Davis–Bacon Act

Davis–Bacon Act
U.S. Government · Public domain · source
Shorttitle	Davis–Bacon Act
Longtitle	An Act to amend the Act approved March 3, 1931, relating to the rate of wages for laborers and mechanics employed by contractors and subcontractors on public buildings.
Enacted by	the 72nd United States Congress
Effective	March 3, 1931
Cite public law	Pub. L. 71–798
Statutes at large	46, 1494
Introducedin	House
Introducedby	Robert L. Bacon
Introduceddate	March 3, 1931
Committees	House Judiciary
Passedbody1	House
Passeddate1	February 28, 1931
Passedvote1	Passed
Passedbody2	Senate
Passeddate2	March 2, 1931
Passedvote2	Passed
Signedpresident	Herbert Hoover
Signeddate	March 3, 1931
Amendments	Service Contract Act of 1965, Walsh–Healey Public Contracts Act
Scotus cases	United States v. Binghamton Construction Co., Building & Construction Trades Dept. v. Allbaugh

Davis–Bacon Act is a foundational United States federal law governing wage standards on federally funded construction projects. Enacted in 1931 during the administration of Herbert Hoover, it mandates the payment of locally prevailing wages and fringe benefits to laborers and mechanics. The law aims to protect local wage standards from being undercut by contractors employing lower-paid, itinerant workers. It has been a persistent subject of political debate, praised by organized labor and criticized by many construction trade associations and free-market advocates.

Background and legislative history

The impetus for the legislation arose in the late 1920s, amid concerns from northern lawmakers about contractors from the Southern United States using low-wage, often African American, laborers to underbid local firms on federal projects. A prominent incident involved a contractor from Alabama using cheap labor to build a Veterans' Bureau hospital in Long Island, which galvanized Congressional action. The bill was introduced by Representative Robert L. Bacon of New York and received strong backing from Senator James J. Davis of Pennsylvania, a former Secretary of Labor. It passed the 72nd United States Congress with bipartisan support and was signed into law by President Herbert Hoover on March 3, 1931, amidst the early years of the Great Depression.

Provisions and requirements

The core provision requires that all contractors and subcontractors performing on federally funded or assisted contracts in excess of $2,000 for the construction, alteration, or repair of public buildings or public works must pay their laborers and mechanics no less than the locally prevailing wages and fringe benefits for corresponding work on similar projects in the area. The Department of Labor determines these prevailing wage rates, typically aligning them with union-negotiated rates in the locality, through its Wage and Hour Division. The act also mandates the submission of weekly payroll certifications and empowers the federal government to withhold contract payments for violations. These requirements are enforced by the department's Wage and Hour Division.

Impact and economic effects

The act has significantly shaped the construction industry and labor economics for nearly a century. Proponents, including the AFL–CIO and the International Brotherhood of Electrical Workers, argue it stabilizes local economies, ensures skilled workforces, and prevents a "race to the bottom" in wages. Studies from institutions like the Economic Policy Institute suggest it supports middle-class incomes and apprenticeship programs. Critics, including the Heritage Foundation and the Associated General Contractors of America, contend it inflates government construction costs, reduces competition, and disadvantages small, non-union contractors. Empirical analyses of its effects on costs, such as those by the Congressional Budget Office, have yielded mixed conclusions over decades.

Controversies and legal challenges

The act has faced continuous controversy and numerous legal challenges since its inception. Opponents have argued it constitutes a protectionist barrier that violates principles of free competition and unfairly advantages organized labor. Significant court cases include United States v. Binghamton Construction Co., which affirmed the government's right to withhold payments for violations, and Building & Construction Trades Dept. v. Allbaugh, which challenged regulatory changes. Debates often intensify during periods of Republican administrations, which have attempted to scale back its scope, and Democratic administrations, which have sought to strengthen its enforcement. Allegations of archaic and inefficient wage determination processes have been a persistent critique.

Amendments and related legislation

The act has been amended several times and serves as the model for related laws. Major amendments include the 1935 Copeland "Anti-Kickback" Act, which prohibited forcing workers to kick back any portion of their wages, and the 1964 provision extending coverage to federally assisted projects through grants, loans, and guarantees. Its principles were expanded to federal service contracts by the Service Contract Act of 1965 and to manufacturing contracts by the Walsh–Healey Public Contracts Act. Many states have enacted similar "Little Davis–Bacon" laws applying prevailing wage requirements to state-funded projects, such as California's Prevailing Wage Law.