[Federal Register Volume 65, Number 224 (Monday, November 20, 2000)]
[Rules and Regulations]
[Pages 69674-69693]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-29533]


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DEPARTMENT OF LABOR

Office of the Secretary

Employment Standards Administration

Wage and Hour Division

29 CFR Parts 1 and 5

RIN 1215-AA94


Procedures for Predetermination of Wage Rates; Labor Standards 
Provisions Applicable to Contracts Covering Federally Financed and 
Assisted Construction and to Certain Nonconstruction Contracts

AGENCY: Wage and Hour Division, Employment Standards Administration, 
Labor.

ACTION: Final rule.

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SUMMARY: This document adopts as a final rule an amendment to the 
regulations that govern the employment of ``helpers'' on federally-
financed and assisted construction contracts subject to the prevailing 
wage standards of the Davis-Bacon and Related Acts (DBRA). 
Specifically, this document amends the regulations to incorporate the 
Wage and Hour Division's longstanding policy of recognizing helper 
classifications and wage rates only where their duties are clearly 
defined and distinct from those of journeyworker and laborer 
classifications in the area; the use of such helpers is an established 
prevailing practice in the area; and the term ``helper'' is not 
synonymous with ``trainee'' in an informal training program.

EFFECTIVE DATE: January 19, 2001.

FOR FURTHER INFORMATION CONTACT: William W. Gross, Director, Office of 
Wage Determinations, Wage and Hour Division, Employment Standards 
Administration, U.S. Department of Labor, Room S-3028, 200 Constitution 
Avenue, NW., Washington, DC 20210. Telephone (202) 693-0569. (This is 
not a toll-free number.)

SUPPLEMENTARY INFORMATION:  

[[Page 69675]]

I. Paperwork Reduction Act

    This rule does not contain any new information collection 
requirements and does not modify any existing requirements. Thus, the 
rule contains no reporting or recordkeeping requirements subject to the 
Paperwork Reduction Act of 1995.

