Labor Standards Training

US Department of HUDOffice of Labor Relations

Contact InformationUnited States Department of Housing and Urban Development Midwest Regional Office of Labor Relations77 West Jackson Blvd, Room 2307Chicago, IL 60604www.hud.gov

Deborah DiezLabor Relations Michigan Specialist (Chicago Regional Office)(312) 913-8127deborah.a.diez@hud.gov

Roxanne VolkmannLabor Relations Illinois Specialist (Chicago Regional Office)(312) 913-8438roxanne.volkmann@hud.gov

U.S. Housing Act of 1937, Sec. 12a, (42 U.S.C. 1437j)

….not less than the wages prevailing in the locality, as determined or adopted…by the Secretary, shall be paid to…all maintenance laborers and mechanics employed in the operation of the low-income housing project involved...

U.S. Housing Act of 1937,as amended, Section 12(a)

Enacted 1931, amended 1935 & 1964

Federal construction contracts >$2,000

Sets minimum hourly wage rates for workers

The Act is “site-based”

Includes alteration, repair, painting & decorating

Davis-Bacon Act

Applies to all laborers & mechanics (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).

Requires payment of prevailing wages

Requires weekly payment of wages

Davis-Bacon Act

Community Development Block Grants

HOME Public Housing Tribally-Designated Housing Authorities

FHA Multi-Family Housing

DB Related Acts

Enacted 1962

Requires overtime at 1½ times the basic hourly rate of pay for all work 40 hrs/week

Applies to contracts $100,000

Liquidated damages apply to violations ($10 per day, per violation)

Contract Work Hours and Safety Standards Act (CWHSSA)

Enacted 1934, regulates deductions from wages

Prohibits “kick-backs” of pay

Requires submission of certified weekly payrolls and accompanying signed Statement of Compliance

Copeland Act

For properties subject to a conventional Annual Contributions Contract, construction, rehabilitation, and maintenance work are covered by some type of prevailing wage to all maintenance laborers and mechanics engaged in the operation of low-income housing projects (Section 12(a) of the US Housing Act of 1937).

PHA Factors of Applicability

Routine Maintenance

Non-Routine Maintenance

Development (Davis-Bacon)

PHA Factors of Applicability

Work that involves the regular upkeep and preservation of buildings, grounds, and facilities

Routine maintenance wage rates are determined or adopted by HUD

Applicable to all laborers and mechanics engaged in covered work, including force account, contractors, temporaries, residents

Routine Maintenance

Agencies collect local wage data and submit HUD 4750 to Labor Relations Specialist on an annual basis

Labor Relations reviews and works with HA to determine the Maintenance Wage Rate Determination

A HUD 52158 is issued for all work classifications (force account and anticipated contracts)

Routine MaintenanceDetermining the Wage Rates

Maintenance Wage Rate Determination HUD 52158

Maintenance Wage Rate Determination HUD 52158 (Cont’d)

52158 - In employee common area (lunch room, office, etc)

52158 - Incorporate into routine maintenance contracts

Posting Requirements-Routine and Non-Routine Maintenance

Work items that ordinarily would be performed on a regular basis in the course of upkeep of a property…but have become substantial in scope because they have been put off

Non-Routine Maintenance

Involves expenditures that would otherwise materially distort the level trend of maintenance expenses

Includes the replacement of equipment and materials rendered unsatisfactory because of normal wear and tear by items of substantially the same kind

Non-Routine Maintenance

Each Maintenance contract MUST incorporate: Current, appropriate wage decision and Federal

Labor Standards provision applicable to work being done.

Federal LS HUD 5370-C (General conditions for Non-construction contracts-HUD determined)

◦ Non-construction contracts (without maintenance) greater than $100,000 – Use Section I

◦ Maintenance contracts (including non-routine maintenance) over $2,000 but not more than $100,000–Use Section II

◦ Maintenance contracts (including non-routine maintenance) greater than $100,000 – Use Section I and II

CONTRACT ADMINISTRATION Routine & Non-Routine Maintenance Work

Certain professional services are excluded from HUD-determined wage requirements

Periodic inspections or testing of equipment

Testing for lead-based paint

Pest control

Installation, service or maintenance of leased equipment, fixtures or appliances

CONTRACT ADMINISTRATION Exclusions from HUD-Determined requirements

New construction

Reconstruction

A substantial improvement in the quality or kind or original equipment and materials

Remodeling that alters the nature or type of housing units falls within the purview of “development” (24 CFR 968.203)

Development (Davis-Bacon)

DEVELOPMENT WAGE RATES

DB wages determined by DOL

Agency gets DB rates on-line or from HUD OLR

Applicable to all laborers and mechanics engaged in covered work, including force account, contractors, temporaries, residents

CWHSSA applies to contractors after 40 hours

CONTRACT ADMINISTRATION

Development Work (Construction) Each covered DB contract for construction,

alteration, or repair work MUST incorporate: Current, appropriate wage decision and Federal

Labor Standards provision applicable to work being done.

