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DOL Announces Final Rule to Modernize Davis-Bacon Act

Aug. 14, 2023
First major changes in 40 years incorporate comments from labor, other stakeholders. Contractor groups ABC, AGC voice concerns.

FROM INDUSTRY PRESS RELEASES

WASHINGTON, DC, Aug. 8 – The U.S. Department of Labor today announced issuance of its final rule “Updating the Davis-Bacon and Related Acts Regulation” to update regulations that implement the Davis-Bacon Act and Davis-Bacon and Related Acts to reflect better the needs of construction workers on federal construction investments.

The announcement follows a Notice of Proposed Rulemaking on March 18, 2022, which received comments from construction industry and labor stakeholders that helped inform the regulatory updates. The updates are the most comprehensive in decades.

Reflecting the Modern Economy

The final rule provides greater clarity and enhances the DBRA regulations’ effectiveness in the modern economy. These updates strengthen and streamline the process for setting and enforcing wage rates on federally funded construction projects to make sure that federal government infrastructure investments are also investments in U.S. workers.

“Modernizing the Davis-Bacon and Related Acts is key to making sure that the jobs being created under the Biden-Harris administration’s Investing in America agenda are good jobs, and that workers get the fair wages and benefits they deserve on federally funded constructions projects across the nation,” said Acting U.S. Secretary of Labor Julie Su. “This updated rule will create pathways to the middle class for more families and help level the playing field for high-road employers because companies who exploit their workers, or who don’t pay workers fairly, should never have a competitive advantage.” 

Regulatory Changes

The final rule’s regulatory changes improve the department’s ability to administer and enforce DBRA labor standards more effectively and efficiently. These changes include the following:

  • Creating new efficiencies in the prevailing wage update system and making sure prevailing wage rates keep up with actual wages which, over time, would mean higher wages 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  • Periodically updating prevailing wage rates to address out-of-date wage determinations;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 are 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 provisions.

Infrastructure Investment

The DBRA requirements apply to an estimated tens of billions of dollars in federal and federally assisted construction spending each year and provide minimum wage rates for hundreds of thousands of US construction workers. The department expects a significant increase in the numbers of industry workers due to the historic investments in federally funded construction projects made possible by legislation such as the Infrastructure Investment and Jobs Act (IIJA). 

“In light of recent investments in our nation’s infrastructure, modernized regulations are more important than ever to ensure fair wages and benefits for the workers who build and repair our roads, bridges, federal buildings and energy infrastructure,” said DOL's Principal Deputy Wage and Hour Division Administrator Jessica Looman. “They will help set correct wage rates for workers on these federally funded construction projects that better reflect the realities of today’s labor market.”

New federal investments will support projects related to clean energy, power and water infrastructure improvements, legacy pollution remediation, and renovation to the nation’s broadband and transportation infrastructures.

The DBRA’s purpose is to ensure employers on federally funded or assisted construction projects pay locally prevailing wages to construction workers and to prevent the unintended consequence of depressing workers’ wages during the government’s construction contracting activity.

Industry Reactions

United Association of Union Plumbers and Pipefitters (UA) General President Mark McManus praised the final Davis-Bacon rulemaking as a monumental victory for workers everywhere. 

“This long-awaited update to the federal Davis-Bacon rule is a historic step forwards for working families like ours. Since 1931, Davis-Bacon protections have guaranteed fair wages for an honest days’ work—protecting our members from wage theft and bad actors. The new rulemaking from the Department of Labor is the most significant update to protect prevailing wage in generations,” said McManus. “The Biden Administration promised to be the most pro-worker and the most pro-union Administration since FDR and the New Deal. This commitment to updating Davis-Bacon prevailing wage protections is further evidence that the Biden Administration is delivering on that promise.”

That sentiment was echoed by Aaron Hilger, CEO of the Sheet Metal and Air Conditioning Contractors' National Association (SMACNA). "These expertly crafted and reasoned reforms to the prevailing wage regulations have been a long time in coming and will put union sheet metal contractors on a fair and level playing field with our non-union competition,” said Hilger. “Given the manpower shortage the construction industry currently faces, the changes could not have come at a better time to boost registered apprenticeship and industry skilled recruitment.”

General contractors, however, were less enthused.

Both union and non-union contractor groups issued statements voicing concerns about the new measures, but for very different reasons. Associated General Contractors of America (AGC) believes the revisions do not go far enough, while Associated Builders and Contractors (ABC) stand vehemently opposed.

“This is yet another Biden administration handout to organized labor on the backs of taxpayers, small businesses and the free market,” said ABC VP of Regulatory, Labor and State Affairs Ben Brubeck. “Unfortunately, the DOL’s final rule 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 nearly 40 years ago, and unlawfully increasing the regulatory burden on small businesses, new industries and public works projects."

“With this final rule, the DOL has abandoned any possibility of instituting commonsense reforms to Davis-Bacon regulations to ensure accurate and prompt prevailing wage determinations while providing the regulated community with the clarity needed to deliver high-quality projects at an affordable cost to taxpayers... ABC will now be forced to take appropriate legal action to address the numerous illegal provisions of the final rule and protect our members, and ultimately hard-working taxpayers, from the harmful impacts of this regulation."

(ABC had submitted nearly 70 pages of comments on the DOL’s proposed rule and its more than 50 significant changes, urging the DOL to withdraw the proposal.)

Meanwhile, AGC CEO Stephen E. Sandherr, issued the following statement in reaction to the emerging details of the  With an over 800-page rulemaking, where AGC is cited over 60 times, there is a lot to analyze to get a solid understanding of the full impact such a massive rulemaking will have on the federal construction market.  A preliminary analysis shows that while more work will be covered, this rulemaking critically missed an opportunity to improve the wage determination process. The 40-year awaited update reverts to the pre-1983 methodology for determining whether a wage rate is prevailing, also referred to as the “30 percent rule”. Just as proposed, this final rule appears to make it easier on the Department of Labor (DOL) itself to set prevailing wages with less of the data it already collects, or lack thereof.

AGC holds that the DOL’s almost exclusive reliance on voluntary surveys to produce and update wage determinations has created a compensation system for Davis-Bacon covered construction that poorly reflects the construction labor market in many parts of the country. AGC recommended the DOL should instead focus on how to collect more accurate data, instead of being able to rely on less, or even at times inappropriate data, to determine wages that are truly prevailing. While we look forward to working with the DOL on implementation of the rule, we will continue to evaluate all our options on behalf of our members.

Next Steps

The final rule will be effective 60 days after its publication in the Federal Register. Learn more about the final rule by visiting www.dol.gov/agencies/whd/government-contracts/construction/rulemaking-davis-bacon.

Learn more about DBRA worker protections or the Wage and Hour Division by visiting the Department of Labor web site at www.dol.gov. 

You may also call toll-free 1-866-4US-WAGE to speak directly and confidentially to a trained Wage and Hour Division professional. The division protects workers regardless of where they are from and can communicate with workers in more than 200 languages.

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