Determining Prevailing Wage for Multi-County Projects Under the Davis-Bacon Act
The Davis-Bacon Act (DBA) has been a pivotal piece of legislation ensuring that workers on federal construction projects are paid fair wages. However, when projects span multiple counties, determining the prevailing wage can be a complex process. Here's a summary of how prevailing wage is determined for such projects:
Traditional Methodology: Historically, if a project spanned more than one county, the contracting officer would attach wage determinations for each county to the contract for the project. This meant that contractors might have to pay different wage rates to the same employees as their work crossed county boundaries. This approach was reinforced in 1971 by the Wage Appeals Board (WAB).
Critics' Concerns: This traditional approach has been criticized for being inconsistent with how workers are paid on non-DBA projects. For instance, on a non-DBA project spanning multiple counties, workers are often paid a single wage rate for all their work on the project. The requirement of different wage rates for the same workers on the same multi-county project was deemed "illogical" by some industry representatives.
New Approach: To address these concerns, the Department proposed adding language to the definition of “area” in the DBA. This new definition would allow the Wage and Hour Division (WHD) to issue project wage determinations with a single rate for each classification, using data from all of the relevant counties in which a project will occur. In essence, if a project requires work in multiple counties, the “area” may include all the counties in which the work will be performed. This allows for a single wage determination for the entire project, ensuring consistency in pay rates across counties.
Flexibility in Application: The Department has decided not to make multi-county areas mandatory for any multi-county project wage determination. Instead, the final rule adopts a flexible approach, allowing the Department to use multi-county areas for multi-county project wage determinations but not requiring their use. This ensures that the multi-county areas do not undermine the two main purposes of the statute: identifying actual prevailing wage rates and guarding against the depression of local wage standards.
State Highway Districts: The document also hints at considerations for state highway districts, suggesting that similar principles might apply, especially for "horizontal projects" like highways.
The recent changes to the Davis-Bacon Act's wage determination processes for multi-county projects aim to provide a more streamlined and logical approach to defining the "area" for wage determination. By considering the entire project area as a single labor market, the Act ensures a more consistent and fair wage determination process.