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Are You Prepared for New Prevailing Wage Rules?
ontractors and specialty subcontractors that regularly perform public works projects are no strangers to prevailing wages. In fact, depending on a contractor’s geographical service area, it may need to be adept at the varying regulations and rules related to prevailing wage compliance in multiple state and local jurisdictions, as well as those applicable to federal government work.
But a recent revamp of the rules governing federally funded work may be cause for contractors to re-evaluate and upgrade their practices, policies and controls related to ensuring such compliance. On August 8, 2023, the Department of Labor (DoL) finalized a Davis-Bacon Act rule, which amounts to the largest overhaul to prevailing wage determination methods in decades. The new rule changes how prevailing wages for federally funded construction projects are calculated, and it is widely expected to increase those wage standards. Under the new rule, the “prevailing wage” is defined as:
1. The wage rate paid to the majority (more than 50%) of workers in a particular classification in a particular geographic area; 2. If the same wage rate is not paid to a majority of the applicable workers, then the “30% rule” applies. That means the prevailing wage is the wage rate paid to the greatest number of workers in a particular classification and area, so long as at least 30% of the applicable workers are paid that rate; 3. If no wage rate is paid to 30% or more of the applicable work-
Properties | November 2023