Legal Challenges Arise After Davis Bacon Act Amendment

Contractor employer groups, including Associated Builders and Contractors (ABC) and Associated General Contractors of America (AGC), have filed lawsuits against the federal government after a modification was made recently to the Davis Bacon Act. The lawsuits were filed in the Texas District Courts and they contest the regulation change that was implemented on the 23rd of October with the intention to raise hourly wages for workers on large federally funded projects.

What was the Objective of the Regulation Change?

The primary objective of the Davis bacon Act modification was actually to increase the hourly wages for the employees that are engaged in federally funded projects.  These are those workers that fall under the CHIPS Act and the Infrastructure Investment and Jobs Act. However, ABC and AGC are arguing that this adjustment could really escalate the costs of construction projects and can as such be a thing of concern for taxpayers.

Legal Arguments and Complaints

ABC and AGC contend that the regulation change that was implemented just two weeks prior to the legal actions is in fact unlawful. The complaints name some key officials, including Jessica Looman, the administrator of the Wage and Hour Division, acting Labor Secretary Julie Su, and the Department of Labor (DOL). The changes that were made in the March of 2022 revised the DOL’s definition of prevailing pay, basing it on 30 percent of workers in a specific trade locality instead of the previous 50 percent.

What is the Background of the Davis Bacon Regulations?

The Davis Bacon Act set to require that the prevailing wages are going to be determined by the DOL’s wage survey, but the changes in the act have now altered the calculation method for the wages. ABC, in its approximately 70 pages of comments during the 60 day comment period, sought to dissuade the federal government from actually implementing the change. Ben Brubeck, the VP of regulatory, labor, and state affairs at ABC, put an emphasis on the need for some legal action to address what he said were “illegal provisions.”