Wage and Hour Division San Diego, California. Davis-Bacon Act Training Your Trainers Bill Isokait, Associated General Contractors, Counsel for Labor and.

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


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


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


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


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


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


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


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


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


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


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


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”


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


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


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


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

Wage and Hour Division San Diego, California. Davis-Bacon Act Training Your Trainers Bill Isokait, Associated General Contractors, Counsel for Labor and.

Documents

n n construction

agency n n

n n applicable

type of construction

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dba coverage n n contract

dbra examples n n hud

nonlocal contractors