In the recent past, the U.S. Department of Labor (DOL) effected major changes to the much older Davis-Bacon Act and Related Acts (DBRA), which are now ninety years old. These amendments, which were effective October 23rd, 2023, constitute the first modification to federal contractor’s fair-pay policy in four decades.
HR professionals play a key role in their work not just the nature of the work itself but also the work being performed. One should establish if the job is about construction, repair, or installation and whether it is done by labourers and mechanics. The “operation of law” principle is important because even in the absence of an express term, DBRA may apply.
Another amendment enforces the preference for annualizing fringe benefits. In real life, employers commonly allocate earned fringe benefits specifically to DBRA projects even when employees are working on both DBRA and non-DBRA projects for the same employer. However, since such a stipulation was yet to be enshrined in law, the employers could report to the DOL the whole employees’ earnings of all annual benefits. Fringe benefits are currently annualized under a new regulation. Consequently, fringe benefits contributions for a worker must be spread across all hours worked on each project, irrespective of whether the project is Davis-Bacon or non-Davis-Bacon.
The revised rule will involve human resource (HR) teams to review the employee’s fair share of legitimate fringe benefits. These amendments of the Davis-Bacon Act aim at promoting fair pay and benefits for construction workers for federally funded projects and providing roadways to the middle class. By modernizing and expanding the Act, the government aims to ensure that the jobs created under various initiatives are good jobs that provide fair compensation and benefits to workers. The DBRA updates seek to level the playing field for responsible employers and ensure that those who exploit or underpay their workers do not have an unfair competitive advantage.
