Department of Labor offers online seminar on prevailing wages for employers, workers on federally funded projects Aug. 29

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Wage and Hour Division
August 6, 2024

WASHINGTON – The Department of Labor today announced its Wage and Hour Division will offer contracting agencies, contractors, unions, workers and other stakeholders an opportunity to attend an online seminar on Aug. 29 on requirements for paying prevailing wages on federally funded construction and service contracts.

Part of the division’s continuing effort to increase awareness and improve compliance, the day-long seminar will offer sessions on the labor standards protections in the Davis-Bacon Act and the Service Contract Act – including how the department sets and administers prevailing wages – and other topics.

“Prevailing wage laws empower workers by ensuring that federally funded construction and service jobs are good jobs with fair wages and benefits,” said Wage and Hour Administrator Jessica Looman. “The Biden-Harris administration’s historic investments in our nation’s infrastructure means a significant increase in the number of federal and federally funded projects, and the Wage and Hour Division is committed to ensuring stakeholders understand the labor standards protections critical to these investments.”

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New regs impact government construction contracting

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New England Biz Law Update staff
October 31, 2023

The the U.S. Department of Labor has issued a final rule updating regulations that implement the Davis-Bacon and Related Acts (DBRA).

The DBRA requires contractors and subcontractors on federally funded construction projects to pay their workers at least the prevailing wage rates for the locality in which the work is being performed. The final rule is the first comprehensive update to the Davis-Bacon regulations in over 40 years.

The rule includes a number of changes, including:

Restoring the 30% rule. The final rule restores the DOL’s definition of prevailing wage that was used until the Reagan Administration. Under this three-step process, the prevailing wage is that which is paid to a majority of workers in the classification. If no majority exists, then the prevailing wage is the rate paid to at least 30% of workers. If no rate is paid to at least 30%, then a weighted average will be used. (Previously, the average was used if a prevailing wage was not paid to 50% of workers.)

Adopting wage escalators. The final rule allows the DOL to more frequently update prevailing wage rates. Rather than hinging on DOL wage surveys, periodic updates will now be based on total compensation data from the Bureau of Labor Statistics Employment Cost Index, which tracks both wages and benefits. Rate updates will occur every three years, at most.

Strengthening worker protection and enforcement rights. The final rule includes new anti-retaliation provisions to protect workers. The rule also strengthens the DOL’s ability to withhold money from federal contractors in order to pay employees their lost wages.

Providing greater clarity. The rule updates a number of definitions that affect applicability. For example, “building or work” now includes solar panels, wind turbines, broadband installation, and the installation of electric car chargers. Other changes affect who is considered a “material supplier” or a “prime contractor.”

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POINT: Strong prevailing-wage standards help grow the economy

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The Sun Chronicle
By Karla Walter Oct 20, 2023

The trickle-down strategies of the last several decades — defined by tax cuts for the wealthy — didn’t work and, in fact, led to stagnating incomes for everyone else.

However, the Biden administration’s vision for growth is clear: The Inflation Reduction Act, Bipartisan Infrastructure Law and CHIPS and Science Act chart a new path based on the philosophy that the economy is strongest when it grows from the “middle out and bottom up.”

These sweeping economic laws build out public investment in 21st century infrastructure and support domestic competitiveness in key sectors, all while strengthening protections to ensure new public investment benefits working people from all walks of life.

At times, pundits portrayed Bidenomics as a gamble, but key elements of the laws’ middle-class protections — such as prevailing-wage standards — are proven strategies that raise standards for workers, support law-abiding contractors and ensure the public receives good value for the investments paid for by tax dollars.

The overwhelming majority of the Bipartisan Infrastructure Law, CHIPS and Science Act funds, and the IRA’s tax credit programs are protected by the Davis-Bacon Act — a 90-year-old law that requires corporations receiving federal funds to pay construction workers market — or “prevailing” — wages and benefits.

Prevailing-wage standards, also frequently adopted by state and local policymakers, prevent the government from driving down standards when it acts as a purchaser of goods and services. Private-sector recipients are required to provide workers with wages and fringe benefits comparable to those paid to other similarly placed workers in the region.

Research shows that prevailing-wage laws improve workers’ lives by supporting middle-class pay, ensuring union wage rates are not undercut, expanding health insurance and retirement coverage, and closing the income gap between white and Black construction workers.

