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Federal Infrastructure Projects Soon to Have New Wage Rule

Accounting Support • Dec 10, 2021
The U.S. Department of Labor's (DOL) requests for a regulatory change that could affect billions of dollars in new infrastructure projects that Congress has approved, and the
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The U.S. Department of Labor's (DOL) requests for a regulatory change that could affect billions of dollars in new infrastructure projects that Congress has approved, and the White House is reviewing that recommendation carefully before making a decision.

The proposed rule is to update a 1931 law, known as the Davis-Bacon Act which requires workers on federally funded construction projects to receive wages and benefits on the same level as similar local jobs. The proposal will also require contractors working for the government or receiving federal funding to pay their laborers at least as much as prospective employees in comparable settings.

The final version of the regulations could redefine what constitutes "prevailing wage" for employers. The specifics of this definition, however, have not been released yet.

The White House Office of Information and Regulatory Affairs received DOL's proposal on December 3rd for review. This is their final step before releasing the rule-making process, which typically follows this process to release a regulation or proposed change in legislation.

Previous administrations inspected issuing a regulation to address some of the longstanding flaws associated with Davis-Bacon, but political and practical complications prevented it from becoming a rule.

DOL's regulatory agenda explicitly described the proposed rule change as an effort to "provide greater clarity and enhance their usefulness for a modern economy.".

If the rule is finalized, it will apply to all public projects funded by federal agencies through the $550 billion infrastructure package.

The Wage and Hour Division of the US Department of Labor began soliciting stakeholder feedback earlier this year on ways to improve Davis-Bacon in order to ensure that it provides the necessary protections for workers engaged in infrastructure projects. The agency said its goal is "modernizing" and updating their program so as to provide adequate protection needed with major construction projects.

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