Davis-Bacon Wage Survey Plan

Posted by National Alliance for Fair Contracting on

USDOL News – April 20, 2022

The U.S. Department of Labor’s Wage and Hour Division announces its Davis-Bacon Wage Survey Plan set to begin in 2022. Construction workers working on Davis-Bacon and related Acts (DBRA) covered contracts must be paid prevailing wages, which are determined by surveys of wages paid on construction projects underway or recently completed within a geographic area.

As the Wage and Hour Division begins its wage survey process, we are reaching out to contractors, contracting agencies, unions, and others in the construction industry to ensure that all stakeholders have an opportunity to participate in the wage survey process.

The division is planning wage rate surveys for Highway construction in:

  • Florida
  • Georgia
  • New Hampshire
  • West Virginia

The division is also planning wage rate surveys for Building construction in:

  • Maine

The division is also planning wage rate surveys for Building, Heavy, Highway, and Residential construction in:

  • Guam

Stakeholders can find the list of 2022 currently planned surveys here, as well as the status of surveys that are currently in progress.

The criteria used to determine areas where a survey should be performed are:

  1. Age of the previous survey
  2. Federal procurement agency plans for construction
  3. Whether stakeholders have requested a new survey of a construction type in a state or locality
  4. Whether public and private data reviews show wages in a locality have sufficiently changed to warrant a new wage determination

The Wage and Hour Division will provide outreach in each survey area to inform stakeholders how to participate in the survey process.

If you have suggestions regarding geographic areas and construction types that you believe should be considered for the 2022 or 2023 Survey Plan, please send your suggestions via email to DB-Wage-Survey-Request@dol.gov.

For more information regarding the Davis-Bacon and related Acts and the Davis-Bacon survey program, please visit the division’s website.

Letter to the editor: Restoring prevailing wage would save taxpayers money (WV)

Posted by National Alliance for Fair Contracting on

Jan 16, 2020

As West Virginia continues to fall short on revenue collections, Gov. Jim Justice said his budget proposal is “very conservative” in his State of the State Address. But Justice missed an important opportunity in his speech to get ahead of budget shortfalls that would put students first, hire West Virginia workers and save taxpayers money.

Restoring the prevailing wage should be one of the tools state government uses to get West Virginia through the leaner times ahead. Since prevailing wage repeal, students have suffered from new schools not opening on time and with faulty school construction. This costs taxpayers dearly.

Taxpayers have lost millions of dollars from the repeal of prevailing wage. Multiple new school facilities must be redone or fixed using our government dollars. Contractors who benefit their own bottom line with shoddy school construction built by unskilled workers from out of state cost us local jobs and the state tax revenues from not having more West Virginians employed.

While taxpayers shell out money later this year to redo floors at two new schools in Fayette County, the governor and Republican leadership in the Legislature will be looking for ways to head off shortfalls with spending cuts. But government leaders should also look at the positive impact of bringing the prevailing wage back. This law will employ more West Virginians to build our schools and eliminate wasteful spending from “do overs” caused by poor school construction.

Charles Parker
President, West Virginia State Building and Construction Trades Council

(Read More)

Time to undo prevailing wage debacle [Opinion] (WV)

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By Rick Wilson
Nov 5, 2019

In 2016, the West Virginia Legislature repealed the state’s prevailing wage law, which set pay standards for workers on public construction projects.

The intent of prevailing wage laws was to prevent these projects from turning into a race to the bottom, with out-of-state contractors profiting at the public expense by underbidding local businesses and importing low wage, low skill workers laboring under unsafe conditions.

The idea for that kind of legislation didn’t come from a bunch of labor radicals. Rather it was the brainchild of two Republican U.S. senators, James J. Davis of Pennsylvania and Robert L. Bacon of Long Island, New York.

In 1927, Bacon was angered to learn that an Alabama contractor won a bid to build a veteran’s hospital in his district, bringing in poorly treated workers to do the job. In his words, they were “herded onto this job, they were housed in shacks, they were paid a very low wage, and … it seems to me that the federal government should not engage in construction work in any state and undermine the labor conditions and the labor wages paid in that state.”

