The Department of Labor recently announced the implementation of a final rule that aims to modernize Davis-Bacon Act and Davis-Bacon and Related Acts regulations and set the prevailing wages contractors must pay workers on federal projects.
Implementation of the “Updating the Davis-Bacon and Related Acts Regulation” follows the August 2023 publication of the final rule in the Federal Register.
The rule restores DOL’s definition of prevailing wage to make it equivalent to the wage paid to at least 30% of workers—rather than 50% of workers—in a given trade in a locality. According to DOL, it aims to raise the hourly earnings of workers for prime contractors and subcontractors on projects that receive federal funding through legislation such as the Infrastructure Investment and Jobs Act and the CHIPS Act.
The Davis-Bacon Act uses pay surveys administered by DOL to set the prevailing wage in a federally funded project’s location. The process can be complicated, and there have been concerns that it skews wage rates.
DOL said the new rule makes the process of updating prevailing wage rates easier by giving the department the authority to adopt prevailing wages determined by state and local governments; issue wage determinations for labor classifications where insufficient data was received through its wage survey process; and update outdated wage rates. It also adds an anti-retaliation provision in contract clauses and strengthens DOL’s ability to withhold money from a contractor to pay employees their lost wages.
Critics of the Davis-Bacon law opposed the rule, saying it will increase regulatory burdens on small businesses, new industries and public works projects, as well as increase the cost of construction, discourage competition and diminish the value of taxpayer investment in government infrastructure projects.
