Federal Labor Standards Training - PHFA HOMEPAGE · 2016. 6. 23. · Federal construction contracts...
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Federal Labor Standards Training: HOME & Davis Bacon Presented By: Ted Jackson Senior Compliance Officer Rev. 1/2015
Transcript of Federal Labor Standards Training - PHFA HOMEPAGE · 2016. 6. 23. · Federal construction contracts...
Federal Labor Standards Training:
HOME & Davis Bacon
Presented By: Ted Jackson
Senior Compliance Officer Rev. 1/2015
COURSE TOPICS
• Introduction – our mission
• Contractor responsibilities
• Applicability factors – HOME
• Davis-Bacon & Related Acts – laws & regulations
• Development work - contract requirements
• Davis-Bacon wage decisions
• Classification , pay & overtime requirements
• Apprentices, trainees, volunteers
• Enforcement principles, investigations
• Reporting requirements
• HUD monitoring
• Resources
Presenter
Presentation Notes
Introductory slide to discuss broad overview of subjects covered in this course. Not intended for in-depth discussion; however, participants may ask questions during this time. It is up to the presenter to acknowledge the topics raised and either answer briefly or make note of the participant’s concerns and put it in the “parking lot” to ensure the matter is addressed fully later.
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HUD’s MISSION
To increase home ownership, support community development, and increase access to affordable housing free from discrimination
Presenter
Presentation Notes
Broad overview of HUD’s mission. The presenter might or might not elaborate on how Labor Relations relates to the overall mission statement. OLR is not to be seen as an impediment to these goals but to facilitate them through protecting the rights of all laborers and mechanics. By ensuring proper payment of wages, the local labor market is supported, workers who may live in the impacted area are able to earn wages, etc. OLR and DOL support training programs that enable low income persons to learn skills to improve their wages and abilities to provide for their families.
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Ensure that construction and maintenance workers (laborers & mechanics) working on
covered projects are paid properly.
OLR MISSION The HUD Office of Labor Relations
Presenter
Presentation Notes
Pretty simple. The presenter might point out that we will discuss what “properly” means (prevailing wage as determined by HUD or DOL), and how those wages are determined.
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CONTRACTOR RESPONSIBILITIES
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PRIME CONTRACTOR RESPONSIBILITIES
Responsible for compliance of all employers
Subcontractors communicate through prime
Include labor provisions in all subcontracts
Provide subcontractors with forms, guidance
Ensures access to employees on site
Submits certified payrolls for own employees
Presenter
Presentation Notes
These subjects will be addressed in later slides. However, emphasize the “chain of command” from prime through all subcontractors and sub-tier subcontractors. Because the prime contractor is responsible for the actions and compliance of the subcontractors, it is important that they educate their subcontractors on the requirements, including reporting requirements and granting access to employees for interview purposes. For State agencies, like the State of PA, point out that the clients first line of communication is with the staff at the Commonwealth rather that the HUD staff as their funding comes through the state. The sub-recipient must coordinate through the state just like subs must communicate through the prime.
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SUBCONTRACTOR RESPONSIBILITIES
Prepare & submit certified weekly payrolls
Instruct sub-tier sub-contractors of responsibilities
Review wage decision, request additional classifications
Ensure interviewer access to employees on-site
Presenter
Presentation Notes
These subjects will be addressed in later slides. Again, note the “chain of command” from prime through all subcontractors and sub-tier subcontractors passes along similar responsibilities for completion of payrolls and proper payment of wages. The prime contractor must manage and control access to the site, and be aware of the lowest tier subcontractor/employees on the work site.
APPLICABILITY FACTORS
HOME
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HOME Program
Davis-Bacon applicable to ALL construction contracts in excess of $2,000 for construction, alteration or repair
(including painting and decorating)
AP
PLI
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Presenter
Presentation Notes
Under ARRA, Tax Credit Development (TCAP) Funds, for the first time, will be subject to Davis-Bacon prevailing wage requirements Under the provisions of the Recovery Act, and as explained more fully in the DOL All Agency Memorandum 207, there are no unit or soft cost thresholds, and no volunteer exclusion. According to AAM 207, all traditional thresholds and other limitations are overridden by the labor standards at Section 1606 of the Recovery Act. See AAM 207, which is posted on http://www.wdol.gov/.
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HOME
HOME and “Prospective Application” – LOCK-IN DATE (the fine print)
The Lock-in Date is the date construction started or the contract was awarded, whichever first occurred. For contracts awarded pursuant to competitive bidding, it was the date bids were opened, provided the contract
was awarded within 90 days after bid opening.
