U.S. Department of Housing and Urban Development

Office of Labor Relations

LR01.DG

CONTRACTORS

GUIDE TO

DAVIS-BACON

Prevailing Wage

Requirements for

Federally-Assisted

Construction Projects

May 1998
This first-ever HUD Contractors Guide to Davis-Bacon is a

product of HUDs partnership with the Department of Labor. It is

designed to improve our performance as public trust agents protecting the statutory rights of construction workers to earn prevailing

wage rates on HUD-assisted projects. We have explained exactly

what is needed to comply with Davis-Bacon prevailing wage

requirements  what will be required of contractors and what

contractors can expect from us.

A parallel goal of the HUD/Labor partnership is to eliminate

excessive paperwork, bureaucratic red tape and unnecessary delays.

By launching a Davis-Bacon streamlining initiative, we have

focused on results and stripped away unproductive processes and

requirements that had accumulated over the years. This Guide offers

the most up-to-date information on our streamlining efforts.

I am pleased to offer the Contractors Guide to David-Bacon and

hope you find it helpful and informative. We welcome any comments

or suggestions you may have. Please contact the HUD Labor Relations

Staff for your area if we can assist you in any way.

Working together, we can help our country meet the affordable

housing needs of low-income families, the elderly, and persons

with disabilities.

Andrew Cuomo

 A Message From The Secretary
i

INTRODUCTION

This Guide is directed primarily to contractors performing work on

construction projects that are assisted by HUD and subject to Davis-Bacon

prevailing wage requirements. This Guide does not address contractor

requirements involved in direct Federal contracting where HUD or another

Federal agency enters into a procurement contract directly under the Federal Acquisition Regulations (FAR) found at Title 48 of the Code of Federal

Regulations. While the guidance contained in this Guide is generally applicable to any Davis-Bacon covered project, specific questions pertaining to

such direct contracts should be addressed to the Contracting Officer who

signed the contract for the Federal agency.

The purpose of this Guide is to explain in simple and non-bureaucratic terms exactly what is required of contractors and subcontractors

working on construction projects covered by Federal Davis-Bacon prevailing

wage and reporting requirements. HUDs Office of Labor Relations is

providing this Guide as a service to assist you in better understanding your

labor standards and compliance responsibilities. This Guide has been

developed in consultation with the Department of Labors Wage and Hour

Division.

There are three chapters in this Guide. The first chapter provides a

brief description of the laws and regulations associated with Federal labor

standards administration and enforcement and discusses both whats in

your contract that requires Davis-Bacon compliance as well as your responsibilities. The second chapter deals with labor standards and payroll reporting requirements. The third chapter discusses what can happen in the

event there is a dispute about the wage rates that should be (or have been)

paid and any back wages that may be due.

Not all HUD construction projects are covered by Davis-Bacon wage

rates. For the purpose of this Guide, we shall assume that a determination

has already been made that Davis-Bacon wage rates are applicable. If you

would like assistance in determining whether Davis-Bacon wage rates apply

to a particular project or if you need other related technical assistance,

please consult with the HUD Labor Relations Field staff for your area. If you

dont know which staff to contact, a list of Labor Relations field offices and

their geographic areas and telephone numbers, as well as other useful

information can be found on HUDs Home Page at the address below.

Visit the Office of Labor Relations

on the World Wide Web HUD Home Page at:

http://www.hud.gov/olr/olr.html
ii

TABLE OF CONTENTS

INTRODUCTION .................................................................................................... i

CHAPTER 1. LAWS, REGULATIONS, CONTRACTS AND RESPONSIBILITIES

1-1 Davis-Bacon and Other Labor Laws ......................................................... 1-1

a. The Davis-Bacon Act (DBA) ................................................................. 1-1

b. The Contract Work Hours and

Safety Standards Act (CWHSSA)......................................................... 1-1

c. The Copeland Act (Anti-Kickback Act)............................................... 1-1

d. The Fair Labor Standards Act (FLSA) ................................................. 1-1

1-2 Davis-Bacon Regulations ............................................................................. 1-1

1-3 Construction Contract Provisions .............................................................. 1-2

1-4 Responsibility of the Principal Contractor ............................................... 1-2

1-5 Responsibility of the Contract Administrator .......................................... 1-2

CHAPTER 2. HOW TO COMPLY WITH LABOR STANDARDS

AND PAYROLL REPORTING REQUIREMENTS

SECTION I  THE BASICS

2-1 The Wage Decision ...................................................................................... 2-1

a. The work classifications and wage rates. ........................................... 2-1

b. Posting the wage decision. ................................................................... 2-1

2-2 Additional Trade Classifications and Wage Rates ................................ 2-1

a. Additional classification rules. ............................................................. 2-1

b. Making the request. ............................................................................... 2-2

c. HUD review. ........................................................................................... 2-2

d. DOL decision. ......................................................................................... 2-2

2-3 Certified Payroll Reports ............................................................................. 2-2

a. Payroll formats........................................................................................ 2-2

b. Payroll certifications............................................................................... 2-3

c. No work payrolls. ............................................................................... 2-3

d. Payroll review and submission. ........................................................... 2-3

e. Payroll retention. .................................................................................... 2-3

f. Payroll inspection. .................................................................................. 2-3

2-4 Davis-Bacon Definitions .............................................................................. 2-3

a. Laborer or mechanic. ............................................................................. 2-3

b. Employee. ................................................................................................ 2-4

c. Apprentices and trainees. ..................................................................... 2-4

d. Prevailing wages or wage rates. .......................................................... 2-4

e. Fringe benefits. ....................................................................................... 2-5

f. Site of work. ............................................................................................ 2-5

g. Overtime.................................................................................................. 2-5

h. Deductions. ............................................................................................. 2-5

i. Proper designation of trade.................................................................. 2-5

SECTION II  REPORTING REQUIREMENTS

2-5 Completing a Payroll Report ...................................................................... 2-6

a. Project and contractor/subcontractor information. .......................... 2-6

b. Employee information. ......................................................................... 2-6
iii

c. Work classification.................................................................................. 2-6

d. Hours worked. ........................................................................................ 2-6

e. Rate of pay. .............................................................................................. 2-6

f. Gross wages earned. ............................................................................. 2-7

g. Deductions. ............................................................................................. 2-7

h. Net pay. .................................................................................................... 2-7

i. Statement of compliance. ..................................................................... 2-7

j. Signature.................................................................................................. 2-7

SECTION III  PAYROLL REVIEWS AND CORRECTIONS

2-6 Compliance Reviews .................................................................................... 2-8

a. On-site interviews.................................................................................. 2-8

b. Project payroll reviews. ......................................................................... 2-8

2-7 Typical Payroll Errors and Required Corrections. ................................... 2-8

a. Inadequate payroll information. ......................................................... 2-8

b. Missing addresses and Social Security Numbers. ........................... 2-8

c. Incomplete payrolls. .............................................................................. 2-8

d. Classifications. ........................................................................................ 2-8

e. Wage rates. ............................................................................................. 2-8

f. Apprentices and trainees. ..................................................................... 2-9

g. Overtime.................................................................................................. 2-9

h. Computations. ........................................................................................ 2-9

i. Deductions. ............................................................................................. 2-9

j. Fringe benefits. ....................................................................................... 2-9

k. Signature.................................................................................................. 2-x

l. On-site interview comparisons. .......................................................... 2-9

