By Jarrett Renshaw
PHILADELPHIA (Reuters) – The Biden administration will bolster union-friendly rules on Tuesday that will boost wages and protections for workers on federally funded construction projects, potentially drawing the ire of trade groups who warn the changes could curtail billions of dollars in new federal investment.
Vice President Kamala Harris will visit Philadelphia on Tuesday to celebrate the new labor reforms at a union hall. The trip marks the latest in a string of visits by Harris and President Joe Biden to this key electoral battleground state to court unions, a core constituency.
The changes to the Davis-Bacon Act issued by the Labor Department seek to boost wages and protections as the federal government spends billions of dollars on new roads and bridges, and expanding industries like computer chips and green energy spurred by several pieces of legislation.
“The rules are more important than ever to ensure fair wages for workers and ensuring good wages for them,” a senior administration official said.
The Davis-Bacon Act, first established in 1931, tasks the federal government with establishing wage floors – known as prevailing wages – that apply to construction projects partially or fully funded by the federal government. It applies to more than one million construction workers on $200 billion of such projects, the administration said.
President Joe Biden ordered the review of the labor law early in the administration and the Labor Department proposed the rule in March last year. It will become effective in roughly 60 days.
Trade groups have long criticized the prevailing wage requirements under the Davis-Bacon Act, saying they are burdensome and discourage small businesses from seeking federal contracts.
The rule changes the way prevailing wages are calculated, basing them on wages paid to at least 30% of local workers, rather than a 50% threshold set in 1983 by then-President Ronald Regan.
The prevailing wage rate is based on an average rate in a region, and eliminating some lower-wage workers in the calculation will boost the wage floor, a senior administration official said.
The Labor Department must currently periodically survey contractors and other parties to update prevailing wage rates, but will now be able to adopt prevailing wages determined by state and local governments, issue wage determinations for jobs when data is lacking and update outdated wage rates.
The rule will add a new anti-retaliation provision in contract clauses to protect workers who raise concerns from being fired or punished and strengthens the government’s ability to withhold money from a contractor in order to pay employees their lost wages.
(Reporting By Jarrett Renshaw; Editing by Bernadette Baum)
