# Presentation: 085515

**FEDERAL LABOR STANDARDS & ADMINISTRATION**
**TRAINING**
- For Community Development Directors
- Jerlinda D. Banks/Nancy L. Oakley
- OFFICE OF LABOR RELATIONS
- Fort Worth Regional Office

## LABOR RELATIONS IN GENERAL

- I.  Organization & Responsibilities
- II.	Programs Covered
- III. Statutory and Regulatory Provisions

## ORGANIZATION & RESPONSIBILITIES

- Office of Labor Relations
- Reorganization Plan No. 14
- Key Labor Standards Objectives
- HUD Program Initiative/Requirements

## Office Jurisdiction
Arkansas - Louisiana - New Mexico - Oklahoma - Texas	

- Arkansas - Louisiana - New Mexico - Oklahoma - Texas

**Fort Worth Regional Office**801 Cherry StreetFort Worth, TX  76102Tel. (817) 978-5617                Fax (817) 978-5565

## Jerlinda D. Banks, Regional Labor Relations Officer---5619
Deborah G. Parker, Secretary	 -----------------------------5617

Labor Relations Specialist(s):
Nancy L. Oakley 
    (Dallas/Houston east)------------------------	817 978-5620
Joyce F. Ingram 
    (New Mexico/Lubbock/FW)----------------	817 978-5622
Tamara Greiner -----------(Oklahoma)-------	405 553-7527
Barbara Van Cleve -------(Arkansas)---------	501 324-5305
Virginia Cockerham ------(Louisiana)--------	504 589-7204
Karen R. Clark-------------(San Antonio)-----	210 475-6818

- Deborah G. Parker, Secretary	 -----------------------------5617
**Labor Relations Specialist(s):**
- Nancy L. Oakley
-     (Dallas/Houston east)------------------------	817 978-5620
- Joyce F. Ingram
-     (New Mexico/Lubbock/FW)----------------	817 978-5622
- Tamara Greiner -----------(Oklahoma)-------	405 553-7527
- Barbara Van Cleve -------(Arkansas)---------	501 324-5305
- Virginia Cockerham ------(Louisiana)--------	504 589-7204
- Karen R. Clark-------------(San Antonio)-----	210 475-6818

- Office of Labor Relations Staff

## Key Labor Standards Objectives

- Apply Davis-Bacon and Related Acts (DBRA)
- Educate and advise contractor
- Monitor contractor performance
- Investigate violations and complaints in regards to DBRA
- Pursue debarment and other sanctions against repeat violators

## PROGRAMS  COVERED

**Community Development (24 CFR Part 570)**
- HOME (24 CFR Part 92)
- National Housing Act SEC 207, 213, 220, 221(d)(3) & (4), 221(h)(1), 231, 232, 233, 234(d), 235(j)(i), 236, 241, 242, Title X, Title XI,  (24 CFR Various Parts)

## HUD PROGRAMSProgram Initiative  

- To enhance the administration & enforcement of Federal wage requirements

## HUD CPD PROGRAMSProgram Responsibilities

- Includes, but not limited to:
- Monitor Grantee Davis-Bacon Compliance
- Build Capacity to Monitor Compliance by Grantees
- Promote Apprenticeship Programs
- Enhance Union Participation in the Consolidated Plan Process

##         Statutory Provisions  

- Davis-Bacon and Related Act (DBRA), enacted 1931
- Contract Work Hour and Safety Standards Act  (CWHSSA), enacted 1931, amended 1932
- Copeland Act (Anti-Kickback Act), enacted 1931

## Davis-Bacon Act(What it Requires)

- COMMUNITIES AND WORKERS FROM ECONOMIC DISRUPTION
- PAYMENTS FOR ALL CONSTRUCTION CONTRACTS IN EXCESS OF $2,000 (FINANCED IN WHOLE OR PART)
- POSTING OF SCALE OF WAGES TO BE PAID (IN A PROMINENT PLACE AT SITE OF WORK)
- WITHHOLDING OF PAYMENTS TO CONTRACTORS FOR VIOLATIONS OF THE PREVAILING RATE PROVISIONS

