Department of Labor announces new Davis-Bacon Act rules now in effect

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The U.S. Department of Labor (DOL) on Monday announced that the final update to the Davis-Bacon Act (DBA) and Davis-Bacon and Related Acts (DBRA) has gone into effect.

The updates, which includes DOL returning to the pre-1980’s definition of prevailing wage, were scheduled to go into effect on Oct. 23. DOL officials said this was the first significant update in 40 years for federally funded projects.

The department amended the definition of prevailing wage and the scope of data used to identify prevailing wage in an area, returning to the definition used from 1935 to 1983, according to the Federal Register. The department proposed the change to address the overuse of weighted average weights, the register added.

“Currently, a wage rate may be identified as prevailing in the area only if it is paid to a majority of workers in a classification on the wage survey; otherwise, a weighted average is used,” according to the executive summary.

“The Department returns instead to the “three-step” method that was in effect before 1983. Under that method (also known as the 30-percent rule), in the absence of a wage rate paid to a majority of workers in a particular classification, a wage rate will be considered prevailing if it is paid to at least 30 percent of such workers,” the summary continued.

Beyond prevailing wage, the DOL made other changes to how the department enforces and administers DBRA. Here is what they changed.

• Created new efficiencies in the prevailing wage update system and made sure prevailing wage rates keep up with actual wages, which officials said over time translate to higher wages to workers;
• Return to the “prevailing wage” definition used from 1935 to 1983;
• The department will periodically update prevailing wage rates to address out-of-date wage determinations;
• Provided broader authority to adopt state or local wage determinations when certain criteria are met;
• The department will issue supplemental rates for key job classifications when no survey data exists;
• Updated the regulatory language to better reflect modern construction practices; and
  The department will strengthen 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 construction workers in the U.S., DOL officials said.

The department anticipates the pool of construction workers to grow significantly after the signage of the Infrastructure Investment and Jobs Act.

Julie Su, the acting secretary of DOL, said modernizing DBRA will ensure jobs created under the Biden-Harris Administration will give fair wages to workers on federally funded construction projects.

“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,” Su added.

According to analysts, contractors and subcontractors working on projects covered by DBRA should be aware of DOL’s final changes and find ways to ensure they are compliant.

The act, signed in 1931, applies to workers on federal contracts worth $2,000 or more for construction and repair of public buildings or works.