NECA Discusses Proposed Davis-Bacon Regulations

(NECA) — The U.S. Department of Labor on March 18, 2022, issued a Notice of Proposed Rulemaking (NPRM) on Updating Davis-Bacon and Related Acts (RIN 1235-AA40), which contains the most sweeping revisions to the rules governing Davis-Bacon Act enforcement since the Reagan Administration last reformed the rules in 1982. The rule, which applies to federal construction contracts of more than $2,000, is designed to ensure that Davis-Bacon rates reflect actual local wages paid to workers in their local communities.

On May 17, 2022, NECA submitted to the Department of Labor public comments on the NPRM, both individually and in partnership with the Construction Employers of America coalition.

Key provisions NECA advocated for include:

• Definition of “Prevailing Wage”- The proposed rule would reverse the 1982 regulation interpretation, which would now identify the prevailing wage rate as: (1) any wage rate paid to a majority of workers; (2) if there is no wage rate paid to a majority of workers, then the wage rate paid to the greatest number of workers, provided it is paid to at least 30 percent of workers (i.e., the so-called “30-percent rule”); and (3) if the 30-percent rule is not met, DOL would use the weighted average rate. DOL asserts this reform is essential “to ensure prevailing wages reflect actual wages paid to workers in the local community.” The 1982 rule set the process of determining “prevailing wage” as: (1) any wage rate paid to a majority (50 percent) of workers, and (2) the weighted average rate.
• Use and Effectiveness of Wage Determinations: The NPRM would require that the most recent version of any applicable wage determination must be incorporated when a contract or order is changed to include additional, substantial construction, alteration, and/or repair work not within the scope of work of the original contract or order.
• Periodic Adjustments to Non-Collectively Bargained Prevailing Wage Rates: The proposed rule includes a provision to the regulation at 29 CFR. 1.6(c)(1) to provide a mechanism to regularly update certain non-collectively bargained prevailing wage rates. The proposed rule also would expand DOL’s practice of updating prevailing rates between surveys to include updating non-collectively bargained rates.
• Misclassifying Construction Workers as Independent Contractors: The NPRM includes provisions to reinforce the “well established” principle that Davis-Bacon labor standards apply even when there is no employment relationship between a contractor and worker.
• Modernizing the Definition of “Building or Work”: In response to covering new technologies not anticipated by the 1982 rule, the NPRM proposes to include the building of solar panels, wind turbines, broadband installation, and installation of electric car chargers be included to the non-exclusive list of covered activities.

NECA welcomes most of the reforms in this proposal, as it is the most comprehensive rewrite repairing several significant gaps in enforcement of the Davis-Bacon and Related Acts since the 1982 changes. The Department of Labor will now consider the public comments and determine if they will amend the NPRM, then submit to the White House for final review. NECA looks forward to working with the administration on the swift implementation of this rule.