US DOL Overhauls Federal Construction Wage Rule

A 92-year-old wage rule for contractors and subcontractors working on federal and federally funded construction projects has new changes. 

The U.S. Department of Labor’s final amendments to the Davis-Bacon Act and Related Acts went into effect Oct. 23. 

The DBRA applies to federal contractors and subcontractors performing on contracts in excess of $2,000 for construction, alteration, or repair of public buildings or public works.

Wage and hour officials said the changes are intended to speed prevailing wage updates, make the current system more efficient, and ensure prevailing wage rates are maintained.

Prevailing Wage Rates

Under the DBRA, contractors and subcontractors on federally funded construction projects must pay their workers at least the prevailing wage rates for the area where the work is being performed. 

The final rule also allows the DOL to more frequently update prevailing wage rates. 

Updates will now be based on total compensation data from the Bureau of Labor Statistics Employment Cost Index, similar to what the Connecticut General Assembly enacted in 2019 for the state’s minimum wage. 

In addition, the rule restores the DOL’s prevailing wage definition to the one that was used until the Raegan administration. 

The rule restores the DOL’s prevailing wage definition to the one that was used until the Raegan administration.

Under the three-step process, the prevailing wage is that which is paid to a majority of workers in the classification. 

If no majority exists, then the prevailing wage is the rate paid to at least 30% of workers. If no rate is paid to at least 30%, then a weighted average will be used.

The DBRA requirements apply to an estimated tens of billions of dollars in federal and federally assisted construction spending each year, according to DOL officials. 

Companies can review the final rule on the Department of Labor’s website.