In a major development for the construction industry, a federal judge has temporarily blocked the Biden administration’s expansion of the prevailing wage rule under the Davis-Bacon Act. The rule, introduced by the U.S. Department of Labor in 2023, sought to significantly increase wage requirements on federally funded construction projects and expand coverage to additional classifications of workers—including some transportation and offsite roles. However, on March 25, 2025, the U.S. District Court for the Northern District of Texas issued a preliminary injunction, halting enforcement of the rule pending further litigation.
What Was the Rule Change?
The revised rule aimed to:
- Return to the “30% rule” from the 1980s, under which a wage is considered prevailing if at least 30% of workers in a classification are paid that rate.
- Expand prevailing wage coverage to certain workers indirectly involved in the project, such as truck drivers and material suppliers.
- Provide federal agencies with broader authority to set wage rates when insufficient data exists.
Supporters argued the rule would boost worker pay and stabilize labor markets. Opponents, including contractor trade groups, challenged it as exceeding statutory authority and imposing excessive burdens on contractors.
How the Block Affects Nevada Contractors
For Nevada contractors bidding on or performing work under federal contracts, the court’s injunction means the status quo remains in place—at least for now. The Davis-Bacon wage determinations currently in effect will continue to govern.
However, the temporary nature of the ruling creates uncertainty. Nevada contractors should consider the following:
- Bid Strategy: If the rule is later upheld, future federal projects could carry substantially higher labor costs. Contractors should prepare flexible pricing strategies to account for potential rule changes mid-project.
- Contract Provisions: Subcontractors may need to renegotiate wage obligations or add clauses to protect themselves against any cost increases due to shifting regulations.
- Compliance Monitoring: While the injunction blocks enforcement of the new rule, contractors should continue to monitor the litigation closely. An adverse appellate ruling could reinstate the rule on short notice.
In Nevada, where public infrastructure and federal defense spending play significant roles in the construction economy, any regulatory change to wage structures on federal projects could ripple through the state’s industry. Contractors who rely on federal jobs for a substantial portion of their revenue may be especially vulnerable.
Need Legal Guidance? We’re Here to Help
If you’re a Nevada contractor with questions about how this ruling might affect your federal contracts, need help reviewing or updating your Subcontract Agreements, are facing issues with the Nevada State Contractors Board, need assistance enforcing your rights to payment for work performed, or require business law support — contact our office today.
Call us at 702-960-1270 or email [email protected] to schedule an initial consultation with one of our experienced construction and business attorneys.