In his view, setting locally based wage standards for public projects would ensure fairness and allow local and distant contractors to compete for bids on an equal basis.
Davis believed that the government had a responsibility to “comply with the local standards of wages and labor prevailing in the locality where the building construction is to take place.”

Their legislation, known as the Davis-Bacon Act, was passed in congress in 1931 and became the model for state prevailing wage laws, including the one that used to protect West Virginia’s workers and contractors.

Opponents of the legislation, who, as far as I can tell, are also opponents of working people generally, argued that repealing the legislation would save taxpayers money.
For example, Senate Finance Committee Chairman Craig Blair, R-Berkeley, argued at the time that “without prevailing wage, you could build five schools for the price of three.” He also claimed that the repeal would save the state $200-300 million annually.

If that really happened, the state would have a huge budget surplus. Instead, the governor has ordered $100 million in cuts due to a budget shortfall.

And the School Building Authority reported in 2017 that, while workers’ wages had gone down on school projects since repealing prevailing wage, “the overall cost of school construction does not reflect a reduction of overall construction costs on SBA projects at this time. At this time the SBA is not realizing an overall savings that would allow for the construction of ‘five new schools for the price of three,’ as some have previously claimed.”
What did go down were the inflation-adjusted wages of carpenters, electricians and operating engineers.

(Read More)

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Report: Labor cites 526 Jobs Act violations, imposes $106,450 of fines (WV)

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By Phil Kabler
10/23/19

CHARLESTON – In the 2018-19 budget year, the Division of Labor cited 526 violations of the Jobs Act, fining contractors a total of $106,450, according to a report to the West Virginia Legislature.

Enacted in 2001, the Jobs Act is intended to assure that 75% of jobs on state-funded public works projects go to local workers. It authorizes the Division of Labor to impose fines of up to $100 a day on employers who knowingly violate the act.

A legislative audit released in June concluded that the Jobs Act has been largely ineffective, in part because in order to comply with federal law, local markets were defined to include out-of-state counties that are within 50 miles of the West Virginia line.

The audit found that means workers residing in 150 counties surrounding West Virginia, with a total population of 17.3 million people, are considered part of the local market area. The local market includes the major metropolitan areas of Pittsburgh and Washington, D.C.

“In terms of general population, West Virginia makes up 9.5% of the local labor market,” the audit noted.

The audit also concluded that the Division of Labor receives no additional funding for Jobs Act compliance, and relies on 18 inspectors statewide to enforce the act – along with multiple other regulations that the inspectors enforce.

According to the report to the Legislature, Labor inspectors conducted 338 Jobs Act field inspections in 2018-19 and reviewed employment and payroll records for 1,943 construction projects.

While the majority of projects in the report were listed as in compliance with the Jobs Act, contractors and projects cited as being out of compliance were:

-S&D Industrial Painting of Tarpon Springs, Florida, six citations on a Division of Highways project in Nicholas County.
-HVB ICF Contractors of Gay Mills, Wisconsin, on a Mercer County Board of Education project.
-Southern Trades of Louisville, Kentucky, on a Doddridge County Board of Education project.
-Bonsai Design of Grand Junction, Colorado, on a Division of Natural Resources project in Summers County.
-KVK Contractors of Tarpon Springs, Florida, on a West Virginia Parkways project in Kanawha County.
-Oglesby Construction of Norwalk, Ohio, on a West Virginia Parkways project in Mercer County.

Additionally, 20 employers requested 353 Jobs Act waivers and were granted waivers for 341 workers.

(Read More)

Labor leader says square footage increase shows prevailing wage repeal hasn’t worked (WV)

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By Jeff Jenkins in News
November 10, 2019 at 4:11PM

CHARLESTON, W.Va. –

School superintendents from dozens of counties will appear before the state School Building Authority next week in hopes of convincing the SBA to fund their school construction projects in the latest round of “Needs” grants. A recent move by the SBA will allow some of those counties to seek more money for their projects.

The SBA last week approved a 20 percent increase in allowable square footage costs for new school construction.

“We’re seeing trends in square foot costs that affect all projects so we thought it was prudent for us to raise the maximum amount a county could request up to 20 percent higher,” SBA Director of Architectural Services Ben Ashley said.

