Office of Labor Relations 

LABOR RELATIONS LETTERS

 

Date: October 26, 2006 (Rev 1) Letter No. LR 2004-01 

SL: Distribution: W-3-1, W-2, W-3, R-1, R-3-1 (PIH), R-6, R-7, R-9, 138-2, 138-7, SL 

Subject: Administration and enforcement of prevailing wage rates determined or 

adopted by HUD 

I. Statutory provisions and prior guidance 

II. Elimination of payroll certification and submission, payroll deduction 

and weekly wage payment requirements 

III. Recordkeeping requirements 

IV. Payroll deductions and frequency of wage payments 

V. Labor standards clauses for routine and non-routine maintenance 

contracts 

VI. Compliance monitoring 

 The Department of Housing and Urban Development (HUD) has undertaken efforts to 

streamline and otherwise reform its policies and instructions relating to the administration 

and enforcement of prevailing wage rates determined or adopted by HUD (aka HUDdetermined wage rates). Ultimately, HUD intends to publish regulations and other formal 

directives relating to these areas. The purpose of this Letter is to provide relief and interim 

guidance for public housing authorities (PHAs), tribes, tribally designated housing entities 

(TDHEs), and their contractors. Note that the guidance in this Letter pertains only to HUDdetermined wage rates applicable to maintenance and non-routine maintenance. This 

guidance does not pertain to construction work subject to Davis-Bacon and Related Act 

wage and reporting requirements. 

 This guidance is provided with the cooperation and advice of the Offices of Public and 

Indian Housing, Native American Programs, and General Counsel. 

I. Statutory provisions and prior guidance 

 HUD prevailing wage requirements are imposed at Section 12(a) of the U.S. Housing Act 

of 1937, as amended, for public housing and at Section 104(b) and 805(b) of the Native 

American Housing Assistance and Self-Determination Act of 1996, as amended, for Indian 

housing and Native Hawaiian housing, respectively. Generally, these clauses require, in 

part, that all maintenance laborers and mechanics employed in the operation of the housing 
Page 2 of 4 Letter No. LR 2004-01

project (which includes routine and non-routine maintenance work) be paid no less than the 

wage rates prevailing in the locality as determined or adopted (subsequent to a determination 

under applicable State, local or tribal law) by HUD.1

In developing its operational policies and procedures for these areas of responsibility, 

HUD relied upon the framework established by the Department of Labor (DOL) for the 

Davis-Bacon and Related Acts (DBRA). HUD disseminated its policies and procedures in 

draft Notice 95-01-SL and in associated memoranda, contract standards, training materials 

and other communications. 

 DBRA standards are similar to those associated with HUD prevailing wage requirements, 

but in some cases are more stringent. HUD has discretion to establish policies and 

procedures for HUD-determined wage rates different from the DOL DBRA standards. HUD 

has concluded that it is reasonable and desirable to establish a prevailing wage 

administration and enforcement framework for HUD-determined wage rates that is less 

burdensome on PHAs, TDHEs, tribes and their contractors. 

II. Elimination of payroll certification and submission, payroll deduction and 

weekly wage payment requirements 

 Prior HUD guidance required contractors and/or subcontractors performing work subject 

to HUD-determined wage rates to submit weekly certified payroll reports to the PHA, tribe 

or TDHE involved, and to comply with DOL regulations at 29 CFR Part 3 concerning 

permissible payroll deductions. In addition, HUD required that all laborers and mechanics 

(covered by HUD-determined wage rates) be paid not less often than once a week. These 

requirements were contained in the draft Notice 95-01-SL and in HUD Form 5370, General 

Conditions (for non-routine maintenance). Effective immediately, HUD is amending its 

guidance and HUD Form 5370 to eliminate the payroll certification and submission and 

weekly wage payment requirements.2

 Note that with regard to records, the HUD is eliminating only the requirements to certify 

and submit payroll reports. This action does not relieve contractors and/or subcontractors of 

 

1

 Note that under NAHASDA, HUD-determined wage rates may be preempted by tribally determined prevailing wage rates; see 

ONAP Program Guidance No. 2003-04. Additionally, bona fide volunteers are excluded from HUD prevailing wage requirements; 

see 24 CFR Part 70. 

2

 Following consultation with the Department of Labor, HUD has concluded that DOL regulations at 29 CFR Parts 3 and 5 are not 

germane where HUD prevailing wage requirements are applicable. 
Page 3 of 4 Letter No. LR 2004-01

their obligations to create and maintain records demonstrating their compliance with HUDdetermined prevailing wage requirements. 

 See Sections III and IV of this Letter concerning recordkeeping, payroll deduction and 

pay frequency requirements. 

III. Recordkeeping requirements 

PHAs, tribes, TDHEs, and any other employers (e.g., contractors, subcontractors) 

engaged on work subject to HUD-determined wage rates must make and maintain for 3 

years from the completion of the work records containing information demonstrating 

compliance with the prevailing wage rates determined (or adopted) by HUD and applicable 

to the work. 3 These records must at a minimum contain for each laborer and mechanic 

employed: 

1) His or her name, address and social security number; 

2) Correct work classification or classifications; 

3) Hourly rate or rates of monetary wages paid; 

4) Rate or rates of any fringe benefits provided; 

5) Number of daily and weekly hours worked; 

6) Gross wages earned; 

7) Any deductions taken; and 

8) Actual wages paid. 

 Such records shall be made available for inspection or transcription by authorized 

representatives of the PHA, tribe, TDHE and/or HUD. 

IV. Payroll deductions and frequency of wage payments 

 Employers (PHAs, tribes, TDHEs, contractors and/or subcontractors) must pay to each 

employee subject to HUD-determined wage requirements the full amount of wages due free 

and clear and without subsequent deduction (except as otherwise provided by law or 

regulations). These payments must be made no later than one pay period following the end 

of the regular pay period in which the wages were earned or accrued. A pay period may not 

be of any duration longer than semi-monthly. 

 

3

 The recordkeeping burden reflected is required by DOL and approved by the Office of Management and Budget under control 

number 1215-0017. 
Page 4 of 4 Letter No. LR 2004-01

V. Labor standards clauses for routine and non-routine maintenance contracts 

 PHAs, tribes and TDHEs that award contracts for routine or non-routine maintenance 

work must incorporate into the contract (and bid specifications, if applicable) appropriate 

labor standards clauses to obligate and ensure the compliance of the contractor and any 

subcontractors. HUD has published labor standards clauses applicable to routine and nonroutine maintenance in HUD Form 5370-C, General Conditions for Non-Construction 

Contracts, Section II4

. The applicable HUD wage decision must also be incorporated into 

the contract and any bid specifications.

VI. Compliance monitoring and employee interviews 

 PHAs, tribes and TDHEs shall perform contractor compliance monitoring with such 

frequency and depth as appropriate (based upon the scope and duration of the contract 

involved) to ensure that all laborers and mechanics are paid no less than the HUD prevailing 

wage rate for the type of work they perform. Such compliance monitoring shall include 

interviews with the employees. Contractors and/or subcontractors shall permit authorized 

representatives of the PHA, tribe, TDHE or HUD to interview employees during normal 

working hours. 

 Any questions regarding this Letter should be directed to the field or Regional HUD 

Labor Relations staff responsible for the jurisdiction involved. A list of Labor Relations 

staff and contact information is available at the Office of Labor Relations website: 

www.hud.gov/offices/olr 

 /S/ 

 Edward L. Johnson 

 Director 

 Office of Labor Relations 

 

4

 Available at HUDClips (www.hudclips.org/cgi/index.cgi) and the Office of Labor Relations web site (www.hud.gov/offices/olr).