On June 24, 2024, a federal judge in Texas issued a nationwide injunction to block parts of the Department of Labor’s recent regulations updating Davis-Bacon prevailing wage requirements on federally funded construction projects. The preliminary injunction prevents the DOL from enforcing three provisions of the updated regulations while the litigation proceeds.
Although the preliminary injunction is only temporary, the court’s decision to issue the injunction is based on the court’s conclusion that the plaintiffs are likely to succeed in demonstrating that these challenged aspects of the regulations are invalid.
By way of background, the DOL’s “Updating the Davis-Bacon and Related Acts Regulations” were issued last August and went into effect in October. The new regulations impose significant new obligations on federal contractors and subcontractors under Davis-Bacon, including expanded coverage for material delivery truck drivers, especially those employed by a material supplier that is also engaged in construction activities on the project. Shortly after DOL issued the updates, trade groups in Texas sued the DOL seeking to invalidate three of the major provisions of the updated regulations.
The provisions of the regulations that have been enjoined by the court are as follows:
- The provision limiting the “material supplier” exemption to entities whose sole obligation under a covered contract is supplying materials. In other words, if a company is supplying materials for the contract, and also engaging in construction activities at the site of the work, that company’s material delivery drivers would be entitled to prevailing wage for the time spent on the site of work, even though drivers delivering materials to work sites where the company does not also engage in construction activities would be subject to the material supplier exemption and, therefore, not entitled to prevailing wage.
- The provision expanding Davis-Bacon coverage to truck drivers employed by contractors or subcontractors whose work includes “onsite activities essential or incidental to offsite transportation” (i.e., loading and unloading) unless such time is de minimis.
- The provision that Davis-Bacon requirements will be considered to be part of every covered contract simply by operation of law, regardless of whether the contracting agency includes such provisions in the contract.
The provisions of the updated regulations listed above are not enforceable by DOL at this time. Because these provisions are not enforceable, the pre-August 2023 rules relating to coverage of truck drivers on Davis-Bacon projects and the material supplier exemption will govern until a final resolution on the merits of the case is reached. Additionally, during this time, Davis-Bacon requirements will not apply to contracts where the Davis-Bacon requirements have been omitted from the agency contract.
For any questions about prevailing wage coverage for truck drivers or how this nationwide injunction impacts your company’s prevailing wage obligations under Davis-Bacon, contact Andrew Levy, Langdon Ramsburg, or Austin Wolfe.