II. Background

    Apart from the brief periods, as discussed below, when the 
suspended ``helper'' regulations were implemented, the longstanding 
practice of the Department of Labor (``DOL'' or ``the Department'') has 
been to allow the use of helper classifications on DBRA-covered 
construction projects only where (1) the duties of the helper are 
clearly defined and distinct from those of the journeyworker and 
laborer; (2) the use of such helpers is an established prevailing 
practice in the area; and (3) the term ``helper'' is not synonymous 
with ``trainee'' in an informal training program.
    On May 28, 1982, Wage and Hour published revised final Regulations, 
29 CFR Part 1, Procedures for Predetermination of Wage Rates, and 29 
CFR Part 5, Subpart A--Davis-Bacon and Related Acts Provisions and 
Procedures (47 FR 23644 and 23658, respectively), containing new 
provisions intended to allow contractors to expand their use of helpers 
on Davis-Bacon covered projects at wages lower than those paid to 
skilled journeyworkers.\1\
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    \1\ The following four new provisions were promulgated:
    <bullet> A new definition of the term ``helper,'' allowing a 
helper's duties to overlap with those of a journeylevel worker: ``A 
helper is a semi-skilled worker (rather than a skilled journeyman 
mechanic) who works under the direction of and assists a journeyman. 
Under the journeyman's direction and supervision, the helper 
performs a variety of duties to assist the journeyman such as 
preparing, carrying and furnishing materials, tools, equipment, and 
supplies and maintaining them in order; cleaning and preparing work 
areas; lifting, positioning, and holding materials or tools; and 
other related, semi-skilled tasks as directed by the journeyman. A 
helper may use tools of the trade at and under the direction and 
supervision of the journeyman. The particular duties performed by a 
helper vary according to area practice.'' [29 CFR 5.2(n)(4), 47 FR 
23667.]
    <bullet> A provision allowing a helper classification to be 
included in the wage determination if it was an ``identifiable'' 
local practice. 29 CFR 1.7(d), 47 FR 23655.
    <bullet> A provision limiting the number of helpers to two for 
every three journeyworkers. 29 CFR 5.5(a)(4)(iv), 47 FR 23670.
    <bullet> A provision allowing the addition of helper 
classifications on contracts containing wage determinations without 
helper classifications, where helpers are utilized in the area. 29 
CFR 5.5(a)(1)(ii)(A), 47 FR 23688.
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    These regulations were challenged in a lawsuit brought by the 
Building and Construction Trades Department, AFL-CIO, and a number of 
individual unions. On December 23, 1982, the U.S. District Court for 
the District of Columbia Circuit held that the new helper regulations 
conflicted with the Davis-Bacon Act and enjoined DOL from implementing 
the regulations. See Building and Construction Trades Department, AFL-
CIO, et al. v. Donovan, et al., 553 F. Supp. 352 (D.D.C. 1982). On 
appeal, the U.S. Court of Appeals for the District of Columbia upheld 
the Department's authority to allow the increased use of helpers, 
concluding that the Secretary's regulatory definition was ``not clearly 
unreasonable.'' Building and Construction Trades Department, AFL-CIO, 
et al. v. Donovan, et al., 712 F.2d 611, 630 (D.C. Cir. 1983), cert. 
denied, 464 U.S. 1069 (1983). However, the court struck down that part 
of the regulation that allowed for the issuance of a helper wage rate 
where helpers were only ``identifiable.'' Id. at 624.
    On remand, the district court lifted the injunction as it applied 
to the helper definition, but maintained it as to the remaining helper 
regulations. The district court added that the Secretary ``may, 
however, submit to this Court reissued regulations governing the use of 
helpers, and if these regulations conform to the decision of the Court 
of Appeals, they will be approved.'' 102 CCH Labor Cases para. 34,648, 
p. 46,702 (D.D.C. 1984).
    In accordance with the district court's order, DOL published in the 
Federal Register (52 FR 31366, August 19, 1987) proposed revisions to 
the helper regulations to add the requirement that helpers must prevail 
in an area in order to be recognized. The Department, on January 27, 
1989, published a revised final rule governing the use of helpers on 
federal and federally assisted construction contracts subject to the 
Davis-Bacon and Related Acts (54 FR 4234).
    On September 24, 1990, the district court vacated its injunction, 
and on December 4, 1990, Wage and Hour published a Federal Register 
notice implementing the helper regulations, effective February 4, 1991 
(55 FR 50148).
    In April 1991, Congress passed the Dire Emergency Supplemental 
Appropriations Act of 1991, Public Law 102-27 (105 Stat. 130), which 
was signed into law on April 10, 1991. Section 303 of Public Law 102-27 
(105 Stat. 152) prohibited the Department from spending any funds to 
implement or administer the helper regulations as published, or to 
implement or administer any other regulation that would have the same 
or similar effect. In compliance with this directive, the Department 
did not implement or administer the helper regulations for the 
remainder of fiscal year 1991.
    After fiscal year 1991 concluded and subsequent continuing 
resolutions expired, a new appropriations act was passed that did not 
include a ban restricting the implementation of the helper regulations. 
On January 29, 1992, Wage and Hour issued All Agency Memorandum No. 
161, instructing the contracting agencies to include the helper 
contract clauses in contracts for which bids were solicited or 
negotiations were concluded after that date. On April 21, 1992, the 
U.S. Court of Appeals for the District of Columbia invalidated the 
regulation that prescribed a ratio of two helpers for every three 
journeyworkers for being without sufficient support in the record, but 
upheld the remaining helper provisions. Building and Construction 
Trades Department, AFL-CIO v. Martin, 961 F.2d 269 (D.C. Cir. 1992). To 
comply with this ruling, on June 26, 1992, Wage and Hour issued a 
Federal Register notice removing the invalidated text, 29 CFR 
5.5(a)(4)(iv), from the Code of Federal Regulations. 57 FR 28776.
    Subsequently, Section 104 of the Department of Labor Appropriations 
Act of 1994, Public Law 103-112, enacted on October 21, 1993, 
prohibited the Department of Labor from expending funds to implement or 
administer the helper regulations during fiscal year 1994. Accordingly, 
on November 5, 1993, Wage and Hour published a Federal Register notice 
(58 FR 58954) suspending the regulations governing the use of semi-
skilled helpers on DBRA-covered contracts, and reinstating the 
Department's prior policy regarding the use of helpers. The Department 
of Labor Appropriations Act for fiscal year 1995 again barred the 
Department from expending funds with respect to the helper regulations 
(Section 102, Public Law 103-333). That prohibition extended into 
fiscal 1996 as a result of several continuing resolutions. There was no 
such prohibition in the Department of Labor's Appropriations Acts for 
fiscal 1996 and 1997, Public Law 104-134, enacted on April 26, 1996, 
and Public Law 104-208, enacted on September 30, 1996.
    On August 2, 1996, Wage and Hour published in the Federal Register 
(61 FR 40366) a proposal to continue to suspend the implementation of 
the helper regulations while additional rulemaking procedures were 
undertaken to determine whether further amendments should be made to 
those regulations. On December 30, 1996, a