## Davis-Bacon Act

_**Penalties for Non-Compliance:**_
- PERMIT DIRECT PAYMENTS TO LABORERS AND MECHANICS FROM WITHHELD FUNDS
- TERMINATION OF THE CONTRACT FOR FAILURE TO PAY REQUIRED WAGES
- 3 YEARS DEBARMENT FOR DISREGARD OF RESPONSIBILITY UNDER THIS ACT

## Contract Work Hours and Safety Standards Act(What is Required)

- Also known as “OVERTIME PAY”
- WORK PERFORMED OVER 40 HOURS IN A WEEK IS OVERTIME
- THE OVERTIME RATE IS ONE AND ONE-HALF TIMES RATE OF PAY

## Contract Work Hours and Safety Standards Act(continued)

_**Penalties for Non-Compliance:**_
- MAKES THE CONTRACTOR AND ANY SUBCONTRACTOR LIABLE TO THE AFFECTED EMPLOYEE FOR THEIR UNPAID WAGES AND TO THE UNITED STATES FOR  LIQUIDATED DAMAGES
- LIQUIDATED DAMAGES ARE COMPUTED AT THE RATE OF $10 PER DAY FOR EACH CALENDAR DAY AN EMPLOYEE IS PERMITTED TO WORK IN EXCESS OF 40 HOURS PER WEEK

## The Copeland (Anti-kickback) Act

- PROHIBITS THE PAYMENT OF ANY COMPENSATION AS AN INDUCEMENT FOR EMPLOYMENT OR CONTRACT AWARD
- SUCH PAYMENTS SHALL NOT BE CHARGED   DIRECTLY OR INDIRECTLY AS PART OF THE CONTRACT BY THE PRIME OR SUBCONTRACTORS
- THIS INCLUDES FEES , GIFTS OR GRATUITY
- PROVIDES FOR THE SUBMISSION OF WEEKLY PAYROLLS AND STATEMENT OF COMPLIANCE

## Regulatory Provisions

- CFR, Title 29, Part 1
- CFR, Title 29, Part 3
- CFR, Title 29, Part 5
- CFR, Title 29, Part 7
- Handbooks, Program Guides, and         Letters

## Regulatory Provisions

- _Code of Federal Regulations, Title 29, Part 1_
- The method of determining prevailing wage rates
- _Code of Federal Regulations, Title 29, Part 3_
- Details conditions under which authorized permissible deductions are permitted from employees wages
- Requires contractors, subcontractors, and lower-tier subcontractors to file weekly payroll statements

## Regulatory Provisions

- _Code of Federal Regulations, Title 29, Part 5_
- Subpart A- General contract provisions and related matters
- Request for wage determination
- All construction contracts including, subcontractors must contain labor standards provisions
- 	 For CDBG Projects, Form 4010

## Regulatory Provisions(Part 5, continued)

- Provisions on apprentices and trainees
- Examination of payrolls
- Interview of employees
- Investigation of wage compliance status of contractors
- Withholding of insurance pending correction of violations
- Reports to HUD and the Department of Labor

## Regulatory Provisions(Part 5, continued, & Part 7)

- Subpart B - Interpretation of the Fringe Benefits provisions of the Davis-Bacon Act
- Fringe benefits requirements and wage determinations
- Funded and un-funded fringe benefit plans
- Meeting wage determination obligations
- Overtime payment
- _Code of Federal Regulations, Title 29, Part 7_
- Provide for appeals to DOL’S Wage Appeals Board
- Review of wage determinations issued
- Review of other proceedings and related matters

## Davis-Bacon ApplicabilityCommunity Development

- Section 110 of the Housing and Community Development Act
- In general, if construction contracts are in excess of  $2,000
- Force account construction work will be exempt
- Volunteers may be exempt
- CWSSHA also applies

