Significant Changes to Davis-Bacon Requirements Effective October 23

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Davis Wright Tremaine – The Labor Department returns to the “30% rule” for calculating construction wages on federal contracts, among other updates.

On August 8, 2023, the Department of Labor issued a new rule redefining how wages are calculated for more than one million construction workers and implements a number of sweeping changes under the Davis-Bacon Act. The rule, published in the Federal Register as of August 23, will be effective as of October 23, 2023. This new rule returns to the “30% rule,” which requires federal contractors and subcontractors to pay the same wages as those received by at least 30% of similarly classified laborers in the local market.

The new rule reverts to a three-step process to determine prevailing wages, loosens restrictions on data included in the calculations, and allows for periodic adjustments to prevailing wages. The revised prevailing wage calculation was the prevailing calculation until 1983 but will be new to many construction contractors.