By Daniel Wiessner
(Reuters) – A federal judge on Monday temporarily blocked a Biden administration rule expanding the cases in which construction contractors are required to pay workers the prevailing wages applicable to $200 billion in federally funded infrastructure projects.
U.S. District Judge Sam Cummings in Lubbock, Texas, said the U.S. Department of Labor does not have the power to impose prevailing wage requirements when government agencies do not explicitly include them in contracts, and to extend them to truck drivers working on construction sites.
“Presidents and their agencies … violate the Constitution when they attempt to unilaterally alter the laws of Congress to suit their policy choices,” wrote Cummings, an appointee of Republican former President Ronald Reagan.
Cummings blocked the rule, which took effect last October, from being enforced nationwide pending the outcome of a lawsuit by Associated General Contractors of America, a major construction trade group.
The Labor Department and Associated General Contractors did not immediately respond to requests for comment.
A New Deal-era law, the Davis-Bacon Act, directs the Department of Labor to set wage floors for federally funded construction projects, which are based on prevailing wages for certain jobs in specific geographic areas.
Today, prevailing wages apply to more than 1 million construction workers working on $200 billion worth of projects.
The Biden administration’s rule has revived a method for calculating those wages that excludes many lower-paid workers and leads to higher wage floors, a method abandoned by the Reagan administration in the 1980s. Other trade groups are challenging these changes in a separate ongoing lawsuit.
The rule brought a number of other significant changes, including giving prevailing wage standards the “effect of law,” meaning they are always in effect and agencies no longer have to explicitly include them in contracts, and expanding the definition of ‘mechanics and workers’ covered by the law. law to also include truck drivers who make deliveries to workplaces.
Associated General Contractors challenged those two provisions in a lawsuit filed in November, saying they went beyond the Department of Labor’s authority to set the level of prevailing wages.
Cummings agreed Monday, saying the rule would cause irreparable harm to construction companies, including pricing some of them out of federal contracts, if it remains in place.
In adopting the rule, the Labor Department said it was necessary to modernize prevailing wage regulations to reflect changes in the law and the economy.
That was echoed by unions and other supporters of the rule, who said it would guarantee workers fair wages and discourage wage theft, especially in the growing number of clean energy construction projects.
(Reporting by Daniel Wiessner in Albany, New York; Editing by Alexia Garamfalvi and Leslie Adler)
