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They Are Final—Davis Bacon Final Rules Are A Game Changer
Courtesy of Law Firm Atkinson, Andelson, Loya, Ruud and Romo
On August 8, 2023, the U.S. Department of Labor (“DOL”) issued over 800 pages representing its final rule “updating the Davis-Bacon and Related Acts Regulation” (“DBRA”).
The regulations were initially issued in a Notice of Proposed Rulemaking nearly 18 months ago. The DOL pretty much ignored the comments by contractors.
We are still conducting a thorough analysis of the comprehensive changes that will be effective 60 days subsequent to the publication in the Federal Register, but wanted to highlight some changes.
These rules have been on the DOL’s agenda since President Reagan rolled back many of the provisions of DBRA in 1982. For example, the final rule implements the Wage and Hour Division’s (“WHD”) original methodology for determining prevailing wages, known as the “three step process” that was in effect before 1983. According to the three step process, in the absence of a wage rate paid to a majority of workers in a particular classification, a wage rate will be considered prevailing, if it is paid to at least 30% percent of such workers. Only if no wage rate is paid to at least 30% of the workers in a classification will a weighted average rate be used.
Moreover, the WHD is allowed to periodically adjust certain noncollectively bargained rates based on the employment cost index published by the U.S. Bureau of Labor Statistics. In other words, the rates will automatically be increased once every three years.
It is critical for California employer contractors to know that the final rule allows the WHD to avoid conducting wage surveys by simply adopting the California prevailing wage rates. It will be interesting to see whether the wage determinations will adopt all of the specifics of the California wage determination, e.g. travel subsistence, holiday pay. What about daily overtime?
While the final rule purportedly does not expand the types of projects subject to DBRA, it does expressly cover energy infrastructure projects that are considered “building or work” as defined by DBRA. For example, these types of projects include solar panels, wind turbines, broadband installation, and installation of electric car chargers.
A concern to all contractors is the expansion of the law to include a “secondary construction site,” which is defined as any other site where a significant portion of the building or work is constructed, provided that such construction is for specific use in that building or work and does not simply reflect the manufacture or construction of a product made available to the general public, and provided further that the site is either established specifically for the performance of the contract or project, or is dedicated exclusively, or nearly so, to the performance of the contract or project for a specific period of time. The regulations further define a “significant portion” of a building or work to mean one or more entire portion(s) or module(s) of the building or work, such as completed room or structure with minimal construction work remaining other than the installation and/or final assembly of the portions or modules at the place where the building or work will remain.
Surprisingly, the regulations explain, that “[a] ‘significant portion’ does not include materials or prefabricated component parts such as prefabricated housing components.” However, offsite manufacture of modular rooms or components will likely be covered.
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Even in ‘At-Will’ California, It’s Wise to Follow Disciplinary Process
Courtesy of: Dana Leisinger, Employment Law Expert, CalChamber
California is indeed at an at-will state, and both employer and employee can end the employment relationship at any time, with or without cause. However, an employer can’t end the relationship for an illegal or discriminatory reason.
Many individuals in protected categories (protected from discrimination) will claim their race, religion or other protected class as the basis for a termination.
In addition, at-will does not protect an employer when an employee claims they were terminated for refusing to perform an illegal act or in retaliation for engaging in a protected activity, such as taking a legally protected leave of absence.
Discipline for Misbehavior
Therefore, it is wise for an employer to follow the progressive disciplinary process, regardless of the at-will status, for employee misbehavior.
This typically begins with an oral warning or two. It is impossible to draw a precise path to follow, as so many things can take place in the workplace.
HRCalifornia has a form titled Employee Disciplinary Warning, with boxes to check for an oral warning, written warning, probation or suspension (for hourly employees only). Typically, the situation will progress to a written warning if the behavior doesn’t improve.
Some employers prefer to issue a suspension before termination. This can be done, however, only with hourly employees, not exempt. Additionally, not all employee misbehavior warrants the progressive disciplinary path. When an employee engages in truly reprehensible behavior, immediate termination may be warranted.
Discipline as Defense
For other situations, however, progressive discipline provides a defense against a claim of discrimination or illegal termination. When an employee makes such a claim, and the employer produces a personnel file with warnings, the claim should go no further.
