The Davis-Bacon Act (DBA) was passed in 1931 to require federal government construction contractors on covered public buildings and public works to pay the “prevailing wage” to laborers and mechanics performing covered work in the civil subdivision where the work is being performed.2 The stated intent of the bill sponsors was to protect higher paid workers during the Great Depression – many of whom were union workers – from out-of-state wage rate competition from contractors that were viewed as taking advantage of the extraordinary economic conditions of the 1930s.
U.S. Department of Labor (DOL) published a notice of proposed rulemaking in the Federal Register,1 calling for the most sweeping revisions to the rules governing Davis-Bacon Act (DBA) enforcement since the Reagan administration’s 1982 reforms.
Here are some of the highlights of the proposals affecting DBA construction:
Return to the 30 percent rule. As noted above, the Reagan DOL in 1982 eliminated a rule that allowed wage rates to be found “prevailing” if voluntary wage surveys found a single wage to be paid to a mere 30 percent of the local workforce in a given trade, if no wage rate was found prevailing among a majority of the workforce. The Reagan DOL found that the 30 percent rule contributed to higher rates in wage determinations than actually prevailed, and also contributed to undesirable inflation. DOL’s proposed rule, in the name of “modernization,” seeks to restore the 30 percent rule by redefining the word “prevailing” and declaring that “weighted average” wage rates are undesirable outcomes.
Undoing the Reagan separation between rural and urban wage rates. Another Reagan-era reform was to eliminate the prior practice of counting together urban and rural wage rates in DOL wage surveys, which not surprisingly resulted in urban wages being overcounted as prevailing in smaller rural area. Nevertheless, DOL now proposes to return to its 1970’s policies.
Expanding site of the work. The DBA expressly states that its coverage is limited to construction performed at the “site of the work.”6 Numerous court decisions during the 1990’s rejected DOL efforts to expand the scope of DBA coverage to pre-fabrication activities away from the construction site or transportation to and from the site. DOL now proposes to reopen this previously settled issue by expanding the definition of the construction “site” and by expanding coverage to material supplier drivers.
Expanding types of activities constituting “construction.” DOL proposes to expand the types of work that will be deemed to be covered by DBA requirements, to expressly include installation of “green” equipment (such as installation of solar panels, wind turbines, broadband, and electric car charges) and to include portions of public buildings under construction and demolition.
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Gary Fleisher is the Editor in Chief of Modular Home Source and Offsite Builder. Email at [email protected]
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