Davis-Bacon Updates & Implications for Contractors

October 11, 2023

Significant updates to the Davis-Bacon and Related Acts Regulations, all 800+ pages, took effect October 23, 2023. Since contractors not in compliance with the new rule risk increased exposure to claims, Merchants Bonding Company compiled a quick overview of the rule's scope and the implications for contractors.  

What Do Contractors On Federally Funded Projects Need To Know About The New DOL Rule?

Effective October 23, 2023, all contracts for federal projects and federally funded projects require a three-step process for contractors when classifying prevailing wages. This is a major rule change by the U.S. Department of Labor – and the first change in decades – which adjusts not only how the Davis-Bacon Act and related prevailing wage regulations are calculated, but also expands the prevailing wage laws to types of construction not previously regulated. It also enlarges the project locales for which prevailing wages are required.

Who Does This Apply To?

Contractors working on federally funded projects who enter into contracts after October 23, 2023. However, if an earlier contract is modified by additional or substantial changes not within the original scope of work, that contract may also be subject to the new DOL rule.

How Does This New Rule Expand Previous Prevailing Wage Requirements?

The prevailing wage acts are now expanded to include construction projects involving solar panels, wind turbines, broadband installation, installation of electric car chargers, and demolition activities, among others. The new rule also expands the definition of a “secondary site” to require compliance with prevailing wage regulations if that site is where a significant portion of the building or work is constructed for specific use in that building and the site is either established specifically for the performance of the contract or project, or is dedicated exclusively, or nearly so, to the performance of the contract or project for a specific period of time.

What Else Does This Mean For Contractors?

General contractors are now liable for wage violations of their lower-tier subcontractors, which will require even more rigorous vetting of subcontractors. All contractors will also be required to undertake additional recording-keeping functions, and to provide certain information of its employees, such as Social Security numbers, telephone numbers, and email addresses, to the DOL upon request. Records must also be kept for three years under this new rule.

How Do I Learn More?

The U.S. Department of Labor has published a list of frequently asked questions to help contractors understand this new rule, which can be accessed HERE.