2-8 Restitution for Underpayment of Wages .................................................. 2-9

a. Notification to the prime contractor. .................................................. 2-9

b. Computing wage restitution. ............................................................. 2-10

c. Correction payrolls. ............................................................................. 2-10

d. Employee signature. ............................................................................ 2-10

e. Review of correction CPR. .................................................................. 2-10

f. Unfound workers. ................................................................................ 2-10

CHAPTER 3. LABOR STANDARDS DISPUTES, ADMINISTRATIVE REVIEWS,

WITHHOLDING AND DEPOSITS AND ESCROW ACCOUNTS

3-1 Introduction ................................................................................................... 3-1

3-2 Administrative Review on Labor Standards Disputes ........................... 3-1

a. Additional classifications and wage rates. ......................................... 3-1

b. Findings of underpayment. ................................................................. 3-1

3-3 Withholding................................................................................................... 3-1

3-4 Deposits and Escrow Accounts .................................................................. 3-1

3-5 Debarment ..................................................................................................... 3-1

INDEX .................................................................................................................... A-1

TABLE OF ACRONYMS AND SYMBOLS .................................................... A-2

EXHIBITS .............................................................................................................. A-3

WH-347, Payroll Form ................................................................................. A-3

WH-348, Statement of Compliance .......................................................... A-4
1-1

CHAPTER 1. LAWS, REGULATIONS, CONTRACTS AND RESPONSIBILITIES

The following paragraphs describe what the

labor standards laws and regulations actually say

and what they mean to you on HUD projects:

1-1 DAVIS-BACON AND OTHER LABOR LAWS.

a. The Davis-Bacon Act (DBA). The DavisBacon Act requires the payment of

prevailing wage rates (which are determined by the U.S. Department of Labor)

to all laborers and mechanics on Federal

government construction projects in

excess of $2,000. Construction includes

alteration and/or repair, including

painting and decorating, of public

buildings or public works.

Most HUD construction work is not covered

by the DBA itself since HUD seldom contracts

directly for construction services. Most often,

if Davis-Bacon wage rates apply to a HUD

project it is because of a labor provision

contained in one of HUDs Related Acts

such as the U. S. Housing Act of 1937, the

National Housing Act, the Housing and

Community Development Act of 1974, the

National Affordable Housing Act of 1990, and

the Native American Housing Assistance and

Self-Determination Act of 1996. The Related

Acts are often referred to as the Davis-Bacon

and Related Acts or DBRA.

b. The Contract Work Hours and Safety

Standards Act (CWHSSA). CWHSSA

requires time and one-half pay for

overtime (O/T) hours (over 40 in any

workweek) worked on the covered

project. The CWHSSA applies to both

direct Federal contracts and to indirect

Federally-assisted contracts except where

the assistance is solely in the nature of

a loan guarantee or insurance. CWHSSA

violations carry a liquidated damages

penalty ($10/day per violation). Intentional violations of CWHSSA standards

are considered a Federal criminal misdemeanor.

The CWHSSA does not apply to contracts of

$100,000 or less. In addition, some HUD projects

are not covered by CWHSSA because some

HUD programs only provide loan guarantee

or insurance. The CWHSSA also does not

apply to construction or rehabilitation contracts that are not subject to Federal prevailing

wage rates (e.g., Davis-Bacon wage rates, or

HUD-determined rates for operation of public

housing and Indian block grant-assisted

housing). However, even though CWHSSA

overtime pay is not required, Fair Labor

Standards Act (FLSA) overtime pay is probably

still applicable. (See also Labor Relations Letter

SL-95-01, CWHSSA Coverage threshold for

overtime and health and safety provisions.)

c. The Copeland Act (Anti-Kickback Act).

The Copeland Act makes it a crime for

anyone to require any laborer or

mechanic (employed on a Federal or

Federally-assisted project) to kickback

any part of their wages. The Copeland

Act also requires every employer (contractors and subcontractors) to submit

weekly payroll reports (CPRs).

d. The Fair Labor Standards Act (FLSA).

The FLSA contains Federal minimum

wage rates and overtime (O/T) requirements. These requirements generally

apply to any labor performed and may

be pre-empted by other Federal standards such as the DBRA prevailing wage

requirements and CWHSSA O/T provisions. Only the DOL has the authority

to administer and enforce FLSA. HUD

will refer to the DOL any possible FLSA

violations that are found on HUD

projects.

1-2 DAVIS-BACON REGULATIONS.

The Department of Labor has published

rules and instructions concerning DavisBacon and other labor laws in the Code of

Federal Regulations (CFR). These regulations can be found in Title 29 CFR Parts 1, 3,

5, 6 and 7. Part 1 explains how the DOL

establishes and publishes DBA wage deter-
1-2

minations and provides instructions on

how to use the determinations. Part 3

describes Copeland Act requirements for

payroll deductions and the submission of

weekly certified payroll reports. Part 5

covers the labor standards provisions that

are in your contract relating to Davis-Bacon

Act wage rates and the responsibilities of

contractors and contracting agencies to

administer and enforce the provisions.

Part 6 provides for administrative proceedings enforcing Federal labor standards on

construction and service contracts. Last,

Part 7 sets parameters for practice before the

Wage Appeals Board (renamed Administrative Review Board). These regulations are

used as the basis for administering and

enforcing the laws.

DOL Regulations are available on-line on the

World Wide Web:

http://www.dol.gov/dol/esa/public/regs/

 cfr/whdcfr.htm.

1-3 CONSTRUCTION CONTRACT PROVISIONS.

Each contract subject to Davis-Bacon labor

standards requirements must contain labor

standards clauses and a Davis-Bacon wage

decision. These documents are normally

bound into the contract specifications.

a. The labor standards clauses. The labor

standards clauses describe the responsibilities of the contractor concerning

Davis-Bacon wages and obligate the

contractor to comply with the labor

requirements. The labor standards

clauses also provide for remedies in the

event of violations, including withholding from payments due to the

contractor to ensure the payment of

wages or liquidated damages which

may be found due. These contract

clauses enable the contract administrator

to enforce the Federal labor standards

applicable to the project. HUD has

standard forms that contain contract

clauses. For example, the HUD-2554,

Supplementary Conditions to the

Contract for Construction, which is

issued primarily for FHA multifamily

housing and other construction projects

administered by HUD; the HUD-4010,

Federal Labor Standards Provisions,

which is used for CDBG and HOME

projects, and the HUD-5370, General

Conditions of the Contract for Construction  Public and Indian Housing Program.

b. Davis-Bacon Wage Decisions. The

Davis-Bacon wage decision is a listing

of various construction work classifications, such as Carpenter, Plumber, and

Electrician, and the minimum wage

rates (and fringe benefits, where prevailing) that people performing work in

those classifications must be paid.

1-4 RESPONSIBILITY OF THE

PRINCIPAL CONTRACTOR.

The principal contractor (also referred to as

the prime or general contractor) is responsible for the full compliance of all employers

(the contractor, subcontractors and any

lower-tier subcontractors) with the labor

standards provisions applicable to the

project. Because of the contractual relationship between a prime contractor and his/her

subcontractors, questions to, or from, or

about subcontractors should always be

channeled through the prime contractor.

To make this Guide easier to understand,

the term prime contractor will mean the

principal contractor; subcontractor will

mean all subcontractors including lower-tier

subcontractors; and the term employerwill

mean all contractors as a group, including the

prime contractor and any subcontractors and

lower-tier subcontractors.

1-5 RESPONSIBILITY OF THE

CONTRACT ADMINISTRATOR.

