The Davis–Bacon Act of 1931 is a United States federal law that establishes the requirement for paying the local prevailing wages on public works projects for laborers and mechanics. It applies to "contractors and subcontractors performing on federally funded or assisted contracts in excess of $2,000 for the construction, alteration, or repair (including painting and decorating) of public buildings or public works".
The act is named after its sponsors, James J. Davis, a Senator from Pennsylvania and a former Secretary of Labor under three presidents, and Representative Robert L. Bacon of Long Island, New York. The Davis–Bacon act was passed by Congress and signed into law by President Herbert Hoover on March 3, 1931.Mar. 3, 1931, ch. 411, 46 Stat. 1494. et seq.
As of 2016, the act increases the cost of wages in federal construction projects by an average of $1.4 billion per year.
History
Leading to passage Prior to the passage of the federal Davis–Bacon Act (abbreviated DBA), other jurisdictions in the United States had passed laws that required that contractors on public works projects pay the wage that prevailed locally. "In 1891, Kansas adopted a law requiring that ‘not less than the current rate of per diem wages in the locality where the work is performed shall be paid to laborers, workmen, mechanics, and other persons so employed by or on behalf of the state of Kansas’ or of other local jurisdictions. Through the next several decades, other states followed suit, enacting a variety of labor-protective statutes covering workers in contract production."
In 1927, a contractor employed African-American workers from Alabama to build a Veterans' Bureau hospital in the district of Congressman Bacon. Prompted by concerns about the conditions of workers, displacement of local workers by migrant workers, and competitive pressure toward lower wages, Bacon introduced the first version of his bill in 1927.
Over the next few years, Bacon attempted to introduce variations on the prevailing wage bill 13 times. Finally, in the midst of the Great Depression, with local workers complaining losing jobs to those willing to work for lower wages, and additional complaints from Congressmen frustrated that their efforts to bring "pork barrel" projects home to their districts did not result in jobs for their constituents (and therefore political support from them), the Hoover Administration requested that Congress reconsider the Act once more as a means of preventing falling wages. Sponsored in the Senate by former Labor Secretary Davis, it passed by voice vote and was signed into law on 3 March 1931.
Since passage
Immediately after passage The Davis–Bacon Act has been amended several times in its history. Almost immediately upon passage in 1931, both unions and contractors expressed dissatisfaction with key components of the law. Unions said that the law lacked enforcement teeth, while contractors said that it was impossible to know beforehand what the prevailing wages were when submitting bids. President Hoover issued Executive Order 5778, clarifying some of the enforcement mechanisms, and Congress considered amendments which were vetoed before Hoover left office.
1930s In 1934, Congress passed and President Roosevelt signed the Copeland "Anti-kickback" Act, a supplement to the DBA. This was followed in 1935 with another amendment which introduced five changes: (1) The threshold for falling under the DBA requirements were lowered from $5,000 to $2,000; (2) coverage was extended to all federal contract construction, including painting and decorating; (3) the agency may withhold funds sufficient to pay underpaid workers; (4) the Comptroller General would make a list of contractors who had “disregarded their obligations to employees and subcontractors” so that they could be blacklisted from federal contracts for three years; (5) right of legal action was explicitly granted to laborers regardless of whether they had accepted wages; and (6) DBA contracts would include “the minimum wages to be paid various classes of laborers and mechanics” prior to the submission of bids by a contractor (predetermination). The predetermination requirement set up a mechanism to collect and disseminate appropriate prevailing wage data prior to issuing proposal requests for federal contract bids. Many of these changes were introduced at the urging of labor unions.
1940–1970 In 1941, the reach of the Act was expanded to cover military construction. In the 1950s, questions were raised about which agencies should control which provisions and whether the new interstate highway acts should specifically reference DBA requirements. In the 1960s, the passage of the Walsh–Healey and McNamara–O'Hara Service Contract Acts confused the situation further, as there were pay differences between manufacturing and construction, with contractors and unions having clear but opposite preferences.
In 1962, the House of Representatives convened the Special Subcommittee on Labor, chaired by James Roosevelt D–CA. In response to this committee, the Secretary of Labor established the Wage Appeals Board to allow wage determinations to be reviewed. The committee brought an amendment to the DBA that required the inclusion of fringe benefits in the wage determination.