Appropriate modification or superseded wage decision

Federal labor standards clauses◦ HUD-5370 PHA Programs – Contracts greater than $100,000

◦ HUD-5370-EZ Contracts greater than $2,000 but not more than $100,000

PHAs ARE REQUIRED TO …(Routine and Non-Routine Maintenance) Ensure ALL maintenance laborers and

mechanics are paid a prevailing wage Create and maintain documents

demonstrating compliance Ensure permissible deductions as allowed

by law or regulation Conduct employee interviews (HUD-11) Comply with Labor Relations Letter LR

2004-01

Wage Decision or Project Wage Rate Sheet (HUD-4720)

Any Additional Classifications (HUD-4230A)

The Employees Rights under the Davis-Bacon Act (WH-1321)

Posting Requirements-Development

DAVIS-BACON WAGE DECISIONS

A Davis-Bacon Wage Decision is simply a listing of different work classifications and the minimum wage rates that must be paid to anyone performing in those classifications

DAVIS-BACON WAGE DECISION BASICS

Must be incorporated in prime contracts & sub-contracts

Identifies work classifications, basic hourly wages, fringe benefits

Must be posted at the job site May be modified periodically Published for 4 types of construction

CHARACTER OF CONSTRUCTION

RESIDENTIAL Single family houses, townhouses Apartment buildings less than 5 stories

BUILDING Sheltered enclosures for the purpose of

housing persons, machinery, and equipment Apartment buildings more than 4 stories Commercial buildings

CHARACTER OF CONSTRUCTION

HIGHWAY Roads Highways Sidewalks Parking areas Other paving work not incidental to other

construction

HEAVY Projects which cannot be classified as Building, Residential, or Highway

OBTAINING DB-WAGE DECISIONS

Go On-line at: www.wdol.gov

NEW – DOL renumbered wage decisions effective January 6, 2012.

Contact your HUD Labor Relations Specialist

<- WD Number

<- Construction Type

<- Counties

Mod Number & Publish Date

<- Description

CLASSIFICATION RATE FRINGE

S

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 days before bid opening are applicable if there is sufficient time to notify bidders (10 days no longer applicable with online access)

Contractor Eligibility (DB) Verify prime

contractor eligibility against GSA Debarred Listwww.sam.gov

Make record of verification to contract file

Certified Weekly Payrolls

Payroll Form WH-347

Reviews of Certified Payrolls Name of employee. Address and SSN are no

longer required on CPR but must be on file and available upon request.

Properly classified according to the work performed

Established work week Hours worked each week Gross wages and net wages properly

calculated “Other” deductions Overtime computed properly Statement of Compliance – Authorized Original

Signature

Reviews of Certified PayrollsTypical Errors

Classification Errors Copy or Fax Statement of Compliance Inadequate or Incomplete Payroll

Information Missing Addresses and SSN One Statement of Compliance for

Multiple Work Weeks Other Deductions Ratio of Laborers to Mechanics Unauthorized Signature on Statement of

Compliance

EMPLOYEE INTERVIEWS – HUD-11 Contractors must permit interviews

Interviews may be performed at random

Interviews are confidential

Interviews must be checked against payrolls

Fringe Benefits

Can include health and life insurance premiums, retirement/pension contributions, vacation irrevocably made to a trustee or third party pursuant to bona fide fringe benefits fund, plan, or program.

May be paid directly to worker

Do not include employer payments or contributions required by Federal, State or local laws (i.e., the employer’s contribution to Social Security, workers’ compensation insurance, etc.)

Fringe Benefits Prevailing wage requirements may be met

by any combination of cash wages and creditable “bona fide” fringe benefits provided by the employer.◦ May be paid entirely as cash wages◦ Payments made or costs incurred by the

contractor for “bona fide” fringe benefits may be creditable

◦ Combination of cash wages paid and “bona fide” fringe benefits may be used together

Fringe Benefits and Overtime

Under Davis-Bacon, fringe benefits must be paid for ALL hours worked, including overtime hours. However, the fringe benefit amounts may be excluded from the half-time premium due as overtime compensation.

Restitution

Restitution Where underpayments are found, the employer

will be required to pay wage restitution to the affected employees.

Must be paid promptly and in the full amounts due, less permissible and authorized deductions.

