Prevailing Wage Requirements and the Emergency Suspension of the Davis-Bacon Act

Prevailing Wage Requirements and the Emergency Suspension of the Davis-Bacon Act

Order Code RS22265
September 16, 2005
CRS Report for Congress
Received through the CRS Web
Prevailing Wage Requirements and the
Emergency Suspension of the Davis-Bacon
Act
John R. Luckey and Jon O. Shimabukuro
Legislative Attorneys
American Law Division
Summary
President Bush has, by proclamation, suspended the application of the Davis-Bacon
Act to all contracts to be performed in the jurisdictions in Alabama, Florida, Louisiana,
and Mississippi included in the Hurricane Katrina disaster area. This has the effect of
permitting the payment of less than the locally prevailing wage on contracts entered into
after September 8, 2005, for the construction or repair of public buildings and public
works in the affected area. H.R. 3684 would make this type of suspension automatic for
one year when a disaster is declared under the Robert T. Stafford Disaster Relief and
Emergency Assistance Act.
On September 8, 2005, President Bush issued a Proclamation suspending the
application of the Davis-Bacon Act to contracts to be performed in the counties included
in the Hurricane Katrina disaster area.1
The Davis-Bacon Act, which dates back to 1931,2 requires every construction
contract in excess of two thousand dollars to which the federal government (or the District
of Columbia) is a party to pay all laborers and mechanics not less than the locally
prevailing wage. Construction includes alteration or repair (including dredging,
excavation, and painting) of buildings, structures, or other real property.3 The term
“construction” has been found to include many types of activities that will be included in
the recovery from Hurricane Katrina such as contracts for improvements to bridges, dams,
1 70 F.R. 54,227 (September 8, 2005), available at [http://www.whitehouse.gov/news/releases/
2005/09/20050908-5.html]. The proclamation also applies to the operation of the so-called
“related acts” to the extent they reference the Davis-Bacon Act. Related acts provide financial
assistance for construction projects and require the payment of prevailing wages for workers on
those projects.
2 Ch. 411, 46 Stat. 1494 (March 3, 1931). Codified at 40 U.S.C. §§ 3141 thru 3148.
3 40 U.S.C. § 3142(a).
Congressional Research Service ˜ The Library of Congress

