Federal officials looking at overhauling Davis-Bacon for first time in 40 years

Listen to this article

The U.S. Labor Department is considering revising federal Davis-Bacon rules, possibly resulting in the first overhaul in decades of the formula used to set prevailing wages on federal projects.

The agency says the proposal is meant to ensure that adjustments to prevailing wages occur faster than now and that workers’ wages rise over time. It would achieve those goals by re-adopting a wage-calculation system eliminated in the 1980s, during the Regan Administration.

Prevailing wages apply to $217 billion in federally funded construction spending a year and affect about 1.2 million workers.

“Federal dollars should be used to create good jobs in local communities all across our country,” said Secretary of Labor Marty Walsh in a statement. “These proposed regulations are good for workers, good for building high-quality infrastructure and for ensuring we have a strong construction industry, as we rebuild America.”

The proposed changes would do away with the current system for calculating prevailing wages, which relies on pay-rate surveys conducted by the Department of Labor. Critics contend that system allows low wages in a particular area to drag down overall prevailing-wage rates.

The Labor Department instead wants to re-institute a three-step process used by federal officials from 1935 to 1983. To set prevailing wages for a particular area, officials would first try to see if there was rate paid to the majority of workers in that place. In the absence of a majority rate, they would next try to learn if there is a rate paid to at least 30% of workers in an area. If that criterion couldn’t be met, they would use a weighted average.

Besides changing how prevailing wages are calculated, the Department of Labor is considering adopting anti-retaliation clauses to protect workers who report employers who fail to pay the correct rates. The labor department’s announcement of the proposed changes last week kicks off a 60-day public comment period.

While labor groups praised the rule changes, some construction interests cried foul.

The Associated Builders and Contractors, for instance, said it would push back against the changes.

“Reversing course by 40 years is not modernization,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs, in a statement. “Instead, it is even worse public policy catering to special interests embedded in the Biden administration that benefit from the broken status quo.” Follow @natebeck9