AP
PLI
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Presenter
Presentation Notes
Under ARRA, a special provision exists for introducing Recovery Act funds into ongoing projects. Unlike regular CDBG or HOME projects, Recovery Act funds will not necessarily trigger Davis-Bacon requirements merely by their introduction into an ongoing project. These rules are to guide determinations for ongoing activities where Recovery Act funds are introduced. Some of the concepts may be new to agency staff, so please contact the HUD Office of Labor Relations on questions of applicability and enforcement. Finally, please be sure to document in your files the rationale for determining applicability and how your agency reached conclusions regarding both applicability and the timing of enforcement actions. Note the description of Lock-In is the same as for any other project. In other words, we go back to pick-up the wage decision that would have applied if the project had been subject to Davis-Bacon requirements from the start. [See also DOL regulations, 29 CFR Section 1.6(c)).
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KEY DAVIS-BACON & RELATED STATUTES, REGULATIONS
• Davis-Bacon Act (DBRA)
• Copeland Act (Anti-Kickback Act)
• Contract Work Hour and Safety Standards Act
• “Related” Acts
LAW
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Presenter
Presentation Notes
What are commonly referred to as “Davis-Bacon” wage requirements are actually based on three statutes (one of which is the Davis-Bacon Act) and a multitude of other statutes, called the “Related Acts” that invoke Davis-Bacon requirements for a particular program.
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DAVIS-BACON ACT
Enacted in 1931, amended in 1935 & 1964
Federal construction contracts over $2,000
Applies to all laborers & mechanics
Includes alteration, repair, painting & decorating
LAW
S &
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Presenter
Presentation Notes
Note that DB applies to “Federal construction contracts.” This means contracts executed between a Federal Agency and the contractor. Obviously, this does not apply to local agencies. That’s where the Related Acts come in. Note that the requirements apply to All laborers and mechanics. This means, among other things, that a contractor also must be paid at least the prevailing wage. The law does not just apply to construction. Alteration (remodeling or modernization), repaid and painting also trigger DB.
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DAVIS-BACON ACT
Requires payment > prevailing wage rates
Requires weekly payment of wages
Is “site-based”
Usually applied through the “Related acts”
LAW
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GU
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Presenter
Presentation Notes
The Davis-Bacon Act is “site based,” which means the requirements to not extend to suppliers or pre-assembled parts (such as trusses) that come from firms not tied solely to the project. For example, gravel may come from a gravel company, the lumber is brought to the site by the lumber company, etc. These material suppliers are not subject to the Act.
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COPELAND ACT
• Enacted in 1934
• Prohibits “Kick-backs” of pay
• Requires certified weekly payrolls
• Regulates payroll deductions from wages
LAW
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Presenter
Presentation Notes
The Copeland Act prohibits kickbacks and requires the submission of “certified” weekly payrolls. The certification is provided in the form of the Statement of Compliance that is contained on the back of the payroll form (WH-347). Payrolls do not need to be notarized.
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CONTRACT WORK HOURS & SAFETY STANDARDS ACT
Enacted in 1962
Overtime for all work > 40 hrs/week
Applies to contracts over $100,000
Liquidated damages for violations ($10 per day per violation)
LAW
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Presenter
Presentation Notes
Keep in mind that even though there is a $100,000 threshold for CWHSSA, employers may also be subject to the requirements of the Fair Labor Standards Act (FLSA) for overtime pay. HUD does not monitor for FLSA but may report suspected violations to the U.S. Dept. of Labor for investigation.
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DOL REGULATIONS - 29 CFR
Pt 1 Determination of wage decisions
Pt 3 Copeland Act requirements
Pt 5 Labor standards provisions for contracts
Pt 6 Administrative proceedings (ALJs)
Pt 7 Practice before the Admin. Review Board
LAW
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Presenter
Presentation Notes
Published at Title 29 of the Code of Federal Regulations, these sections provide the details of federal labor standards requirements. Agencies should be particularly familiar with Parts 1, 3, and 5.
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CONTRACT REQUIREMENTS
For work covered by Davis-Bacon prevailing wages
CO
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LABOR PROVISIONS
Incorporated in every contract (LR2006-03) Identifies contractor responsibilities
Reporting, documentary requirements Remedies for noncompliance
CO
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Presenter
Presentation Notes
As with contracts for PHA maintenance work, required labor provisions must be incorporated or referenced in each covered contract. The provisions set out contractor responsibilities, reporting requirements, and penalties. The provisions mirror the Regulation found at 29 CFR Part 5.