A West Virginia labor leader said the increase is further proof the the legislature’s decision to repeal the state’s Prevailing Wage law in 2016 hasn’t worked.

“It’s true that costs have gone up but it’s kind of surprising that with the repeal of prevailing wage they are recognizing this,” West Virginia Affiliated Construction Trades Foundation Director Steve White recently told MetroNews. “You get what you pay for and the school systems are finding out when low-wage labor is used it’s causing all sorts of problems and costing them more.”

In 2016 the Republican-led legislature wiped out the long-held practice in West Virginia where the government surveys contractors to determine the minimum level of pay for a variety of classifications of jobs on state-funded projects, such as schools.

Supporters of prevailing wage argued prevailing wage provided a living wage for workers, while keeping out-of-state contractors from undercutting West Virginia construction companies and workers. Those favoring the repeal said the state overpaid millions of dollars for projects with the flawed survey system.

(Read More)

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This Labor Day, parade passes West Virginians by (WV)

Posted by National Alliance for Fair Contracting on

Sep 1, 2019

The first Labor Day was celebrated in New York City in 1882. The highlight of the day included a parade by thousands of workers from city hall to Union Station. But with the repeal of prevailing wage, the parade is passing most West Virginians by this holiday weekend.

Prevailing wage is the local “going rate” for construction work. Essentially, it is a market-based minimum wage with benefits for local construction workers.
Since 1931, both under Republican and Democratic control, Congress has made a federal prevailing wage the law of the land. Prevailing wage receives strong bipartisan support because it creates a level playing field for contractors by ensuring that public expenditures reflected local market standards for compensation and craftsmanship.

But leaders in the West Virginia Legislature decided to march to the beat of a different drum by tossing out the going rate altogether.

Many argued the state could further stretch its tax dollars by building five new schools for the price of three. However, a recently released study finds that West Virginia taxpayers saved absolutely nothing from prevailing wage repeal.

Conducted by the University of Missouri-Kansas City and the Midwest Economic Policy Institute, the study determines that not only has the state failed to save any money, it backs up a previous report by the West Virginia School Building Authority (SBA).

(Read More)

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When a ‘Jobs Act’ creates no jobs (WV)

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Hoppy Kerchaval
June 19, 2019 at 12:37AM

Back in 2001, the West Virginia Legislature passed the West Virginia Jobs Act. The aim was to require companies working on public projects financed all or in part with state taxpayer dollars to hire more local workers.

According to the law, “The Legislature finds that the employment of persons from outside the local labor market on public improvement construction projects contracted for and subsidized by the taxpayers of the state contributes significantly to the rate of unemployment and the low per capita income among qualified state residents who would otherwise be hired for these jobs.”

So, I suppose you can give lawmakers the benefit of the doubt. Their hearts may have been in the right place, but their economics were flawed, and the execution has been pitiful. That is evident in the findings in a report by the Legislative Auditor’s Performance Evaluation and Research Division (PERD).

Let’s start with the most incriminating conclusion. From 2011 until this year, Workforce West Virginia, which oversees the program, could not document any hires for a public works project because of the law. Not one.

The legislative audit found a series of problems with the program.

First, the law defined the local labor market as all of West Virginia and any county in surrounding states within 50 miles of West Virginia’s border. The law was likely written that way so it would not violate the Privileges and Immunities Clause of the U.S. Constitution which has been interpreted to prevent the discrimination of non-residents and preference for state residents.

(Read More)

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Labor says study proves ending prevailing wage was a mistake (WV)

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By MetroNews
May 21, 2019 at 2:07 PM

CHARLESTON, W.Va. – The organization which represents skilled tradesmen in West Virginia believes a new study out of the University of Missouri-Kansas City is clear evidence the removal of the prevailing wage requirement in West Virginia was a mistake.

The Affiliated Construction Trades Foundation released the findings from the Midwest Economic Policy Institute which examined West Virginia’s state funded construction costs three years after the legislature eliminated a requirement for payment of a prevailing wage on state funded construction jobs.

