DOL Proposes to Update Prevailing Wage Methodology Under Davis-Bacon Act

On March 18, 2022, the Department of Labor (DOL) published a proposed rule to update regulations implementing the Davis-Bacon Act, which applies to federal and federally-assisted construction projects. DOL has prepared an initial regulatory flexibility analysis for this rulemaking and seeks feedback on the numbers of small businesses affected and their compliance costs. The proposal updates definitions such as “site of the work” to include sites where prefabricated buildings are produced, and “scope of work” to include energy infrastructure. These changes may lead to more small firms being required to comply with Davis-Bacon labor standards. The proposal also changes the methodology for determining the prevailing wage. 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 prevailing wage. In addition, DOL will also update non-union prevailing rates every three years to address out-of-date wage determinations.

Comments are due by May 17, 2022.

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