Largest Expansion of Davis-Bacon Act in Generations

August 22, 2023 - Contractors CLDC LMCC LECET

The U.S. Department of Labor has issued a final rule updating and modernizing the Davis-Bacon Act. The update, announced by the Biden Administration last week, represents the biggest expansion of Davis-Bacon prevailing wage in generations.

The rule restores and strengthens the regulations that implement the Davis-Bacon and Related Acts (DBRA), which set a wage floor — or “prevailing wage” — on federal construction projects.

It also updates the methodology for determining the “prevailing wage” and strengthens enforcement mechanisms.

“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 construction projects across the nation,” said 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.”

The changes include:

  • New efficiencies in the prevailing wage update system to make 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  • Periodically updating prevailing wage rates to address out-of-date wage determinations.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.

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 U.S. 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.

“The Biden–Harris administration once again delivered for working people by ensuring that construction workers on federal and federally assisted projects receive the pay they deserve,” said AFL-CIO President Liz Shuler. “Today’s final rule on Davis–Bacon and Related Acts will not only strengthen prevailing wage laws, but it also will improve legal protections from wage theft for more than one million workers on federal construction projects. Thanks to the Biden administration’s historic federal investments and commitment to ‘ensuring the future is Made in America,’ massive job growth in construction and manufacturing is already underway.

“This rule will guarantee that workers in new and existing jobs, emerging infrastructure, and clean energy sectors are paid fairly,” Shuler said.

The rule is especially significant given the major federal investments the Biden-Harris administration has made through the Inflation Reduction Act, the Bipartisan Infrastructure Law and the CHIPS and Science Act, which will create hundreds of thousands of prevailing wage jobs, said Sean McGarvey, president of North America’s Building Trades Unions. The update “strengthens federal prevailing wage regulations and restores the law to its original intent after it has been watered down over the last 40-plus years. This ruling is a win for ALL construction workers, both union and non-union, for good and fair contractors, and for America’s taxpayers.”

“The ruling is a win for all construction workers,” said John Stiffler, executive secretary treasurer of the St. Louis Building and Construction Trades Council. “This is another example of the Biden-Harris Administration’s commitment to invest in America and uphold laws to pay workers fairly.”

Eric Oller, executive secretary-treasurer of the Southwestern Illinois Building & Construction Trades Council praised the Biden administration for the changes.

“This ruling is a win for workers in southwestern Illinois and across the country, ensuring they are paid fairly on federally assisted construction projects,” Oller said. “I applaud the Biden-Harris administration for getting this done for workers.”

IBEW International President Kenneth W. Cooper noted that the final rule reverses Reagan-era changes that weakened the law’s original intent – ensuring that federally funded or assisted projects support good-paying local jobs for local workers.

“For the past 40 years, a single low-wage contractor could depress wage rates on federal contracts. This rule change will allow construction workers to gain ground they lost in the 1980s, increasing the wages of millions and preventing low-road contractors from undercutting the workforce.”

Brent Booker, general president of LIUNA – the Laborers’ International Union of North America – said the final rule will protect the wages of millions of construction workers.

“LIUNA is deeply grateful to President Biden, Vice President Harris, and the Department of Labor, including Acting Secretary Su and her predecessor Secretary Walsh, who made this crucial update possible,” Booker said. “The Biden Administration continues to make good on their promise to champion working men and women.”