“The report finds there has been no savings,” said ACT Foundation Executive Director Steve White on MetroNews Talkline. “This experiment to bring savings has failed.”

Supporters of the removal of the prevailing wage requirement claimed the action would enable to the state to enjoy enough savings to build five new schools for the cost of three. White said the data from the study found quite the opposite. He said the study found no savings to taxpayers, despite diminished wages for the laborers on the job.

“Building four schools for the price of three or five for the price of three would be a 25 percent savings,” White said. “It’s totally untrue.”

White said many of their members have lost not only wages, but also lost benefits because of the provision’s removal.

“When you compare it to surrounding states, they’ve lost even more,” he said. “The folks in surrounding states that have prevailing wage have seen modest increases. You’ve seen huge cuts in wages and benefits.”

White and his organization plan to use the data to build their case for the legislature to reinstate the prevailing wage law in the next legislative session. White said the provision has done more harm than good, despite what it was touted to have been in the beginning.

“We want good paying jobs and we want people to have good benefits,” he said. “There’s also cost to the taxpayer when people are not paid and not productive and don’t have those benefits.”

(Read More)

(See PDF of Study)

 

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New West Virginia study finds repeal of prevailing wage saved taxpayers no money (WV)

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by Jake Jarvis
May 21, 2019

CHARLESTON – Officials with the West Virginia State Building Trades Council and Affiliated Construction Trades say lawmakers should consider reinstating the prevailing wage law in light of a new study.

The study, published this month by a researcher from Missouri University and the Midwest Policy Institute, found that repeal of the prevailing wage law “had negative impacts for West Virginia’s construction workers, contractors and communities while failing to deliver any meaningful cost savings.”

Steve White, director of the ACT, said in a press conference Tuesday afternoon that the promised results of repealing the prevailing wage law have not been realized.

The law required that workers on state-funded construction projects be paid a so-called prevailing wage, which was calculated by state officials after determining the usual pay rate on such projects in West Virginia.

Proponents of repealing the 1933 law said it would reduce construction costs, but opponents said repealing it would allow out-of-state companies to come to West Virginia and undercut companies here by bidding far below them.

Luther Lasure, director of the Kanawha Valley Builders Association, said that’s exactly what happened.

He said there have been more out-of-state contractors winning bids for state-funded projects. And he said said those out-of-state companies don’t have as much of an incentive to do quality work, since they don’t actually live in the community.

Lasure said that, as uncomfortable as it is to admit it in a press conference full of union officials and supporters, he’s a member of the Republican Party, the party that repealed the prevailing wage. Despite this, he said he believes in listening to the data and the data shows the repeal has hurt workers.

“The taxpayers are not saving any money, but wages have been cut dramatically,” White said.

White called on legislative leaders to “correct course” and reverse the “terrible mistake” they enacted with repealing prevailing wage in 2015.

(Read More)

Union construction workers protest tax fraud in their industry on Tax Day (WV)

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By Jake Flatley in News
April 15, 2019 at 3:26PM

CHARLESTON, W.Va. – Monday marked Tax Day in the United States so the United Brotherhood of Carpenters in Charleston wanted to make a stand against those who in the construction industry who participate in tax fraud.

Local 439 and Local 436 gathered dozens of construction workers and laborers from around the state to protest the “underground” economy that they say goes on with thousands of independent contractors nationwide.

“We are trying to point out the effect of the underground economy, the payroll fraud, paying in cash, illegal classification of independent contractors,” Scott Brewer with the Keystone Mountain Lake Regional Council of Carpenters (KML) in Charleston said.

“What it does to the communities, to the tax base of the communities, to the states and federal governments and how it harms legitimate companies that play by the rules.”

The protest occurred in front of the United States Post Office location on Lee Street in Charleston and Brewster said it joins in with other events in the Construction Industry Tax Fraud Day of Action.

According to Brewer, around 20-percent of construction work in the United States is done under the table which he says boils down to $66 billion a year is lost in the United States.

“That’s money that is lost to cities like Charleston,” he said. “They don’t get their user fee, their local B&O tax. The state of West Virginia gets no payroll taxes, the federal government gets no payroll taxes like Medicare and Social Security.”

(Read More)