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CONTRACT PROVISIONS
Incorporated in every contract (LR2006-03) Identifies contractor responsibilities
Reporting, documentary requirements Remedies for noncompliance
HUD Form 4010 (HOME programs)
CO
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Presenter
Presentation Notes
The required labor provisions must be incorporated or referenced in each covered prime contract. The provisions set out contractor responsibilities, reporting requirements, and penalties. The provisions mirror the Regulation found at 29 CFR Part 5. This requirement is referenced in the Local Agency Guide on page 5 and is located in Section 2 of the HUD Handbook 1344.1, Rev-1, Change1. Form HUD-4010 has been updated to include some references for ARRA and the new version is available on HUD’s website.
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DAVIS-BACON WAGE DECISION
Incorporated in prime & sub-contracts Incorporate additional classifications/rates
Must be posted at the project site
CO
NT
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CT
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Presenter
Presentation Notes
As with the labor standards provisions, the applicable wage decision must be incorporated or referenced in the contract document for the prime and all subcontracts. This requirement is referenced in the Local Agency Guide on page 5 and is located in Section 2 of the HUD Handbook 1344.1, Rev-1, Change1.
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DAVIS-BACON WAGE DECISIONS & CLASSIFICATION ISSUES
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ESTABLISHING DB RATES
Established by survey of contractors
Established by geographic area
Establishes the “prevailing” wage rate
May be modified from time to time
Participation is in contractor’s interest!
WA
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Presenter
Presentation Notes
Ask if the participants are familiar with how Davis-Bacon wage decisions are determined. The point here is that the DOL is responsible for determining prevailing wages, the process is in the form of a survey of contractors. Contractor participation in the survey is voluntary but is in their interest to contribute data. Only the data provided by contractors will be used in analyzing and issuing rates for each classification. In fact, if there is insufficient or statistically invalid data for a given classification, no wage rate may be issued. This is why some wage decisions are missing certain work classes.
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WAGE DECISION BASICS
Identifies work classifications, basic hourly wages, fringe benefits
May be modified periodically
Published for 4 types of construction
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Presenter
Presentation Notes
The wage decision is simply a list of work classifications and hourly wage rates for various work classifications. The wage decisions come in four different flavors, as will be discussed shortly; the wage decision must be posted at the job site where all workers can see it. A wage decision may be modified periodically, and can change before a contract is awarded. We will discuss the concept of wage decision ‘lock in’ shortly.
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WAGE DECISION COMPONENTS
Wage decision number
Modification date
State, county information
Wage decision type
Trade classifications
Base Wage
Fringe Benefits
WA
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Presenter
Presentation Notes
In the following slide, we will consider in some depth each of the components listed here.
WA
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Character of Construction
County(ies)
Details about the Character of Construction
Modification #, Publication Date
WD Number
Presenter
Presentation Notes
The wage decision number identifies the State (first two letters), the year, and the unique number for the wage decision within the state. The publication date is just below that. Note the wage decision this one replaces is identified (FL0200001), which was published in the previous year. A wage decision may cover a single county or multiple counties. It depends upon the survey data. This wage decision covers only Dade County Florida. The character of construction (Heavy, Highway, Building, or Residential). Note that the character of construction is further clarified in this Building decision as excluding homes and apartments up to and including four stories. Note how many times this particular wage decision has been updated. This is revision #12! Not all revisions are major, but the contracting agency must track wage decisions to ensure the correct one is locked in to any given contract. As the modifications are issued, the DOL will indicate the changes made by placing an asterisk in the left margin.
WA
GE
DE
CIS
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S Classification
Fringe Benefits
Hourly Wage Rate
Details about classification / work
Presenter
Presentation Notes
Each classification is identified, along with any qualifiers or limitations. Here, fire alarm installation is specifically identified as work the electrician can do. Note the classification is only for contracts less than $2,000,000. The hourly wage is comprised of the base rate ($23.00) plus the value of any fringe benefits. Here, the fringe benefit is shown as a combination of a dollar value ($6.05) plus a percentage. We add the values to determine the total hourly wage each Electrician must be paid. A contractor may pay the fringe benefits in cash or may make irrevocable contributions to a third party for a bona fide fringe benefit.
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CALCULATE FRINGE BENEFITS W
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Base Rate: $23.00 Fringe Benefit 1: $6.05
Fringe Benefit 2: 8%
8% of the base rate
.08 X 23.00 = $1.84
ADD: 23.00 6.05 1.84
Total: $30.89
Presenter
Presentation Notes
We see here how to compute the base rate plus the fringe benefit rate when the fringe benefit is expressed as a dollar amount or as a percentage. It is noted that while the 8% is figured on the base rate in this instance, it may be necessary occasionally to contact the local union to determine if this is the practice. You should always check the wage decision to determine if the rate is survey or union based. This is done by reading the code number directly above the rate posted. On the above slide we saw the ELEC and a date. This indicates that the rate is from the local electrical union and indicates the local number and the date of the agreement. When you see SU and the 2 digit state indicator, e.g., SUPA it denotes the rates are from a DOL survey.
