Department of Labor’s Wage and Hour Division announces NPRM to update the Davis-Bacon and Related Acts

On March 11, 2022, the Department announced a notice of proposed rulemaking (NPRM), Updating the Davis-Bacon and Related Acts Regulations to better reflect the needs of workers in the construction industry, and planned federal construction investments. The proposed rulemaking by the department’s Wage and Hour Division represents the most comprehensive review of the Davis-Bacon Act regulations in 40 years.

Many of the proposed regulatory changes will improve the Department’s ability to administer and enforce DBRA labor standards more effectively and efficiently.

Proposed changes include:

• Creating several efficiencies in the prevailing wage update system and ensuring prevailing wage rates keep up with actual wages, which over time would mean higher wages for workers.
• Returning to the definition of “prevailing wage” used from 1935 to 1983 to ensure prevailing wages reflect actual wages paid to workers in the local community.
• Periodically updating prevailing wage rates to address out-of-date wage determinations.
• Providing broader authority to adopt state or local wage determinations when certain criteria is met based on sound survey methodology.
• Issuing supplemental rates for key job classifications when no survey data exists.
• Updating the regulatory language to better reflect modern construction practices.
• Strengthening worker protections and enforcement, including debarment and anti-retaliation.

There are 71 DBRA laws applicable to federal and federally assisted construction projects that require the payment of locally prevailing wage rates for 1.2 million U.S. construction workers. The requirements currently cover approximately $187 billion in federal spending on construction each year.

The DBRA requirements also protect workers under the unprecedented federal investments in infrastructure across the country. These projects involve clean energy, power and water infrastructure improvements, legacy pollution remediation, and renovation to the nation’s broadband and transportation infrastructures.

Learn More Here:

https://www.dol.gov/agencies/whd/government-contracts/construction/NPRM-davis-bacon

December 2021 Construction Spending; Annual Review

The U.S. Census Bureau announced construction spending for December 2021 was at a seasonally adjusted annual rate of $1,639 billion, 0.2% above the revised estimate of $1,636 billion in November. Compared to last year’s same period, construction spending in December was up 9%. The overall value of construction in 2021 was $1,589 billion, 8.2% above the total construction spending in 2020.

While private construction spending in December was $1,293 billion, 0.7% above the revised November estimate of $1,284 billion, public construction spending was $347 billion, 1.6% below the revised November estimate of $353 billion. However, the one strong contributor to public construction was highway construction at $103.5 billion, 0.1% above the revised November estimate of $103.4 billion.

Compared to the previous year, the value of public construction in 2020 was $346 billion, 4.2% below what was spent in 2020. Again, highway construction was the sole leader of growth with $99.7 billion, up 0.2 percent above the $99.5 billion in 2020.

More information may be found at:

https://www.census.gov/construction/c30/pdf/release.pdf

Read The Winter – 2022 Edition Of The Contractors Plan Retirement Newsletter!

The purpose of this quarterly newsletter is to provide a deep dive into retirement topics to help you better prepare for upcoming and important events. We will also cover happenings in the retirement industry that may potentially impact your plan.

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Us Department Of Labor Announces Plans To Hire 100 Investigators To Support Its Wage And Hour Division’s Compliance Efforts

The U.S. Department of Labor today announced that its Wage and Hour Division is seeking to add 100 investigators to its team to support its enforcement efforts including the protection of workers’ wages, migrant and seasonal workers, rights to family and medical leave and prevailing wage requirements for workers on federal contracts.

For additional information on this, go to: https://www.dol.gov/newsroom/releases/whd/whd20220201-2

WHD Releases Compliance Guidance for Worker Protections under the Bipartisan Infrastructure Law

In November 2021, President Biden signed the Bipartisan Infrastructure Law (BIL) that focuses on rebuilding and improving the country’s infrastructure. The U.S. Department of Labor, Wage and Hour Division (WHD) recognizes that a vast majority of the federal funding authorized by the BIL requires the payment of Davis-Bacon prevailing wages. Therefore, the WHD developed Protections for Workers in Construction under the BIL to assist recipients and contractors subject to these requirements.

Under the BIL, most of the construction projects will be subject to Davis-Bacon prevailing wage labor standards meaning construction workers on those projects must be paid at least the locally prevailing wage and fringe benefits for the work they perform. This means that the Davis-Bacon labor standards clauses and applicable wage determinations must be included in construction contracts by the federal agencies and fund recipients to achieve compliance. In addition, prime contractors are responsible for ensuring that all subcontracts have the labor standards clauses and applicable prevailing wage determination(s).

WHD guidance notes that contractors will need to ensure that workers are paid the prevailing wage for all hours worked weekly, including fringe benefits. They must also maintain accurate records of wages paid and hours worked, including fringe benefit contributions, and submit certified payrolls to the funding agency or funding recipient each week. And contractors must post in a prominent place an “Employee Rights under the Davis-Bacon Act” poster and the wage determinations at the site of work.