The contract administrator is responsible for

the proper administration and enforcement

of the Federal labor standards provisions on

contracts covered by Davis-Bacon requirements. We use this term to represent the

person (or persons) who will provide labor

standards preconstruction advice and support

to you and other project principals (e.g.,

the owner, sponsor, architect), including
1-3

providing the proper Davis-Bacon wage

decision (see ¶2-1, The Wage Decision) and

ensuring that the wage decision and contract clauses are incorporated into the

contract for construction. The contract

administrator also monitors labor standards

compliance (see ¶2-6, Compliance Reviews)

by conducting interviews with construction

workers at the job site and reviewing payroll reports, and oversees any enforcement

actions that may be required.

The contract administrator could be an

employee of HUD, or of a city or county, or

public or Indian housing authority. For

HUD projects administered directly by

HUD staff, usually FHA-insured multifamily

projects, the contract administrator will be

the HUD Labor Relations field staff. But

many HUD-assisted projects are administered by local contracting agencies such as

Public and Indian Housing Authorities

(PHAs and IHAs), Indian tribes and triballydesignated housing entities (TDHEs), and

cities and counties under HUDs Community Development Block Grant (CDBG)

and HOME programs. In these cases, the

contract administrator will likely be local

agency staff. In either case, the guidance for

you remains essentially the same.

The DOL also has a role in monitoring

Davis-Bacon administration and enforcement. A DOL investigator or other DOL

representative may visit Davis-Bacon construction sites to interview construction

workers or review payroll information.

All communications to or from the prime contractor

concerning the labor standards applicable to a particular

contract, or concerning compliance with those standards,

should go through the contract administrator.
2-1

WHERE TO START?

Now that you know youre on a Davis-Bacon project and you know some of

the legal and practical implications, whats next?

SECTION I  THE BASICS

CHAPTER 2. HOW TO COMPLY WITH LABOR STANDARDS

AND PAYROLL REPORTING REQUIREMENTS

2-1 THE WAGE DECISION.

Davis-Bacon labor standards stipulate the

wage payment requirements for Carpenters,

Electricians, Plumbers, Roofers, Laborers,

and other construction work classifications

that may be needed for the project. The 

Davis-Bacon wage decision that applies to the

project contains a schedule of work classifications and wage rates that must be followed.

If you dont have it already (and by now

you should), youll want to get a copy of the

applicable Davis-Bacon wage decision.

Remember, the wage decision is contained in

the contract specifications along with the labor

standards clauses. See ¶1-3, Construction

Contract Provisions.

a. The work classifications and wage rates.

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 work in

those classifications. Youll want to make

sure that the work classification(s) you

need are contained in the wage decision

and make certain you know exactly what

wage rate(s) you will need to pay. Some

wage decisions cover several counties

and/or types of construction work (for

example, residential and commercial

work) and can be lengthy and difficult to

read. Contact the contract administrator

(HUD Labor Relations field staff or local

agency staff) if you have any trouble

reading the wage decision or finding the

work classification(s) you need.

To make reading lengthy wage decisions easier

for you, the contract administrator may prepare a Project Wage Rate Sheet. This Sheet is a

one-page transcript that will show only the

classifications and wage rates for a particular

project. Contact the contract administrator

monitoring your project for assistance with a

Project Wage Rate Sheet.

b. Posting the wage decision. If you are the

prime contractor, you will be responsible

for posting a copy of the wage decision

(or the Project Wage Rate Sheet) and a

copy of a DOL poster called Notice to

Employees at the job site in a place that

is easily accessible to all of the construction workers employed at the project

and where the wage decision and poster

wont be destroyed by wind or rain, etc.

The Notice to Employees poster is also

available with Spanish text.

2-2 ADDITIONAL TRADE CLASSIFICATIONS

AND WAGE RATES.

What if the work classification you need isnt

on the wage decision? If the work

classification(s) that you need doesnt

appear on the wage decision, you will need

to request an additional classification and

wage rate. This process is usually very

simple and youll want to start the request

right away. Basically, you identify the

classification you need and recommend a

wage rate for DOL to approve for the

project. There are a few rules about additional classifications; youll find these rules

in the DOL regulations, Part 5, and in the

labor clauses in your contract. The rules are

summarized for you here:

a. Additional classification rules. Additional classifications and wage rates can

be approved if:

1) The requested classification is used

by construction contractors in the

area of the project. (The area is

usually defined as the county where

the project is located).

2) The work that will be performed by

the requested classification is not

already performed by another

classification that is already on the

wage decision. (In other words, if

there already is an Electrician classification and wage rate on the wage

decision you cant request another

Electrician classification and rate.)
2-2

3) The proposed wage rate for the

requested classification fits with

the other wage rates already on the

wage decision. (For example, the

wage rate proposed for a trade

classification such as Electrician must

be at least as much as the lowest

wage rate for other trade classifications already contained in the wage

decision.) And,

4) The workers that will be employed

in the added classification (if it is

known who the workers are/will be),

or the workers representatives, must

agree with the proposed wage rate.

b. Making the request. A request for

additional classification and wage rate

must be made in writing through the

contract administrator. (If the contract

administrator is a local agency, the

agency will send the request to the

HUD Labor Relations staff.) If you are a

subcontractor, your request should also

go through the prime contractor. All you

need to do is identify the work classification that is missing and recommend

a wage rate (usually the rate that

employer is already paying to the

employees performing the work) for

that classification. You may also need to

describe the work that the new classification will perform.

c. HUD review. The HUD Labor Relations

field staff will review the requested

classification and wage rate to determine whether the request meets the

DOL rules outlined in paragraph 2-2(a),

above. If additional information or

clarification is needed, the staff will

contact the prime contractor (or contract

administrator for local agency projects)

for more information, etc. If the Labor

Relations review finds that the request

meets the rules, the staff will give

preliminary approval on the request and

refer it to the DOL for final approval.

The staff will send to you a copy of the

preliminary approval/referral letter to

the DOL.

If the HUD Labor Relations staff doesnt

think the request meets the rules and if

agreement cant be reached on the

proper classification or wage rate for the

work described, the HUD Labor Relations staff will not approve the request.

In this case, the staff will send your

request to the DOL with an explanation

why HUD believes that the request

shouldnt be approved. The DOL still

has final decision authority. You will

receive a copy of the disapproval/

referral letter to the DOL.

d. DOL decision. The DOL will respond to

HUD Labor Relations in writing about

the additional classification and wage

rate request. HUD Labor Relations will

notify you of the DOL decision in

writing. If the DOL approves the request, the prime contractor must post

the approval notice on the job site with

the wage decision.

If the DOL does not approve the request,

you will be notified about what classification and wage rate should be used for

the work in question. You will also receive

instructions about how to ask for DOL

reconsideration if you still want to try to

get your recommendation approved.

Its always a good idea to talk to the contract

administrator before submitting an additional

classification and wage rate request. The

contract administrator can offer suggestions

and advice that may save you time and

increase the likelihood that DOL will approve

your request. Usually, the contract administrator can give you an idea about what the

DOL will finally decide.

2-3 CERTIFIED PAYROLL REPORTS.