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FRINGE BENEFITS IN BRIEF
EMPLOYER CONTRIBUTIONS TO:
Health insurance
Retirement
Life insurance
Apprenticeship and Training programs
Vacation, Sick Time, & Holiday Pay
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WHICH ONE TO USE?? CHARACTER OF CONSTRUCTION
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CHARACTER OF CONSTRUCTION
Sheltered enclosures for the purpose of housing persons, machinery, equipment, etc.
Apartment buildings greater than 4 stories Commercial buildings
BUILDING
WA
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Presenter
Presentation Notes
A 5 story apartment building would merit Building rates. A parking deck would merit Building rates
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Single family houses, townhouses
Apartment buildings 4 stories or less
RESIDENTIAL
CHARACTER OF CONSTRUCTION W
AG
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EC
ISIO
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Presenter
Presentation Notes
It’s important to note that when you are building a residential project, the site improvement work may be accomplished using the residential determination as long as the work is contained in the same contract as the roads, infrastructure and utilities are in support of the facility. The site work is considered to “incidental” to the residential project. The same is true for the construction of commercial buildings. This is described in the DOL AAMs 130 and 131. It is also described in Labor Relations Letter No. LR-96-03.
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Roads Highways Sidewalks
Parking areas Other paving work not incidental to other construction
CHARACTER OF CONSTRUCTION
HIGHWAY
WA
GE
DE
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Projects which cannot be classified as Building, Residential, or Highway
Dredging Water & sewer lines
Parks and playgrounds Flood control
CHARACTER OF CONSTRUCTION
HEAVY
WA
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CIS
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S
Presenter
Presentation Notes
In Pennsylvania, most of our heavy and highway determinations are combined but on occasion, it may be necessary to make a specific determination. The State staff may assist you in making these determinations. Additionally, you may refer to the guidance memos discussed above, i.e., AAM 130, 131 and HUD LR 96-03.
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OBTAINING WAGE DECISIONS
From HUD, or…. On-line at
www.access.gpo.gov/davisbacon/
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Presenter
Presentation Notes
Contracting agencies may access and download Davis-Bacon wage rates online.
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How long will a wage decision “keep”?
If wage rates go up, do I have to put the new decision in my
contract?
How do I know which modification
to use?
What if we add federal
funding to an ongoing project?
“LOCK-IN” W
AG
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EC
ISIO
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Presenter
Presentation Notes
We know what wage decisions are, what they are used for, how to get them, that we must include them in contract documents. But we also know that wage decisions may be updated from time to time, so how do we select and keep a wage decision locked in to a contract?
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WAGE DECISION “LOCK-IN”
COMPETITIVELY BID CONTRACTS
Lock-in at bid opening provided contract is awarded within 90 days
Must update wage decision if contract is awarded more than 90 days after bid opening
Modifications published <10 days before bid opening are not applicable if there is insufficient time to notify
bidders
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CIS
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Presenter
Presentation Notes
There is a difference between competitively bid projects and projects subject to negotiation. The Bid open date plays a key role; however, note that the contract must be awarded within a specific time frame, else the wage decision in effect on the date of contract award becomes effective.
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WAGE DECISION “LOCK-IN”
COMPETITIVELY BID CONTRACTS
The “ten day” rule regarding modifications published less than ten days before bid opening is not
automatic.
Document attempts to notify bidders or the reason you were unable to notify bidders.
Contact your Labor Relations Specialist
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WAGE DECISION “LOCK-IN”
NEGOTIATED CONTRACTS
Lock-in at contract award date or the construction start date, whichever occurs first
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Presenter
Presentation Notes
Without the Bid Opening date, we see the contract award date ‘locks in’ the wage decision. Note here that construction start will lock in the wage decision if construction begins prior to contract award. (same for bid contracts)
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WAGE DECISION “LOCK-IN”
ALL CONTRACTS
Ensure your Company or Organization has a system in place to track wage decision modifications and
pending contracts subject to Davis-Bacon prevailing wage requirements
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Presenter
Presentation Notes
The contracting agency must have a system in place to order, manage, and track wage decisions, and to make sure the appropriate and current wage decision is incorporated into each covered contract.
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ADDING CLASSIFICATIONS
EARLY DETECTION
Review decisions for missing classifications
Discuss with contractors early
Submit request after contract award
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Presenter
Presentation Notes
Wage decisions may not include every classification needed to complete a project. This is in the nature of the DOL’s survey process. The best strategy is to review the wage decision and discuss it with the prime contractor at the earliest date possible. The contractor can determine which classifications are needed and submit requests to the contracting agency after the contract has been awarded.
