Wage and Hour DivisionSan Diego, California
Davis-Bacon Act TrainingYour Trainers
Bill Isokait, Associated General Contractors, Counsel for Labor and Employment Law
Steve Schultz, Merrill, Schultz & WoldsTim Helm, Wage and Hour Division, Government
Contract Team LeaderRichard Cheung, Wage and Hour Division, Regional
Wage SpecialistGerri Rimple, Wage & Hour Division InvestigatorLarry Benjamin, Wage & Hour Division Investigator
DAVIS-BACON AND RELATED ACTS
Davis-Bacon Act (DBA)
Enacted in 1931 Protects communities and workers from
competition caused by non-local contractors
Requires payment of locally PREVAILING WAGES and FRINGE BENEFITS
Requires pay to all LABORERS and MECHANICS employed on work site at least once a week
DBACoverage
Contract in excess of $2,000 Construction, Alteration, and/or
Repair including painting and decorating
Public Buildings or Public Works of U.S. or D.C.
Within geographic limits of U.S.
Davis-Bacon And Related Acts (DBRA)
Congress extended DB to over 60 related acts that provide federal assistance for construction:
Grants Loans Loan Guarantees Insurance see Regs. Part 5 section 5.1(a)
DBRAEXAMPLES
HUD financed low income residences on housing authority projects
EPA furnishes grant for construction of sewage plant
Federal Highway Admin (FHA) provides grants to states for reconstruction of roads and bridges on interstate highway system
DB vs DBRA
Direct DB projects: Federal gov’t agency signs
contract
DBRA projects:Agency other than federal
gov’t signs contract
Davis-Bacon
Wage Determinations
DB Wage Determinations Types
General Wage Determinations Project Wage Determinations
DB Wage DeterminationsSelecting The Proper Wage Determinations
Location: State and County Type of Construction: Building;
Heavy; Highway; Residential Current WD: question or disputes
concerning appropriate classification of project should be submitted to Wage and Hour Division for resolution
Project Wage Determinations
Issued on case-by-case basis where no general WD is in effect or where all work on a contract will be performed by a classification that is not listed in general WD
SF-308, “Request for Determination and Response To Request” submitted by agency to request Project WD
DB/DBRA Project Wage Determination
SF-308 Submitted by agency Requesting agency should attach
info indicating cost breakdown for each type of construction
Obtain form from Mr. George Blyther at (202) 219-8441
DB/DBRA Project Wage Determination
SF-308 Anticipate 30 days processing time Mail to: US Dept. of Labor ESA, Wage and Hour Division Branch of Construction Wage
DeterminationsWashington, DC 20210
DB/DBRA Project Wage Determination
Effective for 180 days only Applicable only to particular project Request new Project WD if present
one appears to be expiring between bid opening and contract award date
Extension possible under limited conditions by Wage and Hour Administrator
DB/DBRA Special Project Wage Determination
Issued for retroactive application for DB contracts let without WD or correct WD
DB/DBRA Wage DeterminationModifications
Both General and Project WDs may be modified: To apply results of new survey To update union rates due to CBAs General Wage Decisions contain “ Supersedes wage decisions” that replace prior general WDs. These begin with Mod. No. 0
DB/DBRA Current Wage Determinations
Contracting agency must assure that up to date WD is included in bid/RFP documents, and mods are included up to the time of award
On negotiated contracts (RFPs), contracting agency must use most up to date WD issued at time of contract award date
DB/DBRA Current Wage Determination
Mods to DB WDs and supersedes WD issued after award do not apply to contract
During pre-bid conferences, Contractors should be encouraged to review WDs and raise any objections or questions during advertising period. Later complaints may be deemed untimely and not be acted upon
DB/DBRA Current Wage Determinations
On competitive bidding contracts, WDs issued within 10 days of opening bid date shall be used unless there is not enough time to notify all bidders
Where General WD applies, if contract not awarded within 90 days new mods must be incorporated or extension applied for and granted. Same for Project WD that expires before award
MISCLASSIFICATIONNO CLASSIFICATION
MISCLASSIFICATION Plumber vs Pipelayer (Laborer) Pipelaying - Inside - Plumber Outside - Laborer
Misclassification Roofer vs Sheet Metal Worker
(Materials) Roofer - Asphalt & Concrete Tiles Mop & Hot Tar Sheet Metal Worker -
Flashing/Sheet Metal Carpentry - Wood Shingles
Misclassification Sheet Metal Workers vs Iron
Workers Gauge of Metal Lower the number-thicker the
metal (Ironworker)
Misclassification Fence Erector Chain link - Ironworkers Wood - Carpentry Poles - Laborers
Misclassification Laborer vs Final Cleanup Laborer Laborer - All Phases of
Construction Final Cleanup - After Construction
Procedure
Complaint Investigation Prevailing Practice Compliance Conformance
Classification Missing?
