LABOR STANDARDS COMPLIANCE

Jeff KormannLabor Standards SpecialistCDBG Program

LAWS AND REGULATIONSDAVIS-BACON ACT

Enacted by Congress in 1931 (amended 1935 & 1964)

Intent was to protect local/area wage scales from common practice of “importing” low-cost labor

Applies to Federal contracts > $2000

Sets prevailing wage rates for laborers/mechanics while working on job site

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LAWS AND REGULATIONSDAVIS-BACON ACT

Includes alteration, repair, painting, decorating

Requires weekly payment of wages

Extended to Federally-assisted projects through various “Related Acts”

Applies to construction work financed “in whole or in part” through CDBG program

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LAWS AND REGULATIONSCOPELAND “ANTI-KICKBACK” ACT

Enacted in 1934

Prohibits “kickbacks” of pay (hence the name)

Requires weekly certified payrolls

Regulates payroll deductions from wages

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LAWS AND REGULATIONSCONTRACT WORK HOURS AND

SAFETY STANDARDS ACT

Enacted in 1962

Overtime pay for all work > 40 hours/week

Applies to construction contracts > $100K

Liquidated damages assessed for violations

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CONTRACT PROVISIONSREQUIRED DOCUMENTS

Federal Labor Standards Provisions (HUD/OLR Form 4010 revised 06/2009)

CDBG General Conditions—Items 37-54

Contractor/subcontractor certifications (LS & PW)

Applicable Davis-Bacon Wage Decision

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DAVIS-BACON WAGE DECISIONSHOW THEY “DETERMINE” THE RATES

Data collection—voluntary contractor surveys

Sets “prevailing wage rates” by classification or trade for defined geographic areas

Modified as new information is received

Covers cash wages and fringe benefit programs

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WAGE DECISION COMPONENTS

Wage Decision #

Modification #

Modification date

State and County

Wage decision type

Trade classifications

Basic wage rate

Fringe benefit rate

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WHICH DECISION DO WE USE??TYPE OF CONSTRUCTION--BUILDING

SHELTERED ENCLOSURES FOR PERSONS, MACHINERY, EQUIPMENT (subject to “80/20” rule)

NEW CONSTRUCTION OR RENOVATION OF COMMERCIAL BUILDINGS

NEW CONSTRUCTION OR RENOVATION OF APARTMENT BUILDINGS > FOUR STORIES

DEMOLITION (followed by new Building construction)

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WHICH DECISION DO WE USE?TYPE OF CONSTRUCTION-RESIDENTIAL

NEW CONSTRUCTION OR RENOVATION OF SINGLE-FAMILY HOUSES /TOWNHOUSES

NEW CONSTRUCTION OR RENOVATION OF APARTMENT BUILDINGS < FIVE STORIES

DEMOLITION OF RESIDENTIAL UNITS (when followed by new Residential construction)

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WHICH DECISION DO WE USE?TYPE OF CONSTRUCTION-H/H

HEAVY

DREDGING

WATER SYSTEM

SEWER SYSTEM

STORMWATER

PARKS/REC AREAS

FLOOD CONTROL

HIGHWAY

STREETS/ROADS

SIDEWALKS

PARKING AREAS

OTHER PAVING (non-incidental scope of work)

DEMOLITION (followed by new H/H construction)

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WAGE DECISION “LOCK-IN”

BID OPENING DATE (including a grace period of up to 10 days to allow for bidder notification and adjustment)

CONTRACT AWARD DATE (if >90 days elapses

following bid opening)

CONSTRUCTION START DATE (if >90 days elapses following contract award)

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ADDING CLASSIFICATIONS

REVIEW DECISIONS EARLY TO IDENTIFY MISSING CLASSIFICATIONS

DISCUSS WITH CONTRACTORS AT PRE-BID MEETING (IF APPLICABLE) OR PRE-CON

SUBMIT INFORMATION TO DED FOR REQUEST THROUGH HUD/USDOL (use Form 4230A)

