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Davis-Bacon wage law reimposed in Gulf Coast region

By Allen Smith   10/28/2005

Prevailing wages for federal contract construction workers in Katrina disaster areas will be required again as of Nov. 8, the Bush administration announced Oct. 26, lifting its suspension of the Davis-Bacon Act in the region.

In response to the unprecedented devastation caused by Hurricane Katrina, the president temporarily suspended the Davis-Bacon Act as part of an administration-wide effort to remove as many barriers as possible to aid the recovery efforts in the impacted areas, said Secretary of Labor Elaine Chao.

The reinstatement of the act is in response to a review of current conditions in the declared areas, Chao remarked. However, it came on the heels of widespread criticism on Capitol Hill.

At the urging of several Republican representatives, the president had suspended the laws prevailing wage requirements Sept. 8 for federal contracts awarded on or after that date for construction in Louisiana, Mississippi, six counties in Alabama and three counties in Florida.

The president said the suspension was needed to reduce rebuilding costs. Democrats and labor leaders objected, and a revolt emerged among Republicans, as 37 GOP representatives, led by Rep. Steven LaTourette, R-Ohio, and Rep. Frank LoBiondo, R-N.J., wrote Bush in protest.

LaTourette and LoBiondo also introduced a resolution Oct. 7 to compel the White House to provide the House of Representatives with copies of any contracts related to Hurricane Katrina recovery or rebuilding, including pre-awarded contracts.

I am deeply concerned that those who are working tirelessly to rebuild communities across the Gulf Coast region are not being justly compensated, LaTourette said in announcing the resolution. The indefinite suspension of the Davis-Bacon Act threatens the ongoing reconstruction of public services, transportation infrastructure and city buildings by not fairly reimbursing skilled professionals for their hard work.

The resolution also called for the White House to provide any communications made or received regarding contracts in the Gulf Coast when the president indefinitely suspended the act in the region.

Reversal welcomed

LaTourette and LoBiondo met repeatedly with White House officials and were told of the White Houses reversal in a meeting with Chief of Staff Andy Card.

LaTourette welcomed the news, saying reinstating Davis-Bacon is good for American workers and taxpayers because it will provide some much-needed transparency and accountability in the awarding of Katrina contracts. You may save a couple of dollars an hour by suspending Davis-Bacon, but you invite all kinds of other problems.

The suspension led to profiteering and the hiring of illegal immigrants and unskilled workers, he added.

There are thousands of skilled Gulf Coast workers who should be working to rebuild their communities and it sickens me that companies are passing them by and hiring cheap unskilled illegal workers to beef up their bottom line, LaTourette said.

Davis-Bacon requires employers to file a weekly certified payroll report, and every employee must have a Social Security Number. Although the act has been suspended three times by other presidents, those suspensions were for brief periods, not indefinitely, he noted.

Democrats criticized the president for suspending the law in the first place.

President Bush finally realized that his Gulf Coast wage cut was a bad idea that hurt the workers and their families affected by Katrina, said Rep. George Miller, D-Calif., and the sponsor of a bill (H.R. 3763) to rescind the suspension.

Sen. Edward Kennedy, D-Mass., the sponsor of a companion bill (S. 1749) to Millers proposal, agreed.

Im pleased the president has finally reversed course on his incredibly damaging decision to suspend wage protections for workers rebuilding the Gulf Coast after Hurricane Katrina, he said. Unfortunately, this announcement does nothing to undo the harm done to hard-working Americans who have already paid a high price in lost pay and lost jobs.

Industry balks

However, Kirk Pickerel, president and CEO of the Associated Builders and Contractors, observed that the Gulf region would have been better served by leaving the suspension in place for a longer period of time. Lifting the suspension at this critical juncture will most likely impede the rebuilding process.

He said the fanciful claims of low wages and the eradication of worker protections as a result of this suspension are patently false. Wages in the region are at an all-time high. Certain special interests and their allies in Congress are more concerned about reinstating this wasteful and outdated act than they are with fairly and expeditiously reconstructing the devastated areas.

But LoBiondo applauded the lifting of the suspension.

I am pleased that the president today has set a definitive date to reinstate the Davis-Bacon Act, thus ensuring Gulf Coast workers receive the prevailing wage for their service in rebuilding the devastated region, he said.

The reinstatement of Davis-Bacon will furthermore ensure that there is accountability of the taxpayers interest throughout the process. The employment protections provided under the law will ensure that legal workers are treated fairly and that federal contracts are properly awarded and executed.

Allen Smith, J.D., is senior legal editor for HR News.

For more articles and information related to the natural disasters, go to SHRMs Hurricane Response Page

Related articles:

Davis-Bacon wage laws temporary suspension debated, HR News, Oct. 12, 2005

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