Youll need to submit a weekly certified

payroll report beginning with the first week

that your company works on the project

and for every week afterward until your

firm has completed its work. Its always a

good idea to number the payroll reports

beginning with #1 and to clearly mark your

last payroll for the project Final.

a. Payroll formats. The easiest form to use

is DOLs WH-347, Payroll. A sample

copy of the WH-347 is included in the

back of this Guide. Also, the contract

administrator can provide a few copies

of the WH-347 that you can reproduce.
2-3

You are not required to use Payroll Form

WH-347. You are welcome to use any other

type of payroll, such as computerized formats,

as long as it contains all of the information that

is required on the WH-347.

b. Payroll certifications. The weekly

payrolls are called certified because each

payroll is signed and contains language

certifying that the information is true

and correct. The payroll certification

language is on the reverse side of the

WH-347. If you are using another type

of payroll format you may attach the

certification from the back of the WH-347,

or you can use the WH-348, Statement of

Compliance (same certification language

as on WH-347), or any other format

which contains the same certification

language on the WH-347 (reverse)

or WH-348. A copy of the WH-348 is

included in the back of this Guide.

Copies of the WH-348 are also available

from the contract administrator.

c. No work payrolls. No work payrolls

may be submitted whenever there is a

temporary break in your work on the

project, for example, if your firm is not

needed on the project right now but you

will be returning to the job in a couple

of weeks. (See Tip Box, below, for no

work payroll exemption!) However, if

you know that your firm will not be

working on the project for an extended

period of time, you may wish to send a

short note to the contract administrator

to let them know about the break in

work and to give an approximate date

when your firm will return to the

project. If you send a note, you do not

need to send no work payrolls.

If you number your payroll reports

consecutively, you do not need to submit

no work payrolls!

d. Payroll review and submission. The

prime contractor should review each

subcontractors payroll reports for

compliance prior to submitting the

reports to the contract administrator.

Remember, the prime contractor is

responsible for the full compliance of all

subcontractors on the contract and will

be held accountable for any wage restitution that may be found due to any

laborer or mechanic that is underpaid

and for any liquidated damages that

may be assessed for overtime violations.

All of the payroll reports for any project

must be submitted to the contract administrator through the prime contractor.

An alert prime contractor that reviews subcontractor payroll submissions can detect

any misunderstandings early, prevent costly

underpayments and protect itself from

financial loss should underpayments occur.

e. Payroll retention. Every contractor

(including every subcontractor) must

keep a complete set of their own payrolls and other basic records such as

time cards, for a Davis-Bacon project for

at least 3 years after the project is completed. The prime contractor must keep

a complete set of all of the payrolls for

every contractor (including subcontractors) for at least 3 years after completion

of the project.

f. Payroll inspection. In addition to submitting payrolls to the contract administrator, every contractor (including

subcontractors) must make their own

copy of the payrolls available for review

or copying to any authorized representative from HUD or from DOL.

2-4 DAVIS-BACON DEFINITIONS.

Before we discuss how to complete the

weekly payroll forms, we need to review a

couple of definitions. These definitions can

help you understand what will be required

of you:

a. Laborer or mechanic. Laborers and

mechanics mean anyone who is

performing construction work on the

project, including trade journeymen

(carpenters, plumbers, sheet metal

workers, etc.), apprentices, trainees

and, for CWHSSA purposes, watchmen

and guards. Laborers and mechanics

are the two groups of workers that

must be paid not less than Davis-Bacon

wage rates.
2-4

1) Working foremen. Foremen or

supervisors that regularly spend

more than 20% of their time performing construction work and do

not meet the exclusions in paragraph

2) below are covered laborers and

mechanics for labor standards

purposes for the time spent performing construction work.

2) Exclusions. People whose duties are

primarily administrative, executive

or clerical are not laborers or mechanics. Examples include superintendents, office staff, timekeepers,

messengers, etc. (Contact the contract administrator if you have any

questions about whether a particular

employee is excluded.)

b. Employee. Every person who performs

the work of a laborer or mechanic is

employed regardless of any contractual relationship which may be alleged

to exist between a contractor or subcontractor and such person. This means

that even if there is a contract between a

contractor and a worker, the contractor

must make sure that the worker is paid

at least as much as the wage rate on the

wage decision for the classification of

work they perform.

For more information about working subcontractors, ask the contract administrator or your

HUD Labor Relations Field Staff for a copy of

Labor Relations Letter LR-96-01, Labor standards

compliance requirements for self-employed

laborers and mechanics. Labor Relations Letters

and other helpful Labor Relations publications

are available at HUDs web site (see Introduction

at the beginning of this Guide).

c. Apprentices and trainees. The only

workers who can be paid less than the

wage rate on the wage decision for their

work classification are apprentices

and trainees registered in approved

apprenticeship or training programs,

including Step-Up apprenticeship

programs designed for Davis-Bacon

construction work. Approved programs

are those which have been registered

with the DOL, Bureau of Apprenticeship and Training (BAT) or with a BATrecognized State Apprenticeship Agency

(SAC). Apprentices and trainees are paid

wage rates in accordance with the wage

schedule in the approved program.

Most often, the apprentice/trainee wage rate is

expressed as a series of percentages tied to the

amount of time spent in the program. For

example, 0-6 months: 65%; 6 months - 1 year:

70%; etc. The percentage is applied to the

journeymans wage rate. On Davis-Bacon

projects, the percentage must be applied to the

journeymans wage rate on the applicable

wage decision for that craft.

1) Probationary apprentice. A probationary apprentice can be paid as

an apprentice (less than the rate on

the wage decision) if the BAT or

SAC has certified that the person is

eligible for probationary employment as an apprentice.

2) Pre-apprentice. A pre-apprentice,

that is, someone who is not registered in a program and who hasnt

been BAT- or SAC-certified for

probationary apprenticeship is not

considered to be an apprentice

and must be paid the full journeymans rate on the wage decision

for the classification of work they

perform.

3) Ratio of apprentices and trainees

to journeymen. The maximum

number of apprentices or trainees

that you can use on the job site can

not exceed the ratio of apprentices

or trainees to journeymen allowed

in the approved program.

d. Prevailing wages or wage rates. Prevailing wage rates are the wage rates listed

on the wage decision for the project.

The wage decision will list a minimum

basic hourly rate of pay for each work

classification. Some wage decisions

include fringe benefits which are usually

listed as an hourly fringe rate. If the

wage decision includes a fringe benefit

rate for a classification, you will need to

add the fringe benefit rate to the basic

hourly rate unless you provide bona fide

fringe benefits for your employees.
2-5

1) Piece-work. Some employees are

hired on a piece-work basis, that is,

the employees earnings are determined by a factor of work produced.

For example, a Drywall Hangers

earnings may be calculated based

upon the square feet of sheetrock

actually hung, a Painters earnings

may be based upon the number of

units painted. Employers may

calculate weekly earnings based

upon piece rates provided the

weekly earnings are sufficient to

satisfy the wage rate requirement

based upon actual hours, including

any overtime, worked. Accurate time

records must be maintained for any

piece-work employees. If the weekly

piece rate earnings are not sufficient,

the employer must recompute

weekly earnings based upon the

actual hours worked and the rate on

the wage decision for the work

classification(s) involved.

Note that the total hourly wage rate paid to

any laborer or mechanic (basic wage or basic

wage plus fringe benefits) may be no less than

the total wage rate (basic wage or basic wage

plus fringe benefits) on the wage decision for

their craft. If the value of the fringe benefit(s)

you provide is less than the fringe benefit rate

on the wage decision, you will need to add the

balance of the wage decision fringe benefit

rate to the basic rate paid to the employee.

For example, if the wage decision requires

$10/hour basic rate plus $5/hour fringe benefits,

you must pay no less than that total ($15/hour)

in the basic rate or basic rate plus whatever

fringe benefit you may provide.

e. Fringe benefits include health insurance, retirement, life insurance, vacation

and some contributions to training

funds. Fringe benefits do not include

employer payments or contributions

required by other Federal, State or local

laws, such as the employers contribution to Social Security or some disability

insurance payments.

f. Site of work. The site of work is where

the Davis-Bacon wage rates apply.

