US judge blocks rule seeking higher wages for construction workers

A Biden administration rule was blocked, at least temporarily, after US District Judge Sam Cummings said the Department of Labor (DOL) lacks authority to force prevailing wage requirements when government agencies do not explicitly include them in contracts.

Sunset construction (Image: Adobe Stock) Construction workers at sunset. (Image: Adobe Stock)

The rule sought to expand cases wherein construction contractors would be required to pay workers prevailing wages – usually a union-bargained wage (or wage floor) including benefits – on about US$200 billion of federally-funded infrastructure projects. It also extended these expectations to truck drivers working on those construction sites.

The rule also made the prevailing wage standards the “operation of law”, which meant government agencies did not need to include the standards in contracts.

The Associated General Contractors of America (AGC) sued the administration back in November regarding the rule extensions. It was one of several challenges to Biden-era labour reform, with another trade association taking issue with the administration mandating Project Labor Agreements (PLA) on federal projects worth more than $35 million. AGC also sued the government over PLAs.

In his ruling, Judge Cummings said the labour rule would price some construction businesses out of federal contracts and cause harm to the industry.

The DOL said the rule was meant to modernise wage regulations on what would be some of the largest civil and infrastructure projects in the country. The extended wage rule received support from labour unions, who cited concerns about salary theft within the country’s growing segment of clean energy infrastructure construction projects.

The federal government’s likely next steps are to appeal the decision or rework the expanded rule, but no indication either way was provided.

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