Last month, the US Department of Labor issued a Notice of Proposed Rulemaking to update the Davis-Bacon wage regulations. Specifically, the Department proposes to amend regulations issued under the Davis-Bacon that set forth rules for the pre-determination of Davis-Bacon wage rates.
The Davis-Bacon Act, created in 1931, requires contractors and subcontractors working on federally funded projects to pay employees locally prevailing wages and benefits. At present, Davis-Bacon wages are required for workers on site.
The new regulations seek to include work not previously covered under the Act. For example, the DOL proposes to change the definition of building or work to include offsite fabrication of building materials that make up a “significant portion” of the building. The new regulations may also include transportation that takes place entirely outside of the worksite, such as between a fabrication location and delivery to the worksite.
The proposed changes also impact the way wage rates are calculated. The DOL has indicated that it wants to return to the three-step process for establishing wage rates that was in effect in 1983. The proposed three-step process would include:
- Any wage rate paid to a majority of workers.
- If no wage rate is paid to a majority of workers, then the wage rate paid to the greatest number of workers, provided it was paid to at least 30 percent of workers. Also known as “the 30-percent rule.”
- If the 30-percent rule wasn’t met, the weighted average rate.
The second step above was removed in the mid 1980’s.
The comment period for these rules has begun and comments should be submitted by May 17, 2022.
If you have questions about Davis Bacon wages or these new regulations, we recommend you contract an experienced construction attorney.