Changes to Davis-Bacon Act Could Mean More Wages for Workers on Federally-Funded Construction Projects
On October 23, 2023, significant changes to Davis-Bacon Act regulations will go into effect. The United States Department of Labor just finished the first major overhaul in forty years of the federal law that sets wage rates and other requirements for federally-funded public works construction projects. This overhaul implements new rules, rolls back other rules, and generally enhances worker protections under the Davis-Bacon Act.
The DOL now has the authority to decide that a contract incorrectly left out Davis-Bacon provisions and order that the contract be treated as if it had included Davis-Bacon requirements all along.
Contractors can be held responsible for subcontractors’ failure to pay prevailing wages. The definition of a prime contractor is expanded to include controlling shareholders of a prime contractor and partners in a joint venture that has entered into a prime contract.
The Rule also requires contractors to keep employee contact information and classification information—which can be very important in an investigation or lawsuit—and copies of all contracts, subcontracts, and modifications.
Changing Prevailing Wage Calculations
The Final Rule contains numerous changes to the way that prevailing wages are calculated. The calculations are complicated, but we expect that Davis-Bacon prevailing wages will generally increase and will more often reflect the union wage rates. The Rule also provides for more frequent updates to Davis-Bacon schedules. When a contract is modified to include substantial additional work, the most recent wage schedule must be used.
Expanding the “Site of the Work”
Davis-Bacon rates are limited to construction work performed at the “site of the work.” The Rule expands what is considered the “site of the work” and also includes certain types of delivery drivers. Certain secondary construction sites may be considered the “site of the work” only if that site is used primarily for a Davis-Bacon project.
Expanding “Construction” Activities
Work covered by Davis-Bacon rates will include installation of eco-conscious equipment in public works projects/public buildings, such as installation of solar panels, wind turbines, broadband, and electric car chargers.
The Rule also affirms that flaggers working on and near construction sites protecting worker and public safety are entitled to prevailing wages.
Certain delivery drivers are entitled to prevailing wages. Specifically, prevailing wages must be paid to delivery drivers for on-site time related to off-site delivery, if the time on site is more than a few minutes.
Effective Date of Changes
Most provisions of the new rule will go into effect October 23, 2023 unless the law states otherwise for specific items. Contracts that are already executed will not be subject to the new rules unless there is a future renewal or extension.
How can you seek payment of Davis-Bacon wages?
This varies enormously between jurisdictions. In New York, employees may be permitted to seek Davis-Bacon prevailing wages in state court by what’s known as a “breach of contract” lawsuit, which may be certified as a class action. Confusingly, New York federal courts, which belong to the Second Circuit, generally do not permit workers to bring breach of contract lawsuits to recover Davis-Bacon prevailing wages. Due to the unique complexities of prevailing wage law, it is crucial to seek advice from attorneys who are experienced in pursuing these claims. Pelton Graham has extensive experience in litigating prevailing wage lawsuits, including class actions, and our attorneys are happy to discuss any concerns or questions you may have about prevailing wages.
For more information, you can visit the U.S. Department of Labor FAQs regarding the Davis-Bacon rule changes, a side-by-side comparison of the new and former Davis-Bacon rules, or the text of the U.S. Department of Labor updated rule.