June 8, 1999

DOL's Proposal Governing Helpers on Davis-Bacon Act Projects

  • Susan Dudley

    Director, George Washington University Regulatory Studies Center
Key materials
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Rulemaking:

Procedures for Predetermination of Wage Rates; Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction and to Certain Nonconstruction Contracts;

Proposed Rule Stated Purpose:

"[T]o amend the regulations to incorporate its longstanding policy allowing use of helpers only where their duties are clearly defined and distinct from journeymen and laborer classifications in the area."

Summary of RSP Comment:

Studies suggest that the Davis-Bacon Act adds between $225 million and $570 million each year to the cost of public construction projects, and that it particularly harms young and minority members of the workforce. Though large taxpayer costs and disproportionate impacts on young and minority workers are inevitable consequences of Davis-Bacon, DOL has opportunities to reduce these effects through its implementation of the Act. Unfortunately, DOL's proposed definition of the "helper" job classification misses such an opportunity.

DOL estimates that its proposed rule would add $108.6 million each year to the cost of public construction projects over the existing definition of "helper." It justifies these costs, not with any corresponding social benefits attributable to the narrower definition, but because (1) the proposed definition would be easier to administer, (2) these costs are "relatively modest" and (3) DOL prefers apprenticeships and formal training programs to the on-the-job training that might occur with a broad helper definition.

In this proposal, and in all actions to implement the Davis-Bacon Act, DOL should attempt to maximize net social benefits. Ease of administration and enforcement, while reasonable to consider, should not override consideration of social costs and benefits.

DOL should attempt to conform regulations to private sector practices, rather than impose its views of optimal practices on the private sector. Specifically, a definition of helper that allows the number of helpers to mirror the number in the private sector should be given a strong preference over definitions that constrain private practices and innovation.