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SPECIAL COMPLIANCE CASESTRUCK DRIVERS

COVERED WHILE DRIVING WITHIN JOB SITE

COVERED WHILE LOADING & UNLOADING AT JOB SITE (NOT AT COMMERCIAL FACILITY)

NO COVERAGE WHEN DRIVING BETWEEN JOB SITE AND COMMERCIAL FACILITY

NO COVERAGE FOR SOLE PROPRIETORS DRIVING THEIR OWN COMPANY VEHICLES

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SPECIAL COMPLIANCE CASESAPPRENTICES & TRAINEES

MUST BE REGISTERED WITH USDOL (Certification from the Union is not accepted as documentation)

CANNOT EXCEED ALLOWABLE RATIOS FOR APPRENTICES WORKING WITH JOURNEYMEN

PRE-APPRENTICES MUST RECEIVE TOTAL PREVAILING WAGE UNTIL REGISTERED

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SPECIAL COMPLIANCE CASESOWNER/OPERATORS

WORKING WITH A CREW WORKING ALONE

MUST BE LISTED ON PAYROLL AND REPORT JOB CLASSIFICATION, DAILY AND WEEKLY HOURS WORKED

OWNER NOT REQUIRED TO REPORT HOURLY AND WEEKLY WAGES OR DEDUCTIONS

DOES NOT NEED TO BE SHOWN IF >80% OF TIME STRICTLY SUPERVISORY

MUST RECEIVE THE REQUIRED PREVAILING WAGE FROM PRIME CONTRACTOR, OR IN TERMS OF DIRECT CONTRACT WITH CITY/COUNTY

CANNOT SELF-CERTIFY PAYMENT/RECEIPT OF PREVAILING WAGE S

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FRINGE BENEFITS(CFR TITLE 29, SECTION 5.20-5.31)

IRREVOCABLE CONTRIBUTIONS TO TRUSTEES OR OTHER THIRD PARTIES IN RELATION TO A BONA FIDE PLAN, FUND, OR PROGRAM THAT IS COMMON TO THE INDUSTRY

CAN INCLUDE EMPLOYER CONTRIBUTIONS TOWARD HEALTH INSURANCE PREMIUMS, RETIREMENT PLANS, LIFE INSURANCE, ETC.

PAYMENTS MUST BE DOCUMENTED TO REFLECT HOURLY EQUIVALENT AMOUNT PER EMPLOYEE OR JOB CLASSIFICATION

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FRINGE BENEFITS(CFR TITLE 29, SECTION 5.20-5.31)

DOES NOT INCLUDE EMPLOYER PAYMENTS REQUIRED BY FEDERAL/STATE/LOCAL LAW

MAY BE PAID ALL CASH, OR COMBINED WITH CONTRIBUTION TO PLAN

METHOD OF PAYMENT MUST BE INDICATED ON PAYROLL CERTIFICATION PAGE

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OVERTIME

REQUIRED FOR ALL HOURS WORKED >40 IN A SEVEN-DAY WORKWEEK

PAID AT 1 ½ TIMES REGULAR PAY RATE + FRINGE BENEFITS AT STRAIGHT TIME

PAID AT APPLICABLE RATE FOR THE CLASSIFICATION TRIGGERING OVERTIME

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“PAYROLL 101”BASIC INFORMATION

SUBMIT WEEKLY

FIRST PAYROLL MUST INCLUDE FEDERAL TAX I.D. NUMBER

MUST ACCOUNT FOR EACH WEEK ON JOB, EVEN IF NO WORK PERFORMED

SUBS SUBMIT TO PRIME FOR REVIEW

PAYROLLS SHOULD BE PROVIDED WITH ALL PAY REQUESTS

FIRST PAYROLLS TO DED TO VERIFY LOCAL APPROVAL

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“PAYROLL 101”CONTRACTOR & EMPLOYEE INFORMATION

COMPANY NAME

BUSINESS ADDRESS

PROJECT I.D. INFO.