[[Page 69676]]

final rule was published in the Federal Register (61 FR 68641) 
continuing the suspension. Pursuant to that final rule, the November 5, 
1993 suspension of the helper regulations continues in effect until 
Wage and Hour either (1) issues a final rule amending (and superseding) 
the suspended helper regulations; or (2) determines that no further 
rulemaking is appropriate, and issues a final rule reinstating the 
suspended regulations.
    By decision dated July 23, 1997, the U.S. District Court for the 
District of Columbia upheld the Department's December 30, 1996 final 
rule continuing the suspension of the helper regulations until the 
completion of rulemaking proceedings. Associated Builders & 
Contractors, Inc. v. Herman, C.A. No. 96-1490, 1997 WL 525268 (D.D.C. 
July 23, 1997).
    The Department, by Notice of Proposed Rulemaking (NPRM) published 
in the Federal Register on April 9, 1999 (64 FR 17442), proposed for 
public comment an amendment to the regulations that would reflect the 
longstanding policy of recognizing helpers as a distinct classification 
on DBRA-covered work only where Wage and Hour determines that (1) the 
duties of the helpers are not performed by other classifications in a 
given area, i.e., the duties of the helper are clearly defined and 
distinct from those of the journeyworker and laborer; (2) the use of 
such helpers is an established prevailing practice in the area; and (3) 
the term ``helper'' is not synonymous with ``trainee'' in an informal 
training program.
    In addition to the proposed rule, the Administrator also presented 
for comment the reasons the Department had concluded that the suspended 
rule should not be implemented, as well as the various other 
alternatives that had been considered by the Department: (1) Add a 
ratio requirement to the suspended helper definition; (2) change the 
``helper'' definition to emphasize the semi-skilled nature of the 
classification; (3) define ``helpers'' based on the Bureau of Labor 
Statistics, Occupational Employment Statistics (OES) Dictionary of 
Occupations, which focuses on unskilled duties and the worker's 
interaction with journeylevel craft workers; and (4) explicitly 
delineate the semi-skilled tasks performed by each helper 
classification. The Administrator also presented for comment an 
Economic Impact Analysis comparing the economic costs of the proposed 
rule governing the use of helpers under the DBRA to those under the 
suspended rule and the other alternatives considered by DOL, and a 
Regulatory Flexibility Analysis.
    The Department received 23 responses to the NPRM. These included 18 
responses providing substantive comments, one with no comments, and 
four requesting an extension of the comment period. Comments were 
received from three groups of Congressional Representatives: 
Representatives Charlie Norwood, Bill Goodling, Cass Ballenger, John 
Boehner, Peter Hoekstra, Buck McKeon, and Ron Paul; Representatives 
William L. Clay, Major R. Owens, and James E. Clyburn; and 
Representatives Jan Schakowsky and Anthony Weiner. Comments were also 
submitted by six contractor associations: The Associated General 
Contractors, Inc. (AGC); the Associated Builders and Contractors, Inc. 
(ABC); the Small Business Survival Committee (SBSC); the Associated 
Prevailing Wage Contractors, Inc. (APWC); the AGC of Texas (Highway, 
Heavy, Utilities and Industrial Branch); and the Mechanical Electrical 
Sheet Metal Alliance (MESMA), which is a coalition of members of the 
Mechanical Contractors Association of America (MCAA), the National 
Electrical Contractors Association (NECA) and the Sheet Metal and Air 
Conditioning Contractors National Association (SMACNA).
    Also submitting comments were three union organizations and a 
union-contractor group: The Building and Construction Trades 
Department, AFL-CIO (Building Trades); the Laborers' International 
Union of North America (LIUNA); the International Brotherhood of 
Electrical Workers (IBEW); and the National Joint Apprenticeship and 
Training Committee for the Electrical Industry (NAJTC), which was 
jointly created by the IBEW and NECA.
    The Texas Department of Transportation (TxDOT) commented on the 
proposal, as did two academic sources: A.J. Thieblot, Ph.D., Adj. 
Prof., University of Baltimore and the Regulatory Studies Program, 
Mercatus Center, George Mason University, Wendy L. Gramm, Director. 
Comments were also provided by two individual companies, Halliburton/
Kellog Brown & Root (through in-house counsel) and Elevator Control 
Service (Elcon).
    Finally, two elevator contractors' associations (the National 
Association of Elevator Contractors and the National Elevator Industry, 
Inc.) and two elevator contracting companies (Quality Elevator Co. and 
Barbee Curran Elevator Co., Inc.) requested an extension of the comment 
period. Requests for extension of time were not granted.

