The Department of Labor Publishes a Notice of Proposed Rulemaking Updating Large Portions of the Davis-Bacon Act Following the Bipartisan Infrastructure Law
“History doesn’t repeat itself, but it often rhymes” – Mark Twain
On March 11, 2022, the Department of Labor (“DOL”) announced that they are proposing to issue the largest update to their regulations regarding the Davis-Bacon Act (“DBA” or “Act”) in several decades. While DOL periodically changes its guidance with regard to the DBA to suit the current legal landscape, the Notice of Proposed Rule Making proposes a wide swath of changes that no doubt will reshape compliance practices, increase wages, and perhaps even clarify some existing rules that might alleviate the uncertainties of how to be in compliance. This proposed rulemaking comes on the heels of other DOL pronouncements following the bipartisan infrastructure law to enhance worker rights and compensation and to ensure compliance after what is predicted to be a considerable uptick in federal funding for construction projects throughout the United States.
The DBA requires payment of wages and fringe benefits prevailing in the locality that the employee is doing work. The DBA applies to contracts in excess of $2,000 that are entered into, or possibly funded, by either the federal government or the District of Columbia and are for the purpose of construction, alteration, or repair of public budlings or public works. DOL oversees enforcement of the DBA and has the authority to issue rules and regulations for contractors and subcontractors working on covered projects.
As this is a proposed major revision, there are several changes that will have lasting effects on the construction industry. However, DOL has highlighted a few intentions that drive these changes:
· Creating several efficiencies in the prevailing wage update system and ensuring prevailing wage rates keep up with actual wages, which over time would mean higher wages for workers.
· Returning 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· Periodically updating prevailing wage rates to address out-of-date wage determinations.
· Providing broader authority to adopt state or local wage determinations when certain criteria is met based on sound survey methodology.
· Issuing supplemental rates for key job classifications when no survey data exists.
· Updating the regulatory language to better reflect modern construction practices.
· Strengthening worker protections and enforcement, including debarment and anti-retaliation.
News Release No. 22-109-NAT, Department of Labor, March 11, 2022.
This all is manifested in a 400+ page document that sets forth the proposed revisions to parts 1, 3 and 5 of Title 29 of the Code of Federal Regulations and a lengthy, dense discussion of the rationale for these revisions. Yes, some ibuprofen and caffeine might be of use.
To a certain extent, the so-called “updates” read like a union inspired wish list with respect to interpretations of the Davis-Bacon Act. One especially notable example is the proposed change to the definition of “Prevailing Wage.” The change would restore the so-called “30% Rule” that was an element of determining the prevailing wage rates from the mid-1930s through the early 80s. Presently, a prevailing wage for a classification is either the wage paid to a majority of workers, or where there is no majority rate, the prevailing rate is a weighted average of wages in the area for that classification. If the proposed rule is made final, a long-dormant intermediate step would be reinserted to deem any wage rate paid to the largest number of workers so long as they constitute at least 30% of the workforce in the classification. This is the 30% rule that was removed to eliminate an approach that was perceived in the early 1980s as bestowing an outsized impact to union-negotiated wage rates.
A number of other changes are geared towards updating the regulations so they are more aligned with case law arising out of litigation over the current rules and regulations. For the lawyers in the room, this includes a review of DBA case law concerning the Christian Doctrine, which reads missing provisions into contracts if they are required by law or regulation to have been included in the contract.
One can hope that these changes will fulfill DOL’s stated desire to make compliance easier. Indeed, we hope that contractors will encounter fewer occasions when they have to hunt through several different sources to determine the current DOL practice.
The notice has not been published yet in the Federal Register. Once it is (presumably quite soon) formally released, the public will be given 60 days to submit comments on the changes. For now, the text of the proposed rule can found on DOL’s website here: https://www.dol.gov/sites/dolgov/files/WHD/government-contracts/WHD-1235-AA40-NPRM.pdf.