TWIA Commercial Property & Casualty
Texas judge puts hold on prevailing wage rule
Jun
Dive Brief:
- A federal judge in Texas has hit pause on a rule that would effectively raise wages for workers on federally funded construction projects, nine months after the rule first went into effect.
- Northern District of Texas Judge Sam Cummings issued a temporary injunction halting a Biden administration Davis-Bacon rule nationwide that increased how often contractors working on federal projects had to follow prevailing wage requirements. The rule will not be enforced pending a lawsuit against the Department of Labor filed by the Associated General Contractors of America in November.
- Cummings said in a ruling filed Monday that the Labor Department for now cannot impose the prevailing wage requirements, except for when a federal agency explicitly includes Davis-Bacon requirements in the contract.
Dive Insight:
Cummings paused the rule in response to the AGC’s suit, which claims that the Biden administration lacks the authority to enact the expansion of Davis-Bacon requirements.
AGC praised the decision: “Our concern remains that the Department is expanding the scope of the rule well beyond what Congress ever intended,” said AGC CEO Jeffrey Shoaf in a news release. “This injunction restores the original intention of the Davis-Bacon Act.”
The Davis-Bacon final rule update went into effect on Oct. 23, after it was first announced in March 2022. The change restored the DOL’s definition of prevailing wage, making it equivalent to the wage paid to at least 30% of workers, rather than 50%, in a given trade in the local area around affected federal projects.
Labor groups, such as North America’s Building Trades Unions, have supported the now-paused rule change, saying Davis-Bacon updates prevent “cut-throat bidding practices from driving down local area labor standards.”
The previous version meant that 51% of surveyed wages needed to be within a “same or similar” margin, and, if not, the weighted average, as opposed to a simple average, would be used. The process can be complicated and cumbersome for contractors and has elicited concerns that it skews wage rates.
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