DOL Issues Comprehensive Updates to Davis-Bacon Regulations Applicable to Federal Public Works Projects in a Positive Move for Workers

The Davis-Bacon and Related Acts (DBRA) require contractors performing work on federally funded or assisted contracts for the construction, alteration, or repair of public buildings or public works above $2,000 to pay their laborers and mechanics no less than the locally prevailing wages and fringe benefits as determined by the Secretary of Labor.

On August 8, 2023, the federal Department of Labor (DOL) announced the issuance of the Final Rule updating the DBRA regulations, which will be published in the Federal Register on August 23, 2023. The Final Rule will officially take effect 60 days after its publication, meaning the Final Rule is scheduled to take effect on October 22, 2023 barring any procedural changes or legal challenges to the regulations.

The Final Rule represents the first comprehensive regulatory review of the DBRA in 40 years and provides many substantial changes to the DBRA that will affect hundreds of thousands of workers through strengthening enforcement of the DBRA and improving the accuracy of federal prevailing wage determinations.

Some of the notable changes include:

• Reverting back to the pre-1982 “3-step process” for determining a prevailing wage:

  Prior to the Final Rule, the Secretary of Labor would look to the single wage rate paid to more than 50% of workers in a classification to determine the prevailing wage. If a single wage rate was not paid to more than 50% of workers, then the Secretary of Labor would use a weighted average of all the wage rates in a classification to determine the prevailing wage.

  The use of weighted averages allows for especially low wage rates to lower the prevailing wage for a classification, resulting in workers being paid less on federal public works projects.

  Under the 3-step process, if there is no single rate paid to a majority of workers, the Secretary of Labor will look to the wage rate earned by the greatest number of workers (provided at least 30% of workers earn that rate) to establish the prevailing wage for a classification instead of using a weighted average, resulting in higher wages for workers.

• Allowing the Secretary of Labor to adopt state and local prevailing wage rates under certain circumstances, as long as the state or local government’s method and criteria for setting prevailing wage rates are substantially similar to those the Secretary of Labor uses in making wage determinations under the DBRA.

• Allowing variable wage rates to be counted together as a single wage rate when determining a prevailing wage if the rates are functionally equivalent, and the variation can be explained by a collective bargaining agreement (“CBA”) or the written policy of a contractor.

  For example, CBAs and other written policies often contain slight variations in how workers are compensated, such as time and location-based wage premiums. These variations do not represent a departure from the general compensation scheme in the agreement; they are simply minor variations to account for special circumstances. Hence, they will be treated as the same rate.

• Establishing anti-retaliation provisions that protect workers who report violations of the DBRA.

• Requiring the payment of interest on back wages owed to workers due to violations of the DBRA.

• Granting the DOL priority over other creditors to withhold funds from contractors that violate the DBRA.

• Making the DBRA’s requirements and the DOL’s ability to enforce those requirements effective by operation of law, ensuring that workers are protected by the DBRA even when the DBRA’s requirements are mistakenly omitted from public works contracts.

• Expanding DBRA coverage to energy infrastructure work and related activities.

 The Final Rule’s regulatory changes are especially significant in light of the passage of the 2021 Bipartisan Infrastructure Deal (Infrastructure Investment and Jobs Act), which authorized funding for many DBRA-covered federal public works projects that will employ hundreds of thousands of workers.

If you have any questions about the new Davis-Bacon regulations, or prevailing wage issues more generally, contact your labor law counsel.