On August 15, 2025, the U.S. Department of Labor (DOL) published All-Agency Memorandum No. 251 updating the multiple Davis-Bacon wage determination threshold from $2.5 million to $3.3 million or 20% of the total project cost.
- This threshold determines when more than one wage determination under the Davis-Bacon and Related Acts (DBRA) is required—specifically, when ‘substantial construction’ in a different category exceeds the higher threshold and warrants a separate wage determination.
- The notice also identifies the methodology that the Wage and Hour Division (WHD) will use for updating this threshold in the future.
- WHD will annually re-evaluate whether additional updates are warranted.
Why This Matters: The higher threshold amount will allow more projects to use a single wage determination, thereby streamlining processes for contractors and reducing administrative burdens.
The Terner Center for Housing Innovation at UC Berkeley released a report last year analyzing how prevailing wages impact LIHTC construction costs in California.
- They concluded LIHTC projects in California awarded credits between 2020 and 2023 cost an estimated $94,000 more per unit to build, if they planned to pay prevailing wages, though the estimate can range +/- $25,000 depending on sample.
