Davis-Bacon Act: Understanding the Final Rule - American Society of Employers - Linda Olejniczak

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Davis-Bacon Act: Understanding the Final Rule

For the first time in nearly four decades, the U.S. Department of Labor (DOL) has ushered in significant revisions to regulations governing the Davis-Bacon Act (DBA) and its associated statutes, affecting federal wage regulations applicable to contractors and subcontractors engaged in most government construction projects. These changes, collectively referred to as the DBRA, are aimed at enhancing clarity and consistency in administering and enforcing DBRA regulations.

The DBA, enacted in 1931, establishes minimum wage standards for construction workers on federal projects exceeding $2,000. It mandates payment of locally prevailing wages and fringe benefits, with wage determinations set by the DOL. Over time, Congress extended similar prevailing wage requirements to more than 70 other statutes, known as DBA Related Acts, covering a vast array of federally assisted construction projects.

The Final Rule introduces revisions to terminology and expands the scope of DBRA coverage. Key changes include the addition of definitions for contractor, subcontractor, prime contractor, and material supplier. Moreover, the rule broadens the definition of "building or work" to include installations such as solar panels, wind turbines, broadband, and electric car charging stations. Notably, demolition work is now covered when it involves subsequent construction on the site.

Under the Final Rule, DBRA contract clauses now take effect "by operation of law," ensuring compliance even if omitted from contracts. Prime contractors are accountable for subcontractors' back wages, and DOL has enhanced enforcement mechanisms, including anti-retaliation provisions and remedies. Additionally, the rule introduces "cross-withholding," allowing the government to withhold payments on unrelated contracts to recover owed amounts.

Wage determinations will be updated more frequently, with general wage determinations as the default for contracts. Prevailing wage rates may now incorporate non-collectively bargained rates, updated periodically based on Bureau of Labor Statistics data.

Despite the Final Rule's implementation, industry groups have challenged its legality. Lawsuits filed in federal courts allege DOL exceeded its authority and violated administrative procedures. These cases remain unresolved, and the outcome may hinge on the Supreme Court's stance on Chevron agency deference.

As of October 2023, the updated DBRA is in effect, but legal challenges persist. Monitoring developments and seeking specialist advice on compliance with these regulatory changes is essential for contractors navigating the evolving landscape of federal construction projects.

While the Final Rule aims to streamline DBRA administration, ongoing litigation underscores the complexity and potential implications for contractors in the construction industry. Stay informed, stay compliant, and seek expert guidance to navigate these regulatory changes effectively.


Source:  CCH HRAnswers Now 4/15/24


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