(USNewsBreak.com) – The Biden administration announced new rules centered on prevailing wages on June 18. Prevailing wages are the minimum amount contractors must pay those working on federal projects. They apply to more than one million construction workers in the country. While the rule took effect in 2023, the Treasury Department and IRS issued the final rules to help streamline compliance this month. However, a group challenged the rule in court, and now, a judge has temporarily blocked its enforcement nationwide.
On Monday, June 24, US District Judge Sam Cummings blocked the administration’s expansion of cases where construction industry contractors must pay their workers prevailing wages based on a new calculation. Cummins said that the Department of Labor lacked the power to impose such requirements if contracts don’t specifically define and include the provisions. He said presidential administrations violate “the Constitution when they [unilaterally] attempt to […] amend Acts of Congress to suit […] policy choices.”
The Davis-Bacon Act requires the Labor Department to establish wage floors for federally funded projects. However, the legislation allows the agency some leeway in those calculations.
The Biden administration rule changes attempted to revive a method the Reagan administration eliminated in the 1980s. That method called for calculating wages to exclude some lower-paid workers, thereby boosting the overall wage floor.
In short, construction contractors would pay a lot more for services and would need to charge more, pricing them out of projects, including a number of clean energy projects on the agenda. Several lawsuits resulted from the rule change.
Cummings’ decision resulted from the Associated General Contractors of America lawsuit against the Biden administration. The judge has temporarily blocked the rule’s expansion while the case makes its way through the courts. Other groups are also suing in a separate lawsuit.
The Biden administration enacted the rule in keeping with its efforts to modernize the prevailing wage laws to ensure they reflect changes in the economy and the law.
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