By KERRY SMITH, EDITOR, ST. LOUIS CONSTRUCTION NEWS AND REVIEW MAGAZINE
The U.S. Dept. of Labor’s final rule, issued August 8th, revamps its Davis-Bacon Act procedures for determining prevailing wage levels – in favor of workers – on federally funded construction projects.
Expected to go into effect in approximately 60 days, the rule is being hailed by construction unions yet criticized by contractors and their associations. The revised rule reverts to pre-1983 methodology for determining whether a wage rate is prevailing, also referred to as the “30 percent rule.” Under the 30 percent rule, contractors must use the wage rate paid to a majority of the workers; if no such majority rate exists, they must use the wage paid to the largest number of workers on the job, as long as it was paid to at least 30 percent of that workforce.
The wage rule solidifies as $1.2 trillion in Infrastructure Investment and Jobs Act funding is propelling the start of a deluge of federal construction projects as well as projects that are stemming from the Chips and Science and Inflation Reduction Acts.
AGC of America CEO Stephen Sandherr says the more than 800-page ruling lowers the threshold of reporting required from the Dept. of Labor.
“This final rule appears to make it easier on the Dept. of Labor itself to set prevailing wages with less of the data it already collects, or lack thereof,” says Sandherr.
The Associated Builders and Contractors says this regulatory notice will annually affect an estimated $217 billion in federal and federally assisted construction spending for about 1.2 million construction workers.
“Unfortunately, the DOL’s final rule disregards the feedback of ABC contractors, construction industry stakeholders and thousands of small businesses urging the withdrawal of this unnecessary, costly and burdensome regulation,” says ABC Vice President of Regulatory, Labor and State Affairs Ben Brubeck. “Instead, the DOL is moving forward with dramatic changes to prevailing wage regulations, reversing much-needed reforms that were established nearly 40 years ago, and unlawfully increasing the regulatory burden on small businesses, new industries and public works projects.”
For more information about the ruling, see www.dol.gov/agencies/whd/government-contracts/construction/rulemaking-davis-bacon.
