AGC questions: (1) how the proposal’s use of less data to determine prevailing wage rates improves the wage rate determination process; and (2) the legality of the proposal’s expansion of “site of work” provisions that would include more off-the-jobsite workers under Davis-Bacon requirements.

On May 17, AGC of America weighed in on the Department of Labor’s (DOL) Wage and Hour Division (WHD) proposal to significantly revise the regulations implementing the Davis-Bacon Act and Related Acts (DBRA). AGC recognizes the need for update and reform of the DBRA but views this proposal as a critically missed opportunity to improve the wage determination process and seriously questions the legal authority to expand coverage of the DBRA.

Changes to Prevailing Wage Determination Process

The 40-year awaited proposal reverts to the pre-1983 methodology for determining whether a wage rate is prevailing, also referred to as the “30 percent rule.”  The proposal appears to just make it easier on the WHD itself to set prevailing wages with less of the data it already collects, or lack thereof.

AGC holds that WHD’s almost exclusive reliance on voluntary wage surveys to produce and update wage determinations has created a compensation system for DBRA covered construction that poorly reflects the construction labor market in many parts of the country. AGC recommended WHD should instead focus on how to collect more accurate data, instead of being able to rely on less, or even at times inappropriate data, to determine wages that are truly prevailing.

Expansion of DBRA Coverage

The rule also significantly revises its “site of work” provisions along with its survey data and wage determination collection and processes that would allow WHD to use a broader data set (geographically) than they currently utilize. AGC strongly questions the legality of the proposal’s expansions of coverage of DBRA requirements, as the association believes such an expansion requires a legislative change.

The site of work provisions have been settled through litigation for decades. And regulatory changes made in response to litigation have made application of the “site of work” and “adjacent or virtually adjacent” more consistent and predictable. Contractors understand the current site of work regulations and it appears to AGC that the DOL is trying to get around the litigation and excessively expand the definitions.

Additionally, AGC believes the current limitation of Davis-Bacon coverage to adjacent or virtually adjacent facilities imposed by previous court decisions does not need further elaboration and does not apply to “nearby” facilities.

AGC participated in several stakeholder and private meetings with the WHD prior to the NPRM’s release, provided extensive ideas of regulatory and statutory reforms of the DBRA, and will continue to work with the DOL as it moves to finalize the proposed changes.

For more information, contact Claiborne Guy at [email protected] or 703-837-5382.