III. Comments and Analysis

    In the NPRM, the Department proposed not to implement the suspended 
``semi-skilled'' helper rule, but instead, to issue a rule reflecting 
the current, longstanding practice of recognizing helpers only where 
they are a separate and distinct class with clearly defined duties. The 
Department also provided therein a detailed explanation of the problems 
it identified with respect to the suspended helper definition, as well 
as a discussion of other alternatives for identifying helpers that were 
considered.
    As explained in the NPRM, the Department had preliminarily 
concluded that the suspended rule was not capable of being administered 
and enforced effectively in accordance with the goals and requirements 
of the Davis-Bacon Act, especially in view of the court-ordered 
abandonment of the ratio provision. The Department stated that the 
suspended rule is problematic because it represents a sharp departure 
from the Department's traditional practice of identifying job 
classifications based on the duties performed by such classifications. 
The suspended helper definition is unique in that it allows the 
determination of a Davis-Bacon classification based on subjective 
standards--the worker's skill level (``semi-skilled'') and the 
existence of work-site supervision. Furthermore, the Department noted 
that the definition is internally inconsistent in that the examples 
given of the types of assistance the helper might provide to a 
journeyworker are not semi-skilled, but rather are largely unskilled 
duties commonly performed by laborers. The Department also stated that 
the requirements that the helper be ``semi-skilled'' and work under the 
supervision of a journeyworker are vague and would provide little 
assistance in enforcement.
    The Department reasoned that, because the suspended rule allows the 
duties of a helper to overlap with those of both journeyworkers and 
laborers and provides no readily ascertainable means for distinguishing 
helpers from other classifications, contractors would find it difficult 
to determine whether they were in compliance and the Department in turn 
would find it difficult to enforce the regulation. Additionally, the 
Department expressed concern that the ambiguities in the suspended rule 
would make it difficult to prevent unscrupulous contractors from 
intentionally reclassifying large numbers of both journeyworkers and 
laborers as helpers when they work on DBRA projects, thus undermining 
locally prevailing wages for construction job classifications. The 
Department indicated that this is an even greater concern now that 
there is

