Published date: 04/12/2024

Question

Under the new Davis-Bacon rules that went into effect last October, how are prevailing wage calculations changing?

Answer:

One significant change is that the U.S. Department of Labor has decided to reintroduce the three-step process for determining wage rates. As part of this three-step method, if a majority of workers under the same classification are not receiving the same wage rates, the rate paid to at least 30 percent of those workers will be considered prevailing. In the absence of a common wage among 30 percent of workers, then a weighted average approach is used to determine the prevailing wage rate.

Another noteworthy change pertaining to wage calculation is how the WHD determines prevailing wages when there is insufficient wage data in a given county. In these cases, wages of surrounding counties are taken into consideration. This methodology applies even if a county is considered “metropolitan” and the other as “rural”. This marks a shift from the previous ruling which prohibited using nearby “metropolitan” counties to set prevailing wages for a “rural” county and vice versa.

In addition, the new ruling allows the WHD to adopt wages set by state or local governments to determine wage rates. It also now permits the use of state highway districts as a basis to calculate wages for highway projects.

For more information on what other changes took effect as part of the final ruling, check out our newest LCPtracker Academy class led by our Davis-Bacon expert, Aliecia Taormina.

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Have a burning question about labor compliance that you’ve been eager to ask? Submit it anonymously to our live submission form and you might just see it answered in a future entry of our monthly AMA series! You can also check out our past entries here.

Want an opportunity to get questions like these and other topics answered in person? Check out our events page for our educational Spark Seminars. These are perfect opportunities for you to hear from industry experts and expand your prevailing wage knowledge.

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These materials are being issued with the understanding that LCPtracker is not engaged in rendering legal or other professional services and is providing these for informational purposes only. If legal, accounting, or tax expert assistance is required, the services of a competent legal, accounting or tax professional should be sought.