Funds may be withheld if violations are not corrected promptly

Deposit of funds may be necessary if matter is under appeal, or workers cannot be found

Restitution Computing Wage Restitution

Corrected Payrolls

Contract Administrator Review

Document restitution on certified corrected payroll report

Submit 5.7 report where restitution totals $1,000 per contractor (See LR-92-02 for instructions)

INVESTIGATIONS

Funds may be withheld if violations are not corrected promptly

Deposit of funds may be necessary if matter is under appeal, or workers cannot be found

Administrative sanctions may be necessary◦ Limited Denial of Participation◦ Debarment

Work Classifications

You’ll want to make sure that the work classification(s) you need are contained in the wage decision.

ADDITIONAL CLASSIFICATIONS

Review and discuss the wage decision with contractor early to identify missing classifications

Submit Requests immediately after contract award (HUD-4230A)

HUD will respond in writing Post new classification & rate Make restitution payment if necessary

Davis-Bacon Additional Classifications Process

Form HUD-4230A Request of Additional Classification and Rate

AND

Employer needs to send a letter on company letterhead requesting the job classification and detailing the

duties the employee will be performing

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT REPORT OF ADDITIONAL CLASSIFICATION AND RATE

DATE OF REPORT

TO: (Appropriate Regional Office, U.S. Department of Labor) U.S. DEPARTMENT OF LABOR EMPLOYMENT STANDARDS ADMINISTRATION WAGE-HOUR / DIVISION OF CONSTRUCTION WAGE RATE DETERMINATION - ROOM S-3012 WASHINGTON, DC 20210

FROM: (Name and Location of HUD Office)

NAME OF PROJECT

PROJECT NUMBER

LOCATION OF PROJECT (City, County and State)

DESCRIPTION OF WORK WAGE DECISION NO. & MODIFICATION NO. (Also attach copy of applicable wage decision)

WAGE DECISION EFFECTIVE DATE

In order to complete the project, it is necessary to establish wage rates for the following classifications not included in the above-referenced U.S. Department of Labor Wage Decision: CLASSIFICATIONS

BASIC HOURLY RATE(S)

FRINGE BENEFIT PAYMENTS

NAME, ADDRESS & ZIP CODE OF LABOR ORGANIZATION

NAME, ADDRESS & ZIP CODE OF PRIME CONTRACTOR

TITLE OF LABOR ORGANIZATION REPRESENTATIVE

TITLE OF CONTRACTOR’S REPRESENTATIVE

Supporting documents attached. The interested parties, including the employees or their authorized representatives, agree on the classification and wage rate. The interested parties, including the employees or their authorized representatives, cannot agree on the proper classification and wage rate. A determination of the question by the Secretary of Labor is therefore requested. Available information and recommendations are attached. APPROVED (Signature of HUD Area Insuring Office Representative)

_______________________________ Date

(Signature of HUD Regional Labor Relations Officer)

_______________________________ Date

HUD-4230A (4-73) PREVIOUS EDITION IS OBSOLETE

HU

D 4230A

FL020001/Mod 1

Community Center

CD2002-24

Miami, Dade County, FLBLDG constr: rehab comm center

4/2/02

Electrician

22.50 4.50

Contractor, Labor Organization

Do all parties agree?

Apprentices and Trainees Apprentices and trainees are persons

registered and receiving on-the-job training in a construction occupation under a program which has been approved in advance by DOL

Apprentices and trainees must be registered in a Department of Labor-approved program

Apprentices and Trainees

Contractor must submit a copy of registration/apprentice agreement and ratio language

Apprentices/trainees that are not registered or that are utilized out of ratio must be paid the full rate (base + fringes) listed on the wage decision for the classification of work they perform.

Self-employed Subcontractors(Labor Relations Letter LR-96-01)

All laborers and 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) - Exception: Owners of business working with their crew

Semi-Annual Labor Standards Enforcement Report

Instructions and

Fillable Form (HUD-4710)

can be found at:

www.hud.gov/offices/olr/olrform.cfm

Semi-Annual Labor Standards Enforcement Report - HUD 4710

Period 1 Oct 1 – Mar 31 Due April 4 Period 2 Apr 1 – Sep 30 Due October 4

Maintenance Wage Rate Determination Annual Renewal of 52158 HUD sends a reminder prior to the end of the Fiscal Year. The housing commission then sends in the HUD-4750, personnel policy or CBA, and job descriptions.

Report Deadlines

1344.1 Rev 2 – February, 2012

Contractor’s Guide – Jan. 2012

What’s New?

Wage Determinations – http://www.wdol.gov

Wage and Hour Division – http://www.dol.gov/whd/index.htm

Office of the Administrative Law Judges Law Library – http://www.oalj.dol.gov

Administrative Review Board – http://www.dol.gov/arb

Debarred Bidders List – http://www.sam.gov

HUD – http://www.HUD.gov/offices/olr

Internet Sites

Questions