Employees are terminated in large numbers every day. Few terminations ripen into a wrongful termination lawsuit. A personnel file with absolutely no warnings tends to lead to a presumption the employer wasn’t being up front about the terminated employee.
Never promise progressive discipline; that promise erodes the at-will status. However, practice progressive discipline, and a natural defense will be built.
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California’s 2024 Minimum Wage Increases to $16 Per Hour
On Monday, July 31, the California Department of Finance Director Joe Stephenshaw officially certified that beginning January 1, 2024, California’s minimum wage will increase from $15.50 per hour to $16 per hour for all employers, regardless of size.
Per California’s Labor Code, once the state’s minimum wage reaches $15 per hour — which already has occurred, as the current minimum wage is $15.50 per hour — the California Director of Finance must determine on or before August 1 of each year whether to adjust the minimum wage for inflation and, if so, calculate the increase.
The director calculates the increase by applying whichever of the following two options would result in the smaller increase:
- A 3.5 percent increase; or
- The actual rate of change per the U.S. Consumer Price Index (CPI).
For the 12-month period from July 1, 2022, to June 30, 2023, the department’s calculations showed that the CPI increased by 6.16 percent compared to the 12-month period from July 1, 2021, to June 30, 2022, meaning the minimum wage will increase by 3.5 percent — to $16 per hour — on January 1, 2024.
This hourly increase also affects the minimum salary requirements for full-time exempt employees, which currently is $64,480 per year ($5,373.34 per month). Beginning January 1, 2024, the minimum salary for a full-time exempt employee will be $66,560 per year ($5,546.67 per month).
Employers also must keep in mind that some cities and counties in California have adopted their own local minimum wage rates that are separate from the state rate. If the ordinance where employees are performing work requires a higher minimum wage rate than the state minimum wage rate (such as Berkeley, Los Angeles, Milpitas and San Francisco, to name just a few), the local rate must be paid. Keep in mind that only the state minimum wage — not local minimum wages — determines the minimum salary requirements for exempt employees.
Looking ahead, a measure that is eligible for the November 2024 ballot would, if passed by California voters, further accelerate the pace of minimum wage increases. If passed, by January 1, 2025, for employers with 26 or more employees, the statewide minimum wage would increase to $18 per hour, and employers with 25 or fewer employees would pay the same wage on January 1, 2026.
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COVID-19 Prevention Non-Emergency Regulations
COVID cases are increasing again. California is following non-emergency regulations through February 3, 2025. Procedures must be either included in IIPP or a separate document. Employers are still required to notify employees if they have been in close contact with someone who has tested positive. Employers must provide COVID tests free of charge if someone has tested positive and has been in close contact with other employees. If there is a COVID major outbreak (20 or more employees testing positive), employer must post notification at least 14 days or until there is less then 2 cases.
The California Division of Occupational Safety and Health (Cal/OSHA or the Division) adopted the COVID-19 Prevention Non-Emergency Regulations, effective through February 3, 2025. The recordkeeping requirements are effective through February 3, 2026. The Non-Emergency Regulations replace the COVID-19 Prevention Emergency Temporary Standards (ETS).
Cal/OSHA published FAQs, which are incorporated in part below. FAQs do not have the force of law, but they do provide employers with information on how the enforcement agency may interpret the regulations.
Coverage
The Non-Emergency Regulations apply to all employees and places of employment in California except the following:
- Work locations where there is only one employee who does not have contact with other people;
- Employees who are working from home;
- Employees who are teleworking from a location of the employee's choice, which is not under the employer's control; and
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Employees who are covered by the Aerosol Transmissible Diseases Standard.
According to the FAQs, the regulations apply to workplaces with only one employee who has brief contact with others. However, the safety measures that an employer must implement to comply will reflect this type of limited exposure.
Further, for employees who split their work time between home and the workplace, the regulations apply only when employees work at the workplace, or are exposed at work, but not when they work from home.
The FAQs further provide that the regulations do not apply to employees an employer assigns to telework but who choose to work somewhere other than their home, such as at a hotel or rental property. The regulation on employer-provided housing applies when a person is working from a hotel arranged for or provided by the employer, but does not apply to business travel by employees unless they share a room or suite.
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Who Is a Public Works Contractor?
If you work or bid on a public works project, then you are considered a public works contractor. The term "public works contractor" includes subcontractors. All public works contractors must fulfill four key responsibilities.
Public Works Contractor Responsibilities
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