## Davis-Bacon ApplicabilityCommunity Development(continued)

- Decisions to be made - Thresholds requiring Davis-Bacon
- CDBG Rehabilitation		8 or more units
- Section 8 Rehabilitation	9 or more units
- Rental Rehabilitation 		12 or more units
- HOME				12 or more assisted
- Soft cost related to construction generally does not trigger Davis-Bacon
**When are Wage Decisions “Locked” into contract?**

## DAVIS-BACON COVERAGE CHART

## Obtaining Wage Determinations

- Davis-Bacon Wage Decisions are available on-line free from DOL by accessing:
- 	_ __http://www.gpo.gov/davisbacon/index.html_
- 	(preferred method)
- (or)
- Contact your local Labor Relations Specialist

## Wage Determinations

- _Wage Determination Types _(most often used)
- General Determination
- Project Determination
- _Wage Determination for Construction Type_
- 	The Department of Labor’s “All Agency Memorandum No. 130” is a helpful tool in making this determination.  **(See handout)**
- 	Generally construction projects are classified as follows:
- Building
- Heavy
- Highway
- Residential

## Preconstruction Conference

- 	Preconstruction Conferences _for labor standards         purposes_ are optional
- HUD acknowledges that there are many good reasons to hold a preconstruction conference such as discussing inspections, progress payments, Section 3 employment and training, etc.
- Many contractors have prior Davis-Bacon contract experience and have demonstrated successful performance.
- Basic training for contractors new to Davis-Bacon projects can be provided through printed guidelines such as HUD’s Contractor’s Guide to Davis-Bacon.

## Classifications not on Wage Determination

- 	Clients should request an additional classification if class of laborers or mechanics are not listed on the wage determination.  The local agency shall submit a request to HUD.  Request should included:
- 		Project Name
- 	 	Project Number
- 	  	Prime contractor’s name, address & telephone #
- 	 	Location (including County)
- 		Contract Award or Bid Opening date
- 	 	Applicable wage decision #
- 	 	Propose classification & rate (including fringe benefits, if applicable)

## Classifications not on Wage Determination(continued)

- The request can be approved if:
- Classification is used by construction contractors in the     area of the project;
- The work that will be performed is not already performed by another classification on the wage decision (See handout);
- The proposed wage request “Fits” with the other wage rates already on the wage decision (i.e. conforms to another classification); or
- The workers that will be employed in the added classification must agree with the proposed rate (for collective bargaining agreements)

## Classifications not on Wage Determination(continued)

- _HUD/DOL REVIEW PROCESS:_
- HUD will review the classification to see that it meets the criteria above, if so advise client of tentative approval and forward to DOL for final approval (approximately 4-6 weeks)

## Break

## LABOR STANDARDS COMPLIANCE AND ENFORCEMENT CONSTRUCTION PHASE

- Two basic elements:
- 	(1)  Job-site inspections (form HUD 11’s) – David Jasso
- 	(2)  Review of payrolls and other basic records
- Assure wage determination is posted at project
- Receive and review weekly payrolls submitted.  Review should include:
- Identification of first and final payroll “Initial” & “Final” and they must be numbered sequentially.
- Initial payroll shall contain the IRS employee’s ID.

## LABOR STANDARDS COMPLIANCE AND ENFORCEMENT CONSTRUCTION PHASE (continued)

- Conduct on-the-job employee wage interviews.  Employee interviews must be sufficient to establish the degree of compliance and to indicate the nature and extent of violations, if any, also, they must be representative of all classifications of employees working on the project site.
- Utilize HUD-11 employee interview form **(See handout)**
- Check employee interview against applicable payroll period

## LABOR STANDARDS COMPLIANCE AND ENFORCEMENT CONSTRUCTION PHASE (continued)

- INITIATING THE INTERVIEW BY:
- Identifying yourself
- Show identification
- Explain that the project is being assisted with Federal funds
- Explain the purpose of the interview
- Advise the employee that the prevailing wages applicable are posted
- Inform worker where wage decision is posted

