Labor Dept. Updates Prevailing Wage Methodology Under Davis-Bacon Act

The US Department of Labor (DOL) is proposing rules to update regulations implementing the Davis-Bacon Act (DBA). The review and update pertain to the prevailing wage standard regarding how federal contractors are paid when working on federally funded construction projects.

Labor Dept. Updates Prevailing Wage Methodology

Considered the first comprehensive regulatory review in nearly 40 years, the DOL believes that revisions of the regulations will help offer greater clarity and modernize the regulations. The department last engaged in a comprehensive revision of the regulations governing the DBA and the Related Acts in a 1981-1982 rulemaking.

The proposal updates definitions such as ‘site of the work’ to include sites where prefabricated components are produced, and ‘scope of work’ to include energy infrastructure.

It also changes the methodology for determining the prevailing wage. This is intended to help in the enforcement of the minimum wage provisions of the Davis-Bacon Act and the various statutes dealing with federally assisted construction that contain similar minimum wage provisions.

The DOL currently uses the average rate if a majority of workers do not receive the same wage rate. Under the proposed rule, if a majority of workers are not paid a particular wage, DOL will identify any wage rate that is paid to more than 30 percent of the workers as prevailing.

If there is still no wage prevailing, the agency will revert to an average rate to determine the prevailing wage. In addition, DOL will also update non-union prevailing rates every three years to address out-of-date wage determinations.

What is the Davis-Bacon Act?

First passed in 1931 the Davis-Bacon Act uses pay surveys administered by the DOL to set the prevailing wage in a federally funded project. It applies to federal government contracts above $2,000 for the construction, alteration, or repair of public buildings or public works.

Image: Depositphotos

This article, “Labor Dept. Updates Prevailing Wage Methodology Under Davis-Bacon Act” was first published on Small Business Trends