requirement. 

Read More

Columbia University: The Complex Worlds of New York Prevailing Wage

The study found the New York system of using collective bargaining agreements to establish wage rates is likely invalid given that union membership is presently lower than 30 percent in most localities. In fact, unions now represent only 24 percent of the state's construction workforce, yet New York still relies on union collective bargaining agreements when establishing prevailing wage rates. Near the turn of the last century, New York established wage standards to ensure construction workers were receiving a normal, or "prevailing," private-sector wage and benefits on public construction work. 

Read More

GAO: Davis-Bacon Act: Methodological Changes Needed to Improve Wage Survey

An April 6, 2011 report published by the Government Accountability Office (GAO), titled, "Davis-Bacon Act: Methodological Changes Needed to Improve Wage Survey," highlighted serious flaws in how wages are determined under the Davis-Bacon Act, and recommended steps for the Department of Labor (DOL) to take to remedy some of the issues. GAO examined how DOL has addressed previous concerns from stakeholders, and also looked at new issues that need to be resolved.

Read More

Cato: Prevailing Wage Laws: Public Interest or Special Interest Legislation?

A study published in the Cato Journal, Vol. 30, No.1, concludes the purpose of prevailing wage laws are to limit competition and provide significant benefits to labor unions. These policies come at the expense of taxpayers that are forced to pay more than otherwise necessary for projects that require prevailing wage mandates. George Leef, Director of Research at the John W. Pope Center for Higher Education Policy, concludes that no societal benefits result from union favoritism.

Read More

Dual GAO Studies Find Negative Impact of Davis-Bacon Prevailing Wage Requirements on Recovery Act Projects

The American Recovery and Reinvestment Act of 2009 (ARRA) expanded federal Davis-Bacon requirements to 40 additional federal programs, according to a Feb. 2010 study conducted by the Government Accountability Office (GAO). Although the impacts of these requirements vary among agencies (primarily because many are not directly involved in construction activities), several--including the U.S. Department of Energy (DOE)* –report that Davis-Bacon has had a negative impact on ARRA-related program administration and goals. 

Public Policy Foundation of West Virginia: An Economic Examination of West Virginia’s Prevailing Wage Law

The Public Policy Foundation of West Virginia on Feb. 16, 2009, released a study that concludes West Virginia's average state prevailing wage rate is at least 49 percent, and as high as 74 percent (using adjusted figures), above West Virginia's true market prevailing wage in the construction industry. The study also found that as many as 1,500 more jobs could be created if West Virginia's prevailing wage law were repealed or reformed to reflect actual market wages. 

Read More

GAO Report: The Federal Government Could Save More Than $4 Billion Over Five Years if the Davis-Bacon Act Were Repealed

In a March 2000 report, the General Accountability Office (GAO) estimates the federal government could save more than $4 billion in discretionary spending outlays over a five year period by repealing the Davis-Bacon Act.

Read More

The Beacon Hill Institute: The Federal Davis-Bacon Act: The Prevailing Mismanagement of Wage

The Beacon Hill Institute (BHI) at Suffolk University in Boston, Mass., found that wages on federally funded construction projects under the Davis-Bacon Act (DBA) are grossly inflated. The February 2008 study compared the methods used by the U.S. Department of Labor’s (DOL) Bureau of Labor Statistics (BLS) and the DOL’s Employment Standards Administration’s Wage and Hour Division (WHD) to determine the prevailing wage for workers employed on federally funded construction projects. 

Read More

Minnesota Taxpayers Association: Prevailing Wage Rates in Minnesota

A study conducted by the Minnesota Taxpayers Association (MTA) found the state's method for calculating prevailing wage rates on public construction increased project costs between 7 percent and 10 percent. Minnesota and California use a “modal” calculation, in which the rate that is most frequently reported in a survey is designated as the “prevailing” wage.

Read More

Mackinac Center for Public Policy: The Effect of Michigan’s Prevailing Wage Law

A study by the Mackinac Center for Public Policy estimates that Michigan's prevailing wage law, which requires union wages to be paid on state construction projects, costs state taxpayers about $250 million per year. The main effect of this extra cost is to boost the wages of construction workers, most of whom earn compensation well above the average for Michigan residents, according to the study. Michigan's prevailing wage law also appears to decrease the number of construction jobs in the state.

Read More

California Institute for County Government at California State University, Sacramento: An Analysis of Market and Prevailing Wage Rates for the Construction Trades in California

An August 2003 study from the California Institute for County Government at California State University, Sacramento shows that federal commercial prevailing wage rates and state prevailing wage rates in California are on average 36 percent to 55 percent higher than market wages.

Read More

University of California, Berkeley: The Effects of Prevailing Wage Requirements on the Cost of Low-Income Housing

A working paper released in September 2003 by the Program on Housing and Urban Policy at the University of California, Berkeley presents new evidence on the increased costs of prevailing wage laws on construction. The paper estimates that new prevailing wage requirements signed into law by eventually-recalled Governor Gray Davis in 2001 increased costs on state-subsidized low-income housing in California between 9 percent and 32 percent under the most credible statistical models.

Read More

Ohio Legislative Bureau: The Effects of the Exemption of School Construction Projects From Ohio's Prevailing Wage Laws

The Legislative Bureau of the Ohio Legislature determined that rescinding prevailing wage requirements for school construction saved $487.9 million in aggregate school construction during the post-examination period, an overall savings of 10.7 percent. This study provides background information and evaluates the amount of money saved by school districts and education service centers due to the exemption, the impact of the exemption on the quality of school building construction, the impact of the exemption on the ways of construction of public school buildings, and summarizes the findings and discusses the limitations.