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ADDING CLASSIFICATIONS
STANDARD FOR CONSIDERATION
Work not represented on wage decision
Area practice
“Reasonable relationship” standard
Consent of all parties
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Presenter
Presentation Notes
Discuss with the contractor the requirements for adding a classification. The work for the classification cannot be represented by any other classification already on the wage decision. An obvious example would be a contractor asking for a classification that is on the wage decision. Sometimes, there are classifications of a different name that can be used or conformed to the classification needed. Consult with your Labor Relations Specialist. The ‘reasonable relationship’ standard means that the rate for a classification for a skilled trade cannot be less than the lowest skilled trade on the wage decision. Similarly, for equipment operators, the rate requested cannot be less than that paid to the lowest paid equipment operator class on the wage decision. The requesting contractor must certify in his application that all parties (employees) agree.
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ADDING CLASSIFICATIONS
Do not “borrow” classifications/wage rates from other wage decisions
Contractor’s rights re: additional classifications
Post new classification & rate
Restitution payments & documentation requirements
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Presenter
Presentation Notes
Some ‘do’s and don’ts’ A contractor may press to request a classification and rate neither the contracting agency nor HUD OLR believes is approvable. Nevertheless, if the contractor cannot be convinced, the agency and HUD will forward the request – with their non-concurrence and let DOL make its determination. If the contractor’s request would result in an underpayment, the contracting agency must so advise the contractor and ensure the anticipated difference in wages are withheld from the contractor’s payment.
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Classification
Pay
Overtime
Posting requirements
ESSENTIAL CONCEPTS
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LABORERS & MECHANICS
Laborers & Mechanics are workers whose duties are manual or physical in nature, including those workers who use tools or who are performing work of a trade, as distinguished from mental or managerial duties.
CLA
SSIF
ICA
TIO
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LABORER OR MECHANIC?
Laborers & Mechanics mean anyone who is performing construction work on the project
Supervisors are covered if they spend 20% or more of their time performing manual work
Every person who performs work is considered “employed” regardless of any contractual
relationship
CLA
SSIF
ICA
TIO
N
CLASSIFY AND PAY FOR WORK PERFORMED
Not according to skill or experience
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SPLIT CLASSIFICATIONS
An employees performing work in more than one classification may be paid the wage rate specified for each classification only if
accurate time records are kept. Otherwise, pay the employee the highest wage rate of the
applicable classifications
CLA
SSIF
ICA
TIO
N
Presenter
Presentation Notes
If a worker performs the duties of more than one classification, he or she must be paid for the hours worked in each class or the higher of the two.
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Covered if driving on the “site of the work” Covered if loading/unloading on the “site of the work”
if the time so spent is not de minimus Not covered if driving between DB site and commercial
facilities
TRUCK DRIVERS C
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IFIC
AT
ION
Presenter
Presentation Notes
De minimus simply means the truck drivers are just entering the work site long enough to drop of the materials or supplies they brought, or about 20% of their time.
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HUD follows DOL non-enforcement policy for Owner/Operators who own and drive their own
trucks This policy does not extend to owner operators of
heavy equipment
TRUCK DRIVERS - OWNER/OPERATORS
CLA
SSIF
ICA
TIO
N
Presenter
Presentation Notes
This is explained in OLR’s LR 96-01.
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HELPERS
Not included on wage decisions
Strict regulatory definition precludes addition of this classification
Advise contractors of the requirements & that funds will likely be withheld from payment
Refer to HUD OLR or U.S. DOL if contractors insist on pursuing this option
CLA
SSIF
ICA
TIO
N
Presenter
Presentation Notes
There are no classifications for “Helpers” on Davis-Bacon wage decisions. Contractors should be advised that requests for additional classifications would need substantial information to prevail and may not receive a timely response from the DOL. Consequently, there would likely be restitution held on deposit from the amounts due the contractor under contract. 29 CFR Part 5.2 Definitions: (4) A distinct classification of “helper” will be issued in wage determinations applicable to work performed on construction projects covered by the labor standards provisions of the Davis-Bacon and Related Acts only where: (i) The duties of the helper are clearly defined and distinct from those of any other classification on the wage determination; (ii) The use of such helpers is an established prevailing practice in the area; and (iii) The helper is not employed as a trainee in an informal training program. A “helper” classification will be added to wage determinations pursuant to §5.5(a)(1)(ii)(A) only where, in addition, the work to be performed by the helper is not performed by a classification in the wage determination.
