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WHAT'S NEW?
On Tuesday, August 8, 2023, the U.S. Department of Labor issued its final regulations updating the Davis-Bacon Act. This is the first major update to those regulations in 39 years. While there are many changes which are administrative in nature and not truly significant, I do want to highlight a couple of key factors that both contractors and agencies will need to keep in mind. Because of the numerous changes, I am writing this in two parts. Let’s get started:
New Way DOL Will Determine Prevailing Wage The DOL will use the 30% rule to determine prevailing wages. Under the prior rule, 50% of the wages had to be the same before that wage rate would be adopted as prevailing. Now only 30% of the wages need to be the same for the wage rate to be adopted.
State Prevailing Wage Rates can be Adopted. DOL can now adopt State prevailing wage rates as the prevailing wage rate under the Davis Bacon Act.
Automatic Adjustment in Wage Rates Every 3 Years For projects which are more than 3 years in duration, there will be a cost of living increase for specific wages every 3 years.
Prevailing Wage Updates Updates to current DB rates will apply if: 1) a change order adds work which is not part of the original scope of work; 2) additional time is added to the contract not originally obligated, included triggering exercising an option; 3) certain on call and maintenance contracts (IDIQ type contracts) not tied to a specific contract with a firm completion date will require updates annually. Certain types of Tasks Orders will need to incorporate current DB wages to apply for each Task Order.
Expanded Definition of Building and Work Definition expanded to include solar panels, wind turbine, broadband installation, electric car charges and similar activities.
Expanded Definition of Contracting Officer Expanded definition of contracting officer now includes someone involved in the contract award process for a state or local agency.
Clarification of Site of Work Site of work includes any site where a significant portion of the work is performed, even if not directly on the project site itself, if the site is designated to service the particular DB or DBRA project. Regulations continue to exclude manufacturing or assembly which occurs in a contractor’s permanent shop.
Documentation Updates All records relating to labor compliance are to be maintained for a period of 3 years from completion of the project by the prime contractor. Also, confirmation that CPRs may be signed and submitted electronically (eliminating the wet signature requirement).
Double Standard Created for FAR contracts Inclusion of federal contract clauses and applicable wage rates has been the norm for decades. The new regulations allow contracts awarded under the FAR (Federal Acquisition Regulations) to incorporate the wage determination and contract clauses by reference.
Anti-Retaliation Final rules added anti-retaliation provisions, including “make whole” remedies.
Interest Added to Worker Wages Due Interest will apply to wages due as established by the IRS. (Interest will be compounded daily.)
Consistent Debarment for DB and DBRA violations A 3 year debarment is now the standard for serious violations under the Davis Bacon or Davis Bacon and Related Act contracts. Debarment will also apply to officers of contractors and subcontractors.
Stay Tuned for installment 2 on fringe benefits and apprenticeship.
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