Prevailing wage in New York: a comprehensive guide

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Jacob Maslow
July 30, 2023

Prevailing wage is a crucial aspect of the construction industry in New York, as it ensures that workers receive fair compensation on public works projects. In essence, the prevailing wage is the pay contractors and subcontractors in New York must pay their employees when working on public works sites. This rate is higher than the standard minimum wage, based on hourly rates paid by unions to specific workers in a given market.

The New York State Department of Labor issues prevailing wage schedules for general and residential construction projects on a county-by-county basis. General construction rates apply to buildings, heavy and highway, tunnel, and water and sewer work. Contractors and subcontractors must adhere to these wage schedules to comply with state regulations.

Key Takeaways
Prevailing wage is critical in the New York construction industry, ensuring fair pay for workers on public works projects.
The New York State Department of Labor establishes wage schedules for general and residential construction on a county-by-county basis.
Contractors and subcontractors must adhere to these prevailing wage schedules to maintain compliance with state regulations.

Understanding Prevailing Wage
Article 8

In New York State, the prevailing hourly wage and usual benefits and overtime are paid to most workers, laborers, and mechanics within a given area. New York’s prevailing wage law is regulated under Article 8, which focuses on public construction projects. Prevailing wages are usually equivalent to the union wage. They can vary by location, as they are determined based on the average wages earned by professionals in similar roles in the area.

Article 8 of the New York State Labor Law ensures that contractors and subcontractors on public works projects pay their employees the appropriate prevailing wage, as established by the Department of Labor (DOL). These requirements apply to all parties involved in a public work contract, regardless of whether they have a direct contractual relationship with the public entity.

Public Work

Public work refers to any construction, maintenance, or improvement project funded and executed by a public entity, such as federal, state, or local government. These projects typically include building and renovating schools, hospitals, transportation infrastructure, and other public facilities. Regarding prevailing wages, contractors and subcontractors must know the specific rates applicable to their work locality and trade.

The New York State Department of Labor issues prevailing wage schedules for “General Construction Projects” and “Residential Construction Projects” on a county-by-county basis. General construction rates apply to buildings, heavy and highway construction, tunnels, water, and sewer. Employers with government contracts or foreign workers must pay their employees the prevailing wages to comply with the law and ensure fair compensation for their labor.

Understanding prevailing wage laws in New York, specifically under Article 8 and public work projects, is essential for contractors, subcontractors, and employees. Compliance with these laws protects workers’ rights and helps maintain a fair and competitive labor market.

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Evidence of Worker Exploitation Stops Work at 110 Job Sites

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New Jersey Department of Labor & Workforce Development
FOR IMMEDIATE RELEASE
July 11, 2023

TRENTON – In the four years since Governor Murphy expanded the New Jersey Department of Labor and Workforce Development’s (NJDOL) powers in 2019 to halt work on job sites when there is strong evidence of worker exploitation, over 110 stop-work orders have been issued and more than $2.7 million in back wages owed to affected workers, liquidated damages, and penalties have been assessed.

In 2021, Governor Murphy further boosted these powers, permitting stop-work orders to be applied to all work sites of an employer found to be in violation of the law.

“Since the beginning of our Administration, we have been dedicated to respecting, defending, and upholding the rights of all New Jersey workers, who are the lifeblood of our economy,” said Governor Murphy. “These expanded powers have led to over a hundred stop-work orders in just the past few years, advancing our commitment to stronger and fairer worker protections.”

“Having the authority to shut down work as soon as wrongdoing is identified has exponentially strengthened the department’s effectiveness at enforcing our state’s wage and hour laws and protecting workers and law-abiding employers,” said Labor Commissioner Robert Asaro-Angelo. “We’ve made it clear: If we find you are cheating workers, we will halt your business operations, and in many cases, you will be told to leave the job by the general contractor or contracting authority.”

“A vast majority of New Jersey employers follow the law and do right by their workers, but NJDOL wants to ensure all businesses are following the law and treating workers fairly,” Asaro-Angelo added. “It’s not just about stopping the violations in progress. There is also an educational component to prevent these issues from happening in the first place.”

NJDOL’s Division of Wage and Hour and Contract Compliance has the authority to immediately halt work at any public or private worksite – both construction and non-construction – when an investigation finds evidence an employer has violated state wage, benefit or tax laws. Examples include: misclassifying employees as independent contractors; not having appropriate workers’ compensation insurance; failing to pay prevailing wage or overtime; or paying workers partially, late, or off the books.