Can project work be performed without this class?
New Wage Decision
Simple Classification Missing?
Prepare bid with regular rate & conformance criteria in mind.
Request additional classification and wage rate after award.
CONFORMANCE CRITERIA
Classification requested is not performed by class in wage decision.
Class is used by construction industry in the area.
Requested rate is similar to the rates contained in the decision.
Davis-Bacon
Survey Process
DB Survey ProcessAnnual Plan
Survey activities planned using Regional Survey Planning Report (RSPR) and Uniform Survey Planning Procedure (USPP)
Information about procurement agency construction is obtained
Geographic area identified and included on an annual survey plan
Survey plan distributed to interested parties
DB Survey ProcessInitiating And Conducting
Interested parties and identified contractors are contacted by letter requesting their participation
Contractors identified by F.W. Dodge Reports
Wage data: verified as to area, time, time frame, construction type, timeliness
Data compiled and analyzed (4 to 8 months)
DB Survey ProcessImportance of Participation
Accuracy and comprehensiveness dependent upon interested party participation
Participation by federal agencies is sometimes required to issue new schedule
DB Survey ProcessKey Classes
Adequate data to establish rates for at least 1/2 of the key classes for a given type of construction:
Building Heavy Highway Residential
DB Survey ProcessBuilding
Heat/Frost Insulators Bricklayers Boilermakers Carpenters Cement Masons Electricians Iron Workers Laborers - common
DB Survey ProcessBuilding
Painters Pipefitters Plumbers Power Equip Operators (Operating Eng.) Roofers Sheet Metal Workers Tile Setters Truck Drivers
DB Survey ProcessHeavy And Highway
Carpenters Cement Masons Electricians Iron Workers Laborers - common Painters Power Equip Operators Truck Drivers
DB Survey ProcessResidential
Bricklayers Carpenters Cement Masons Electricians Iron Workers
DB Survey ProcessResidential
Painters Plumbers Power Equip Operators Roofers Sheet Metal Workers Truck Drivers
DB Survey ProcessImpact of Participation
Accuracy dependent upon interested party participation
Complete WD dependent upon participation and construction activities
Prevailing wages mirror data submitted Participation by federal agencies
sometimes required
DB Survey ProcessPlanning
Regional Survey Planning Report (RSPR) and Uniform Survey Planning Procedure (USPP) used to plan survey activity
RSPR shows construction activity in current year and basis for prevailing rates
USPP directs selection of survey areas by date of last survey, number of projects, cost of projects, agency plans, survey requests
Info on agency procurement most important Pre-survey meetings with interested parties
DB Survey ProcessConduct
Nat’l and local interested parties notified Letters sent to contractors Follow-up for non-response Contractors called to obtain missing data Wage data submissions are verified Data analyzed and area practice issues
resolved
DB Survey ProcessConduct
Wage data tabulated by computer/prevailing wage and fringe benefits calculated
Wage rates tested for accuracy Wage determinations developed and issued Surveys take 4 to 8 months Accuracy dependent on participation Completeness dependent on participation
and construction activities
DB/DBRA Compliance Principles
Area Practice Survey Used to determine proper classification Used to determine proper classification
for work performed on DB projectfor work performed on DB project Limited Area Practice Survey when all Limited Area Practice Survey when all
parties agree on accuracy of preliminary parties agree on accuracy of preliminary datadata
Full Area Practice Survey when Full Area Practice Survey when preliminary data is disputed - involves preliminary data is disputed - involves similar projects in area for prior yearsimilar projects in area for prior year
DB/DBRA Compliance Principles
Limited Area Practice Survey - Union Rates
Contact Unions that have jurisdiction over the Contact Unions that have jurisdiction over the work in question to determine if unions worked work in question to determine if unions worked on similar projects in same county during prior on similar projects in same county during prior year year
Survey each union about how workers were Survey each union about how workers were classifiedclassified
