Federal Contractors May Welcome Trump Approach to Enforcement

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By Elliott T. Dube

Longtime critics of the Davis-Bacon Act might have to keep waiting for a repeal of the law, even amid the favorable political climate marked by an incoming Republican-controlled White House and Congress.

But the Labor Department under President-elect Donald Trump likely will take a markedly different approach from President Barack Obama’s DOL in enforcing Davis-Bacon, attorney Paul DeCamp told Bloomberg BNA Dec. 19. DeCamp was an administrator of the DOL’s Wage and Hour Division under President George W. Bush and is now a principal at management firm Jackson Lewis PC in Washington.

Davis-Bacon, passed in 1931, requires employers to pay a prevailing wage set by the DOL to workers under public infrastructure contracts with the federal government.

A repeal of Davis-Bacon is unlikely, DeCamp said. The question is whether members of Congress who want to repeal Davis-Bacon or at least substantially change it will be willing to spend political capital on that legislative battle, considering the many others that will arise during the next administration, he said.

Violations of Davis-Bacon can result in the employer being banned from getting additional federal contracts. That process is known as debarment and can block a contractor from getting government work for up to three years.

Trump’s DOL will probably oversee “more finely calibrated enforcement” of Davis-Bacon’s prevailing wage standards, compared to the Obama administration’s “enormous focus on punitive enforcement in the government contract space,” DeCamp said.

“We won’t see, I don’t think, debarments over non-willful violations,” he said. “And there may be room to change some of the language in the statute relating to enforcement and remedies so that it’s clear that not every misdemeanor situation results in the death penalty, to use a criminal law analogy.”

Union Official Also Doesn’t See Repeal on Horizon

Building trade unions’ long-term efforts to keep Davis-Bacon intact have paid off, as 52 Republican members of the House support the law’s preservation, Tom Flynn, political director for the United Brotherhood of Carpenters and Joiners of America, told Bloomberg BNA Dec. 16.

“I think we’ll be successful in continuing those efforts,” he said. “People have seen the wisdom in paying people good wages and protecting good jobs in America.”

Flynn said his union had a “good relationship” with the most recent labor secretary in a Republican administration—Elaine Chao, who served under Bush and is now Trump’s pick for secretary of transportation. The union will take a “wait and see approach” in terms of interacting with Trump’s DOL, Flynn said. Trump is set to nominate Andrew Puzder, the chief executive officer of the Hardee’s and Carl’s Jr. burger chains, as labor secretary.

“We will work with the new secretary on areas we can work with him on,” Flynn said.

Puzder Could Take Foot Off Enforcement Pedal

Puzder’s experience running a franchise makes him “very attuned” to how regulations and agency enforcement affect small businesses, DeCamp said. A Wage and Hour Division under Puzder likely would tailor Davis-Bacon enforcement to “the needs of the situation,” and there is room for potential changes to the law to reflect this tailoring, DeCamp said.

“As a matter of good public policy, it might make sense for willful, bad actor, egregious violators to be debarred—but most of the violations that happen are not of that sort,” DeCamp said. “So having the statute amended to better differentiate between the good-faith actors and that small number of really bad actors could do a world of good that I think both sides of the aisle might be able to get behind.”

Meanwhile, Trump’s DOL likely will be “much more even-handed” than the Obama administration has been in its enforcement-related treatment of union and nonunion contractors, DeCamp said. There has been a “strong sense that nonunionized contractors were really in the crosshairs for DOL enforcement” under Obama, he said.

Congress and the Trump administration will aim to reduce discrimination against small and nonunion contractors in awarding federal contracts, a spokesperson for Sen. Lamar Alexander (R-Tenn.), chairman of the Senate Health, Education, Labor and Pensions Committee, told Bloomberg BNA Dec. 20.

Associated Builders & Contractors, a trade group consisting of primarily nonunion companies, is looking forward to working with Trump’s DOL to make “meaningful reforms” to Davis-Bacon, Ben Brubeck, ABC’s vice president of regulatory, labor and state affairs, told Bloomberg BNA in a Dec. 20 statement.

“ABC is committed to reforming the law so that wage determinations more accurately reflect prevailing wages and contractors have clear notice of any applicable work assignment rules through every available avenue,” Brubeck said.

To contact the reporter on this story: Elliott T. Dube in Washington at edube@bna.com

To contact the editor responsible for this story: Jo-el J. Meyer at jmeyer@bna.com

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