## LABOR STANDARDS COMPLIANCE AND ENFORCEMENT CONSTRUCTION PHASE (continued) 

- Payrolls are to be submitted seven work days following completed workweek **(See sample)**
- Payrolls are to be examined upon receipt.  HUD-11 comparison  -  Detect Falsification.
- Falsification Indicators
- Ratio of laborers to mechanics
- Too few or irregular hours
- Discrepancies in wage computations
- Extraordinary deductions
- Routine review results may be communicated by phone or by letter; communications via phone should be documented with “memo to file”
- Take necessary corrective action before problem multiplies
- Aim enforcement activities at willful violators
- Payrolls shall be maintained for 3 years and HUD approval prior to their destruction

## Slide 35

## Slide 36

## PROCEDURES FOR CORRECTINGLABOR STANDARDS VIOLATIONS  

- When any violation of labor standards requirements result in an underpayment of wages, the compliance person shall:
- Notify the prime contractor in writing
- Ensure violations are corrected within 30 days
- Ensure that wage restitution is made to all workers found to be underpaid
- Withhold monies from the contractor when necessary (withhold an amount necessary to ensure payment of back wages and/or liquidated damages)
- Wage restitution in excess of $10 per worker requires corrected payrolls and copies of signed statements by employees, or copies of cancelled checks (back and front)

## PROCEDURES  FOR  CORRECTING  LABOR  STANDARDS VIOLATIONS  WITHHOLDING   FUNDS

- When it becomes necessary to withhold funds, the compliance person shall:
- Notify the prime contractor in writing of intent to withhold funds
- Establish a special account for depositing funds for wage restitution
- Efforts should continue to be made to locate employees
- Deposit accounts shall be held for 3 years after establishing account
- The compliance person should consult with its local Labor Relations Specialist for exact instructions for withholding and disbursing funds

## PROCEDURES  FOR  CORRECTING  LABOR  STANDARDS VIOLATIONS  WITHHOLDING   FUNDS(continued)

- Upon receipt of the supplemental payrolls, the recipient shall check the computations and payrolls to determine whether they are approximately corrected (the goal is substantial compliance, not accuracy to the last penny).

## PROCEDURES FOR CORRECTINGLABOR STANDARDS VIOLATIONS (CWHSSA) DISBURSEMENT  OF  FUNDS WITHHELD 

- When contractors violate the Contract Work Hours and Safety Standards Act (CWHSSA)
- Liable to the United States for liquidated damages
- Computation of liquidated damages is at the rate of $10 for each calendar day for which such individual was required or permitted to work in excess of the standard workweek of 40 hours

## PROCEDURES FOR CORRECTINGLABOR STANDARDS VIOLATIONS (CWHSSA) DISBURSEMENT  OF  FUNDS WITHHELD (continued)

- In cases when it is necessary to compute liquidated damages, the local contracting agency/HUD shall:
- Notify the contractor in writing of the amount and the basis for the computation,
- Send Notice of Determination of Liquidated Damages (contractor has 60 days to contest)

## LABOR  STANDARDS   DUTIESAFTER  CONSTRUCTION  PHASE

- Prior to closing, the local contracting agency shall assure the following:
- Clear any unresolved labor violations
- Ensure all certified payrolls have been received
- Ensure restitution to employee has been made
- Ensure contractors have submitted all apprentices certifications (if applicable)
- Ensure correct wage decision and any additional classifications have been used

## Semi-Annual Enforcement Reporting

- Regulatory requirement, 29 CFR Part 5.7 (b)
- Local Contracting Agencies should report from October 1st through March 31st and April 1st through September 30th of each year
- Report reflects all DB/CWHSSA contracted work, including applicable force account
- Should report even if no contracts awarded  **(See handout)**

## REFERENCE MATERIAL

-  OLR Library webpage:
-  http://www.hud.gov/offices/olr/library.cfm
-  List of useful websites
-  DOL Memo No. 130

## Slide 45

## Case Studies(handout and discussion)