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Wage Rule Aimed at Federal Infrastructure Projects Nears Release

Dec. 6, 2021, 10:15 AM

The U.S. Department of Labor has asked the White House to review a regulatory proposal that could affect the billions of dollars in new infrastructure projects Congress has approved.

The proposed rule would update the Davis-Bacon Act, a 1931 law requiring workers on federally funded construction projects to receive wages and benefits on par with similar local jobs.

Building trades unions, who have long complained about how Davis-Bacon has been administered and enforced, covet the regulation.

Details of the regulation’s scope have been kept under wraps, but the final version could redefine how employers determine what constitutes the “prevailing wage” they must pay workers when the federal government finances a building project.

The White House’s Office of Information and Regulatory Affairs’ receipt of the proposal was recorded in a website posting stating DOL transmitted it for review Dec. 3. OIRA approval typically is the final step before an agency can release a rule.

Previous administrations contemplated issuing a regulation to address some of the longstanding flaws associated with Davis-Bacon, such as inaccurate wage survey data that dictates required pay levels, but political and practical complications prevented a rule from materializing.

When DOL first signaled its intent to issue this proposal, via the administration’s regulatory agenda in June, the agency described it as an effort to “provide greater clarity and enhance their usefulness in the modern economy.”

The rule, if finalized, would apply to the wave of new public works projects funded in whole or in part by federal agencies through the $550 billion infrastructure package.

In a sign of the heightened stakes for this rulemaking relative to most DOL regulations, the department’s Wage and Hour Division began soliciting stakeholder feedback earlier this year on ways to improve Davis-Bacon. The agency said its objective was to “modernize its Davis-Bacon program to ensure that it provides the necessary worker protections to meet the demands of large infrastructure investments as well as reflect the needs of the modern construction industry.”

To contact the reporter on this story: Ben Penn in Washington at bpenn@bloomberglaw.com

To contact the editors responsible for this story: John Lauinger at jlauinger@bloomberglaw.com; Martha Mueller Neff at mmuellerneff@bloomberglaw.com

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