The U.S. Department of Labor has given the green light to a new rule under the Davis-Bacon Act that changes how prevailing wages are determined for construction projects funded by the federal government. This update will lead to a significant change to wage assessments and is great news for those in the construction industry.
The Davis-Bacon Act affects nearly all government-funded projects and is a common piece of prevailing wage legislation. Basically, it says that companies working on these projects need to pay their employees wages and benefits that are in line with what other workers in the same area get for similar projects. Under the new rule, the wages for federal construction projects can now be figured out using the “30% rule.” This means that if at least 30% of workers in a particular job in an area are paid a certain wage, that wage will become the standard. This is a change from the old way of calculating wages, which was called the “weighted average.” In this old method, the total wages are divided by the number of workers to find an average wage. But now, the focus will be on the “30% rule”, and the weighted average will only come into play if there isn’t a common wage for at least 30% of workers, according to the Department of Labor (DOL). This shift essentially brings back the prevailing wage standard of the Davis-Bacon Act that was used between 1935 and 1983.
This may be great news for people working in the construction industry. This change will raise the minimum wage levels for more than 1 million construction workers involved in about $200 billion worth of construction projects each year. These workers have been getting paid less than what the law intended and what they actually deserve, as highlighted by the White House.
The new rule will start60 days after it’s officially published in the Federal Register. Also, there’s more to this rule than just the “30% rule.” It also allows for occasional adjustments to prevailing wages if they become outdated, as long as these wages haven’t been set through a collective bargaining agreement. Additionally, the rule makes things clearer about what kinds of projects fall under the Davis-Bacon Act. It specifies that activities like putting in solar panels, wind turbines, broadband internet infrastructure, and electric car charging stations are considered “construction activities.” Usually, prevailing wages are determined by county. However, the new rule gives the option to calculate prevailing wages across multiple counties for projects that go beyond one county. For highway projects, state highway districts can be used instead of counties to figure out prevailing wages. And the rule also adds a better provision against retaliation, which protects construction workers from facing negative consequences at work if they speak up about payment issues.
If you work in the construction sector, it’s crucial to review your pay statements to make sure you’re receiving accurate payment for your hard-earned wages. Numerous companies neglect to appropriately compensate their workers for projects that should pay prevailing wage rates. Reach out to the legal team at Fitapelli & Schaffer for a complimentary consultation to determine if you’re owed any unpaid wages.