[[Page 69677]]

no longer any numerical limitation to using helpers on DBRA projects.
    The Department also concluded that there seemed to be no generally 
accepted meaning for the term ``helper'' in the construction industry, 
and therefore there was reason to believe that the definition in the 
suspended rule did not in fact represent industry practice. For this 
reason, the Department was concerned that it would be difficult to 
conduct meaningful wage surveys and, therefore, specifically requested 
that commenters submit evidence regarding how helpers are in fact used.
    Wage data collected by the Department during the implementation 
period provided further support for the Department's decision to 
reconsider the advisability of implementing the suspended rule. A key 
underpinning of the helper rule at the time it was proposed was the 
notion that helper use is widespread in construction in the private 
sector. According to the preamble to the proposed rule published in 
1987, the Secretary projected that helpers would prevail in two-thirds 
to 100% of all craft classifications.\2\ The wage survey data submitted 
to the Department during the implementation period, though admittedly 
limited in quantity and geographic scope, indicated to the Department 
that use of helpers might not be as widespread as previously thought. 
This led the Department to examine other available data sources in 
order to reassess its previous assumption that helper use is 
widespread.
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    \2\ The final rule stated, without quantification, that this 
percentage would be reduced to the extent that collectively 
bargained rates were found to prevail and did not provide for a 
helper classification. 54 FR 4234, 4242 (January 27, 1989).
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    The Department also became concerned, as a secondary matter, that 
the suspended rule might have a negative impact on apprenticeship and 
training by lessening the incentive for contractors to employ 
apprentices and trainees participating in formal programs.
    After a full and careful review of the suspended rule, as well as a 
number of alternative approaches, the Department decided to propose for 
implementation the duties-based approach to recognizing helpers, which 
reflects longstanding policy. As discussed in the NPRM, it is the 
Department's view that this approach is more consistent with the intent 
of the Davis-Bacon Act to assure that workers employed on federal and 
federally-assisted construction work are paid at least the wages paid 
to workers doing similar work on similar construction in the area. The 
Department also stated in the NPRM that this approach, in sharp 
contrast to that under the suspended rule, would provide an objective 
basis for administration and enforcement of helper use, as well as 
clear criteria to facilitate compliance.
    The following is a summary and analysis of the comments received as 
they relate to the proposed regulation, the alternatives considered, 
the problems identified by the Department with respect to the suspended 
rule, and the Department's analysis and conclusions concerning the 
proposed rule set forth in the NPRM. Each submission has been 
thoroughly reviewed and each comment has been carefully considered.