Read More

Kentucky Legislative Research Commission: An Analysis of Kentucky’s Prevailing Wage Laws and Procedures

In May of 2001 the Program Review and Investigations Committee authorized a study of Kentucky's prevailing wage law. The committee staff suggested changes to the prevailing wage laws so they would more accurately reflect local wages.

Read More

Senate HELP Committee Holds Confirmation Hearing on Secretary of Labor Nominee R. Alexander Acosta

On March 22, the U.S. Senate Committee on Health, Education, Labor and Pensions (HELP) held a confirmation hearing on the nomination of R. Alexander Acosta to serve as United States Secretary of labor. President Trump nominated Acosta to head the U.S. Department of Labor On Feb. 16. Acosta’s nomination must be approved by the HELP Committee before the full Senate can vote on his nomination. 

Read More

R. Alexander Acosta Nominated to Serve as Secretary of Labor After Puzder Withdraws

On Feb. 15, President Trump’s nominee for Secretary of Labor, former CKE Restaurants CEO Andrew Puzder, withdrew from consideration of the position. Prior to his withdrawal, Puzder was slated to appear before the U.S. Senate Committee on Health, Education, Labor, and Pensions for a hearing on Thursday Feb. 16. 

Read More

Legislation Introduced in the House to Repeal the Davis-Bacon Act

Legislation was introduced in the U.S. House of Representatives to repeal the prevailing wage requirements of the Davis-Bacon Act on Jan. 30 by Rep. Steve King (R-Iowa). The bill, H.R. 743, was referred to the House Committee on Education and the Workforce.

Read More

Illinois Governor Vetoes Bill Tying Prevailing Wage to Union Contracts

On July 22, Illinois Gov. Bruce Rauner vetoed a bill that would have significantly changed the prevailing wage calculation process by tying wage rates to union collective bargaining agreements. In vetoing the bill, Gov. Rauner said Senate Bill 2964 would effectively discount the wage rates of those who have chosen not to join a union and who make up a majority of the construction workforce. 

Read More

West Virginia Enacts Prevailing Wage Repeal and Right to Work

On Feb. 12, the West Virginia legislature voted 18-16 to override Gov. Earl Ray Tomblin’s vetoes of  a prevailing wage repeal bill and the West Virginia Workplace Freedom Act, making West Virginia the 26th Right to Work state in the country and the fourth state to pass Right to Work since 2012. 

Read More

New Hampshire Rejects Prevailing Wage Bill

Last week, the New Hampshire House rejected a bill (House Bill 1641) that would have required prevailing wage be paid on all state construction projects. Citing a union-backed study, proponents of the bill argued the legislation would create jobs, spur economic activity, and raise workers’ wages without increasing the cost of projects. Opponents rejected those assertions and insisted the state would pay more for construction projects under the provisions of the bill. 

Read More

Prevailing Wage’s Impact on Affordable Housing

The New York Independent Budget Office (IBO) has released a revised report on the impact prevailing wage requirements would have on affordable housing projects built with the 421a property tax break. The 421a tax credit had been the subject of extensive negotiations in the past months. In Jan. 2016, the parties involved announced they could not reach a compromise, killing the tax credit and jeopardizing Mayor de Blasio’s plans for 80,000 affordable housing units for New York City residents. The agency had initially estimated that prevailing wage requirements would add $2.8 billion to the initiative’s total, but the agency says that figure was low as a result of data errors. After receiving additional information from the Department of Housing Preservation and Development, IBO now estimates prevailing wage requirements would cost the city an additional $4.2 billion, increasing affordable housing construction costs by 23 percent or $80,000 per unit

Read More

West Virginia Legislature Advances Prevailing Wage Repeal, Right to Work

On Feb. 4, the West Virginia Legislature sent two important bills to the governor’s desk. The House of Delegates passed ABC-supported right-to work legislation, the “Workplace Freedom Act” (SB 1) by a vote of 54-46, while the state Senate approved legislation repealing the state’s prevailing wage law along party lines. The measures were intensely debated in both chambers in the weeks leading up to the votes. West Virginia’s prevailing wage law was mired in controversy following the passage of a reform bill in 2015 and ABC’s West Virginia Chapter has been a vocal supporter of repealing the state’s prevailing wage.

Read More

New West Virginia State Sen. Puts Right-to-Work, Prevailing Wage Repeal in Motion

West Virginia State Senator Sue Cline (R-Wyoming) was sworn into office on Jan. 25 following a Jan. 22 court decision requiring Gov. Earl Ray Tomblin (D- W.Va.) to appoint a Republican to fill a vacant seat. Sen. Cline was appointed to fill a vacancy created by the resignation of Sen. Daniel Hall (R-Wyoming), who was elected as a Democrat but switched parties prior to resigning.

Read More

Study Finds Flaws in Wisconsin's Prevailing Wage Methods

In a study evaluating Wisconsin’s approach to calculating prevailing wages and its financial impact on taxpayers, the nonpartisan, nonprofit, and independent Wisconsin Taxpayers Alliance (WISTAX) found at least two methodological “flaws” that tend to raise prevailing wages above market rates.

Read More


Read More Davis-Bacon Newsline Articles