The US Department of Labor’s final rule that updates the Davis-Bacon and Related Acts (DBRA) is now officially in effect as of Oct. 23, 2023. The DOL proposed changes to the prevailing wage regulations, which hadn’t been updated in more than 40 years, as part of President Biden’s Executive Order 14008.
According to the DOL, the update greater clarifies and enhances the effectiveness of the DBRA regulations to meet the demands of the modern economy. “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,” says Acting 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.”
But many in construction don’t agree that the update will benefit the industry. Associated Builders and Contractors (ABC) issued a statement opposing the new rule, stating: “This is yet another Biden administration handout to organized labor on the backs of taxpayers, small businesses and the free market,” said ABC Vice President 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.”
The Davis-Bacon Act or DBA was created in 1931 to protect workers from receiving low pay while competing for federally funded construction projects during the Great Depression. The act, as currently amended, requires that any federal contractor who takes on a job over $2,000 on public buildings or public works must pay their workers no less than the prevailing wage and fringe benefits as on similar projects. Types of work include construction, alteration or repair (including painting and decorating).
All contracts entered into after Oct. 23 will be subject to the new rule’s provisions. Additionally, in certain situations the rule may apply to existing contracts. This includes if a contract is changed to cover substantial Davis-Bacon-covered work not within the scope of the original contract, if an option to extend a contract’s term is exercised, and for ongoing contracts not tied to completion of a particular project.
The DOL’s new rule updates the Davis-Bacon prevailing wage regulations by:
- Creating new efficiencies in the prevailing wage update system and making sure prevailing wage rates keep up with actual wages, which over time could mean higher wages for workers.
- Returning to the “prevailing wage” definition used from 1935 to 1983 to make sure 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.
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