Problems With the Suspended Helper Definition

1. The Suspended Helper Definition Would Be Difficult To Administer and 
Enforce
    The Building Trades commented that the suspended rule would be 
unenforceable because it is simply too difficult to distinguish a 
helper from a journeylevel worker on a job site. The Building Trades 
stated that, if contractors and subcontractors were permitted to assign 
helpers to perform the tasks of any and all classes of laborers and 
mechanics at less pay, as the suspended definition would allow, the 
requirement in the Davis-Bacon Act that wages be based on 
``corresponding classes'' would effectively be read out of the statute. 
The AGC, the ABC, and Dr. Thieblot, on the other hand, stated in their 
respective comments that the Department should be able to identify 
helper classes through area practice surveys as easily as it 
differentiates among the various trade classifications.
    The Department believes that it is much more difficult to identify 
a helper classification under the suspended rule, than to identify a 
craft or laborer classification under the traditional duties-based 
approach. Under DBRA, a laborer or mechanic is entitled to be paid the 
prevailing rate for the work performed according to the local area 
practice, and therefore, is classified based on the duties the worker 
performs. Because under the suspended definition, helpers may perform 
the duties of other classifications--both journeylevel workers and 
laborers--without any limitations other than that they be supervised by 
and assist a journeyworker, it would be extremely difficult for the 
Department to identify the work of a helper in any given area, both for 
enforcement and wage determination purposes.
    Comments suggesting that the Department can simply examine 
prevailing practices to identify helpers provide no practical guidance 
for resolving the suspended rule's inherent definitional problems. 
Construction craft workers generally perform certain basic, core duties 
that are specific to their respective classifications and therefore, 
are more easily identifiable for both enforcement and wage 
determination purposes. For example, it is widely understood that 
carpenters use hammers, saws and other tools of the trade to construct 
structures made of wood. Area practice issues arise concerning gray 
areas, where in a particular locality certain types of duties may be 
performed by another craft as an adjunct to its core duties, or may be 
carved out as a separate classification altogether. Thus, in some 
areas, carpenters may install drywall, while in others it may be 
installed by a specialty classification referred to as ``drywall 
installers.'' An area practice survey can make this determination. But 
it is not necessary for Wage and Hour to conduct an area practice 
survey to determine the work of each and every classification. For 
example, an area practice survey would not be needed to determine 
whether, instead of building wood structures, carpenters install water 
pipes, because such work is part of the basic, core duties of a 
plumber. Conversely, helpers, under the suspended rule, cannot be 
identified under the duties-based approach because there is no 
generally accepted subset of duties performed by helpers that would 
distinguish the helper from other classifications.
    LIUNA commented that the combination of the suspended rule's 
allowance of overlap with laborers' duties and the lower wages 
generally paid to helpers would result in either the displacement of 
laborers in favor of workers classified and paid at lower helpers' 
rates, or the performance by the existing laborer workforce of the same 
work at lower wage and fringe benefit rates--contrary to the purpose of 
the Davis-Bacon Act to prevent Federal construction from depressing 
locally prevailing wages. LIUNA observed that many of the work 
activities of certain construction laborer classifications are 
precisely the same as the potential helper duties specifically 
enumerated under the suspended rule. LIUNA noted, for example, that a 
wide variety of ``tender'' classifications, which are negotiated 
between the Laborers' local unions and construction employers 
throughout the country, include the

[[Page 69678]]

