Proposed changes to Davis-Bacon Act spark debate amid infrastructure spending

An excavator loads a dump truck in February 2017 as traffic passes through the Zoo Interchange project. Proposed changes to the Davis-Bacon Act and related laws would require that dump-truck operators be paid prevailing wages both when working directly on federal project sites and when driving to and from them. (Photo by Kevin Harnack)

Non-union contractors are lining up in opposition to proposed changes to federal prevailing-wage laws that they argue will make public projects more expensive at a time when the U.S. is looking to rebuild much of its infrastructure.

But union representatives contend an overhaul of the roughly 90-year-old Davis-Bacon Act is needed to ensure money from last year’s Infrastructure Investment and Jobs Act is distributed fairly to workers rather than hoarded by unscrupulous contractors.

The Associated Builder and Contractors, a predominantly non-union trade group, submitted a comment letter to federal officials this week contending that their proposed changes to Davis-Bacon law setting prevailing wages on federal projects would lead to “inflationary” results. In general, federal officials are seeking revisions that would let fewer contractors set prevailing-wage rates in a given geographic area, would apply prevailing wages to work done at prefab shops and other off-site settings and would cause certain wage rates to be based on more up-to-date data, among other things.

In its letter, the ABC argues the proposals couldn’t come at a worse time. If adopted, according to the ABC, they would serve only to exacerbate the supply and labor shortages, cost increases and other burdens that are already weighing on the construction industry.

“This proposal will ultimately result in less value and job creation from taxpayer investment in infrastructure––including the $550 billion of new infrastructure funding via the Infrastructure Investment and Jobs Act,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs, in a statement.

Robb Kahl, president of the union-allied Construction Business Group, meanwhile noted Davis-Bacon has not been revised in 40 years. With the federal government poised to spend more than $1 billion on infrastructure projects, Kahl said, now is exactly the right time for an overhaul.

“We all have to agree that it’s important that it gets spent wisely and it gets spent fairly, instead of having that money line the pockets of rich unscrupulous contractors and not benefit the workers and the taxpayers,” Kahl said. “All these changes are doing is making sure the money goes where it’s supposed to go.”

Dan Bukiewicz, president of the Milwaukee Building-Construction Trades Council, said revisions to Davis-Bacon are overdue.

“We want to make sure people are being paid fairly for this work,” Bukiewicz said. “You don’t want to undercut the industry.”

In one of its most significant changes, federal officials’ proposed revision of Davis-Bacon would reinstitute a prevailing-wage system that had been in place until the ‘80s. Before the system’s elimination, a three-tier process had been used to calculate Davis-Bacon wages.

First, federal officials had tried to learn if a standard wage was being paid to more than half of all workers in a particular in a certain geographic area. Failing that, they would then see if there were a standard wage paid to at least 30%. Still failing that, they would turn to a system of weighted averages. The second step was eliminated in 1982 by the Reagan Administration amid anxieties about inflation.

The current proposed changes would restore the 30% threshold. If that were to happen, critics contend, a minority of contractors in a specific geographic area would essentially gain the ability to control what other companies in the same place must pay their workers on federal projects. Since union companies often agree across the board to pay various trades set wages laid out in collective-bargaining contracts, the proposed change would give labor officials more influence over what all workers – union and non-union alike – are paid in a given trade.

Another proposed change would let the Department of Labor use the Bureau of Labor Statistics’ Employment Cost Index to revise the wages paid to trades not governed by collective-bargaining agreements. Prevailing wages for those trades are now set using employer surveys that can often be 10 or more years out of date. Federal officials’ proposed change would instead allow the wages to be revised every three years.

Still another proposal would modify a provision stipulating that prevailing wages apply only at “the site of the work.” The proposed change would extend prevailing wages to work performed at pre-fabrication sites and by dump-truck drivers hauling materials to job sites.

Ron Lingford, president of the United Dump Truck Association of Wisconsin, said it’s absurd that material haulers can now be paid one rate when they’re on a construction site and another when they’re driving to and from it.

“You are constantly trying to figure out when you are in the perimeter of the project,” Lingford said. “And you get into this very complicated situation.”

Still other provisions are meant to make it easier to hold employers who violate Davis-Bacon and related to laws to account.

The proposed Davis-Bacon changes were introduced in March. Wednesday marked the last day that interested parties could submit comments on them to the Department of Labor.

According to the department, the Davis-Bacon Act and various related acts apply to roughly $217 billion in federal and federally assisted construction spending every year and provide government-determined wage rates for an estimated 1.2 million U.S. construction workers.