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Department of Labor to hold online seminars to educate current, prospective federal contractors on prevailing wage requirements

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Edwin Nieves
June 14, 2023

The U.S. Department of Labor announced today that its Wage and Hour Division will offer online seminars for contracting agencies, contractors, unions, workers and other stakeholders on the requirements for paying prevailing wages on federally funded construction and service contracts.

Part of the division’s effort to increase awareness and improve compliance, the seminars will include recorded training videos on a variety of Davis-Bacon Act and Service Contract Act topics that participants can view on-demand. The division will then offer live Q&A sessions to provide additional information.

Q&A sessions on compliance issues will be offered as follows:

Davis-Bacon Act: June 27 and Sept. 13.
Service Contract Act: June 28 and Sept. 14.

“Prevailing wage laws are key to ensuring that construction and service jobs are good jobs and that workers on federally funded projects across the country are paid fair wages and benefits,” said Principal Deputy Wage and Hour Administrator Jessica Looman. “Recent investments in our nation’s infrastructure offer us a great opportunity to educate employers so they can compete for new federal contract opportunities and put skilled employees to work in their communities.”

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For the first time, Philly enforces its wage theft law by suing an employer who stiffed workers

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The Philadelphia Inquirer
by Juliana Feliciano Reyes
Apr 5, 2023

The lawsuit, against Joe Carvalho of Carvalho Construction, represents an escalation of the city’s efforts to enforce wage theft violations.

For the first time in seven years, the City of Philadelphia has sued an employer who broke the city’s wage theft law.

The lawsuit represents an escalation of the city’s efforts to enforce its 2016 wage theft law. In some cases, it can take years for workers to get paid after they win a wage theft claim; some never get paid at all.

The Law Department, which hired a dedicated attorney last spring to handle these kinds of cases for the Department of Labor’s Office of Worker Protections, has begun taking legal action “to force bad actors into compliance,” a spokesperson for the Office of Worker Protections said in a statement. Lawsuits are “an avenue of last resort,” the spokesperson said.

Bad actors are employers that broke the law but refuse to comply with city orders and pay workers what they’re owed. More than 90% of employers that have broken the law comply, the spokesperson said.

The city filed a complaint in Common Pleas Court earlier this year against Joe Carvalho, a Philadelphia construction company owner who the city says broke its wage theft law twice.

In March 2021, Carvalho didn’t pay an employee for eight days of work, owing him $1,105 in wages and overtime, a city investigation found. Carvalho had said he would pay the worker $130 per day.

The following month, the worker repeatedly asked for his pay and Carvalho ignored the texts or “responded with curse words,” according to a city violation notice.

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Michigan lawmakers repeal right-to-work, revive prevailing wage

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The Detroit News | March 21, 2023
Beth LeBlanc & Craig Mauger

Lansing — The Democratic-led Michigan Legislature voted along party lines Tuesday on landmark legislation to restore prevailing wages for state construction projects and repeal the right-to-work law that barred union contracts from requiring membership fees as a condition of employment.

The Michigan Senate took a final vote on the bill to repeal the right-to-work law for private employers and sent the measure to Gov. Gretchen Whitmer’s desk on Tuesday afternoon. The Senate passed the bill 20-16 along party lines after the legislation cleared the House in a 56-52 party-line vote.

The House on Tuesday also approved two other labor bills in the package, one House bill that helps to require union-rate wages for public construction jobs and another bill that would repeal right-to-work for public sector employees.

The votes Tuesday were significant for the labor movement nationally, said Ron Bieber, president of the Michigan American Federation of Labor and Congress of Industrial Organizations (AFL-CIO).

“It’s a huge day for the working people of Michigan,” Bieber said.

Rep. Regina Weiss, the Oak Park Democrat who sponsored the public sector right-to-work repeal, said the final passage of the bills Tuesday delivered on changes promised by the new Democratic majorities when they took office in January. Weiss rejected arguments that the right-to-work repeal would hurt the state’s economy.

“To me, it’s not a choice,” Weiss said. “You don’t have to choose to support business and then also choose to screw over workers. You can support business, you can support workers at the same time.”

The legislation headed to Whitmer’s desk would allow union contracts to require workers to pay agency fees for the cost of representation at the bargaining table with their employer.