Usually, this means the boundaries of

the project. Site of work can also

include other adjacent or virtually

adjacent property used by a contractor

or subcontractor in the construction of

the project, like a fabrication site.

g. Overtime. Overtime hours are defined

as all hours worked on the site of the

work in excess of 40 hours in any work

week. Overtime hours must be paid at

no less than one and one-half times the

regular rate of basic pay plus the straighttime rate of any required fringe benefits.

h. Deductions. You may make payroll

deductions as permitted by DOL Regulations 29 CFR Part 3. These regulations

prohibit the employer from requiring

employees to kick-back any of their

earnings. Allowable deductions include

employee obligations for income taxes,

Social Security payments, insurance

premiums, retirement, savings accounts,

and any other legally-permissible

deduction authorized by the employee.

Deductions may also be made for

payments on judgements and other

financial obligations legally imposed

against the employee.

i. Proper designation of trade. You must

select a work classification on the wage

decision for each worker based on the

actual type of work he/she performed

and you must pay each worker no less

than the wage rate on the wage decision

for that classification regardless of their

level of skill. In other words, if someone

is performing carpentry work on the

project, they must be paid no less than

the wage rate on the wage decision for

Carpenters even if they arent considered by you to be fully trained as a

Carpenter. Remember, the only people

who can be paid less than the rate for

their craft are apprentices and trainees

registered in approved programs.

1) Split-classification. If you have

employees that perform work in

more than one classification, you can

pay the wage rates specified for each

classification only if you maintain

accurate time records showing the

amount of time spent in each classification of work. If you do not

maintain accurate time records, you

must pay these employees the

highest wage rate of all of the classifications of work performed.
2-6

SECTION II  REPORTING REQUIREMENTS

tered or approved program. A copy

of the portions of the registered or

approved program pertaining to the

wage rates and ratios shall also

accompany the first CPR on which

the first apprentice or trainee appears.

2) Split classifications. For employees

in split classifications, list the employees once for each classification,

distributing the hours of work

accordingly, and reflecting the rate

of pay and gross earnings for each

classification. Deductions and net

pay may be based upon the total gross

amount earned for all classifications.

d. Hours Worked. The payroll should

show ONLY the regular and overtime

hours worked on this project. Show

both the daily and total weekly hours

for each employee. If an employee

performs work at job sites other than

the project for which the payroll is

prepared, those other job hours

should not be reported on the payroll.

In these cases, you should list the

employees name, classification, hours

for this project only, the rate of pay and

gross earnings for this project, and the

gross earned for all projects. Deductions

and net pay may be based upon the

employees total earnings (for all

projects) for the week.

e. Rate of Pay. Show the basic hourly rate

of pay for each employee for this

project. If the wage decision includes a

fringe benefit and you do not participate

in approved fringe benefit programs,

add the fringe benefit rate to the basic

hourly rate of pay. Also list the overtime

rate if overtime hours were worked.

1) Piece-work. For any piece-work

employees, the employer must

compute an effective hourly rate for

each employee each week based upon

the employees piece-work earnings

for that week. To compute the effective hourly rate, divide the piecework earnings by the total number

of hours worked, including consideration for any overtime hours.

2-5 COMPLETING A PAYROLL REPORT.

What information has to be reported on

the payroll form? The weekly payroll form

doesnt ask for any information that you

dont already need to keep for wage payment and tax purposes. For example, you

need to know each employees name,

address and social security number; his or

her work classification (who is working for

you and what do they do?), the hours worked

during the week, his or her rate of pay, the

gross amount earned (how much did they

earn?), the amounts of any deductions for

taxes, etc., and the net amount paid (how

much should the paycheck be made out

for?). No more information than you need

to know in order to manage your work crew

and make certain they are paid properly.

And, certainly, no more information than

you need to keep for IRS, Social Security

and other tax and employment purposes.

For most contractors, the Weekly Certified

Payroll is the only paperwork required for a

Davis-Bacon project!

a. Project and contractor/subcontractor

information. Each payroll should show

the contractor or subcontractors name

and address, the project name and

number, and the week ending date.

Indicate the dates in the spaces provided. Numbering payrolls is optional

but strongly recommended.

b. Employee information. The first payroll

on which each employee appears must

contain the employees name, address

and Social Security Number. Afterward,

the address and Social Security Number

only need to be reported if there is a

change in this information.

c. Work Classification. Each employee

must be classified in accordance with

the wage decision based on the type of

work they actually perform.

1) Apprentices or Trainees. The first

payroll on which any apprentice or

trainee appears must be accompanied by a copy of that apprentices

or trainees registration in a regis-
2-7

The effective hourly rate must be

reflected on the certified payroll and

the hourly rate may be no less than

the wage rate (including fringe

benefits, if any) on the wage decision for the classification of work

performed. It does not matter that

the effective hourly rate changes

from week-to-week, only that the

effective rate is no less than the rate

on the wage decision for the classification of work performed.

Remember, the overtime rate is computed at

one and one-half times the basic rate of pay

plus any fringe benefits. For example, if the

wage decision requires $10/hour basic plus

$5/hour fringe benefits, the overtime rate

would be: ($10 x 11⁄2) + $5 = $20/hour.

f. Gross Wages Earned. Show the gross

amount of wages earned for work

performed on this project. Note: For

employees with work hours and earnings

on other projects, you may show gross

wages for this project over gross earnings all projects (for example, $425.40/

$764.85) and base deductions and net

pay on the all projects earnings.

g. Deductions. Show the amounts of any

deductions from the gross earnings.

Other deductions should be identified

(for example, Savings Account or Loan

Repayment). Any voluntary deduction

(that is, not required by law or by an

order of a proper authority) must be

authorized in writing by the employee.

A short note signed by the employee is

all that is needed and should accompany the first payroll on which the other

deduction appears.

Only one employee authorization is needed

for recurring (e.g., weekly) other deductions.

Written employee authorization is not required

for income tax and Social Security deductions.

h. Net Pay. Show the net amount of

wages paid.

i. Statement of Compliance. The Statement of Compliance is the certification.

It is located on the reverse side of a

standard payroll form (WH-347) or on

form WH-348. Be sure to complete the

identifying information at the top,

particularly if you are attaching the

Statement of Compliance to an alternate

payroll form such as a computer payroll.

Also, you must check either 4(a) or 4(b)

if the wage decision contains a fringe

benefit. Checking 4(a) indicates that you

are paying required fringe benefits to

approved plans or programs; and 4(b)

indicates that you are paying any required fringe benefit amounts directly

to the employee by adding the fringe

benefit rate to the basic hourly rate of

pay. If you are paying a portion of the

required fringe benefit to programs and

the balance directly to the employee,

explain those differences in box 4(c).

Only one Statement of Compliance is required

for each employers weekly payroll no matter

how many pages are needed to report the

employee data.

j. Signature. Make sure the payroll is

signed with an original signature. The

payroll must be signed by a principal of

the firm (owner or officer such as the

president, Treasurer or Payroll Administrator) or by an authorized agent (a

person authorized by a principal in

writing to sign the payroll reports).

Signature authorization (for persons

other than a principal) should be submitted with the first payroll signed by

such an agent.
2-8

SECTION III  PAYROLL REVIEWS AND CORRECTIONS

2-7 TYPICAL PAYROLL ERRORS AND

REQUIRED CORRECTIONS.

