Davis Bacon Act Updated – New Wages Take Effect in October on Federal Projects

The U.S. Department of Labor (DOL) August 8 finalized significant regulations under the Davis Bacon Act (DBA), the prevailing wage law for direct federal and federal-aid projects. 
 
In the Fall of 2021, ARTBA convened Contractor members and several Virginia firms to provide suggestions to DOL staff on updating the regulations.  In March 2022, DOL proposed updates to the DBA’s regulations. VTCA, ARTBA and other industry groups filed individual comments on DOL’s proposed rule, supporting some of the rule’s objectives in principle, while disagreeing with other parts. 
 
While portions remain problematic, the final rule was responsive to and specifically referenced some of ARTBA’s comments. These modifications include: 

• The initial proposal expanded DBA coverage beyond active project sites. The rule released today narrows the scope of coverage to locations where a significant portion of work is performed, and where the site is established for the exclusive performance of the covered contract. 
• DOL at first proposed requiring prevailing wages for the time that off-site drivers and materials providers spend on the worksite, even if that time is negligible. This provision was omitted. 
• The final rule clarifies the difference between licensed surveyors that are salaried professionals—and not subject to the DBA—and workers surveying on sites. 
• DOL proposed redefining the term “area” for highway construction projects. DOL now allows multi-county wage data to be combined and used to calculate the prevailing wage.  This is something VTCA contractors specifically identified as problematic in the past. 

Additional provisions of note:

• DOL will be permitted to issue wage determinations when survey data is insufficient. As a result, wage determinations can be based on factors that may not paint the entire wage picture. 
• The prevailing wage will now be set if it’s paid to at least 30 percent of surveyed workers in a given area. This is a change from the current 50 percent and may result in wage rate increases.  (VDOT has not updated rates at this point.) 
• Prime contractors are responsible for DBA compliance by subcontractors and will be liable if subcontractors don’t pay a prevailing wage. 

The rule takes effect 60 days after publication in the Federal Register which is expected on August 23. ARTBA will provide further input on the rule once the association completes a more exhaustive review.  
 
VDOT Rates:
All of VDOT’s current Davis Bacon Wage Rates can be found online here and are updated whenever VDOT receives updated wage rates from DOLI.  VTCA is in communication with VDOT on the impact of the new rule and future projects. 
 
Materials Suppliers:
The National Sand Stone and Gravel Association (NSSGA), along with our industry partners in NAPA (National Asphalt Paving Association) and NRMCA (National Ready Mixed Concrete Association) ensured that material suppliers’ voices were heard through constant communication with the DOL leadership and Biden administration staff throughout the deliberation process. This included submitting comments to the DOL emphasizing how ‘‘material suppliers’’ have never been considered contractors or subcontractors under and subject to Davis-Bacon standards, and why that needed to change.  
   
NSSGA is pleased the new rule includes a clarification for material suppliers that  industries requested. Specifically, the final rule clarifies that activities that are incidental to material supply, such as loading, unloading and pickup (when performed in conjunction with delivery), do not constitute construction activity. However, if a material supplier is also performing construction activities at the project (i.e. supplying aggregates and paving on a highway project) then all employees including the material supplier would be subject to Davis Bacon. 
   
The new rule is almost 600 pages long and ARTBA, NSSGA and other groups will continue digging into the regulation to ensure no other impacts are imposed on your businesses. Further, VTCA will closely follow any possible legal action attempting to halt the implementation of the new wage requirements on construction projects. 
 
Members interested in discussing the rule further may contact VTCA’s Tom Witt or ARTBA’s Prianka Sharma.