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DOL Issues Final Rule on Changes to Davis-Bacon Requirements

Tue, August 15, 2023 3:14 PM | Anonymous

After of months of development and thousands of comments, U.S. Department of Labor has issued a final rule, Updating the Davis-Bacon and Related Acts Regulations, which will make comprehensive revisions to the Act and related regulations that apply to federal and federally assisted construction projects funded by taxpayers. The voluminous DOL final rewrite, over 600 pages plus, comes some 40-years since the last changes were adopted to Davis-Bacon Act requirements. The final version details scores of significant proposed new rules (e.g., prevailing wage matters, wage determinations, and even critically important changes to definitions – such as site of work, prime contractors, and even the word agencies), many of which will be likely targets for litigation.

Due in part to the massive nature of the final rule, the DOL has published a chart comparing the old and new Davis-Bacon regulations at https://www.dol.gov/agencies/whd/government-contracts/construction/rulemaking-davis-bacon/dba-comparison-charts and provided other resources here: https://www.dol.gov/agencies/whd/government-contracts/construction/rulemaking-davis-bacon

Interestingly, the proposed and now final version of the rule have run into “bi-partisan” opposition or resistance on both the House side (House Education and Workforce Committee), and on the Senate side (HELP Committee) -- mostly on the grounds/concern with adding costs to infrastructure projects in a time of inflationary pressure. Many expect additional industry and likely state/local lawmakers, and other public officials will join this push back now that the final rule has been issued.

The 1931 Davis-Bacon Act and related regulations require contractors and subcontractors that perform work on federal and federally funded construction projects of $2,000 or more to pay a government-determined prevailing wage and benefit rate on an hourly basis to on-site construction workers. According to the DOL rulemaking, the Davis-Bacon Act and 71 active Related Acts collectively apply to an estimated $217 billion in federal and federally assisted construction spending per year—about 63% of all government construction put in place—and provide government-determined wage rates for an estimated 1.2 million U.S. construction workers.

The Congressional Budget Office estimates that repealing the 1930s-era Davis-Bacon Act would save the federal government $24.3 billion in spending between 2023 and 2032. A May 2022 study found that the Davis-Bacon Act costs taxpayers an extra $21 billion a year, increasing the price tag of construction projects by at least 7.2% and inflating construction workforce wages by 20.2% compared to local market averages if the DOL calculated prevailing wages using modern and scientific methodology via the U.S. Bureau of Labor Statistics.

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