1970–present In 1979, the U.S. Congress General Accounting Office (GAO) – (which was renamed the Government Accountability Office in 2004) published a report titled, “The Davis–Bacon Act Should Be Repealed". The GAO summarized its argument as:
This publication reflected an ongoing political debate. Concluding about the same time, the Carter Administration's Office of Management and Budget (OMB) and its Office of Federal Procurement Policy (OFPP) had formed a task force to review DBA and the Services Contract Act. They published new regulations just as they were leaving office. The Reagan Administration froze all pending regulations in order to review them, and then issued its own set of regulations in 1982. These consisted of five changes: (1) setting the threshold for how much of the workforce must be paid a common wage for that wage to become the "prevailing wage" at 50% (previously 30%); (2) strictly limiting the importation of urban rates for projects in rural areas; (3) limiting the use of wages paid on other DBA-covered federal projects in the determination of prevailing rates to prevent bias in the base rate; (4) expanding the potential use of unskilled “helpers” on federal construction; and (5) eliminating the weekly payroll report requirements of the Copeland "Anti-kickback" Act of 1934, opting instead to require reports only in support of enforcement actions. These rules were challenged in Building and Construction Trades' Department. AFL-CIO v. Donovan, 712 F.2d 611 (D.C. Cir. 1983). Of the five changes, all were eventually upheld except for the change in reporting requirements.
In addition to these changes, DBA prevailing wage principles have been included in more than 50 federal statutes.
In November 2013, President Barack Obama signed the Streamlining Claims Processing for Federal Contractor Employees Act into law. This law amended the Davis–Bacon Act by transferring authority from the Government Accountability Office (GAO) to the United States Department of Labor for processing claims for wages due to laborers and mechanics hired by contractors on public works projects.
Little Davis–Bacon laws In addition to the federal law, several other jurisdictions have passed "Little Davis–Bacon" laws.
+ Little Davis–Bacon Statutory Thresholds State Threshold Amount Alabama, Arizona, Arkansas, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky,Effective January 9, 2017, with emergency clause in the legislation Louisiana, Mississippi, New Hampshire, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, Utah, Virginia, West Virginia,Effective May 12, 2016, 90 days after veto override WisconsinRepeal effective September 23, 2017. No Prevailing Wage Law Connecticut,Raised the threshold from $400,000 to $1,000,000 as part of the state budget. Effective October 31, 2017. Delaware, Maryland, Nevada, Vermont $100,000 to $1,000,000 Alaska, Maine, Minnesota†, Missouri,Changes the formula for calculating the prevailing wage to become much weaker, and exempts projects under $75,000. Effective August 28, 2018. Montana, New Mexico, Ohio††, Oregon, Pennsylvania, Tennessee,Applies to road construction only, as all other projects became exempted starting January 1, 2014. Wyoming $25,000 to $75,000 California, Hawaii, New Jersey, Rhode Island $1,000 to $2,000 Illinois, Massachusetts, Michigan, Nebraska, New York, Texas, Washington No threshold
Suspensions The Davis–Bacon Act allows for suspension by the President in case of emergency. This authority has been exercised four times since passage: twice in general, and twice in limited areas.
President Franklin D. Roosevelt suspended the Act in 1934 for three weeks to aid in the introduction of New Deal efforts President Richard Nixon suspended the Act in 1971 for one month as an anti-inflationary measure President George H. W. Bush initiated a suspension in Florida, Louisiana, and Hawaii. This suspension was not lifted until March 1993 by President Bill Clinton. The cited reason for the suspension was the need to provide as many employment opportunities as possible in the recovery from hurricanes Andrew and Iniki. President George W. Bush suspended the Act for one month in Florida, Alabama, Mississippi, and Louisiana after Hurricane Katrina.
Current practice The Davis–Bacon Act is part of the United States Code, codified as 40 U.S.C. 3141-3148. The Act covers four main areas of construction: residential, heavy, buildings, and highway. Within these areas are further classifications, including craft positions such as plumber, carpenter, cement mason/concrete finisher, electrician, insulator, laborer, lather, painter, power equipment operator, roofer, sheet metal worker, truck driver, and welder.WDOL website
The agency responsible for collecting and disseminating the prevailing wage data is the Wage and Hour Division (WHD) of the United States Department of Labor (DOL). The procedure "involves four steps: (1) planning and scheduling of surveys, (2) conducting the surveys, (3) clarifying and analyzing the respondents' data and (4) issuing the wage determinations."
Planning and scheduling surveys: In the third quarter of each year, the WHD distributes a Regional Planning Survey Report, published by the F. W. Dodge division of the McGraw-Hill Information Systems, to regional offices. The regional offices then consider the types of construction planned as well as the age of the current wage determination. This analysis determines when and where surveys will be conducted.
Issuance of surveys: WD-10 survey forms are sent to contractors and subcontractors along with a cover letter requesting information. Letters and forms are also sent to members of Congress, trade associations, and building trade unions to solicit information from them.
Compilation of data: WHD analysts then review the returned forms for completeness, ambiguity, and inconsistencies. If the information received is deemed to be inadequate, the scope of the survey may be expanded. For example, if it is determined that relevant projects have not been completed recently, or that the area is inadequately represented, WHD may conduct telephone surveys to increase the robustness of data.
Publication of data: Once compiled and analyzed, the wage determinations are made publicly available. See, for example, the Department of Labor website set up for this purpose.
Controversy