New Is Old Again: DOL Seeks Return to Past Rule for Federal Contractor Minimum Wage Calculations

The Division of Labor not too long ago proposed new federal rules relating to how minimal wages will probably be calculated for federal building initiatives. DOL’s new proposal will add to the price of performing these initiatives. The remark interval for the brand new rules will probably be closing quickly, and we then will probably be in a position to see what the following steps will probably be.

The federal regulation often known as the Davis-Bacon Act, or DBA, turned regulation within the Thirties and offered that staff on federal building contracts should be paid what is named the “prevailing wage” for staff within the space of the mission. The regulation was meant to hold federal contractors from bidding work primarily based upon wage charges for staff who might be imported from areas apart from the place the mission was to be carried out.

From the DBA’s inception till the Reagan period of the early Nineteen Eighties, a strategy was used for figuring out prevailing wage charges that will enable charges to be primarily based upon as little as 30% of the related workforce. The Reagan administration, believing that the DBA rule contributed considerably to inflation, rewrote the rule to take into consideration a bigger cross part of staff.

The Biden administration now has proposed returning to the pre-Reagan period rule. This proposed change would elevate prevailing charges and additional enable for periodic upward changes for sure wage charges. The Biden administration disputes that the influence of inflation ought to be thought of in implementing the brand new prevailing wage rule.

So, in case you are a federal contractor performing work topic to the DBA, be looking out for new developments relating to prevailing wages quickly. Even be prepared for will increase of relevant prevailing wages as the brand new rules are carried out.

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