I have handled numerous prevailing wage cases, including dozens under the federal Davis-Bacon Act (DBA) and read with great interest the proposed changes to the decades-old law.  The proposed rule will likely set higher rates on DBA construction projects, a boon for employees and unions.  The changes are the most dramatic proposed changes in forty years.

The biggest change is the return to the (outdated) 30% rule.  This now will set prevailing wages at wage rates paid to only a minority, 30% of workers.  The proposal does away with the “weighted average” concept, which would seem a fairer, more comprehensive way to set these wage rates.  Now, although unions represent a small (and historically shrinking) portion of the work force, these union wage levels may well become those that are “prevailing” in a large number of geographic locales in the nation.

The final rule makes no change to almost haphazard survey process, but it then adopts the Bureau of Labor Statistics (BLS) wage escalators which are issued tri-annually.  The rule does not, however, incorporate the BLS wage information collection protocols.  This anomaly may well also lead to further enhancement of the wage rates.

Another wage escalator is to re-adopt the practice that existed before 1982 as concerns urban and rural wage rates.  There had been an elimination of mixing the urban and rural wage rates, which was good (for employers) as that practice had resulted in urban wage rates, obviously higher than rural rates, slanting the wage rates higher.  The proposed rule does away with this procedure and will also result in distinctly higher wage levels.  The rule will also expand the geographical scope of wage determinations, instead of being a county-by-county approach.  Now, there is a chance that multi-county or statewide rates may be used, although such rates may exist in areas far removed from the site of the work under scrutiny.

Although there are many other items of concern in this rule, one that especially irks me is the attempt to expand the “site” of the work.  Pre-fabrication work, off site, has often been the subject of legal cases and challenges, where workers/unions try to expand that definition to include these off-site activities.  The new rule seeks to expand that definition as well as including in DBA coverage certain classifications of delivery drivers, which had never happened heretofore.  The rule also expands the actual coverage of the DBA to include installation of solar panels, wind turbines and other so-called “green” machines or equipment.  The rule will also now include surveyors and other workers who had never been deemed “laborers” or “mechanics” as defined under the DBA.

The Takeaway

Whether it is the NLRB or the USDOL, government agencies are tilting definitely towards employees. These revisions to the DBA are designed, it seems, to promote the acceptance of “union scale” as the correct rates on federal construction work. I am troubled by a return to the 30% rule which will escalate these wage rates and I am even more troubled by the expansion of the geographic definition given to wages and the expansion of the meaning of “construction” work.

A sign of the times…

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