For additional information on Worker Protections under the Bipartisan Infrastructure Law, go to:

https://www.dol.gov/agencies/whd/government-contracts/protections-for-workers-in-construction

New York Expands Application of Prevailing Wage Requirements

On January 1, 2022, an amendment to the State of New York prevailing wage took effect, expanding the number of construction projects subject to prevailing wage requirements. A vital component of the law is that it broadens the definition of construction projects, therefore increasing the number of projects for which the law applies. Additionally, the law imposes new compliance obligations regarding prevailing wage.

Previously, a project was regarded as a prevailing wage job only if a public entity was a party to a construction project and benefited the public. Now prevailing wages must apply to work done under a contract where the amount of all public funds, when aggregated, exceeds thirty percent of the total construction project costs and where total costs exceed $5 million.

There are also new compliance obligations such as certifying that prevailing wages are required on the project, retention of payroll records after completion of the project, and compliance with the objectives and goals of the Minority- and Women-Owned Business Enterprises program and the Service-Disabled Veteran-Owned Businesses program.

To ensure compliance, all construction project parties should determine if they are subject to the new prevailing wage requirements based on the parameters established by the new law.

Supreme Court Blocks Workplace Covid-19 Vaccination Mandate

The U.S. Supreme Court voted to block the Administration’s workplace mandate requiring larger businesses to ensure that workers are vaccinated against Covid-19 or wear masks and get tested weekly. However, the Court upheld a separate mandate requiring vaccinations for an estimated 20 million health care workers.

President Biden’s workplace mandate directed the Occupational Safety and Health Administration (OSHA) to issue an emergency temporary standard (ETS) requiring all private businesses with more than 100 employees to mandate COVID-19 vaccinations or impose weekly testing, which would have gone into effect January 10th.

The SCOTUS decision does not affect, nor does it address, the federal contractor requirements under Executive Order 14042. However, the implementation of EO 14042 was halted by a Federal District Court in December 2021. The federal government appealed this decision, which is pending.

DOL & NLRB Enter Agreement to Strengthen Partnership

Earlier this month, the Department of Labor (DOL) and the National Labor Relations Board (NLRB) signed a Memorandum of Understanding outlining procedures to enhance information sharing, enforcement, training, and outreach. The agreement is meant to prevent and address their joint goals of protecting workers who exercise their workplace rights and educating employers about their legal responsibilities under federal laws.

By forming this agreement, the agencies hope to improve the enforcement process of the laws they administer, ensuring the rights and protections of workers and making sure employers pay workers their rightful wages.

In the agreement, DOL and NLRB have established mechanisms to share information and create a process for referral, joint investigation, and cross-training of personnel. The goal is to improve enforcement against the misclassification of workers as independent contractors, unlawful pay practices, and retaliation against workers.

In addition to boosting enforcement, the agencies will use the collaborative agreement to increase the public’s understanding of the laws they enforce through shared compliance materials, increased community outreach, joint presentations, and training events.

WHD Issues Final Rule Implementing Minimum Wage Increase

The Department of Labor’s Wage and Hour Division (WHD) published the Final Rule to increase the minimum wage for federal contractors beginning January 20, 2022. The final rule implements Executive Order (EO) 14026, “Increasing the Minimum Wage for Federal Contractors,” signed by President Biden on April 27, 2021.

The EO states that federal contractors must pay a $15 minimum wage to employees working on federal contracts, promoting economy and efficiency in Federal procurement by increasing the hourly minimum wage paid by the parties that contract with the Federal Government. Currently, workers are paid a minimum wage of $10.95 per hour for performing work on covered federal contracts.

The final rule establishes standards and procedures for implementing and enforcing the minimum wage protections of the EO.  U.S. Secretary of Labor Marty Walsh noted that “implementing this Executive Order improves the economic security of these workers and their families, many of whom are women and people of color.”

The rule applies in all 50 states, the District of Columbia, and specified U.S. territories and requires all agencies to use the $15.00 minimum wage on new contract solicitations. Additionally, agencies must implement the new higher wage rate into existing contracts when parties exercise their extension option. After 2022, the minimum wage will also be subject to annual inflation increases set forth by the Secretary of Labor.

WHD to Host 2022 Compliance Seminars Concerning the Contractor Minimum Wage Increase

The Wage and Hour Division (WHD) has announced that they will be hosting compliance seminars to provide information on Executive Order 14026, “Increasing the Minimum Wage for Federal Contractors.” The seminars will include video training on the Executive Order’s requirements that participants may view at their convenience, followed by an interactive webinar with a live Q&A session offered on the alternate dates of January 26 and 27, 2022.

The compliance seminars are intended for contracting agencies, contractors, unions, workers, and other stakeholders to help increase awareness of federal prevailing wage requirements on federally funded construction or services contracts.

The Minimum Wage Executive Order applies across the U.S. and increases the hourly minimum wage for workers performing work on or in connection with covered federal contracts to $15 beginning January 30, 2022.

The seminar attendance is free; however, registration is required. Additional information, including the links to video training and virtual Q&A session dates, will be provided to registrants. Participants may register at https://www.eventbrite.com/e/department-of-labor-minimum-wage-executive-order-seminar-tickets-215860654027