The following paragraphs describe common

payroll errors and the corrective steps you

must take.

a. Inadequate payroll information. If the

alternate payroll (such as a computer

payroll) does not contain all of the

information that would be on the

optional form WH-347, the employer

will be asked to resubmit the payrolls on

an acceptable form.

b. Missing addresses and Social Security

Numbers. If the first payroll on which

an employee appears does not contain

the employees address and Social

Security Number, the employer will

be asked to supply the missing information. A short note providing the

information is all that is needed.

c. Incomplete payrolls. If the information

on the payroll is not complete, for

example, if work classifications or rates

of pay are missing, the employer will be

asked to send a corrected payroll.

d. Classifications. If the payrolls show

work classifications that do not appear

on the wage decision, the employer will

be asked to reclassify the employees in

accordance with the wage decision or

the employer may request an additional

classification and wage rate (See 2-2). If

reclassification results in underpayment

(i.e., the wage rate paid on the payroll is

less than the rate required for the new

classification), the employer will be

asked to pay wage restitution to all

affected reclassified employees. (See 2-8

for instructions about wage restitution.)

e. Wage Rates. If the wage rates on the

payroll are less than the wage rates on

the wage decision for the work classification reported, the employer will be

asked to pay wage restitution to all

affected employees.

2-6 COMPLIANCE REVIEWS.

The contract administrator or other inspector may visit the project site and interview

some of the workers concerning their

employment on the project. In addition,

the contract administrator will periodically

review payrolls and related submissions,

comparing the interview information to the

payrolls, to ensure that the labor standards

requirements have been met. You will be

notified by the contract administrator if

these reviews find any discrepancies or

errors. You will be given instructions

about what steps must be taken to correct

any problems.

a. On-site Interviews. Every employer

(contractor, subcontractor, etc.) must

make their employees available for

interview at the job site with the contract administrator or other agency

representative, or HUD or DOL representative. The interviews are confidential and the employee will be asked

about the kind of work they perform

and their rate of pay. Every effort will be

made to ensure that these interviews

cause as little disruption as possible to

the on-going work. The interviewer will

record the interview information,

usually on a form HUD-11, Record of

Employee Interview, and forward the

interviews to the contract administrator.

b. Project payroll reviews. The contract

administrator will compare the information on the interview forms to the

corresponding payrolls to ensure that

the workers are properly listed on the

payrolls for the days, work classification

and rate of pay. The contract administrator will also review the payroll submissions to make certain that the payrolls

are complete and signed; that employees are paid no less than the wage rate

for the work classification shown;

apprentice and trainee certifications are

submitted (where needed); employee

authorizations for other deductions are

submitted (where needed); etc.
2-9

f. Apprentices and trainees. If a copy of

the employee(s) registration or approved

program ratio and wage schedule is not

submitted with the first payroll on

which an apprentice or trainee appears,

the employer will be asked to submit a

copy of each apprentices or trainees

registration and/or the approved program ratio and wage schedule. If the

ratio of apprentices or trainees to

journeymen on the payroll is greater

than the ratio in the approved program,

the employer will be asked to pay wage

restitution to any excess apprentices or

trainees. Also, any apprentice or trainee

that is not registered in an approved

program must receive the journeymans

wage rate for the classification of work

they performed.

g. Overtime. If the employees did not

receive at least time and one-half for any

overtime hours worked on the project,

the following will occur:

1) If the project is subject to CWHSSA

overtime requirements, the employer

will be asked to pay wage restitution

for all overtime hours worked on the

project (overtime hours worked at

other projects are not subject to

CWHSSA). The employer may also

be liable to the United States for

liquidated damages computed at

$10 per day per violation. Or,

2) If the project is not subject to

CWHSSA, the employer will be

notified of the possible FLSA overtime violations. Also, the Labor

Relations staff may refer the violations to the DOL for further review.

h. Computations. If the payroll computations (hours worked times rate of pay)

or extensions (deductions, net pay)

show frequent errors, the employer

will be asked to take greater care. Wage

restitution may be required if underpayments resulted from the errors.

i. Deductions. If there are any Other

deductions that are not identified, or if

employee authorization isnt provided,

or if there is any unusual (very high, or

large number) deduction activity, the

employer will be asked to identify the

deductions, provide employee authorization or explain unusual deductions, as

necessary.

j. Fringe benefits. If the wage decision

contains fringe benefits but the payroll

does not indicate how fringe benefits

were paid [neither 4(a) nor 4(b) is

marked on the payroll form], the employer may be asked to submit corrected

payrolls and will be required to pay

wage restitution if underpayments

occurred. However, if the basic hourly

rates for the employees are at least as

much as the total wage rate on the

wage decision (basic hourly rate plus

the fringe benefit rate), no correction

is necessary.

k. Signature. If the payroll Statement of

Compliance is not signed or is missing,

the employer will be asked to submit a

signed Statement of Compliance for

each payroll affected.

l. On-site interview comparisons. If the

comparison of on-site interviews to the

payrolls indicates any discrepancies (for

example, the employee does not appear

on the payroll for the date of the interview), the employer will be asked to

submit a corrected payroll report.

2-8 RESTITUTION FOR UNDERPAYMENT OF WAGES.

Where underpayments of wages have

occurred, the employer will be required to

pay wage restitution to the affected employees. Wage restitution must be paid promptly

in the full amounts due, less permissible

and authorized deductions.

a. Notification to the prime contractor.

The contract administrator will notify

the prime contractor in writing of any

underpayments that are found during

payroll or other reviews. The notice will
2-10

describe the underpayments and provide instructions for computing and

documenting the restitution to be paid.

The prime contractor is allowed 30 days

to correct the underpayments. Note that

the prime contractor is responsible to

the contract administrator for ensuring

that restitution is paid. If the employer is

a subcontractor, the subcontractor will

usually make the computations and

restitution payments and furnish the

required documentation through the

prime contractor.

b. Computing wage restitution. Wage

restitution is simply the difference

between the wage rate paid to each

affected employee and the wage rate

required on the wage decision for all

hours worked where underpayments

occurred. The difference in the wage

rates is called the adjustment rate. The

adjustment rate times the number of

hours involved equals the gross amount

of restitution due.

c. Correction payrolls. The employer will

be required to report the restitution paid

on a correction certified payroll. The

correction payroll will reflect the period

of time for which restitution is due (for

example, Payrolls #1 through #6; or a

beginning date and ending date). The

correction payroll will list each

employee to whom restitution is due

and their work classification; the total

number of work hours involved (daily

hours are usually not applicable for

restitution); the adjustment wage rate

(the difference between the required

wage rate and the wage rate paid); the

gross amount of restitution due; deductions and the net amount to be paid. A

signed Statement of Compliance must

be attached to the correction CPR.

Employers are no longer required to submit

checks (certified or otherwise) to correct

underpayments. Restitution payments are

reported and certified by the employer on a

correction payroll.

d. Employee signature. Each employee

who has received restitution signs the

correction payroll as evidence of their

receipt of the payment.

e. Review of correction CPR. The contractor administrator will review the

correction payroll to ensure that full

restitution was paid. The prime contractor shall be notified in writing of

any discrepancies and will be required

to make additional payments, if needed,

documented on a supplemental correction payroll within 30 days.

f. Unfound workers. Sometimes, wage

restitution cannot be paid to an affected

employee because, for example, the

employee has moved and cant be

located. In these cases, at the end of the

project the prime contractor will be

required to place in a deposit or escrow

account an amount equal to the total

amount of restitution that could not be

paid because the employee(s) could not

be located. The contract administrator

will continue to attempt to locate the

unfound workers for 3 years after the

completion of the project. After 3 years,

any amount remaining in the account

for unfound workers will be credited

and/or forwarded by the contract

administrator to HUD.
3-1

CHAPTER 3. LABOR STANDARDS DISPUTES ADMINISTRATIVE REVIEWS,

WITHHOLDING, AND DEPOSITS AND ESCROW ACCOUNTS

WHAT HAPPENS WHEN THINGS GO WRONG?

