The federal Davis-Bacon Act (DBA) of 1931 requires contractors to pay prevailing wages to all “mechanics or laborers” employed on certain federal public works projects. New Jersey employment law addresses prevailing wages for state projects. Failure to meet the prevailing wage requirements could result in termination of the contract and civil liability to workers. The Wage and Hour Division (WHD) of the U.S. Department of Labor is responsible for determining the prevailing wage for specific types of work in specified geographic areas. The current rule governing this process has been in place since 1983. The WHD published a new final rule in August 2023, which will replace the current rule on October 23. Among other changes, it expands the criteria that the WHD may consider when calculating prevailing wages.
The DBA defines “wages” to include hourly pay, medical benefits, worker’s compensation, pensions or retirement benefits, disability insurance, unemployment benefits, and other forms of compensation. “Prevailing wages” are based on several factors:
– The “class of laborers and mechanics” working on a project;
– The type of project; and
– The “civil subdivision of the State” — meaning the county — where the project is located.
Contractors and subcontractors working on federal contracts must pay workers every week at the worksite and post the wage scale somewhere where workers can see it.
Federal agencies may cancel a contract if the contracting officer discovers that the contractor is paying workers less than the applicable prevailing wage. The contractor may be liable for the costs incurred by the federal agency to complete the project. Since workers may find themselves out of a job in this situation, the DBA allows federal agencies to pay workers any wages owed to them directly out of withheld payments. If the agency does not have enough in the withheld funds to pay workers what they are owed, the DBA states that workers may file civil lawsuits against the contractor and its sureties.
The WHD gathers data to determine prevailing wages by conducting surveys on a county-by-county basis. Prior to 1983, the WHD could base prevailing wage determinations on one of three calculations:
1. The wage rate paid to a majority of a particular class of workers in a county;
2. If there is no majority wage rate, the wage rate earned by at least thirty percent of workers; or
3. If no wage rate accounts for thirty percent or more of workers in a class, the weighted average of all wages in that class and county.
The rule adopted in 1983 eliminated the second item, as shown in in 29 C.F.R. § 1.2(a)(1). Since then, prevailing wages can only be based on the wage paid to a majority of workers or, in the absence of that, the weighted average. The new rule will reinstate the second item, also known as the “thirty-percent rule.”
Section 1.7(b) of the current rule allows the WHD to look at “wages paid on similar construction in surrounding counties” if no similar construction occurred in the subject county during the preceding year, but prohibits comparing data between “metropolitan” and “urban” counties. The new rule will eliminate these geographic restrictions, which the WHD states will “will more accurately reflect modern labor force realities.”
If you believe that your employer has violated your rights by engaging in unlawful workplace practices in New Jersey or New York, you may be entitled to damages and other legal relief. The experienced and skilled employment attorneys at the Resnick Law Group can advocate for your rights. Please contact us at 973-781-1204, 646-867-7997, or online today to schedule a confidential consultation with a member of our team.