Biden Administration Issues Final Labor Rule on Prevailing Wages

Labor
Published
Contact: Michelle Kitchen
[email protected]
Senior Director, Multifamily Finance
(202) 266-8352

The U.S. Department of Labor (DOL) has published a final rule updating the Davis-Bacon and Related Acts (DBRA) regulations regarding the calculation of prevailing wages in local areas. The new rule goes into effect Oct. 23.

In the home building industry, the final rule primarily affects multifamily builders who participate in certain HUD and Federal Housing Administration (FHA) Multifamily Mortgage Insurance programs.

NAHB Chairman Alicia Huey said recently of the final rule, “This final rule fails to address many of NAHB’s concerns made during the rulemaking process, including the DBRA’s overly burdensome contractor requirements and wage determinations that are misrepresentative of the real wages being paid in an area.”

Key changes to the current DBRA regulations include:

  • Returning to the original “three-step method” to determine prevailing wages on Davis-Bacon covered projects for the first time in 40 years. This process allows DOL to determine the prevailing wage of a given area if only 30% of workers surveyed report the same wage rate.
  • Removing a ban on combining urban and rural wage rates when determining the prevailing wages of a given area, which could make multifamily housing projects in rural areas cost-prohibitive.
  • Expanding the definition of “site of the work” to apply to materials delivery drivers and secondary sites where “significant portions” of work on a DBRA-covered project are performed. However, this provision excludes many prefabricated component parts such as prefabricated housing components.
  • Codifying DOL’s current guidance by requiring contractors and subcontractors to pay Davis-Bacon wages to delivery drivers for onsite time that is related to offsite delivery, but DOL does not clarify how much onsite time a delivery driver must have to trigger coverage.
  • Expanding the types of activities that would categorize a worker as covered under the Davis-Bacon labor standards. For example, the rule states survey crew members may be subject to prevailing wage requirements depending on the activities they perform.

Additionally, DOL did not change its policy on split wage determinations, which have been problematic for many FHA-insured multifamily deals and for which NAHB strongly advocated against in its response to the agency’s proposed rule.

DOL’s Wage and Hour Division will provide an overview of the changes in a free webinar for interested parties on Sept. 13 and 14. The webinar will contain the same information on both days.

Subscribe to NAHBNow

Log in or create account to subscribe to notifications of new posts.

Log in to subscribe

Latest from NAHBNow

Economics
Oct 19, 2026
Builder Sentiment Falls on Rising Rates

Builder confidence in the market for newly built single-family homes fell three points to 29 in October, according to the NAHB/Wells Fargo Housing Market Index (HMI) released today. The reading was the lowest since June 2012.

Safety
Oct 16, 2026
The Importance of Safety Guardrails on a Home Building Site

Join NAHB and its official safety sponsor, Builders Mutual, as we celebrate the seventh annual Guardrail Safety Week, Oct. 19-23, and be part of the difference proper guardrail use makes in protecting workers and saving lives.

View all

Latest Economic News

Economics
Oct 16, 2026
Single-Family Permitting Declines Through August

Single-family permitting activity continued to soften through the first eight months of 2026, while multifamily permitting remained stronger compared with the same period last year.

Economics
Oct 16, 2026
Research Highlights the Broad Benefits of Homeownership

A rich, peer-reviewed academic literature finds that homeownership produces benefits that extend well beyond house-price appreciation.

Economics
Oct 15, 2026
Building Material Price Inflation Nears Four Year High

The Producer Price Index for final demand was up 1.3% in September, after rising 0.5% in August. Compared to a year ago, final demand prices were up 6.3%.