1) Reconsideration. The DOL normally

identifies the reasons for denial in its

response to the request. Any interested person (for example, the

contract administrator, employer,

representatives of the employees)

may request reconsideration of the

decision on the additional classification request. The request for reconsideration should be made in writing

and should thoroughly address the

denial reasons identified by the

DOL. Requests for reconsideration

should be made through the contract administrator. (See 2-2(d), and

also DOL Regulations 29 CFR 1.8.)

2) Administrative Review Board. Any

interested party may request a review

of the Administrators decision on

reconsideration by the Administrative Review Board (formerly, Wage

Appeals Board). DOL regulations

29 CFR Part 7 explain the procedures

for such reviews. (See also 29 CFR 1.9.)

b. Findings of underpayment. Compliance

reviews and other investigations may

result in findings of underpayment. The

primary goal in every case and at every

step in this process is to reach agreements about who may have been underpaid and how much wage restitution

may be due and, of course, to deliver

restitution to any underpaid workers.

The contract administrator will usually

work informally with you to reach such

agreements. You will have an opportunity to provide additional information to

the contract administrator that may

explain apparent inconsistencies and/or

resolve the discrepancies.

If informal exchanges do not result in

agreement, the final determination and

schedule of wages due will be presented

3-1 INTRODUCTION.

Even in the best of circumstances, things

can go wrong. In a Davis-Bacon context,

things going wrong usually means theres

a difference of opinion  a dispute  about

whether and to what extent underpayments

have occurred. These disputes are usually

between the contract administrator and one

or more employers (the prime contractor

and/or a subcontractor). The dispute may

involve something simple such as an additional classification request that is pending

before the DOL; or something as significant

as investigative findings following a complaint of underpayment. This chapter

discusses some of what you may expect and

what you can do to make your views known

and to lessen any delays in resolving the

problem or issue.

3-2 ADMINISTRATIVE REVIEW ON

LABOR STANDARDS DISPUTES.

As mentioned in the Introduction above,

a dispute about labor standards and compliance can arise for a number of reasons.

The labor standards clauses in your contract

and DOL regulations provide for administrative review of issues where there is a

difference of views between the contract

administrator and any employer. The most

common circumstances include:

a. Additional classifications and wage

rates. Additional classification and wage

rate requests are sometimes denied by

the DOL. An employer that is dissatisfied with the denial can request

reconsideration by the DOL Wage and

Hour Administrator. The employer

may continue to pay the wage rate, as

requested, until a final decision is

rendered on the matter. When the final

decision is known, the employer will be

required to pay any additional wages

that may be necessary to satisfy the

wage rate that is established.
3-2

to you in writing and you will be permitted 30 days in which to correct the

underpayment(s) or to request a hearing

on the matter before the DOL. The request

for hearing should be made in writing

and should explain what findings are in

dispute and the reasons. The request

should be made through the contract

administrator. The contract administrator will submit a report of the findings

and the hearing request to the DOL for

review and further consideration.

1) DOL review. The DOL will review

the contract administrators report

and the arguments against the

findings presented in the hearing

request. The DOL may affirm or

modify the findings based upon the

materials presented. You will be

notified in writing by the DOL of the

results of its review; you will be

given an opportunity to correct any

underpayments or to continue with

the hearing request. (See DOL

Regulations 29 CFR 5.11 (b) and

29 CFR Part 6, Rules of Practice for

Administrative Proceedings....)

2) Administrative Review Board.

Contractors and/or subcontractors

may request a review by the Administrative Review Board of the

decision(s) rendered by the DOL

in the administrative hearing process. See DOL regulations 29 CFR

Part 7 for more information about

this proceeding.

3-3 WITHHOLDING.

The contract administrator may cause

withholding from payments due to the

prime contractor to ensure the payment of

wages which are believed to be due and

unpaid, for example, if wage underpayments or other violations are not corrected

within 30 days after notification to the

prime contractor. Withholding is considered

to be serious and is not taken unless

warranted. Very often, the amount kept

in retention is sufficient to cover any back

wage liability so withholding from payments is not considered necessary. However, if withholding is deemed necessary,

you will be notified in writing. Only the

amounts necessary to meet the contractors

(and/or subcontractors) liability shall be

withheld.

Remember, the prime contractor is responsible

and will be held liable for any wage restitution

that is due to any worker employed in the

construction of the project, including workers

employed by subcontractors and any lowertier subcontractors. See ¶1-4, Responsibility of

the Principal Contractor, and ¶2-8, Restitution

for underpayment of wages.

3-4 DEPOSITS AND ESCROWS.

In every case, we attempt to complete

compliance actions and resolve any disputes

before the project is completed and final

payments are made. Sometimes, corrective

actions or disputes continue after completion and provisions must be made to ensure

that funds are available to pay any wage

restitution that is ultimately found due. In

these cases, we allow the project to proceed

to final closings and payments provided the

prime contractor deposits an amount equal

to the potential liability for wage restitution

and liquidated damages, if necessary, in a

special account. The deposit or escrow account

is controlled by the contract administrator.

When a final decision in rendered, the

contract administrator makes disbursements from the account in accordance

with the decision. Deposit/escrow accounts

are established for one or more of the

following reasons:

a. Where the parties have agreed to

amounts of wage restitution that are due

but the employer hasnt furnished

evidence yet that all of the underpaid

workers have received their back wages.

The deposit is equal to the amount of

restitution due to workers lacking

payment evidence. As proper documentation is received, amounts corresponding to the documentation are returned

to the depositor. Amounts for any

workers who can not be located are held

in the escrow account for three years

and disbursed as described in 2-8(f) of

this Guide.

b. Where underpayments are suspected or

alleged and an investigation has not yet

been completed. The deposit is equal to

the amount of wage restitution and any

liquidated damages, if applicable, that is

estimated to be due. If the final determination of wages due is less than the

amount estimated and placed in the
3-3

escrow account, the escrow will be

reduced to the final amount and the

difference will be returned to the depositor. If the parties agree to the investigative findings, the amounts due to the

workers will be disbursed from the

escrow account in accordance with the

schedule of wages due. Amounts for

unfound workers will be retained as

described above (See 2-8(f) and 3-4(a)).

If the parties do not agree and an administrative hearing is requested, the escrow

will be maintained as explained in 3-4(c),

below.

c. Where the parties are waiting for the

outcome of an administrative hearing

that has been or will be filed contesting

a final determination of wages due. The

deposit shall be equal to the amount of

wage restitution and liquidated damages, if applicable, that have been

determined due. Once a final decision is

rendered, disbursements from the

escrow account are made in accordance

with the decision.

3-5 DEBARMENT.

Contractors and/or subcontractors that are

found by the Secretary of Labor to be in

aggravated or willful violation of the labor

standards provisions of the Davis-Bacon

and Related Acts (DBRA) will be ineligible

(debarred) to participate in any DBRA or

Davis-Bacon Act contracts for up to 3 years.

