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CDBG Labor Standards Requirements

For Local Officials

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Why are Labor Standards Crucial?

• Standards guarantee fair wages and compensation for workers

• Helps provide a level playing field for bidders

Why are Labor Standards Crucial?

• Local grantee must ensure and document compliance

• Required by CDBG and other statutes

• Transgressions endanger future funding

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ApplicabilityCDBG and Davis-Bacon Requirements

Housing and Community Development Act of 1974 Section 110(a):

“All laborers and mechanics employed by contractors and subcontractors in the performance of construction work financed in whole or in part with assistance received under this title shall be paid wages at rates not less than those prevailing on similar construction in the locality as determined by the Secretary of Labor in accordance with the Davis-Bacon Act, as amended (40 U.S.C. 276a—276a5)”

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Davis-Bacon Act (40 U.S.C. 276a.-5)

• Enacted 1931, amended 1935 & 1964

• Applies to construction contracts > $2,000 • Properties with 8 or more housing units

• Act is “site-based”

• Includes alteration, repair, painting & decorating

Davis-Bacon Act (40 U.S.C. 276a.-5)

• Applies to all laborers & mechanics

• Requires payment of prevailing wages

• Requires weekly payment of wages

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Davis-Bacon Regulations

Department of Labor (DOL) regulations, rules and instructions concerning implementation of the Davis-Bacon Act and other labor laws are found at Title 29 CFR Parts 1, 3, 5, 6 and 7

http://www.dol.gov/dol/allcfr/ESA/Title_29/Chapter_I.htm

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Contract Work Hours and Safety Standards Act (CWHSSA)

(40 U.S.C. 327-333)

• Enacted 1962

• Overtime pay required for all contract work greater than 40 hrs/week

• Applies to contracts for more than $100,000

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Copeland Act (40 U.S.C. 276c)

• Prohibits “kickbacks”

• Requires contractors to submit certified payrolls w/ signed “statement of compliance” each week

Copeland Act (40 U.S.C. 276c)

• Regulates deductions from wages:

– FICA, federal & state taxes

– Bona fide prepayment of wages

– Court ordered payments, fringe benefit plans, etc.

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Contractor Responsibilities(Title 29 CFR Part 5)

• Prime contractors

– Responsible for all employers in project

• Subcontractors

– Also responsible for lower-tier subcontractors

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Local Grantee Responsibilities

• Designate a Labor Standards Compliance Officer

• Request a Wage Rate Decision per Davis Bacon Requirements

• Put Wage Decision and Labor Standards 4010 clauses in contract bid documents

• Check contractor eligibility (http://epls.arnet.gov/)

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Grantee Responsibilities - continued

• Conduct a pre-construction conference (optional)

• Review weekly payrolls and compliance statements

• Conduct employee interviews

• Ensure that underpaid workers receive restitution

Grantee Responsibilities - continued

• Maintain contract management system and compliance files

• See HUD Handbook 1344

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Davis-Bacon Wage Determinations

• Established by geographic area

• Published for 4 types of construction– Building– Residential– Highway – Heavy

• Rates may be modified periodically

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Davis-Bacon Wage Determinations

• Must be included in bid documents and contract

• Stipulates the wage requirements for construction trades

• Flows down to all subcontracts

• Records must be kept with project records

Keys to Know

• Davis-Bacon applies to construction contracts greater than…………$?

• Construction contractors are required to pay workers the…………wage?

• Local Government designates a……..…to administer Davis-Bacon labor standards?

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Keys to Know

• Overtime wages must be paid for contract work more than a 40 hour work week?

• Davis Bacon labor standards applies to residential single-family housing contractors?

• Contractors may withhold a worker’s pay as a fee for working for the contractor?

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Labor Relations References

• Making Davis Bacon Work (HUD Publication) A Practical Guide for States, Indian Tribes and Local Agencies http://www.hud.gov/offices/adm/hudclips/forms/files/4813-LR.pdf

• Also available from HUD’s Customer Service Center: (800) 767-7468

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HUD Labor Relations References

• HUD Office of Labor Relations: www.hud.gov/offices/olr

• Davis-Bacon Wage Determinations: http://www.wdol.gov

• GSA’s On-Line Debarment List:http://epls.arnet.gov