Submitted via www.regulations.gov
Amy DeBisschop
Division of Regulations, Legislation, and Interpretation,
Wage and Hour Division
U.S. Department of Labor
Room S-3502, 200 Constitution Avenue NW
Washington, DC 20210.
Re: Updating the Davis-Bacon and Related Acts Regulations (RIN 1235-AA40)
Dear Ms. DeBisschop,
The Economic Policy Institute (EPI) is a nonprofit, nonpartisan think tank created in 1986 to include the needs of low- and middle-income workers in economic policy discussions. EPI conducts research and analysis on the economic status of working America, proposes public policies that protect and improve the economic conditions of low- and middle-income workers, and assesses policies with respect to how well they further those goals. EPI submits these comments on the Department of Labor’s (DOL, Department) proposal to amend regulations issued under the Davis-Bacon and Related Acts (DBRA, Act). EPI supports these efforts to modernize the DBRA to the benefit of workers throughout the country.
The DBRA, as described by the Congressional Research Service, “is intended to promote stability within the construction industry as well as to protect labor standards.”1 Specifically, it requires that workers on federally funded construction projects be paid at least the local prevailing wage including fringe benefits. In a highly competitive and unstable industry rife with wage theft2, the Act has helped ensure workers on federal projects are afforded fair wages and are protected from exploitation while simultaneously ensuring that public investments yield high-quality work. These prevailing wage standards currently impact 1.2 million workers and cover roughly $217 billion in federal spending annually.3
Research shows that prevailing wage laws—such as the Davis-Bacon Act—benefit workers, employers, and taxpayers alike. For instance, studies have found that prevailing wage standards have boosted workers’ pay, expanded health care coverage, and increased the share of workers with pension plans.4 Prevailing wage standards are also shown to reduce racial pay gaps5 and can be used a tool to increase recruitment of women and workers of color in the construction industry.6 Employers also benefit from prevailing wage standards because they level the playing field for contractors and ensure that competitive bidding procedures used to award federal construction contracts do not undermine local wage standards.7 Finally, taxpayers benefit from prevailing wage standards because they encourage local hiring at livable wages, reducing workers’ reliance on government assistance programs such as Supplemental Nutrition Assistance Program (SNAP).8 For these reasons, it is imperative that the Department of Labor ensure the wage rates associated with Davis-Bacon and Related Acts are regularly updated and accurately reflect local standards.
In the notice of proposed rulemaking (NPRM), the Department proposes several changes aimed at improving the efficiency and effectiveness of the administration and enforcement of the Act. These updates represent the first comprehensive review of the Act in forty years. Among important proposed changes is the restoration of a three-step process for defining the prevailing wage using the 30-percent rule in place prior to 1983. The 30-percent rule stipulates that in the absence of a wage rate paid to a majority of workers, the prevailing wage is defined using the wage rate paid to the greatest number of workers, provided it was paid to at least 30 percent of workers. In this three-step process, a weighted average is the third and final option, used to set prevailing wage only if no rate was paid to at least 30 percent of workers. Restoring this long-standing prior definition would lessen the reliance on weighted averages in setting prevailing wage rates, which do not reflect actual local wage standards and instead drive down wages of construction workers.9
The proposal also seeks to use the Bureau of Labor Statistics’ Employment Cost Index (ECI) to update certain non-collectively bargained prevailing wage rates in circumstances where the prevailing wage has not been updated by other survey methods. These proposals are critical to ensuring that DBRA prevailing wage rates truly reflect local standards and contribute to stabilizing rather than eroding workers’ wages, which have been lower in inflation-adjusted terms than they were in 1970 despite decades of economic growth and a higher national income.10
Finally, the proposal also aims to strengthen enforcement of the Act in several ways. The Department seeks to impose contract clauses and wage determinations by “operation of law,” underscoring contractors’ responsibility to provide appropriate prevailing wages even in the absence of explicit language in their contracts. Additionally, the Department proposes new, broad anti-retaliation provisions, including deterrence and correction measures. It also aims to tackle weaknesses in current law that prevent WHD from ordering reinstatement of workers who were fired due to their involvement in an investigation nor from compensating workers whose pay may have decreased due to retaliatory reduction of hours or demotions. Strengthening anti-retaliation protections is particularly important for low-wage and immigrant workers who are disproportionately affected by wage theft in the construction industry,11 where many wage payment violations go unreported due to workers’ well-founded fears of retaliation.12
With the recent enactment of the Infrastructure Investment and Jobs Act, the need for strong, up-to-date, prevailing wage standards is critical. Under the proposed rule, the Department of Labor seeks to modernize prevailing wage rates to ensure they are reflective of local wages. Further, the proposal aims to strengthen enforcement of Davis-Bacon with the inclusion of anti-retaliation provisions. Countless studies have shown that strong prevailing wage standards benefit workers, employers, and their communities. For these reasons, EPI strongly supports the Department’s proposed rule updating Davis-Bacon and Related Acts regulations.
