


The Labor Department will reportedly issue a controversial pro-union final rule that would beef up regulations surrounding pay for construction workers on federal projects.
Acting Labor Secretary Julie Su will finalize the rule on Tuesday, the American Prospect reported. The rule affects the Davis-Bacon Act, which was first created in 1931 and establishes the requirement for prevailing wages to be paid to mechanics and laborers employed by contractors and subcontractors with federal contracts.
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Prevailing wages differ depending on location, but they basically set a floor for construction worker payment on public works projects. In some areas of the country that have a lower cost of living, the calculated prevailing wage may be lower than in some high-cost areas, like the country’s urban enclaves.
While exact details of what is in the expected finalized rule haven’t been released, the Labor Department first proposed the rule over a year ago and allowed interested parties to weigh in during a public comment period. The final rule has reportedly been delayed for so long so that it could be made to withstand the muster of a court challenge, which it will undoubtedly face.
Sean Higgins, a research fellow at the libertarian Competitive Enterprise Institute, told the Washington Examiner that the key question, and the one being changed as part of the final rule, is how the government calculates what a prevailing wage is. The wage is calculated through surveys of the area.
Under Davis-Bacon, prior to this expected rule, to calculate the prevailing wage, a majority of those providing wages had to be surveyed. But under the revised rule, a prevailing wage can be determined from a survey of just 30% of the workers.
“The issue there being of course if it’s just 30% then it’s not clear that that is in fact the prevailing wage. It might be out of step with the other 70%,” Higgins said. “But that’s sort of the reason why they’re doing it, it gives the administration leeway to sort of fudge the numbers and require even higher wages under Davis-Bacon.”
Up until the 1980s, wage rates were seen as prevailing if they were paid to at least 30% of workers in a given area. That was replaced in 1982 when it was replaced by the greater-than-50% requirement. So the Biden-era rule in a way reverts back to the previous standard.
Higgins said that the purpose of Davis-Bacon is to wipe away the advantage of non-union labor. He said it can set the wages so high that employers might as well have a union workforce because they won’t be able to pay the workers less than what they would probably get under a collective bargaining contract anyway. He said that the final rule would be a major boost for unions.
But advocates of the rule see it as a way to achieve better wages for construction industry workers and support labor unions, something that President Joe Biden, who has touted himself as the most union-friendly president in history, has made a priority.
Groups like Associated Builders and Contractors have already come out swinging against the rule. Back when the plan was first floated over a year ago, the group, which represents the non-union construction industry, urged the Labor Department to withdraw the proposal.
In a statement provided to the Washington Examiner, Ben Brubeck, ABC vice president of regulatory, labor, and state affairs, said it does little to improve or modernize Davis-Bacon Act regulations.
“Instead, the rule fails to fix the DOL’s unscientific wage determination process, rescinds modest pro-taxpayer reforms made by the Reagan administration, and illegally increases regulatory burdens on small businesses, new industries, and more public works projects,” he said.
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The move will have an effect on taxpayers, too, because it will mean federal contracts will be more expensive, costing the government more money, according to Higgins.
The final rule will likely be challenged and could face a very lengthy battle in the legal system as it winds its way through the courts.