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Dive Brief:
- A federal judge in Texas has put on hold a rule that would effectively raise wages for workers on federally funded construction projects, nine months after the rule took effect.
- Texas Northern District Judge Sam Cummings issued a temporary injunction halting a nationwide Biden administration Davis-Bacon rule that increased the frequency with which contractors working on federal projects had to follow current salary requirements. The rule will not apply pending a lawsuit against the Labor Department filed by the Associated General Contractors of America in November.
- Cummings said in a ruling filed Monday that the Labor Department cannot currently enforce prevailing wage requirements, except when a federal agency explicitly includes Davis-Bacon requirements in the contract.
Diving knowledge:
Cummings paused the rule in response to the AGC’s lawsuit, which claims 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 far beyond what Congress intended,” AGC CEO Jeffrey Shoaf said in a news release. “This ban restores the original intent of the Davis-Bacon Act.”
The Final update to the Davis-Bacon rule went into effect on October 23, after first being announced in March 2022. The change restored the DOL’s definition of prevailing wage, making it equivalent to wages paid to at least 30% of workers , rather than 50%, in certain trade in the local area around the affected federal projects.
Labor groups such as the Construction Unions of North America have supported the stalled rule change, saying the Davis-Bacon updates prevent “uncovered bidding practices from lowering labor standards locals”.
The previous version meant that 51% of the wages surveyed had to be within an “equal or similar” range, and if not, the weighted average would be used, rather than a simple average. The process can be complicated and cumbersome for contractors and has raised concerns that it will skew wage rates.
