Davis-Bacon Act updates mean higher pay, expanded coverage, more worker protections on projects headed our way

The U.S. Labor Department has announced comprehensive updates to the Davis-Bacon Act that will raise pay for many construction workers (including millwrights), help ensure prevailing wages keep pace with actual wages, expand coverage to modern energy projects, beef up enforcement, and protect workers from retaliation.

The new rule, which was announced Aug. 8 and should go into effect later this year, will mean better pay and benefits and stronger protections for millwrights who will work on numerous projects funded by three new laws: the Bipartisan Infrastructure Law, the CHIPS and Science Act, and the Inflation Reduction Act.

“The updated Davis-Bacon Act ensures that those who work on these projects will receive strong wages that allow a person to support their family,” said Wayne Jennings, executive secretary treasurer of the Southern States Millwright Regional Council. “For far too long, labor movements have had to scratch and claw for every opportunity. We now have an administration in place that is investing to improve the lives of working-class citizens, with investments that will last for more than a decade.”

What is Davis-Bacon?

The Davis-Bacon Act was created in 1931 and establishes the requirement for contractors and subcontractors to pay “prevailing wages” to mechanics and laborers working on federally funded or assisted projects worth more than $2,000. Under the Davis-Bacon and Related Acts, contractors must pay the prevailing wage – a combination of the hourly rate and any fringe benefits – for the particular craft and geographic area as determined by local wage surveys.

One of the main, original purposes of Davis-Bacon was to ensure federal projects benefit everyone in the communities in which they are built. Federal projects should not drive down wages in an area. But if wages paid to workers on those projects are lower than those that “prevail,” the projects will have that negative effect. The intent of the Davis-Bacon Act was to prevent this from happening, and the updates restore the government’s ability to achieve the intended results.

“Updating these regulations will ensure workers on federal projects are being paid fairly and help contractors recruit and retain skilled workers,” a Labor Department statement reads.

Higher wages, especially in rural areas

The new rule will reinstate a definition of “prevailing wage” used from 1935 to 1983. Under that definition, prevailing wages will be calculated based on the rate paid to at least 30% of local workers rather than 50%. The 30%-rule allows more lower-wage, usually non-union wages to be removed from the calculation.

Under the 50%-rule, established during the Reagan administration, if no rate covers more than half of workers in a particular craft and area, the prevailing wage is calculated as “a weighted average” of all wage rates for all workers in that craft and area. In effect, this means low-ball, non-union wages can pull down everybody’s pay.

If there is not sufficient wage data for a given county – a situation that most often happens with rural counties – the new rule allows the Labor Department to use data from nearby counties, even if one county is “metropolitan,” where wages are typically higher, and the other is “rural.” Currently there is a bar on mixing metropolitan and rural data. This change will raise rural wages.

Another expansion allows the Labor Department to make multi-county wage determinations for workers on projects such as highways that stretch across geographic areas. The Labor Department also will be able to use state highway districts or other state geographic subdivisions rather than counties to determine the areas for highway projects.

More frequent wage updates

Under the current rule, prevailing wages sometimes fall years behind actual wages because wage determinations aren’t regularly updated. The new rule requires prevailing wages to be calculated more frequently, accurately, and efficiently.

“A more efficient survey process facilitated by the final rule means frequent Davis-Bacon wage surveys, ensuring that workers on federal jobs don’t have to wait 10 years for their wages to be updated to the locally prevailing rate,” the Labor Department states on its website. “The rule also recognizes that the Wage and Hour Division has the authority to adopt state or local wage determinations as the federal prevailing wage under certain criteria.”

Expanded coverage

The new rule also updates the definition of “building or work” to include energy infrastructure such as wind turbines, solar panels, electric-vehicle charging stations, and the retrofitting of structures to reduce carbon emissions. It also makes clear construction activities are covered even if they involve only a portion of a building or work.

Increased enforcement and worker protections

The updated Davis-Bacon Act includes an anti-retaliation clause that protects workers who raise concerns. It also will give the government more power to withhold money from contractors and distribute it to employees who were not fairly paid.

This is the first time in four decades that the Davis-Bacon and Related Acts have been comprehensively updated. President Joe Biden ordered a review of the labor law soon after taking office.

According to the Labor Department, the changes will apply to approximately $217billion in construction spending and 1.2 million workers annually.

Vice President Kamala Harris announced the Davis-Bacon updates at a union training center in Pennsylvania. “These workers deserve our recognition and appreciation, and they deserve something more – they deserve a raise,” Harris said.

These changes to Davis-Bacon restore the act’s original purpose – to improve the lives of working people and level the playing field for fair and ethical contractors, Jennings said. “We can only hope our country’s leaders from both sides of the isle keep up the fight for middle-class America,” he continued. “I, for one, support those who support me.”