Info from unions should be confirmed by Info from unions should be confirmed by collective bargaining reps of contractorscollective bargaining reps of contractors
DB/DBRA Compliance Principles
Limited Area Practice Survey -
Open Shop Rates Contact open shop contractors to Contact open shop contractors to
determine if they worked on similar determine if they worked on similar projects in same county during prior year projects in same county during prior year
If so, ask how workers were classifiedIf so, ask how workers were classified If all or a majority of contractors agree, If all or a majority of contractors agree,
the area practice is establishedthe area practice is established
DB/DBRA Compliance Principles
Limited Area Practice Survey -
Mixed Rates Contact Unions, union shop and Contact Unions, union shop and
open shop contractors to determine open shop contractors to determine if they worked on similar projects in if they worked on similar projects in same county during prior yearsame county during prior year
If all parties, or a majority agree, If all parties, or a majority agree, area practice is establishedarea practice is established
DB/DBRA Compliance Principles
Full Area Practice Survey Identify similar projects in same county as Identify similar projects in same county as
project which were in progress during one project which were in progress during one year prior to start of project under year prior to start of project under investigationinvestigation
Determine what firms performed work in Determine what firms performed work in question and contact those that are either question and contact those that are either open shop or union depending on the open shop or union depending on the basis for the wage rates issued in basis for the wage rates issued in applicable WDapplicable WD
DB/DBRA Compliance Principles
Full Area Practice Survey Determine for each contractor the week in Determine for each contractor the week in
which the greatest number of employees which the greatest number of employees performed the work in question and determine performed the work in question and determine how they were classifiedhow they were classified
Compile info received and total the number of Compile info received and total the number of employees in each classification which employees in each classification which performed work in questionperformed work in question
Classification which has clear majority (60%) Classification which has clear majority (60%) of employees is proper classificationof employees is proper classification
DB/DBRA Compliance Principles
Laborers and Mechanics
Does not include: Timekeepers, inspectors, architects,
and engineers Bona Fide executive, administrative,
or professional employees as defined by FLSA are not laborers or mechanics
DB/DBRA Compliance Principles
Laborers and Mechanics
Working Foreman are generally non-exempt and must be paid the DB rate for the classification of work performed
Owners of subcontract firms performing work of laborers and mechanics are entitled to the prevailing wage rate for the classification of work performed
DB/DBRA Compliance Principles
Laborers and Mechanics Subcontractor working as laborer
or mechanic If subcontract price covers applicable
prevailing wage rate for number of hours worked, DOL would consider the owner/subcontractor to have been paid in compliance
Fair Labor Standards Act (FLSA) Information
Applicable to:Service Contract Act (SCA)Davis-Bacon Act (DB / DBRA)Public Contracts Act (PCA)Contract Work Hours and Safety Standards Act (CWHSSA)
HOURS WORKED
Hours Worked
Suffer or Permit: Work not requested but suffered or
permitted is work time The reason the employee works
extra time - requested or not - is immaterial
Hours Worked
Lunch Period: hours worked do not generally
include lunch period - provided: period is of 30 minutes or more employee is completely relieved of
duty
Hours Worked
Breaks: Breaks of 5 to 20 minutes promote
efficiency of the employee considered hours worked
Hours Worked
Meetings, Lecturers, and Training Programs Time spent in these activities is considered work
time, unless all 4 conditions are met: Attendance is outside regular working hours Attendance is voluntary The course, lecture, or meeting is not job
related Employee does not perform any productive
work during attendance
Hours Worked
Waiting Time: Engaged to wait
Idle time where employee is at the appointed place of duty at the appointed time and for whatever reason there is no active work for the employee to do.