Debarment includes the contractor or

subcontractor and any firm, corporation,

partnership or association in which the

contractor or subcontractor has a substantial

interest. Debarment proceedings can be

recommended by the contract administrator

or can be initiated by the DOL on its motion. Debarment proceedings are described

in DOL regulations 29 CFR 5.12.

Remember, if you have any questions or need

assistance concerning labor standards requirements help is always available. Contact the

contract administrator for the project youre

working on or the HUD Field Labor Relations

staff in your area.
A-1

INDEX

Acronyms ....................................................................... iv, A-2

Additional classification .................................................... 2-1

Additional classification rules ............................. 2-1

Additional classifications ...................................... iv, 2-1, 3-1

Administrative Review Board ................................... 1-2, 3-1

Administrative Review on

Labor Standards Disputes ........................................... 3-1

Apprentices ....................................... iii, 2-3, 2-4, 2-5, 2-6, 2-9

Apprentices and trainees .................................................. 2-4

Pre-apprentice ....................................................... 2-4

Probationary apprentice ...................................... 2-4

Ratio of apprentices and trainees

to journeymen .................................................. 2-4

Basic Hourly Rate ......................................... 2-4, 2-6, 2-7, 2-9

Certified Payroll reports ........................... iii, 1-1, 2-3

Payroll certifications .............................................. 2-3

Payroll formats ...................................................... 2-2

Payroll inspection .................................................. 2-3

Payroll retention .................................................... 2-3

Payroll review and submission ........................... 2-3

No work payrolls ............................................... 2-3

Compliance Reviews ......................................................... 2-8

Construction contract provisions .................................... 1-2

HUD-2554 .............................................................. 1-2

HUD-4010 .............................................................. 1-2

Labor standards clauses ....................................... 1-2

Contract Administrator ........................ iii, 1-2, 2-1, 2-2 - 2-4,

2-8, 2-9, 2-10, 3-1, 3-3

Contract Provisions ............................................... iii, 1-2, 2-1

Contract Work Hours and

Safety Standards Act ............................... iii, 1-1 - 1-3, A-2

Copeland Act ................................................................. iii, 1-1

Correction payrolls ......................................................iv, 2-10

CPR ................................................................ iv, 2-6, 2-10, A-2

CWHSSA ............................................................................. 1-1

Davis-Bacon Act .......................................................... 1-1, 1-2

Davis-Bacon Definitions ................................................... 2-3

Apprentices and trainees ..................................... 2-4

Fringe benefits ....................................................... 2-5

Laborer or mechanic ............................................. 2-3

Working foremen .................................................. 2-4

Davis-Bacon Regulations .................................................. 1-1

Davis-Bacon Wage Decisions ........................................... 1-2

Davis-Bacon Act ...................................... iii, 1-1, 1-2, 3-3, A-2

DBA ......................................................................... iii, 1-1, A-2

DBRA .................................................................... 1-1, 3-3, A-2

Debarment ......................................................................iv, 3-3

Deductions .................................................... iii, 1-2, 2-5 - 2-7,

2-8, 2-9, 2-10

Deposits and Escrow Accounts ....................................iv, 3-1

Deposits and Escrows ....................................................... 3-2

DOL .......................................... iii - 1-3, 2-1, 2-2, 2-3, 2-4, 2-5,

2-8, 2-9, 3-1, 3-3, A-2

DOL investigator ............................................................... 1-3

DOL Regulations .................................. 1-2, 2-1, 2-5, 3-1, 3-3

Employee ................................iii - 1-3, 2-4, 2-5, 2-7, 2-8, 2-10

Fair Labor Standards Act ..................................... iii, 1-1, A-2

Findings of underpayment .......................................... iv, 3-1

FLSA ................................................................ iii, 1-1, 2-9, A-2

Fringe Benefits ...............................iii - 1-2, 2-4 - 2-5, 2-7, 2-9

Gross wages ....................................................................iv, 2-7

HUD........................................ 2, 3, 1-1, 1-3, 2-1, 2-2, 2-3, 2-4,

2-8, 2-10, 3-3, A-2

HUD Home Page .................................................................... i

HUD Labor Relations field staff ...................................... 1-3

HUD-11 ............................................................................... 2-8

Labor Relations Staff ........................................... 2-2, 2-8, 3-3

Liquidated damages ................................................... 1-1, 3-2

Local contracting agencies ............................................... 1-3

Net pay .................................................................... iv, 2-7, 2-9

Notice to Employees ......................................................... 2-1

On-site Interviews ............................................................. 2-8

Overtime ................................... iv, 1-1, 2-3, 2-5, 2-7, 2-9, A-2

Payroll certification ............................................................ 2-3

Payroll errors ..................................................................iv, 2-8

Payroll format ..................................................................... 2-2

Payroll retention ........................................................... iii, 2-3

Payroll submissions ........................................................... 2-8

Piece-work ................................................................... 2-5, 2-6

Posting the wage decision ........................................... iii, 2-1

Prevailing wages or wage rates ....................................... 2-4

Prime Contractor ........................................... iv, 1-2, 2-1, 2-2,

2-3, 2-9, 2-10, 3-1, 3-2

Principal Contractor ....................................... iii, 1-2, 1-3, 3-2

General Contractor ............................................... 1-2

Project Wage Rate Sheet ................................................... 2-1

Proper designation of trade ............................................. 2-5

Split-classification.................................................. 2-5

Rate of Pay ........................................ iv, 2-4, 2-6, 2-7, 2-8, 2-9

Site of work .................................................................... iii, 2-5

Split-classification .............................................................. 2-5

Statement of Compliance ................... iv - 2-3, 2-7, 2-9, 2-10

Step-Up apprenticeship

programs ........................................................................ 2-4

Subcontractor ................................. iii - 1-2, 2-2, 2-3, 2-4, 2-5,

2-6, 2-8, 2-10, 3-1, 3-3

Lower-tier subcontractors .................................... 1-2

Trainees .................................................... iii, 2-4, 2-5, 2-6, 2-9

Typical Payroll Errors ........................................................ 2-8

Unfound workers ................................................ iv, 2-10, 3-3

Wage Appeals Board ......................................................... 1-2

Wage Decision ................................................ iii, 1-3, 2-1, 2-2,

2-4, 2-7, 2-8, 2-10

Wage restitution ............................. iv, 2-3, 2-8, 2-10, 3-1, 3-3

Computing wage restitution ............................. 2-10

Correction payrolls ............................................. 2-10

Unfound workers ................................................ 2-10

Withholding..................................................... iv, 1-2, 3-1, 3-2

Work Classification ................. iv, 2-1, 2-2, 2-4, 2-6, 2-8, 2-10

Working foremen ............................................................... 2-4

World Wide Web ..................................................................... i
A-2

BAT  Bureau of Apprenticeship and Training

CDBG  Community Development Block Grant

CPR  Certified Payroll Report

CWHSSA  Contract Work Hours and Safety Standards Act

DBA  Davis-Bacon Act

DBRA  Davis-Bacon and Related Acts

DOL  Department of Labor

FHA  Federal Housing Administration

FLSA  Fair Labor Standards Act

HUD  Housing and Urban Development (Department of)

IHA  Indian Housing Authority

LCA  Local Contracting Agency

O/T  Overtime

PHA  Public Housing Agency

S/T  Straight-time

SAC  State Apprenticeship Council/Agency

§  Section

¶  Paragraph

TABLE OF ACRONYMS AND SYMBOLS
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