It’s coming. From all outward signs, it appears that the Biden Administration may be planning to use the “American Jobs Plan” – otherwise known as the proposed infrastructure plan – to expand the Davis Bacon Act (“DBA”) and require the use of prevailing wages on all projects funded by any infrastructure bill ultimately passed by Congress.
The Davis Bacon Act (40 U.S.C. §§ 3141-3148), requires employers performing construction work under contract with the federal or District of Columbia government valued at more than $2,000 to pay their laborers and mechanics a prevailing wage and fringe benefits, at levels set on a regional or local level by the U.S. Department of Labor. Noncompliance with the DBA can potentially lead to severe penalties, including suspension, debarment, and even False Claims Act civil and/or criminal liability.
Over the years, the DBA’s prevailing wage and fringe requirements have been engrafted onto a number of other federal funding or federal assistance statutes such as the Housing and Community Development Act of 1974 (HCDA), HOME Investment Partnerships Act, and the Native American Housing Assistance and Self-Determination Act of 1996 (NAHASDA). Compliance with the DBA was also mandated in the American Recovery and Reinvestment Act of 2009 (ARRA) as part of the federal government’s plan to revive the economy after the 2008 housing bubble burst.
Because the Obama Administration required DBA compliance in connection with federal ARRA funds disbursed or certain categories of bonds use to finance ARRA covered activities, it is reasonable to assume that the Biden Administration may require similar – or even broader – application of the DBA as part of the currently proposed infrastructure plan. While the DBA is not mentioned by name, the White House’s current “Fact Sheet” on the proposed American Jobs Plan expressly mentions “prevailing wages” no less than six times, and mostly in the context of “Create[ing] good-quality jobs that pay prevailing wages.”
This echoes President Biden’s public statements back in February 2021 when discussing his infrastructure plans: “And I think we have an incredible opportunity to make some enormous progress in creating jobs — good-paying jobs, Davis-Bacon and prevailing wage jobs — to rebuild the infrastructure of this country in a way that everybody knows has to be done.”
Based on the foregoing, and other public statements and Executive Orders issued to date, we may see the DBA’s prevailing wage and fringe benefit requirements become a required component of the infrastructure bill. Companies contemplating doing any work funded by the American Jobs Plan – assuming it is passed into law – should start now to familiarize themselves with the DBA and its requirements so that they can ensure that they price future work properly and they have the appropriate DBA enforcement mechanisms in place before they are awarded their first contract.