Waiting to be engaged Idle time where employee shows up on
own volition in hopes of being put to work
Hours Worked
On call time: Work Time - employee is required to be on
the employer’s premises or so close thereto that employee cannot use time for employee’s own purposes
Non-work Time - employee is merely required to carry a “beeper” or leave word at home or with employer where employee can be reached
Child Labor
14 and 15 year olds -- cannot work on construction site hours limits
16 and 17 year olds -- hazardous orders Driving Power-driven hoisting apparatus Power-driven saws Demolition Roofing Excavation
DB/DBRA Compliance Principles
Site Of The Work
DB/DBRA applies only to workers on “site of the work” Limited to the physical place or places
where the construction remains after work has been completed
Adjacent or nearby property used by contractor that would be reasonable to include in the “site”
DB/DBRA Compliance Principles
Site Of The Work Includes
Property dedicated exclusively to and located in proximity to actual construction location
Fabrication plants, mobile factories, batch plants, borrow pits, headquarters, tool yards, etc.
Not included Permanent offices, plants, pits, yards, etc. of
contractor Commercial supplier or materialman
DB/DBRA Compliance Principles
Site Of The Work
Truck Drivers Are Covered by DB/DBRA when:
Driving is done on the “site of the work”
Travel Time
Travel between work sites is hours worked
Travel between meeting place and work site
DB/DBRA Compliance Principles
Prevailing Wage
Basic hourly wage and fringe benefit obligation may be satisfied by:
Paying both by cash Paying cash and crediting costs of
bona fide fringe benefits in any combination
DB/DBRA Responsibilities Contracting agency has day-to-day
enforcement responsibility. This includes among others: Insuring DB requirements and applicable
WD are included in covered contracts Reviewing certified payrolls in a timely
manner Conducting employee interviews Cannot contract out enforcement of DB
requirements Insuring that grant recipients enforce DBRA
DB/DBRA Responsibilities
DOL Responsibilities Determines prevailing wages Issues regulations and standards to
be observed by contracting agencies Performs oversight function and has
independent authority to conduct investigations
Contract Work Hours And Safety Standards Act
CWHSSA
CWHSSA Enacted in 1962 Requires OT pay At T1/2 basic rate of pay To laborers and mechanics Also covers guards and watchmen After 40 hours in a work week for
work on covered contracts (same as FLSA)
CWHSSA
Self-executing - Failure to include CWHSSA stipulations in
contract does not preclude its application No Site of Work Limitation -
CWHSSA applies if an employee performs part of construction work at job site and part of work at a shop
Does not apply to federal assistance in form of loan guarantees or insurance (i.e., HUD assistance under National Housing Act)
CWHSSA Covered Contracts
Most federal contracts - contracts of U.S., any agency thereof, D.C., Territory of U.S.