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HELPERS
Indicates possible misclassification, underpayment of semi-skilled or skilled workers
Follow up: determine actual duties of “Helper”
Do not merely permit contractor to change payroll to rename as “Laborers” without review
CLA
SSIF
ICA
TIO
N
Presenter
Presentation Notes
Often, Helpers will be listed along with Laborers. While it is possible the “Helper” label is just another term for Laborer, it is not automatically so. Helpers should be interviewed and the contracting agency should conduct interviews with other workers to determine the work performed by this classification. It is insufficient to request the contractor to “correct” its payrolls only to have the “Helpers” now be listed as “Laborers.” 29 CFR Part 5.2 Definitions: (4) A distinct classification of “helper” will be issued in wage determinations applicable to work performed on construction projects covered by the labor standards provisions of the Davis-Bacon and Related Acts only where: (i) The duties of the helper are clearly defined and distinct from those of any other classification on the wage determination; (ii) The use of such helpers is an established prevailing practice in the area; and (iii) The helper is not employed as a trainee in an informal training program. A “helper” classification will be added to wage determinations pursuant to §5.5(a)(1)(ii)(A) only where, in addition, the work to be performed by the helper is not performed by a classification in the wage determination.
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APPRENTICES & TRAINEES
Only apprentices & trainees registered in an approved program may be paid less than the wage rate
specified for their work classification
“Approved program” means a program registered with the DOL or DOL recognized State Apprenticeship
Agency
CLA
SSIF
ICA
TIO
N
Presenter
Presentation Notes
A contractor participating in an approved program will be able to provide the required information to the contracting agency. It is not the contracting agency’s duty to chase down this documentation. Instruct the contractor to arrange the State or DOL office to provide the certifications regarding enrollment in the program, along with the appropriate step, pay, and ratio information.
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Ratio requirements apply, re: the maximum number of apprentices that may be on the job site
Pre-apprentices not registered in a program must be paid the full journeyman rate for the classification of work
they perform
APPRENTICES & TRAINEES C
LASS
IFIC
AT
ION
Presenter
Presentation Notes
Ratios of journeymen to laborers may vary from program to program. Typically, the ratio is three to one. That is three journeymen to the first apprentice. In such a ratio, a second apprentice can be added only after three more journeymen (for a total of six) are added to the work site. The ratios must be maintained each day; however, the contracting agency should check with the OLR Labor Relations Specialist regarding wage restitution for underpayments concerning apprentices due to ratio errors. In some cases, it may be necessary to obtain the ratio criteria from the local union.
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Employing contractor must submit documentation of registration and current participation in the program –
typically this will come from the DOL or State apprenticeship program office
Apprentices/trainees not registered or who are utilized out of ratio must be paid the full wage rate (base +
fringes) listed on the wage decision for the classification of work performed
APPRENTICES & TRAINEES C
LASS
IFIC
AT
ION
Presenter
Presentation Notes
Apprentices used out of ratio must be paid the full wage. If all apprentices began working on the site simultaneously, which one is deemed to have caused the imbalance? The DOL would accept any “equitable formula” to determine which apprentices were “first” employed. Contact the OLR office for assistance with this.
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VOLUNTEERS
Performs services voluntarily
Does not receive compensation for services
May be paid expenses, reasonable benefits, nominal fee for services
Not otherwise employed at any time on the construction work
AP
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PAY
57
Pay workers weekly (7 consecutive days)
Pay wage rates at or above those on wage decision for class of work performed
Post the wage decision, DOL Notice to Employees, in an area accessible to all workers
IN GENERAL PA
YM
EN
T IS
SUE
S
Presenter
Presentation Notes
Work weeks, once established, should not change. If a contractor’s work week begins on Sunday and ends on Saturday, that is the work week that should be maintained throughout the project for that contractor. NOTE: The DOL has update the wage posters and they are available on-line at their website. See HUD OTM #13 notice for the specific web address
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PIECE WORK
Convert to hourly wage rate
Total weekly wages x hours worked = effective hourly wage rate
It is important that contractors keep good records of hours worked
PAY
ME
NT
ISSU
ES
Presenter
Presentation Notes
Many construction trades are compensated based on production – the more is produced, the higher the pay. This concept is not at odds with the Davis-Bacon prevailing wage requirement, it just means the contractor must keep track of the hours worked by each employee and calculate the pay in hourly wage terms.
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FRINGE BENEFITS
Any contribution irrevocably made…to a trustee or third party pursuant to a bona fide fringe benefits fund plan,
or program
The rate of costs…which may be reasonably anticipated in providing bona fide fringe benefits…communicated to
the employee in writing
PAY
ME
NT
ISSU
ES
Presenter
Presentation Notes
A fringe benefit is generally structured, as described in the first paragraph, and involves regular payments on behalf of the employee – for the benefit of the employee.
