Coalition for Non-profit Housing & Economic Development (CNHED) Lewis P. Brown

Washington, DC’s lead workforce development and labor agencyDepartment of Employment Services

Coalition for Non-profit Housing &Economic Development (CNHED)

Lewis P. BrownOffice of Apprenticeship and First Source

June 21, 2012

District of ColumbiaVincent C. Gray, Mayor

Department of Employment ServicesLisa María Mallory, Director


New First Source Law

• Bill 19-50, “Workforce Intermediary Establishment and Reform of First Source Amendment Act of 2011” signed by Mayor in December 2011

• Law took effect on February 24, 2012– Makes sweeping changes to the First Source Employment

Agreement Act of 1984, but still requires 51% of all new hires on government contracts to be District residents (same as previous law)

– Eliminates contracts under $300K from First Source obligations and establishes baseline for First Source Agreements


General Changes to New First Source Law• Requires each construction project receiving government

assistance totaling $5 million or more to have the following percentage of DC residents on those projects: – 20% of journey worker hours; 60% of apprentice hours;

51% of skilled laborer hours; 70% of common laborer hours

• Mandates that retail and commercial tenants are subject to hiring requirements for 5 years following the commencement of the tenant’s initial lease date

• Contract end dates established when Certificate of Occupancy is issued


Bidding Process• Initial employment plan must outline strategy to meet local hiring

requirements as part of its response to the solicitation– Bid/proposal shall be evaluated by the Mayor and worth 10%

of overall bid score

• Requires bidders/offerors of government-assisted projects or contracts to submit employment plans that reveal past compliance and employment practices– Past compliance shall be scored and account for 10% of overall

bid score

• Requires disclosure of compliance with Davis-Bacon Act

• Allows for “roll over” hours – beneficiaries may count hours that exceed previous requirements toward their current requirements if hours are in excess


Bidding Process (continued)• Winning bidder/offeror must submit a revised employment

plan to the Mayor for final approval prior to beginning work associated with the relevant government project or contract.

• Requirements for employment plan include:– Description of health and retirement benefits for

employees who worked on any of the bidder’s/offeror’s past three (3) completed projects or contracts

– Description of bidder’s/offeror’s efforts to provide District residents with ongoing employment and training opportunities after they complete work on the job for which they were initially hired


Bidding Process (continued)• Requirements for employment plan include:

– A projection of the total # of hours to be worked on a project or contract by trade

– A projection of the total # of journey-worker hours by trade, including total hours to be worked by DC resident journey-workers

– A projection of the total # of apprentice hours by trade, including total hours to be worked by DC resident apprentices

– A projection of the total # of skilled laborer hours by trade area (if applicable), including total hours to be worked by DC resident skilled laborers

– A projection of the total # of common laborer hours, including total hours worked by DC resident common laborers


Reporting Requirements• Employers are given choice to report hiring hours

(cumulative) either by contractor or sub-contractors for construction projects only

• Employers can “double count” hours for the “hard to employ,” up to 15% of total hours worked by DC residents

• Contractors must submit monthly and cumulative certified payrolls from all subcontractors at any tier working on the project or contract


Reporting Requirements (continued)• Adds additional monthly reporting requirements for contractors between

$300,000 and $5M

– Employers must report: • # of employees who worked on the project• # of current employees transferred• # of new job openings created• # of job openings created by employee attrition • # of job openings listed with the Department of Employment Services • total monthly direct and indirect labor costs associated with the project or

contract • total # of all District residents hired for the reporting period • cumulative total # of District residents hired• each employee’s name, Social Security Number, job title, hire date,

residence, and referral source for all new hires


Reporting Requirements (continued)• Contractors must submit certified payrolls monthly, as well as make

such payroll records available upon request at job sites, which include certified payrolls from all subcontractors and tiers working on the project or contract that are subject to Davis-Bacon law

• For government-assisted construction projects that are not subject to Davis-Bacon law in which certified payroll records do not exist, contractors must submit monthly documents of workers employed on the project, including DC residents in all employment classifications of hours worked, and contractors must provide payroll verification of workers upon request


Apprenticeship Requirements• Change in this First Source law allows DOES to consider altering

the ratio of journey worker to apprentice positions based on a compelling District-resident hiring rationale

• Reminders (in Apprenticeship Law):‒ Contractors must submit Apprenticeship Agreements to the Office

of Apprenticeship for official registration prior to classifying individuals as apprentices employed on government-assisted construction projects subject to Davis-Bacon law

‒ The District Government mandatory Apprenticeship Law under DC Law 2-156 continues to apply to all projects and contracts irrespective of individual contractor’s contract amount (single and cumulative)


Good Faith Efforts• Requires specific documentation evidencing a good-faith

effort to comply with First Source requirements prior to obtaining a waiver from First Source Agreement

• Waivers may be granted to contractors based on the following:– DOES has certified that there is an insufficient number

of District residents in the labor market who possess the skills required to fill the position(s) that were created (advertised) as a result of the project or contract


First Source Employment ProgramFines and Penalties

• 5% of direct and indirect labor costs (monetary fines) kept the same, however new law now includes additional pro-rated fines for not reaching specific hiring requirements – 1/8 of 1% of total amount

• Those who have been found in violation two (2) times over a 10-year period may be:– Debarred and/or deemed ineligible of consideration for

government-assisted projects for a period of 5 years • Appeals are heard at Contract Appeals Board• Prime contractors who choose to report cumulative hours on

a construction project will be penalized if hiring percentage requirements of District residents are not met


Processing• DOES will receive the First Source Employment Agreement no less

than 7 calendar days in advance of the project or contract start date, whichever is later

• No work associated with the relevant government assistance can begin on a project or contract until the employment agreement has been accepted by the Department of Employment Services

• DOES must provide on-line public access to executed First Source Employment Agreements, current compliance status of each project, and the contact information for the relevant compliance officer – within 120 days of effective date of act from 2009 through present


First Source Employment ProgramWorkforce Intermediary and Trust Fund

• Establishes a workforce intermediary pilot program that shall act as an intermediary between employers and training providers to provide employers with qualified job applicants– Intermediary will focus on construction and hospitality industries. The

Workforce Investment Council will lead this effort.

• Establishes a workforce trust fund, administered by DMPED, in which contributions and monetary fines for breach of First Source Employment Agreements shall be deposited for the purpose of establishing and operating a DC Workforce Intermediary Program

• Requires the Mayor to review and report to the Council the appropriateness of the hiring and reporting every three years


Definitions:• Direct labor cost – all costs, including wages and benefits, associated

with the hiring and employment of personnel assigned to a process in which payroll expenses are traced to the units of outpost and are included in the cost of goods sold

• Indirect labor cost – all costs, including wages and benefits, that are part of operating expenses and are associated with the hiring and employment of personnel assigned to tasks other than producing products

• Hard to employ – a District resident who is confirmed by a District of Columbia government agency to possess characteristics that impede his/her ability to find and keep a job (e.g., ex-offender, TANF participant, homeless, etc.)

• Contract – construction project that receives any direct government monetary assistance

• Project – construction project that receives indirect government monetary assistance


QUESTIONS?

Coalition for Non-profit Housing & Economic Development (CNHED) Lewis P. Brown

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