There has been an initiative to revise the Davis Bacon Act (“DBA”) regulations and I have been following this closely as the DBA (and prevailing wage work) have always been a special interest of mine. Well, the process is in full swing as the US Department of Labor has received more than 37,000 comments on a proposed rule. The commentators opine that this would be the biggest change to the Davis-Bacon Act since President Ronald Reagan was in office.
A large component of the rule change would be to amend the manner in how prevailing wages are calculated and determined in a specific region (i.e. county). This is typically done through wage surveys. The critics of the proposal assert that Unions will have an inflated role in ascertaining a particular geographic area’s (e.g. Counties) wage rates. These critics, Congressional Republicans, state that “we are disappointed that the Department did not consider alternative methods to improve the accuracy of its data, including calculating wage rates using Bureau of Labor Statistics (BLS) data. The proposed rule instead reverts to a decades-old definition of prevailing wage to reward the administration’s Big Labor allies.”
The DOL plan would be to again use the so-called 30% rule, which looks at wages earned by one-third of the workers in the county if the designated protocol, using a 50% measuring rod, does not yield good data. They assert that “lowering the threshold for what is considered prevailing to less than a majority of responses is nonsensical and is clearly aimed at making it easier for union wage rates to prevail because collective bargaining agreements often set a uniform wage for an entire group of workers.”
Not unexpectedly, the construction labor unions applauded the proposed changes. The United Brotherhood of Carpenters and Joiners of America believes the new rules solve many problems created by the splintering of the construction industry. The Union points to the fact that the proposal strengthens the law by holding general contractors liable as the agency would be able to go against the Company or its shareholders. The proponents also applaud the rules specifying that anyone working on a project, even if deemed an “independent contractor” is entitled to the prevailing wage. The Union states that “while this does not solve the rampant and growing abuse of construction workers, it nonetheless establishes an important principle on federal and federally assisted construction projects.”
The Center for American Progress Action Fund, a supporter of the new regulations, asserts that the new regulations are needed to restore the balance for workers which was changed when the Reagan DOL eliminated the 30% threshold and ruled that a rate was “prevailing” only if 50% of the workers in a given county were paid that wage. The organization wrote that “the Center for American Progress Action Fund has long supported a return to the 30% standard since it will help to ensure that DBA rates reflect the actual wage rates paid in local markets.”
The Takeaway
These new changes are coming at an opportune time for workers on federally financed construction projects and the construction unions. There will be many millions of dollars flowing into projects under the Infrastructure Investment and Jobs Act. I can understand the initiative to stop bad contractors from undercutting legitimate contractors by paying less than the prevailing wage. Maybe the playing field should be leveled.
I thought it was…
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