What is the Davis-Bacon Act?
The Davis-Bacon Act requires payment of prevailing wages on federal construction contracts over $2000. As stated by Representative Robert L. Bacon, a sponsor of the law: “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 the state….The least the Federal Government can do is comply with the local standards of wages and labor prevailing in the locality where the building construction is to take place.” Click here for a history of the Davis-Bacon Act.
The Davis-Bacon Act is a federal law enacted by the US government in 1931. In brief, the law forbids paying workers on public works projects less than the prevailing wage. Many of the public works construction projects are bid on by private companies who then perform the work, but underbidding by lowering employee wages can create an inequitable situation. Essentially, the Davis-Bacon Act attempted to correct this by demanding that all employees must be paid a prevailing wage, and this can be defined as a wage that would be average and expected in the same area for the same type of work. Senator Jim Davis and Representative Robert L. Bacon sponsored the bill, and it may have been a partial response to anger created when workers from Alabama were hired to build a hospital in New York. Due to the fact that Alabama wages were generally lower than New York wages, the company with the successful bid was able to significantly lower its bid by paying the Alabamans, who were African Americans,
The Davis-Bacon Act-also known as the prevailing wage law – preserves local area wages and labor standards in the process of letting contracts for federal construction work. Enacted in 1931, the law states that contractors for federal projects must pay their workers no less than the wage rates prevailing in the local area for each craft, as determined by the US Department of Labor. Q. Why is such a law needed today? A: For several reasons. First, the past two decades have seen stagnating or declining incomes for the middle class. Davis-Bacon is one of the few federal laws that prevent further erosion of living standards for millions of workers. Its repeal would set the appalling precedent of government using tax dollars to drive down the wages of taxpayers. Second, when government enters the construction industry through federally – funded contracts, its monopoly power risks skewing this unique market unfairly. That is because construction wages vary greatly across the country, reflect
• The Davis-Bacon Act requires federal construction contractors to pay at least the wage rates prevailing on non-federal construction projects in the same locality. • The act was intended to prevent the purchasing power of the federal government from driving down construction wages during the Great Depression. • The act 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.[1] • To calculate the wages that contractors must pay, the Wage and Hour Division (WHD) surveys construction wages and publishes prevailing wage determinations for each county in the United States. Federal contractors must then pay their employees at least the prevailing wage for each class of worker. Policy Objections • In most cities, Davis-Bacon wages bear no resemblance to prevailing market wages. In some cities, Davis-Bacon rates are mor
