Recent Updates to Prevailing Wage Standards

As of October 23, 2023, the construction industry sees the enactment of the revised regulations under the Davis-Bacon and Related Acts (DBRA), as directed by the Department of Labor (DOL). This significant update, the first in over four decades, stems from President Biden's Executive Order 14008, aiming to align the prevailing wage laws with the current economic landscape.

The DOL emphasizes that these revisions are crucial for ensuring that the burgeoning jobs from the Biden-Harris administration's infrastructure investments are synonymous with fair wages and benefits. Acting Secretary of Labor Julie Su highlighted the rule's role in fostering middle-class growth and establishing equitable competition among employers by eliminating unfair advantages for those undercutting worker compensation.

However, the reception within the construction sector is mixed. The Associated Builders and Contractors (ABC) have voiced their dissent, labeling the rule as a giveaway to unions at the expense of taxpayers and small businesses, and calling for its retraction due to the perceived increase in regulatory burden and costs.

The Davis-Bacon Act, originating from 1931, was designed to safeguard workers from substandard wages on federal construction projects during the Great Depression. The act mandates federal contractors to pay the local prevailing wages and fringe benefits on public works projects exceeding $2,000.

The new rule will apply to contracts initiated post-October 23 and, in certain cases, may affect existing contracts. This includes contracts expanded to encompass significant DBRA-related work, extensions of current contracts, and ongoing contracts not confined to a specific project.

Key updates to the prevailing wage regulations include:

• Streamlining the wage determination process to better reflect current wages, potentially leading to higher worker earnings.
• Reverting to the prevailing wage definition from 1935-1983 to more accurately represent local wage standards.
• Regular updates to wage rates to correct outdated determinations.
• Enhanced authority to utilize state or local wage determinations under specific conditions.
• Provision of supplemental rates for certain job classifications lacking survey data.
• Modernization of regulatory language to mirror contemporary construction practices.
• Reinforced worker protections and enforcement measures.

For federal contractors, maintaining compliance with these regulations is critical. A robust time tracking system that interfaces seamlessly with leading payroll services can simplify wage sorting and certified payroll reporting. hh2's mobile app offers a solution for precise time logging and secure data storage, facilitating compliance with federal mandates.

Book your demo to see the benefits of hh2's Remote Payroll app and its integration capabilities with payroll systems.