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Commentary: Results in states that repealed their prevailing-wage laws aren’t pretty

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Crain’s Chicago Business
January 30, 2023 | Frank Manzo

A good rule of thumb in policymaking is “first, do no harm.” When elected leaders fall short, the genius of our system is that we have the opportunity to course correct, either at the ballot box or by demanding legislative change.

In the case of states that repealed laws governing who can win bids on public infrastructure projects, the data overwhelmingly suggests that such a correction is warranted.

Between 2015 and 2018, six U.S. states—Indiana, Wisconsin, Michigan, Kentucky, West Virginia and Arkansas—each repealed their state prevailing-wage laws that established minimum labor standards on taxpayer-funded projects like roads, bridges, schools and water infrastructure. All did so promising to save money, including by “building five schools for the price of three.”

The problem is: it never happened. As one Indiana Republican lawmaker put it, “we got rid of prevailing wage and, so far, it hasn’t saved us a penny.” His conclusions were ultimately confirmed by the Indiana Department of Labor.

In Wisconsin, a study that examined highway projects pre- and post-repeal showed that the state not only failed to save money, but that it might have increased cost overruns. In West Virginia, the School Building Authority similarly concluded that prevailing-wage repeal was not saving taxpayers any money. The list goes on.

…

That’s why researchers at the Illinois Economic Policy Institute and the Project for Middle Class Renewal at the University of Illinois Urbana-Champaign recently compared construction labor market outcomes in repeal states against the states that maintained their prevailing-wage laws.

The results are not pretty.

Compared to states that maintained their prevailing-wage laws, construction wage growth lagged by 4% to 13% in repeal states. Construction employment growth and workforce productivity were slower as well. On-the-job fatalities increased by 14%. Repeal created unnecessary hardships for blue-collar workers struggling to keep up with rising costs.

Repeal also imposed new burdens on taxpayers. Local businesses won fewer projects, with more than $1 billion in taxpayer dollars being exported to out-of-state contractors annually. And, instead of delivering any project savings, repeal states saw the number of construction workers relying on food stamps and other government assistance programs grow as job quality eroded.

The bottom line is that market standards and job quality matter. Especially in construction, where competence can be a matter of life and death and a lack of job quality only makes it harder to attract skilled workers to in-demand and physically challenging occupations.

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Rolling back laws that set minimum wages for construction workers meant pay shrunk, jobs got more dangerous, and workers had to rely more on public assistance

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BUSINESS INSIDER | Juliana Kaplan – Jan 16, 2023

  • A new study looks at the impact of rolling back prevailing wage laws on wages and workers.
  • Prevailing wage laws set pay standards for government contract workers, particularly construction workers.
  • Rolling back the laws led to lower wage growth, and increased worker fatalities.

It turns out that getting rid of some minimum wage controls left workers earning less, being less productive, relying more on public assistance, and even facing a higher risk of dying on the job.

That’s according to a new study from the Illinois Economic Policy Institute (ILEPI) and Project for Middle Class Renewal (PMCR) at the University of Illinois at Urbana-Champaign. Researchers Frank Manzo, Robert Bruno, and Larissa Petrucci examine the impact of repealing prevailing wage laws — laws that essentially set minimum wages for construction workers on government contracts.

With the bipartisan infrastructure bill pouring billions of dollars into construction projects across the nation, the findings show that contractors in states that have repealed prevailing wage laws may face problems staffing up. Historically, prevailing wage laws have helped plug labor shortages, and contractors could have trouble competing with higher-paying competitors across the country.

Indiana, West Virginia, Kentucky, Arkansas, Wisconsin, and Michigan all repealed their prevailing wage laws between 2015 and 2018. Using data from the US Census Bureau and Department of Labor, the researchers looked at how construction workers fared as those laws were rolled back.

Those states saw their wages for construction workers drop. In Indiana, West Virginia, and Kentucky — the three states that fully repealed prevailing wage laws — average construction hourly wages were $23.94 before the laws were rolled back. By 2017, the average hourly wage was $23.77. Meanwhile, states with the laws in place saw wages grow by 12.2% in the same period.

“What prevailing wage does, it kind of standardizes and stabilizes the industry of a local market,” Petrucci said. “When you repeal that, what you have is contractors who are able to undercut wages and pay workers far below the training that they have developed to get these kinds of jobs. Naturally, you’re gonna see wages decrease.”

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