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highways, streets, subways, tunnels, sewers, power lines, cemeteries, pumping stations,
railways, airports, docks, piers, lighthouses, jetties, breakwaters, levees, canals, and
channels. The Davis-Bacon Act reflects Congress’ interest in giving the government “the
power to require its contractors to pay their employees the prevailing wage scales in the
vicinity of the building projects.”4
Prevailing wage is the rate of wages, including fringe benefits, paid to a majority of
workers in a geographic area for the same type of work on similar projects.5 The
Department of Labor is responsible for issuing wage determinations as to what the
prevailing wage is for particular occupations in a particular type of project in a particular
jurisdiction.6
Under section 6 of the Act, the President may suspend the requirements of the Act
during a “national emergency.”7 Over its long history the Act has been suspended several
times for various types of national emergencies such as war,8 economic emergency,9 and
natural disaster.10 Suspension of the Act does not require that less than the prevailing
wage be paid on the covered contracts, but it does remove the bar to the payment of such
wages.
In addition to the Davis-Bacon Act itself, Congress has added prevailing wage
provisions to approximately thirty-eight statutes that provide financial assistance for
construction projects through grants, loans, and other funding mechanisms.11 These so-
4 S.Rept. 71-1445, at 1-2 (1931). For a more detailed history of the Davis-Bacon Act, see CRS
Rept. 94-408, The Davis-Bacon Act: Institutional Evolution and Public Policy. The Davis-Bacon
Act establishes a wage floor for covered construction. In practice, conditions may require
contractors to pay a higher rate of wages.
5 40 U.S.C. § 3142(b).
6 Id. The Department of Labor regulations governing wage determinations may be found at 29
C.F.R. parts 1 and 4. Amendments to these regulations, effective August 26, 2005, provide for
online request of wage determinations. 70 F.R. 50,888 (August 26, 2005). Examples of
prevailing wage determinations can be found at [http://www.gpo.gov/davisbacon/allstates.html].
7 40 U.S.C. § 3147.
8 See Presidential Proclamation No. 2487, 6 F.R. 2617 (May 29, 1941) declared an unlimited
national emergency which was in effect until terminated by Joint Resolution (ch. 327, § 3, 61
Stat. 451) in 1947. While the Presidential Proclamation itself did not specify the Davis-Bacon
Act as being suspended, the Joint Resolution terminating national emergencies proclaimed by the
President did list the Davis-Bacon Act.
9 See Presidential Proclamation No. 4031, 36 F.R. 3457 (February 25, 1971) which suspended
the Act because of an economic emergency in the construction industry.
10 The Act was suspended for contracts in the recovery areas in Florida, Louisiana, and Hawaii
in the wake of hurricanes Andrew and Iniki in 1992. See, Presidential Proclamation No. 6491,
57 F.R. 47,553 (October, 14, 1992).
11 See National Housing Act, 12 U.S.C. § 1715c; Housing Act of 1959, 12 U.S.C. § 1701q(c)(3);
National Foundation on the Arts and the Humanities Act, 20 U.S.C. § 956(j); General Education
Provisions Act, 20 U.S.C. § 1232b; Education of the Deaf Act, 20 U.S.C. §§ 4305(b)(4),
4332(b)(5); Federal-Aid Highway Act, 23 U.S.C. § 113(a); Indians Self-Determination and
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called “related acts” involve construction in areas such as transportation, housing, air and
water pollution reduction, and health. The Robert T. Stafford Disaster Relief and
Emergency Assistance Act, the federal statute that authorizes the Federal Emergency
Management Agency (“FEMA”) to provide funds for the repair and reconstruction of
facilities following a major disaster and for construction related to emergency
preparedness, includes a prevailing wage provision.12 Section 611(j)(8) of the Stafford
Act references the Davis-Bacon Act to require the payment of locally prevailing wages
to laborers and mechanics employed on construction projects related to emergency
preparedness.13 Section 611(j)(8) does not apply to repair or reconstruction projects
involving state or local public facilities, private nonprofit facilities, and owner-occupied
private residences following a major disaster.14 These projects are funded by other
11 (...continued)
Education Assistance Act, 25 U.S.C. § 450e; Indian Health Care Improvement Act, 25 U.S.C. §
1633(b); Federal Water Pollution Control Act, 33 U.S.C. § 1372; Postal Reorganization Act, 39
U.S.C. § 410(b)(4)(C); National Visitors Center Facilities Act of 1968, 40 U.S.C. § 808;
Appalachian Regional Development Act of 1965, 40 U.S.C.App. § 402; Hospital Survey and
Construction Act, 42 U.S.C. § 291e(a)(5); Safe Drinking Water Act, 42 U.S.C. § 300j-9(e);
Public Health Service Act, 42 U.S.C. §§ 300s-1(b)(1)(I), 300t-12(b)(1)(D); U.S. Housing Act of
1937, 42 U.S.C. § 1437j; Demonstration Cities and Metropolitan Development Act of 1966, 12
U.S.C. § 1715c, 42 U.S.C. §§ 3310, 1437j; Housing Act of 1964, 42 U.S.C. § 1486(f); Defense
Housing and Community Facilities and Services Act of 1951, 42 U.S.C. § 1592i; Headstart,
Economic Opportunity, and Community Partnership Act of 1974, 42 U.S.C. § 2992a; Atomic
Energy Act, 42 U.S.C. § 2297g-3; Housing and Urban Development Act of 1965, 42 U.S.C. §
3107; Public Works and Economic Development Act of 1965, 42 U.S.C. § 3222; Domestic
Volunteer Service Act of 1973, 42 U.S.C. § 5046; Robert T. Stafford Disaster Relief and
Emergency Assistance Act, 42 U.S.C. § 5196(j)(8); Housing and Community Development Act
of 1974, 42 U.S.C. §§ 1440(g), 5310; Federal Nonnuclear Energy Research and Development
Act, 42 U.S.C. § 5919(x)(2); National Energy Conservation Policy Act, 42 U.S.C. § 6371j; Public
Works Employment Act of 1976, 42 U.S.C. §§ 6708, 6728; Energy Conservation and Production
Act, 42 U.S.C. § 6881(h); Solid Waste Disposal Act, 42 U.S.C. § 6979; Clean Air Act, 42 U.S.C.
§ 7614; Head Start Act, 42 U.S.C. § 9839(g)(3); Urban Mass Transportation Act, 49 U.S.C. §
5333(a); Rail Passenger Service Act, 49 U.S.C. § 24312; Airport and Airway Improvement Act,
49 U.S.C. § 47112(b); Model Secondary School for the Deaf Act, Pub. L. No. 89-694, § 4, 80
Stat. 694; Delaware River Basin Compact, Pub. L. No. 87-328, § 15.1, 75 Stat. 714.
12 42 U.S.C. § 5121 et seq.
13 42 U.S.C. § 5196(j)(8). See 42 U.S.C. § 5195a(3) (The term “emergency preparedness” means
“all those activities and measures designed or undertaken to prepare for or minimize the effects
of a hazard upon the civilian population, to deal with the immediate emergency conditions which
would be created by the hazard, and to effectuate emergency repairs to, or the emergency
restoration of, vital utilities and facilities destroyed or damaged by the hazard.” Measures to be
undertaken in preparation for anticipated hazards include the construction of shelters, shelter
areas, and control centers.).
14 See 42 U.S.C. §§ 5172(a)(1) (The President may make contributions (1) to a State or local
government for the repair, restoration, reconstruction, or replacement of a public facility which
is damaged or destroyed by a major disaster and for associated expenses incurred by such
government; and (2) to a person who owns or operates a private nonprofit facility damaged or
destroyed by a major disaster for the repair, restoration, reconstruction, or replacement of such
facility and for associated expenses incurred by such person.); 5174(c)(2)(A)(i) (The President
may provide financial assistance for the repair of owner-occupied private residences, utilities, and
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sections of the Stafford Act, which are not affected by the prevailing wage requirements
of section 611(j)(8). In 2002, one proposal for the establishment of a homeland security
agency included a provision that would have arguably required the payment of prevailing
wages for workers on these kinds of projects.15 The prevailing wage language in this
proposal was not included in the final version of the homeland security measure.
On September 7, 2005, Representative Jeff Flake introduced H.R. 3684, the Cleanup
and Reconstruction Enhancement Act. This bill would amend the Stafford Act to
automatically suspend the requirements of the Davis-Bacon Act in areas declared by the
President to be major disasters. The suspension would be for a one year period from the
date of the declaration.
14 (...continued)
residential infrastructure damaged by a major disaster to a safe and sanitary living or functioning
condition).
15 S. 2452, 107th Cong. § 194 (2002) (Lieberman substitute).