DOL Releases New Rule to Boost Pay Rates for Construction Workers

Leah Shepherd

Leah Shepherd is the Senior Legal Editor for the Society for Human Resource Management (SHRM). She has been covering employment law and employee benefits for 18 years. Prior to joining SHRM, she was the Managing Editor for Employee Benefit News. She is the co-author of “The Three Rs of Employee Benefits.” She earned a bachelor’s degree in journalism from the University of Maryland, College Park. Reprinted by permission from SHRM at, ©2023. All rights reserved.

September 1, 2023

The U.S. Department of Labor (DOL) issued a final rule on August 8 to raise the
prevailing wage standard for approximately 1 million construction workers under the federal Davis-Bacon Act.

The number of construction workers affected by the new prevailing wages is likely to increase in light of the Bipartisan Infrastructure Law of 2021, which funded many federal infrastructure projects, senior Biden administration officials said.

The final rule will provide periodic updates for non-collectively bargained wages. It also adds anti-retaliation provisions and strengthens the DOL’s ability to withhold money from a federal contractor in order to pay employees their lost wages.

The final rule gives the DOL authority to adopt prevailing wages determined by state and local governments, issue wage determinations for labor classifications where insufficient data was received through the wage survey process, and update outdated wage rates.

The Davis-Bacon regulations have not been comprehensively updated in 40 years.


The Supreme Court has described the Davis-Bacon Act as “a minimum wage law designed for the benefit of construction workers,” the DOL noted in its summary of the proposed rule. The law, enacted in 1931, requires the payment of locally prevailing wages and fringe benefits on federal contracts for construction. It applies to workers on contracts in excess of $2,000 entered into by federal agencies and the District of Columbia for the construction, alteration, or repair of public buildings or public works.

The law’s purpose is to protect local wage standards by preventing contractors from basing their bids on wages lower than those prevailing in the area, the Supreme Court has noted.

In the new rule, the DOL recommended returning to a three-step process previously used to identify the most frequently used wage rate for each classification of workers in a locality.

This three-step process identified as prevailing:

  • Any wage rate paid to a majority of workers.
  • If there was no wage rate paid to a majority of workers, then the wage rate paid to the greatest number of workers, provided it was paid to at least 30% of workers— the so-called 30% rule.
  • If the 30% rule was not met, the weighted average rate.

The three-step process relegated the average rate to a final, fallback method of determining the prevailing rate. The average wage can pull down the prevailing wage if some employers pay workers significantly less.

A rule that took effect in 1983 eliminated the second step in the process. At the time, the DOL said that the 30% rule may be inflationary, and may give undue weight to collectively bargained wages.

But now the DOL has concluded that this change was mistaken or resulted in outcomes that did not align with the Davis-Bacon Act.

Recent research shows that wage increases, particularly at the low end of the distribution, do not cause significant, economy-wide price increases, the DOL has said.

The DOL said the use of weighted averages has increased from 15% of classification rates across all wage determinations before 1982 to 64% of classification determinations now. This overuse is inconsistent with the text and purpose of the law, the DOL noted.

The final rule comes as inflation has fallen by two-thirds over the last year, and inflation-adjusted wages are up 2.4% for nonsupervisory construction workers.

AIA Releases Compensation and Benefits Trends in 2023

American Institute of Architects (AIA) has released its most comprehensive report on architecture firm compensation and benefits trends in 15 years. The 2023 edition of the AIA Compensation & Benefits Report ( provides a comprehensive look into how firms are addressing rising inflation, staff shortages, and increased financial pressures and their impact on recruitment and retention.
Firms have been prioritizing creating a better pipeline to employment for students, as well as implementing diverse hiring and employee support practices. “Firms continued to find flexible, supportive, and transparent workplace solutions for employees,” said Michele Russo, AIA Vice President of Research and Practice.
The data collected for this report was extensive, with 16,308 positions reported—an increase of 53% from 2021. The data, which includes information from 37 metropolitan areas, indicates the average compensation for architects rose about 4% per year to $96,626 from 2021 to 2023.
The report also found that casual dress policies, child- and pet-friendly offices, flexible work hours, work-from-home opportunities, and adopting Juneteenth as a paid holiday have become more common among firms. Despite these efforts, though, for most architect positions, compensation gains did not keep pace with the rising cost of living over the last 2 years.
Although there were fewer remote workers in 2022 than in 2020, the number of remote workers remained higher than pre-pandemic levels. In addition to this shift toward remote work opportunities, 93% of all firms reported offering at least one form of employee licensure support in 2023.
The report provides an invaluable resource to help individuals and firms  understand the current landscape of  compensation and benefits trends, and  it provides the data behind AIA’s salary  calculator (
Visit for more information on this report.