same duties that would be performed by helpers under the suspended 
regulations.\3\ Dr. Thieblot, however, stated that the fact that the 
suspended helper definition may include work that would otherwise be 
done by laborers should be of no more concern to the Department than 
the performance by ``tender'' classifications of work that could be 
done by laborers.
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    \3\ LIUNA stated that the laborer's role as a ``tender'' or 
``helper'' to other trades has a long history, as demonstrated by 
the American Federation of Labor's 1903 charter to LIUNA, which 
described the laborer's work as ``tending to masons, mixing and 
handling all materials used by masons (except stone setters), 
building of scaffolding for mason's plasters, building of centers 
for fire proofing purposes, tending to carpenters, tending to and 
mixing of all materials for plastering, whether done by hand or any 
other process, clearing of debris from buildings, scoring, 
underpinning and raising of old buildings * * *.'' LIUNA also stated 
that, although today the term ``tender'' is preferred over 
``helper'' in describing laborers' support relationship to other 
craft workers, the two terms are interchangeable in the construction 
industry and that DOL's Davis-Bacon General Wage Determinations 
include ``literally hundreds of examples of `tender' or `helper' job 
titles (mason tender, plasterer tender, carpenter tender, plumbing 
tender, etc.) listed as part of the laborer classification.''
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    The Department believes that LIUNA's concerns on the overlap of 
helper duties with other existing laborer classifications under the 
suspended rule are valid. The Department also believes that the 
recognition of a wide variety of tender classifications under its 
current policy demonstrates the manner in which helper classifications 
will be recognized under the final rule. The Department under its 
current policy, and under the final rule, will issue rates for helper 
classifications where the duties they perform are distinct from those 
of other classifications, including the journeyworkers they assist and 
other laborer or tender classifications. Tender classifications 
recognized by the Department must meet these criteria. While tender 
classifications do perform laborer-type duties, their performance of 
such work must be prevailing in the locality, i.e., more tenders than 
any other classification perform the work in question in that 
particular locality. In contrast, under the suspended rule, the use of 
helpers by contractors must be prevailing in the locality and the 
duties they perform is determined by area practice, but there is no 
requirement that their performance of certain duties be prevailing in 
relation to those performed by other classifications in the locality. 
Thus, the suspended rule would allow the duties of a helper to overlap 
with those of other classifications that prevail within the locality, 
possibly leading to the employment of helpers to perform the work of 
other classifications at lower wages. Because tender/helper 
classifications must perform distinct duties for which the tender/
helper classifications prevails in the locality, the recognition of 
such classifications does not carry the same potential for abuse and, 
therefore, the undermining of prevailing wages associated with the use 
of helpers under the suspended rule.
    The Department indicated in the NPRM that it does not believe that 
the suspended rule can be effectively enforced under the vague, 
subjective criteria of its definition. For instance, the Department 
stated in the NPRM that the suspended definition's failure to 
distinguish between ``semi-skilled'' and ``skilled'' workers presented 
the Department with a ``fundamental problem'' when it tried to develop 
enforcement guidelines. LIUNA commented that the suspended definition 
provides no guidance for distinguishing between a ``semi-skilled'' 
helper who uses tools of the trade, and a journeyworker with little 
experience. The ABC stated, on the other hand, that contractors have 
developed methods for recognizing differences between skilled and semi-
skilled work and have implemented pay scales based on such differences. 
None of the commenters, however, has identified any methods or criteria 
used by contractors that would be helpful to the Department in 
distinguishing between skilled and semi-skilled work. Similarly, the 
AGC stated that contractors routinely make hiring decisions based on 
skill level and compensate craft workers based on their training and 
experience. The Department believes that these practices are reflective 
of the normal practice of non-union employers in many industries where 
workers within an occupation are paid a range of rates based on their 
training and experience. The Department does not believe that such a 
practice demonstrates the existence of separate classes of workers 
within the meaning of the Davis-Bacon Act.\4\
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    \4\ See the recent decision of the Administrative Review Board 
in Miami Elevator Company and Mid-American Elevator Company, Inc., 
ARB Case Nos. 98-086 and 97-145 (April 25, 2000), pp. 33-34.
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    The AGC stated that whether a skilled worker would accept and 
perform a ``semi-skilled'' job as a helper is an irrelevant concern, 
because compliance should focus on ensuring that individuals are 
properly compensated for the work they actually perform. This point 
echoes one of the Department's main concerns which led it to reject the 
suspended helper rule in favor of the traditional duties-based approach 
under the proposed rule. Under the suspended rule, individuals 
classified as helpers, who may perform the work of both higher paid 
craft workers and laborers, would not be compensated based on the work 
they perform, but rather on their comparatively lower skill levels. 
Furthermore, the Department still does not believe it could draw the 
line effectively between semi-skilled and skilled work, especially 
given that, in today's construction market, skilled craft workers may 
perform a whole range of duties from unskilled to semi-skilled to 
skilled, and laborers often perform what may be considered semi-skilled 
work as well.
    The Department also observed in the NPRM that the supervision 
aspect of the suspended helper definition would provide little 
assistance in distinguishing a helper from other classifications of 
workers. LIUNA agreed that supervision by a journeyworker is not a 
practical standard for distinguishing ``semi-skilled'' helpers from 
others on the work-site, because many classifications are supervised by 
other workers or supervisors. LIUNA stated that laborers, apprentices, 
trainees and lesser skilled journeyworkers all may work under the 
``direction and supervision'' of other, more highly skilled 
journeyworkers. The AGC, on the other hand, stated that the definition 
of a helper does not need to ``indicate the nature or amount of 
direction that helpers must receive to distinguish them from others on 
a worksite,'' because this should be left to local prevailing practice. 
None of the commenters offered suggestions as to how, from a practical 
standpoint, the Department could determine local supervisory practices.
    Nothing in the comments received by the Department contradicts its 
view that laborers and journeylevel construction workers, like helpers 
under the suspended rule, also may work under the ``direction and 
supervision'' of other journeyworkers. In the Department's experience, 
which is supported by LIUNA's comments, supervision on a construction 
worksite is often an amorphous concept, especially where it is 
performed by a ``team leader,'' and therefore, does not lend itself to 
objective evaluation. Thus, the Department continues to be of the 
opinion that supervision by a journeyworker is not a practical standard 
for distinguishing semi-skilled helpers from other classifications on 
the worksite.
    The Department also stated in the NPRM that it believes the 
problems resulting from the suspended rule's

