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Department of Labor announces prevailing wage changes

The Department of Labor announced large-scale changes to the Davis-Bacon Act (and Related Acts, collectively the “DBRA”). These changes were described as the “first comprehensive regulatory review in nearly 40 years[,]” and encompass 700+ pages of regulatory changes. See Wage and Hour Division, Department of Labor, Updating the Davis-Bacon and Related Acts Regulations, 88 FR 57526 at 57694. While these changes are voluminous, the changes that will likely affect local governments in federal contracting are as follows:

  • Reinstitution of the 30% Rule as a second step in the process of calculating “prevailing” wage that was in place prior to 1983. As part of this “30% Rule,” “if the absence of a wage rate paid to a majority [50%] of workers in a particular classification, a wage rate will be considered prevailing if it is paid to at least 30% of such workers.” 88 FR 57526 at 57529. If no wage rate is paid to 30% of workers in a particular classification, the weighted average wage rate will be utilized to determine which wage is “prevailing,” the second step currently utilized by the federal government.

  • The Department of Labor strengthened anti-retaliation provisions by adding new provisions in contracting (88 FR 57526 at 57656), additional whistleblower protections, and new remedies for retaliation including make-whole relief and remedial actions, such as reinstatement of employees and back pay (88 FR 57526 at 57657).

  • Eliminates the strict bar on mixing metropolitan and rural county data in making a wage determination, and the Wage and Hour Division is expressly authorized to issue multi-county wage determination with a single wage per classification. See Wage and Hour Division, Department of Labor, Frequently Asked Questions: Updating the Davis-Bacon and Related Acts Regulations Final Rule, at: https://www.dol.gov/agencies/whd/government-contracts/construction/rulemaking-davis-bacon/faqs, Question 6.

  • Department of Labor can now accept state calculations of prevailing wage, if such calculations are derived in a similar manner to how the Department calculates prevailing wage. 88 FR 57526 at 57559.

  • Finally, the rule provides for a periodic adjustment: The Department specifically added in provisions to the rule that will allow the Department to regularly adjust wage rates roughly every 3 years. 88 FR 57526 at 57572.

The Final Rule goes into effect October 23, and would apply to contracts entered into after October 23, 2023. Should you have any additional questions on these prevailing wage changes, please consult your City Attorney.

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