Labor Department moves to reboot Davis-Bacon wage calculation

The Labor Department Wage and Hour Division (WHD) will open a public comment period for its formal Notice of Proposed Rulemaking, “Updating the Davis-Bacon and Related Acts Regulations” (DBRA). Regulatory changes outlined will improve WHD’s ability to administer and enforce DBRA labor standards on federally funded construction projects more effectively and efficiently, officials contend, and include:

• Creating efficiencies in the prevailing wage update system and ensuring rates keep up with actual wages, which over time would mean higher compensation for workers.
• Returning to the definition of “prevailing wage” used from 1935 to 1983 to ensure prevailing wages reflect actual wages paid to workers in the local community.
• Periodically updating prevailing wage rates to address out-of-date wage determinations.
• Providing broader authority to adopt state or local wage determinations when certain criteria is met.
• Issuing supplemental rates for key job classifications when no survey data exists.
• Updating the regulatory language to better reflect modern construction practices.
• Strengthening worker protections and enforcement, including debarment and anti-retaliation.

WHD counts 71 DBRA laws applicable to federal and federally assisted construction projects and stipulating payment of locally prevailing wage rates for 1.2 million U.S. construction workers. The requirements currently cover approximately $187 billion in annual building and nonbuilding work. DBRA will apply to federal outlays embodied in the Infrastructure Investment and Jobs Act of 2021, which in addition to transportation will support projects involving clean energy, power, water supply, wastewater conveyance and treatment, legacy pollution remediation, plus broadband upgrades.

“Given recent unprecedented investments in our nation’s infrastructure, this comprehensive regulatory review is necessary to ensure employers on federally funded or assisted construction projects pay fair wages to the workers who build our roads, bridges, federal buildings and energy infrastructure,” says Acting WHD Administrator Jessica Looman. “The Davis-Bacon and Related Acts benefit construction workers, their families, their communities and taxpayers by ensuring all contractors can compete on equal footing and by preventing employers who pay workers substandard wages from gaining an unfair competitive advantage.”

“The 91-year-old Davis-Bacon Act and related regulations are in dire need of modernization and clarity. For decades, watchdogs in the federal government have criticized the Department of Labor’s convoluted method for determining prevailing wage and benefit rates through an outdated and unscientific survey process riddled with errors and inefficiencies,” adds Associated Builders and Contractors Vice President of Regulatory, Labor and State Affairs Ben Brubeck, whose organization is one of the top critics of the DBRA’s impact on federally funded construction.

“In its current form, 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,” he continues. “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.

“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 administration that benefit from the broken status quo.”