A federal judge in Lubbock permanently rolled back updated wage regulations last week in the 1931 Davis Bacon Act. The feds added new regulations in 2023 when Joe Biden was president – which were meant to expand “prevailing wage” protections in contracts involving federal money.
Associated General Contractors of America, J. Lee Milligan, Incorporated of Amarillo and the Lubbock Chamber of Commerce sued the administration to stop the update.
“Presidents cannot just amend acts of Congress at will. That’s what President Biden tried to do here … He [was] trying to make the laws himself like a king. And that’s unconstitutional every day of the week,” attorney Fernando Bustos added.
Chris Chambers, co-founder of Lubbock’s Chambers Engineering, said, “Ultimately, the impact would have eliminated a very huge number of companies’ ability to compete on federal and state contracts.”
Chambers is also the chair of the Lubbock Chamber of Commerce.
Not every update to the regulations went away, but these three did.
- The administration wanted material suppliers to be treated as job site workers and get protection if the suppliers did anything on the job site.
- The updated regulation included truck drivers who did anything more than minimal work on the job site.
- The higher wages had to be paid even if the contract failed to give proper notice under the Davis Bacon Act.
Davis Bacon history
Bustos said of the era in which Davis Bacon passed, “Contractors would import cheap labor. Back in the day, it was Chinese labor, for example. … they would pay those foreign workers super cheap labor, super cheap wages. And that had the effect of depressing the labor market for wages.”
The act requires workers to get prevailing local wages determined by the Department of Labor on federal contracts. Congress included those same prevailing wages in 70 other federal laws, according to the Federal Register – which also said the Davis Bacon Act impacts “an estimated $217 billion in federal and federally assisted construction spending per year.”
Bustos said, “You’ll be surprised to see how much federal money gets involved in even local construction.”
The Federal Register, where proposed regulations are published for the public to consider, said the wage law impacts an estimated 1.2 million construction workers yearly.
The disagreement
Biden’s proposed regulations went beyond the actual law, Bustos said.
“For example, say that part of the construction project involves some steel beams. And those steel beams are constructed in a factory 500 miles away. He tried to make the factory workers in that factory that’s 500 miles away from the work site subject to the prevailing wage rules of Davis-Bacon.”
Bustos used the example of a trucking company in Lubbock hired to deliver materials to a job site in Chicago.
“Under President Biden’s attempt, that truck driver from Lubbock would be subject to the Davis-Bacon prevailing wage and the owner of the trucking company in Lubbock would be forced to pay Chicago wage rates to his truck drivers,” Bustos said.
Chambers said, “Those wage rates being set as a national minimum in any location would create problems in competitive markets, especially in competitive markets like the one we have here in Texas.”
His business was not going to be directly impacted but many other firms his company’s various projects would have to raise prices, Chambers said, that means higher costs for city, county and school projects if they take federal grant money.
“It would have driven the cost up of all those projects,” Chambers said.
Federal officials had a different view.
“Enforcement efforts at the Department [of Labor] have resulted in the recovery of more than $229 million in back wages for over 76,000 workers,” the Federal Register said.
“But the Department has also encountered significant enforcement challenges,” officials also wrote.
In one case, the failure to put everyone on notice of the wage requirements in a contract meant workers did not get fully paid for eight years.
The government collected more than 40,000 comments from the public.
“Commenters expressed a wide variety of views on the merits of particular aspects of the Department’s proposal; however, most commenters favored some, if not all, of the changes proposed,” the Federal Register said.
The Lubbock Chamber got involved
The Lubbock Chamber of Commerce represents 1,500 businesses, Chambers said.
“Fernando [Bustos] came over and he actually explained it to our board. … He felt like this was going to … create problems for a number of those businesses and he was correct,” Chambers said.
Chambers testified in a deposition for the case.
“Our company actually has experience with those wage rates, and we use those daily in our Dallas office. We felt like this certainly impacts the Lubbock area, our chamber, and the state as a whole,” Chambers added.
People from all over testified, Chambers said – for example, Washington D.C., South Dakota and California.
Bustos said President Trump’s election eventually made a difference with the Department of Labor eventually deciding not to defend the three provisions under dispute in Lubbock.
“It took quite a while for the Trump administration to finally see the light. … We were finally able to persuade them that, ‘Hey, look, these regulations, they’re not worth defending,’” Bustos said.
Senior United States District Court Judge Sam Cummings in Lubbock signed a preliminary injunction two years ago. The case went more recently to judge Wesley James Hendrix, also in Lubbock, who signed the final order.