WEEK END DATE

EACH DAY/DATE IN WORKWEEK

EMPLOYEE NAME AND IDENTIFIER

EMPLOYEE WORK CLASSIFICATION

HOURLY PAY RATE

WEEKLY HOURS WORKED (STRAIGHT TIME/OVERTIME) ON COVERED PROJECT

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“PAYROLL 101”WAGES AND DEDUCTIONS

GROSS WAGES EARNED FOR WEEK

TOTAL DEDUCTIONS FROM WAGES

NET PAY REPORTED FOR WORKWEEK

STATEMENT OF COMPLIANCE MUST SUBMIT WITH EACH WEEKLY PAYROLL SIGNED BY CORPORATE OFFICER/DESIGNEE

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ENFORCEMENT RESPONSIBILITIES THE ROLE OF THE GRANT ADMINISTRATOR

ENSURE SUBMISSION OF CERTIFIED PAYROLLS FROM ALL CONTRACTORS

REVIEW EACH PAYROLL TO CONFIRM PAYMENT OF CORRECT PREVAILING WAGES/COMPLIANCE WITH APPLICABLE REGULATIONS, ETC.

CONDUCT EMPLOYEE INTERVIEWS

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EMPLOYEE INTERVIEW METHODS“WHERE’S THE MIC AND CAMERA?”

USEFUL IN VALIDATING PAYROLL DATA

CAN BE TARGETED TO INVESTIGATE SUSPECTED VIOLATIONS

SHOULD NOT BE ORCHESTRATED OR FINDINGS SHARED WITH CONTRACTORS

INTERVIEW FORM ALSO IN SPANISH

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PAYROLL REVIEW PROCEDURES“LEARN TO TROUBLESHOOT LIKE A PRO”

CLOSELY REVIEW INITIAL PAYROLLS FROM ALL PRIME CONTRACTORS/SUBS BEFORE SUBMITTING TO DED FOR VERIFICATION

REVIEW FOR USE OF ANTICIPATED TRADES

COMPARE PAYROLLS AGAINST EMPLOYEE INTERVIEWS AND FOLLOW UP IF NEEDED

DO ADDITIONAL INTERVIEWS IF NECESSARY

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PAYROLL REVIEW PROCEDURES“LEARN TO TROUBLESHOOT LIKE A PRO”

IT MAY LOOK LIKE EVERYONE’S PAID THE CORRECT WAGES. BUT ALSO CHECK FOR…

IMPROPER RATIO OF LABORERS TO MECHANICS?

TOO FEW OR IRREGULAR HOURS AT THE JOB SITE?

DISCREPENCIES/ROUNDING IN WAGE COMPUTATIONS?

EXTRAORDINARY DEDUCTIONS?

NONE OF THE WORKERS KNOW WHAT THEY MAKE?

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PAYROLL REVIEW PROCEDURES“LEARN TO TROUBLESHOOT LIKE A PRO”

CORRESPOND PROMPTLY WITH PRIME CONTRACTOR WHEN PROBLEMS ARISE

DOCUMENT ALL CORRECTIVE ACTIONS TAKEN AND FORWARD TO OUR OFFICE

KEEP INITIAL WITHHOLDINGS IN LINE WITH AMOUNT OF UNDERPAYMENT; TOUGHER ENFORCEMENT WHEN NEEDED

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LET’S WORK TOGETHER!

EFFECTIVE COMMUNICATION AND TIMELY RESPONSE ARE KEYS TO A SUCCESSFUL LABOR STANDARDS COMPLIANCE EFFORT.

BE SURE TO CONTACT ME OR YOUR “FIELD REP” WHENEVER WE CAN HELP…THAT’S WHAT WE’RE HERE FOR!

GOOD LUCK!!

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