Sincerely,
Ihna Mangundayao
Policy Assistant
Economic Policy Institute
Margaret Poydock
Policy Analyst and Government Affairs Specialist
Economic Policy Institute
Jennifer Sherer
Senior State Policy Coordinator, Worker Power Project
Economic Analysis and Research Network (EARN)
Economic Policy Institute
Endnotes
1. Congressional Research Service, The Davis-Bacon Act: Institutional Evolution and Public Policy, November 2007.
2. David Cooper and Teresa Kroeger, Employers Steal Billions from Workers’ Paychecks Each Year, Economic Policy Institute, May 2017.
3. U.S. Department of Labor, “For the First Time in 40 Years, US Department of Labor Proposes Rulemaking for Davis-Bacon Act to Reflect Needs of Today’s Construction Industry” (news release), March 11, 2022.
4. Frank Manzo IV, Alex Lantsberg, and Kevin Duncan, The Economic, Fiscal, and Social Impacts of State Prevailing Wage Laws: Choosing Between the High Road and the Low Road in the Construction Industry, Illinois Economic Policy Institute and Smart Cities Prevail, February 2016.
5. Jill Manzo, Robert Bruno, and Frank Manzo IV, State Prevailing Wage Laws Reduce Racial Income Gaps in Construction, Illinois Economic Policy Institute, February 2018.
6. Karla Walter, Getting Americans Back to Work and Good Jobs, Center for American Progress, June 2020.
7. Kevin Duncan, Peter Philips, and Frank Manzo IV, Building America with Prevailing Wage: The Davis-Bacon Act Delivers Good Middle-Class Jobs, a Stronger Economy, and the Best Value for U.S. Taxpayers, Illinois Economic Policy Institute, April 2017.
8. Frank Manzo IV, Alex Lantsberg, and Kevin Duncan, The Economic, Fiscal, and Social Impacts of State Prevailing Wage Laws: Choosing Between the High Road and the Low Road in the Construction Industry, Illinois Economic Policy Institute and Smart Cities Prevail, February 2016.; Kevin Duncan, Peter Philips, and Frank Manzo IV, Building America with Prevailing Wage: The Davis-Bacon Act Delivers Good Middle-Class Jobs, a Stronger Economy, and the Best Value for U.S. Taxpayers, Illinois Economic Policy Institute, April 2017.
9. Updating the Davis-Bacon and Related Acts Regulations, 87 Fed. Reg. 15710, (March 18, 2022).
10. Ross Eisenbrey and Teresa Kroeger, “Repealing Prevailing Wage laws Hurts Construction Workers,” Working Economics Blog (Economic Policy Institute), March 24 2017.
11. Ihna Mangundayao, Celine McNicholas, Margaret Poydock, and Ali Sait, More than $3 billion in Stolen Wages Recovered for Workers Between 2017 and 2020, Economic Policy Institute, December 2021.
12. Laura Hizar, Exposing Wage Theft Without Fear: States Must Protect Workers from Retaliation, National Employment Law Project, June 2019.
