How Periodic Revisions are Shaping the Future of the Davis-Bacon Act

The Davis-Bacon Act (DBA) has long been a pillar of labor standards in the United States, ensuring that workers on federally funded construction projects receive fair wages. However, as with any legislation, periodic updates are essential to ensure its continued relevance and effectiveness. One of the most significant recent changes to the DBA pertains to the introduction of periodic revisions to wage determinations. This article delves into these changes and their implications for the future of the Act.

The Need for Periodic Adjustments:

The Department of Labor recognized the necessity to regularly update certain non-collectively bargained prevailing wage rates. The aim is to ensure these rates don't become outdated and lag behind the prevailing wage rates in the area.

Historically, the Wage and Hour Division (WHD) published two types of prevailing wage rates: modal rates (paid to a majority of workers in a classification) and weighted average rates (published when no single wage rate dominated). While collectively bargained wage rates were updated based on periodic adjustments in the Collective Bargaining Agreement (CBA), non-collectively bargained rates often remained static between surveys.

The Challenge of Outdated Rates:

Due to the resource-intensive nature of wage surveys and the vast number of survey areas, significant time can elapse between surveys in any given area. This delay can lead to wage rates becoming outdated.

A report from 2011 highlighted that while 36% of nonunion-prevailing rates were 3 years old or less, almost 46% were 10 or more years old. Such outdated rates can adversely affect construction workers, diminishing the real value of their wages as the cost of living rises.

Introducing Periodic Revisions:

The Department's proposal aims to expand the practice of updating wage rates between surveys to include non-collectively bargained prevailing wage rates.

Revisions to wage determinations can now occur to keep them current. These revisions can modify some or all rates in a wage determination, such as periodic updates to reflect current rates, or even re-issue a wage determination entirely after a new wage survey.

Adjustments to non-collectively bargained prevailing wage and fringe benefit rates on general wage determinations will be based on data from the U.S. Bureau of Labor Statistics Employment Cost Index (ECI) or its successor. These rates can be adjusted based on ECI data no more frequently than once every 3 years and no sooner than 3 years after the rate's initial publication.

Implications for Contracts:

The date of issuance of a revised wage determination is pivotal. If issued before a contract award, it becomes effective for the project. Specific guidelines are provided for contracts entered via sealed bidding procedures, projects under the National Housing Act, and projects receiving housing assistance payments.

The introduction of periodic revisions to wage determinations under the Davis-Bacon Act signifies a proactive approach to ensure that wage rates remain relevant and reflective of current market conditions. By ensuring that wage determinations are periodically updated, the Act is poised to continue its legacy of safeguarding the interests of construction workers on federally funded projects.