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FRINGE BENEFITS
Can include employer contributions to health insurance premiums, retirement contributions, life insurance, etc.
Bona fide funded plans: common to the industry, paid directly in cash or into a fund, plan or program on the
employee’s behalf
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FRINGE BENEFITS
Does not include employer payments required by Federal, state or local law
Unfunded plans: Contractor must obtain DOL approval
Contractor must identify on certified payroll that fringe benefits are or are not paid
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Presenter
Presentation Notes
Point out the check boxes found on the certification statement.
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FRINGE BENEFITS
Prevailing wage requirements may be met by any combination of cash wages and creditable “bona fide”
fringe benefits provided by the employer
Fringes may be paid entirely as cash wages
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Presenter
Presentation Notes
That a wage decision includes a fringe benefit does not mean that a contractor must set up a fringe benefit plan to match the type or amount identified on the wage decision. The contractor need only pay the amount shown, adding the base and the fringe amount. The reverse is true: If a fringe benefit is not identified on a wage decision, the contractor may nonetheless take credit for bona fide fringe benefits paid by the employer.
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FRINGE BENEFITS
Fringes must be paid for all hours worked, including overtime; however, the half-time premium for hours over 40 does not apply to fringe benefit payments
when computing overtime pay
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Presenter
Presentation Notes
That a wage decision includes a fringe benefit does not mean that a contractor must set up a fringe benefit plan to match the type or amount identified on the wage decision. The contractor need only pay the amount shown, adding the base and the fringe amount. The reverse is true: If a fringe benefit is not identified on a wage decision, the contractor may nonetheless take credit for bona fide fringe benefits paid by the employer.
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FRINGE BENEFITS PA
YM
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SUE
S Typical Fringe Benefits These are NOT Fringe
Benefits
Life Insurance Workers Compensation
Health Insurance Unemployment Compensation
Sick Leave Social Security Regular Leave / Vacation
Thanksgiving Turkey
Holidays Company Car/Cell Phone
Pension
Employer-Paid Auto Insurance
Presenter
Presentation Notes
Here are some typical fringe benefits and examples of what may not be considered as fringes.
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OVERTIME
For all hours worked over 40 per week
Paid at 1½ times the regular rate of basic pay plus the straight-time rate of fringe benefits
Applies to hours worked on covered project
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DEDUCTIONS
Those deemed permissible by 29 CFR Part 3
Deductions not provided for by 29 CFR Part 3 must be approved by the DOL
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Presenter
Presentation Notes
The Code of Federal Regulations identifies a set of accepted payroll deductions; all others must be requested through the DOL
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CONTRACTOR REPORTING REQUIREMENTS
Φορ µανψ χοντραχτορσ, τηε ωεεκλψ χερτιφιεδ παψρολλ ισ τηε ονλψ ∆αϖισ−Βαχον παπερωορκ τηεψ ωιλλ νεεδ το συβµιτ.
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PAYROLL BASICS
Optional WH-347 form
Compliance statement (original signature)
Payrolls are due weekly
Identify first and final payroll
“No Work” payrolls optional – but all weeks must be accounted
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Presenter
Presentation Notes
The DOL payroll form is optional; contractors may use any other form that includes all of the information requested. The compliance statement is required for each payroll week reported. Contractors must account for all work on the project, and so must clearly identify when work begins and ends. All weeks in between must be clearly accounted for, whether the payrolls are numbered or not.
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PAYROLL BASICS
Payrolls must be complete & legible
Prime contractor reviews payrolls for completeness, submits to LCA
Payroll retention – three years
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Presentation Notes
We need to be able to read them! It also helps if the contractor and the agency do not punch holes in or otherwise deface the payrolls in such a way as to obscure key information.
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PROJECT & CONTRACTOR INFORMATION
Contractor/sub-contractor name
Business address
Project name & number
Week ending date
Day & date for each day in the workweek
Numbering payrolls (optional – but strongly recommended)
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EMPLOYEE INFORMATION
Employee name & identifying number – contractor must make address & SSN available on request
Employee work classification
Rate of pay
Straight/Overtime hours worked per day, per week on THIS project
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Presentation Notes
It is no longer permitted to include Social Security Numbers on certified weekly payrolls. Nevertheless, the contractor must maintain this information, and must provide it on request. In lieu of the SSN, the contractor must include a unique identifying number for each employee. This number (if unique) may be the last four digits of the employee’s SSN. See HUD’s OTM #12 for more information and the effective date. This requirement applies to contracts awarded after 1/29/09.
