The 2023 Davis-Bacon rule: what changed for contractors filing certified payroll

The Department of Labor published "Updating the Davis-Bacon and Related Acts Regulations" on August 23, 2023. It took effect October 23, 2023. It rewrote parts of 29 CFR parts 1, 3, and 5 that had not been comprehensively revised since 1982, and the January 2025 revision of Form WH-347 was designed around it.

Most of the rule concerns how the Department sets wage rates. A handful of provisions change what a contractor keeps, files, and pays.

Which contracts it applies to

The new clauses apply to contracts entered into after October 23, 2023. Existing contracts pick them up when they are modified in a way that changes scope, exercises an option, or extends the term. Indefinite-quantity contracts adopt them with the next annual wage determination update. A sub on a project awarded in 2022 that has run without modification is still under the old text; a sub on anything awarded since late 2023 is under the new.

Records: 3 years after the prime finishes

Payrolls and basic records must be kept for at least 3 years after all work on the prime contract is completed. The old text said 3 years from completion of the work, which contractors often read as their own work. The new text removes the ambiguity: the prime's completion date starts the clock for everyone. Retention in detail.

Records: phone numbers and email addresses

Basic payroll records must now include each worker's last known telephone number and email address, alongside the name, SSN, and address already required. They stay in your records and do not go on the weekly payroll. The Department wants them so it can find workers owed back wages after a project ends.

Certified payrolls are records too

The rule states explicitly that the weekly certified payrolls themselves must be preserved for the same 3-year period, and that any electronic submission system an agency or prime requires must give the contractor, the agency, and the Department access to them for that period.

Fringe: annualization written into the rule

The Department has long applied "annualization" to fringe benefit credit: a contribution to a plan that covers all of a worker's hours is credited per hour across all hours, covered and not. The rule codifies it in 29 CFR 5.25(c), with the exception for defined contribution pension plans with immediate participation and essentially immediate vesting (within the first 500 hours worked). Fringe in detail.

Coverage: who is a laborer or mechanic

Three clarifications in the definitions affect who appears on your payroll.

Truck drivers. Drivers who spend more than a de minimis amount of time on the site of the work, loading, unloading, or waiting, are covered for that time. Drivers who also do construction work on site, such as installing what they delivered, are covered for the construction hours at that classification. Purely offsite delivery remains uncovered.

Survey crews. Members of survey crews doing primarily physical work on the site immediately before or during construction, in direct support of construction crews, may be laborers or mechanics.

Demolition. Demolition and removal are covered when they are themselves construction, alteration, or repair, or when they are done in anticipation of covered construction on the site.

Flaggers and traffic control workers on the site are covered as laborers.

Material suppliers are defined for the first time: an entity whose only obligation on the project is delivering materials, whose facility is not on the site of the work and either predates bid opening or is not dedicated, exclusively or nearly so, to the project (a definition the court vacated in 2026). Material suppliers' employees are not covered.

Site of the work

The definition now includes secondary construction sites where a significant portion of the building or work is constructed for specific use in the project, if the site was established for or is dedicated to the project for a period of time. A yard that prefabricates whole modules for one project is on the site of the work; a plant that makes trusses for anyone is not.

Operation of law

If a contracting agency forgets to put the Davis-Bacon clauses or the wage determination in a covered contract, the rule says they apply anyway, by operation of law, and the contractor must comply. Before 2023 an omission had to be fixed by contract modification. This is one of the provisions under injunction; see below.

Anti-retaliation and cross-withholding

The rule adds an anti-retaliation clause: a contractor may not discharge, demote, intimidate, or discriminate against a worker for filing a complaint, testifying, or asserting rights under the Act, and remedies include reinstatement and back pay. It also allows an agency to withhold funds from any contract held by the same prime contractor to cover back wages owed on a different one.

How rates are set

The changes to wage determination methodology do not change what you file, but they change the numbers on the determinations you receive.

The rule returned to the "30 percent rule" for identifying the prevailing wage: the rate paid to a majority of workers in a classification prevails; if no rate has a majority, the rate paid to at least 30 percent prevails; only if no rate reaches 30 percent is a weighted average used. Between 1983 and 2023 the Department skipped the 30 percent step and went straight to the average.

Survey rates that are not based on collective bargaining agreements may now be adjusted for inflation between surveys, no more often than once every 3 years and no sooner than 3 years after publication. Determinations that had sat unchanged for a decade or more are being updated.

The Administrator may adopt prevailing wage rates set by state or local governments under specified conditions. Wage determinations for highway projects may be split by geographic area within a state. Reading a determination.

The injunction

In June 2024, in a case brought by the Associated General Contractors of America, the U.S. District Court for the Northern District of Texas issued a preliminary injunction against enforcement of 3 provisions nationwide: the coverage of truck drivers' onsite time, the changes to the material supplier definition, and the operation-of-law provision. The rest of the rule was not affected and is in force.

On June 24, 2026 the court entered final judgment vacating the 3 provisions nationwide after the Department declined to defend them. They are no longer in effect. The rest of the rule is, and in August 2026 the Department said it would not revise it. If your payroll question turns on whether a driver's site time is covered, ask the contracting agency's labor advisor what position it is taking rather than relying on either version of the text.

What a sub should do differently

Add phone and email to the worker information you collect at hire and keep it with the payroll records. Change your retention rule to 3 years past the prime's completion date and ask primes for that date at closeout. Annualize plan contributions when workers split time between covered and private jobs. Watch for drivers and survey crews on site and classify their site time. And expect the wage determinations attached to new contracts to carry higher survey rates than the ones you saw before 2023.