We wrote in August about major updates to the Davis-Bacon regulations issued by the Department of Labor. The Final Rule updating those regulations became effective on October 23, 2023. In the time since, contractors have been working to ensure compliance with the new requirements, including, among other things, seeking approval from the DOL before taking Davis-Bacon fringe credit for unfunded benefit plans, like PTO and holiday pay.

Recently, however, the Associated Builders and Contractors, Inc. (“ABC”), and its Texas affiliate, filed suit against the DOL (including its Acting Secretary, Julie Su, and the Wage and Hour Division), challenging the Rule on several grounds. Below is a brief description of the lawsuit and the grounds on which the suit claims the Rule is invalid.

First, ABC alleges that the DOL’s regulation contradicts the Davis-Bacon Act and the Administrative Procedure Act for four reasons. They are as follows:

• ABC claims the Rule adopts a flawed definition of “prevailing,” improperly establishing as the prevailing wage any single wage paid to only 30 percent of the covered workers in a given area.
• The lawsuit alleges the Rule’s combination of urban and rural wage rates is contrary to the Davis-Bacon Act.
• The lawsuit claims that the Rule is unlawful because it imposes Davis-Bacon coverage on contractors simply by operation of law, even if the provisions are omitted from the construction contract.
• The lawsuit alleges the Rule is contrary to law is because it...

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