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WAGES & DEDUCTIONS
Gross wages earned
Deductions from wages
Net pay
Statement of compliance
• one for each weekly payroll
• Signed by corporate official or designee
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Presenter
Presentation Notes
Normally, the owner or an officer of the firm shall sign the payrolls (no special authorization form required); however, if someone other than an owner or officer of the firm is to certify the payrolls, that person must receive written authorization to do so (from an owner or officer of the firm). This is a duty not to be taken lightly. The person signing the form is stating that he or she actually pays or supervises the payment of the workers identified on the payroll.
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SUBCONTRACTORS WORKING ALONE (No Crew)
All laborers & mechanics are covered regardless of any contractual relationship alleged to exist
Must be paid weekly
May not certify to payment of own wages (may not sign own payrolls)
Must be reported on the General Contractors payroll submissions.
Exception: Owners of business working with
their crew
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Presentation Notes
Sometimes an agency will hire directly a sole proprietor, with no other contractor involved. In such cases, and only in such cases, the contracting agency may accept payrolls from the contractor working alone. Please refer to LR 96-01 for more information.
Optional Payroll Form WH-347
Presenter
Presentation Notes
The DOL has updated the form WH-347. The new version is available at their website and the OLR website.
Optional Payroll Form WH-347 Statement of Compliance
Presenter
Presentation Notes
Page 2 of the Form WH-347 contains the required “Statement of Compliance”. The DOL has discontinued the form WH-348 that used to be used for this purpose. Contractors who choose to use their own format may use page 2 for the certification in place of the 348 or may make their own provided that all information is included.
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ENFORCEMENT Payroll & Document Review
Employee Interviews
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AGENCY BASICS - REVIEW
Ensure submission of certified weekly payrolls
Check payrolls/related records
Ensure correction of underpayments
Prepare / submit required reports
Maintain records for three years
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PAYROLL REVIEW
Falsification Indicators
• Ratio of laborers to mechanics >1:1 • Too few or irregular hours • Discrepancies in wage computations • Extraordinary deductions • Worker with a complaint
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Presentation Notes
The falsification indicators are listed on page 22 of the Local Contracting Guide.
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FOLLOW UP
Communicate routine review results by phone; document with “memo to file”
Take corrective action promptly
Notify contractor in writing of violations if not corrected promptly after informal
request
Always send written notification of serious violations or when sanctions,
withholding are possible
Provide appeal rights to contractor
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Presentation Notes
Follow up is very important. When you have repeated requested the contractor provide information and he has failed to do so, it is recommended that you move forward with a strong letter demanding payment of restitution and the potential for withholding. There is nothing like being faced with the non-payment of contract funds to get the contractor’s attention. I just had a case where the contractor ignored requests for information and when the prime was advised we were going to withhold $150,000 the information was submitted within 2 days. The OLR staff can provide sample letters if necessary.
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LIQUIDATED DAMAGES FOR OVERTIME VIOLATIONS
Must assess liquidated damages for OT violations
$10 per day per violation
Contact OLR re: Notice of Intent to Assess letter
Agency recommendation
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Presentation Notes
The contracting agency must assess liquidated damages in each instance where overtime violations occur.
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RESOURCES
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HUD OLR Reference Library
Labor Relations Letters On-the-Mark! Series
http://www.hud.gov/offices/olr/library.cfm
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DOL DBRA Homepage http://www.dol.gov/compliance/laws/comp-dbra.htm
DOL Regulations http://www.dol.gov/regulations/
DOL Forms http://webapps.dol.gov/libraryforms/
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DOL RESOURCES ONLINE
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GSA’s On-Line Debarment List http://www.sam.gov
Davis-Bacon Wage Decisions
www.wdol.gov
HUD Office of Labor Relations
www.hud.gov/offices/olr
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OTHER RESOURCES ONLINE
If you have any questions or concerns please feel free to contact Ted Jackson:
Ted Jackson
Senior Compliance Officer
211 North Front Street Harrisburg, PA 17101
(717) 780-1847 [email protected]
Thank You!
DISCLAIMER
This presentation is intended as general information only and does not carry the force of legal opinion.
The Department of Housing and Urban Development (HUD) is
providing this information as a public service. This information and related materials are presented to give the public access to information on HUD programs. You should be aware that, while
we try to keep the information timely and accurate, there will often be delay between official publications of the materials and the modification of these pages. Therefore, we make no express
or implied guarantees. The Federal Register and the Code of Federal Regulations remain the official source for regulatory
information published by the Department of Housing and Urban Development. We will make every effort to keep this information
current and to correct errors brought to our attention.