Federal Construction contracts over $100,000
Any covered service contract $100,000 or over
Federally assisted construction contracts for over $100,000 (DBRA)
CWHSSA Does Not Apply
Work under Walsh-Healy Public Contracts Act (PCA)
Construction contracts of less than $100,000
Purchase and other contracts under $100,000
Agreements under Commodity Credit Corporation for storage of commodities
CWHSSA Enforcement
Funds can be withheld to ensure payment of back wages
Liquidated damages can be assessed by agency for violations - $10 per day per laborer/mechanic/service employee
Debarment may be initiated
CWHSSA Exemptions
Contracts for: Transportation by air, land, water Transmission of intelligence Purchase of supplies/materials on
open market Work performed in foreign country TVA sale of surplus power
DB/DBRA/CWHSSA Investigations
Issues: DB Stipulations and WD included in contract Determine correctness of classifications Proper wage and fringe benefits for the
classification of work performed were paid Laborer/apprentice ratio correct Appropriate contributions to bona fide FR
plan T1/2 after 40 hours in a work week was paid
DB/DBRA/CWHSSA Conducting InvestigationsNot necessarily in this order: Obtain copy of labor standards clauses in
contract, WD, and copies of certified payrolls
Contact Employer (includes contractor and sub-contractor), hold initial conference and obtain information
Examine certified payrolls Examine basic payroll records
DB/DBRA/CWHSSA Conducting Investigations
Check for apprenticeship compliance Determine if conformance is necessary Interview employees Determine Compliance with DB MW and FR
requirements Determine compliance with CWHSSA Compute Back Wages and Liquidated Damages Final Conference Withhold
Copeland “Anti-Kickback” Act
CA
Copeland ActPurpose
Prohibits “kickbacks” of wages and back wages
Requires contractors on DB/DBRA projects to submit weekly a “statement of compliance” - Certified Payroll
Regulates payroll deductions from wages
Copeland ActDeductions Allowed
SS, federal, state withholding income tax
Deductions for bona fide prepayment of wages
Deductions for court ordered payments Deductions for fringe benefit
contributions - voluntary in writing or CBA required, convenience of employee, no profit to employer
Copeland ActDeductions Allowed
Deduction for U.S. Savings Bonds Voluntary charitable deductions Deductions for union dues & fees per CBA Deductions for reasonable cost of board,
lodging or facilities under FLSA Deduction for safety equipment - if not
prohibited by FLSA or required by law for employer to furnish - based on actual cost
Copeland Act Statement of Compliance
Referred to as “Certified Payroll” Contractors and sub-contractors
must submit weekly Falsification is criminal violation
and can result in $5,000 fine, 5 years in prison, or both
Copeland Act Anti-Kickback Provisions
Prohibits kickback of wages or back wages
Kickback is criminal violation punishable by fine of $5,000 or 5 years in prison, or both
DB/DBRA Compliance Principles
Prevailing WageFringe Benefits:
Must be paid for all hours worked Cash wages in excess of basic hourly
rate may be used to offset , credit or satisfy fringe benefit obligation (Note: this is different from SCA)
ExampleWD REQUIRES:
Basic Hourly Rate $10.00Fringe Benefit $1.00Total Rate $11.00
The contractor can comply by paying:$11.00 in cash wages$10.00 plus $1.00 in “bona fide” fringe benefitsOR $9.00 plus $2.00 in “bona fide” fringe benefits
Overtime must be paid at the rate required by the wage determination. In this example, the basic hourly rate for OT purposes is $10.00 per hour.
Under DBRA, fringe benefits must be paid for allhours worked, including the overtime hours. However, the fringe benefit amounts may be excluded from the half-time premium due as overtime compensation.
CONTRACTORS PACKAGE
Completed SF - 1444 Description of duties if other than
basic trade. Documentation showing interested
parties’ agreement. Employees’ signature (or
representative) Employer’s signature
DB/DBRA/CWHSSADebarment
Contractor or sub-contractor is declared ineligible for up to 3 years from receiving DB/DBRA contracts Violations were in disregard of the
contractor’s obligations to employees and subcontractors (DB)
Aggravated or willful violation of labor standards (DBRA)
DB/DBRA/CWHSSA Debarment Criteria
Debarment is considered when contractor has: Submitted falsified certified payrolls Required kickbacks of wages or back
wages Committed subsequent violations of
an identical nature
DB/DBRA/CWHSSAThe Hearing Process
Refusal to pay cases: If factual issues are in dispute WH notifies
contractors in writing of findings and offers opportunity to request hearing before Administrative Law Judge
If only issues of law are in dispute: WH offers contractors opportunity for a
hearing before Department’s Administrative Review Board
Where debarment criteria is met, contractor offered opportunity to request ALJ hearing
DB/DBRA/CWHSSAAdministrative Review
Board Hears all appeals of ALJ decisions Consists of three members appointed by
Secretary of Labor Appeals may be in the form of oral
hearings in Washington, DC or by review of record in closed session
Board also acts on petitions to review rulings of WH Administrator on coverage, interpretations, and WD matters
Wage and Hour DivisionSan Diego, California