The U.S. Department of Labor announced the issuance of the final rule, “Updating the Davis-Bacon and Related Acts Regulation,” revising regulations that implement the Davis-Bacon Act and Davis-Bacon and Related Acts, reflecting the needs of construction workers on federal construction investments, though members of the industry are not happy about the revisions.

The announcement follows a Notice of Proposed Rulemaking on March 18, 2022, which received comments from the construction industry and labor stakeholders that helped inform the regulatory updates. The department says the updates are the most comprehensive in decades.

According to a release from the department, the final rule "provides greater clarity and enhances the DBRA regulations’ effectiveness in the modern economy." The updates are intended to strengthen and streamline setting and enforcing wage rates on federally funded construction projects.

“Modernizing the Davis-Bacon and Related Acts is key to making sure that the jobs being created under the Biden-Harris administration’s Investing in America agenda are good jobs, and that workers get the fair wages and benefits they deserve on federally funded constructions projects across the nation,” said Acting Secretary of Labor Julie Su. “This updated rule will create pathways to the middle class for more families and help level the playing field for high-road employers because companies who exploit their workers, or who don’t pay workers fairly, should never have a competitive advantage.” 

The changes include:

• Creating new efficiencies in the prevailing wage update system and making sure prevailing wage rates keep up with actual wages, which, over time, would mean higher wages for workers.
• Returning to the definition of “prevailing wage” used from 1935 to 1983 to ensure prevailing wages reflect actual wages paid to workers in the local community.
• Periodically updating prevailing wage rates to address out-of-date wage determinations.
• Providing broader authority to adopt state or local wage determinations when certain criteria are met
• Issuing supplemental rates for key job classifications when no survey data exists.
• Updating the regulatory language to better reflect modern construction practices.
• Strengthening worker protections and enforcement, including debarment and anti-retaliation provisions.

The DBRA requirements apply to tens of billions of dollars in federal and federally assisted construction spending each year and provide minimum wage rates for hundreds of thousands of U.S. construction workers. The department expects a significant increase in the number of industry workers due to the historic investments in federally funded construction projects made possible by legislation such as the Infrastructure Investment and Jobs Act.

“In light of recent investments in our nation’s infrastructure, modernized regulations are more important than ever to ensure fair wages and benefits for the workers who build and repair our roads, bridges, federal buildings and energy infrastructure,” said Principal Deputy Wage and Hour Division Administrator Jessica Looman. “They will help set correct wage rates for workers on these federally funded construction projects that better reflect the realities of today’s labor market.”

New federal investments will support projects related to clean energy, power and water infrastructure improvements, legacy pollution remediation, and renovation to the nation’s broadband and transportation infrastructures, the department said in a release.

New Rules Called a 'Handout' to Organized Labor

The Associated Builders and Contractors issued a statement in response to the final rule, characterizing it as a handout from the Biden administration to "organized labor on the backs of taxpayers, small businesses and the free market." The trade association notes it submitted 70 pages of comments on the proposed rule.

“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," said ABC Vice President of Regulatory, Labor and State Affairs Ben Brubeck in a written statement. "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.”

Brubeck said the final rules come in the midst of challenging economic realities, including high material costs and an ongoing skilled labor shortage, saying it will only exacerbate the tough conditions facing those in the construction industry.

"[T]he rule makes it much more likely that the DOL will adopt union wage scales at the prevailing wage at a greater frequency than in current practice, which already adopts union wage scales at improbable rates considering just 11.7% of the construction industry is unionized," he said.

The association indicated it would take legal action to address the "numerous illegal provisions" of the final rule.

The final rule will be effective 60 days after its publication in the Federal Register. Learn more about the final rule to modernize Davis-Bacon Act regulations here.