U.S. District Judge Harold H. Greene has blocked the Reagan administration from promulgating new regulations that would have resulted in lower wages for construction workers on federal projects.
In issuing a permanent injunction against most of the revisions proposed by Labor Secretary Raymond J. Donovan, Greene concluded Thursday that they either would "subvert" the will of Congress or would make it easier for contractors to circumvent federal laws to discourage kickbacks.
Greene's decision marked the second time in a week that a federal judge has set aside Reagan administration regulatory activities. On Wednesday, a federal district judge in Minneapolis accused the Social Security Administration of using "arbitrary, capricious and irrational" standards and ordered the agency to restore disability payments to 20,000 mentally ill persons in six Midwest states.
Rex Hardesty, a spokesman for the AFL-CIO, which had fought the new labor regulations, said yesterday that "the court has done the right thing. The Labor Department has been stopped from doing administratively what they have failed to do legislatively."
Greene, who had issued a temporary injunction last July blocking the new regulations, ordered a permanent injunction on Thursday that allows only one of the five revisions that were backed by the administration and the construction industry.
In his July ruling, Greene estimated that the new regulations would affect 600,000 projects at any one time and would cost those workers $43 million annually.
The proposed changes would have made major revisions in two laws: the 1931 Davis-Bacon Act, which guarantees employes on federal construction projects a wage equal to the local prevailing level, and the Copeland Anti-Kickback Act, which was intended to discourage kickbacks from contractors on federal projects.
The only proposed regulation upheld by Greene will allow the prevailing wage to be set at the level that is paid to more than 50 percent of the workers in a job classification in a given area. The rate currently is set at the level of the wage paid to at least 30 percent of the workers.
He rejected a proposal that would have more than tripled the percentage of workers that contractors could have hired in a lower-paid "helper" category. Greene said the change would have allowed contractors to pay lower wages to skilled employes by hiring them in the helper category and was likely to have an especially bad effect on minority workers.
Greene also rejected proposals to:
* Allow contractors to ignore wages in nearby metropolitan areas in setting rural wage rates.
* Permit contracts to exclude wage rates on federal projects in setting the prevailing wage rates.
* Abolish the requirement that contractors must furnish a weekly statement to the Labor Department outlining wages paid to each employe in the previous week.
Greene concluded that the final proposal would make the Copeland Act "largely unenforceable."
In reaching his decision, Greene said "the basic issue governing this lawsuit is relatively simple. Congress enacted the Davis-Bacon Act and the Copeland Act in the 1930s with certain purposes in mind. . . . In spite of substantial public debate concerning both the laws and regulations in the years since then, the Congress has not amended the law and it has not expressed its displeasure with the regulations.
"Moreover, 15 secretaries of Labor serving under eight presidents have never altered the regulators' scheme. The present secretary's claim to have discovered a wholly different congressional intent rings hollow in the light of that history," he said.