Published date: 09/19/2024

The United States government is divided into three distinct branches:

Judicial: Interprets and applies the law, represented by the Supreme Court.

Executive: Implements and enforces the law, represented by the President.

Legislative: Creates laws, represented by the House of Representatives and the Senate.

These branches maintain a system of checks and balances to ensure that no single branch becomes too powerful. One unique power of the Executive branch is the issuance of executive orders, which can significantly impact public works construction, and in some cases, prevailing wages, specifically. Executive orders can shape labor standards, dictate compensation, and influence economic and social policies.

Here’s a look at some key executive orders that supplement and directly affect public works construction:

Executive Order 11246

• Year Issued: 1965
• Overview: Issued by President Lyndon B. Johnson, this order prohibits federal contractors and subcontractors from engaging in employment discrimination based on race, color, religion, sex, or national origin.
• Importance: Federal contractors are required to offer equal employment opportunities, which indirectly supports wage equity and upholds labor standards. By fostering nondiscrimination, this initiative helps build a less discriminatory workplace, creating an environment where prevailing wages can be more consistently applied. This underscores the role of prevailing wages in leveling the playing field and preventing unethical wage undercutting, which can disproportionately impact certain demographic groups.

Executive Order 13658

• Year Issued: 2014
• Overview: Issued by President Barack Obama, this order establishes a minimum wage for federal contractors, initially set at $10.10 per hour, with adjustments for inflation.
• Importance: This executive order – applying to Davis-Bacon ACT (DBA) contracts, but not Davis-Bacon Related Acts DBRA contracts – ensures that workers on federal contracts are paid a livable wage, above the federal minimum wage. It directly impacts prevailing wage rates by setting a baseline that influences wage standards on public projects. By raising the minimum wage for federal contractors, it helps to elevate overall wage levels, providing appropriate compensation for workers.

Executive Order 13706

• Year Issued: 2015
• Overview: Also issued by President Obama, this order requires federal contractors to provide paid sick leave to employees, accruing at least one hour of leave for every 30 hours worked.
• Importance: This order enhances worker benefits, contributing to overall labor standards and worker well-being. While it doesn’t directly set prevailing wages, it influences the total compensation package, indirectly supporting the principles of adequate compensation and working conditions.

Executive Order 13838

• Year Issued: 2018
• Overview: Issued by President Donald Trump, this order exempts certain contracts for recreational services or seasonal recreation equipment rental, such as those in national parks, from the requirements of Executive Order 13658.
• Importance: By providing exemptions, this order affects the application of the prevailing wage rules in specific sectors. It illustrates how executive orders can tailor prevailing wage requirements to different industries, reflecting economic considerations and the need for flexibility in policy implementation.

Executive Order 11246

• Year Issued: 2021
• Overview: Issued by President Joe Biden, this order increases the minimum wage for federal contractors to $15 per hour, with future increases tied to inflation.
• Importance: This order replaces Executive Order 13568 for projects started after 1/1/2023. It significantly raises the wage floor for federal contractors, promoting higher living standards and economic security for workers. By increasing the minimum wage to $15 per hour and tying future increases to inflation, it updates the baseline for prevailing wages on federal contracts, so that wage standards keep pace with living costs.

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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.

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