The DOL Issues Final Rule “to Modernize the Davis Bacon Act.”

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Under the Davis-Bacon Act, construction companies are required to pay a federally-set prevailing wage and benefit rate to employees performing work on federal contracts or subcontracts. The U.S. Department of Labor, which enforces the Act, has issued a final rule that drastically revises contractor obligations. According to the DOL’s press release, the revised rule:

  • Creates new efficiencies in the prevailing wage update system and makes sure prevailing wage rates keep up with actual wages which, over time, would mean higher wages for workers.
  • Returns 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  • Periodically updates prevailing wage rates to address out-of-date wage determinations.
  • Provides broader authority to adopt state or local wage determinations when certain criteria are met.
  • Issues supplemental rates for key job classifications when no survey data exists.
  • Updates the regulatory language to better reflect modern construction practices.
  • Strengthens worker protections and enforcement, including debarment and anti-retaliation provisions.

The construction industry, however, notes that these changes have a significant negative impact on contractors and subcontractors. Among the issues identified by the Association of Builders and Contractors, a national construction industry trade association, are the following:

  • Lowers the definition of “prevailing wage” to a wage paid to at least 30% of workers in a locality, down from 50%.
  • Allows the DOL to adopt state or local prevailing wage rates as DBA wage rates.
  • Makes DBA requirements effective by “operation of law,” meaning even if a federal agency fails to include DBA clauses in a contract, contractors are still required to pay prevailing wages.
  • Adds new anti-retaliation provisions to DBA contracts.