[[Page 69679]]

definitional ambiguities are compounded by evidence that the term 
``helper'' has multiple, quite different meanings within the 
construction industry. LIUNA stated that the examples of duties that a 
helper may perform, as listed in the suspended definition, are not 
``semi-skilled,'' but rather include a range of skilled, semi-skilled, 
and unskilled duties commonly performed by other classifications. AGC, 
on the other hand, stated that many different craft classifications 
have multiple, quite different meanings within the construction 
industry, and that this is the primary reason that no standard 
definitions have ever been promulgated for craft classifications 
performing Davis-Bacon work.
    While it is true, as discussed above, that craft classifications 
may have somewhat different meanings within the industry, craft 
classifications generally encompass certain well-recognized duties that 
are widely understood to be the core duties of the craft occupation. 
Thus, despite the occasional need for clarification regarding the 
prevailing classification used by contractors in an area for workers 
performing specialized work, the fundamental scope of work of most 
construction craft occupations is not usually in question.
    In contrast, it appears to the Department, as demonstrated by the 
rulemaking record, that a helper classification can have various 
meanings and uses even within the same locality. For example, the APWC 
stated that helpers, in its view, ``are semi-skilled workers who work 
under the direction of and provide assistance to journeymen,'' whereas 
the AGC of Texas described the use of helpers in the State of Texas as 
``allow[ing] construction contractors to utilize unskilled workers 
while teaching them a trade or skill through our on-the-job training 
programs.'' [Emphasis added]. Similarly, commenters on the proposed 
rule to continue the suspension of the helper regulations, variously 
characterized helpers as skilled workers who have not been trained in 
the full range of journeylevel work, short-term entry-level workers 
assisting journeyworkers in unskilled laborer duties, and longer-term 
specialized workers who perform a limited number of duties that overlap 
journeylevel workers. 61 FR 68646. In this regard, the Department, in 
the NPRM, invited commenters to submit further evidence regarding how 
helpers are in fact used by contractors, particularly any data 
regarding whether there is in fact a generally recognized definition of 
helpers that is capable of being objectively identified. No such data 
were submitted by the commenters. The Department therefore believes 
that it was correct in its view that no definition of helpers exists 
that could adequately reflect ``the actual and varied practice in the 
construction industry as a whole or even in any particular area.''
    The Department also expressed its concern that Wage and Hour would 
not be able to conduct a meaningful wage determination process using 
the suspended definition of helpers in light of the likelihood that 
contractors responding to area wage surveys would ascribe very 
different meanings to the term ``helpers.'' Dr. Thieblot stated that 
surveying for helper rates presents no special difficulties since it is 
Wage and Hour's practice ``to accept the rates and job titles as 
submitted by the contractors who paid them, whatever those titles might 
be'' without analyzing job content. Dr. Thieblot stated, for example, 
that it should be no more difficult for Wage and Hour to determine if 
the job title ``mason's helper'' prevails in a given area, than to 
determine if the job title ``mason's tender'' prevails.
    This comment highlights a common misunderstanding of the 
Department's wage determination process. Wage and Hour, in gathering 
wage data, does not automatically accept the job titles as submitted by 
reporting employers. Wage and Hour's experience in collecting wage data 
is that contractors may use different job titles for the same craft 
work. When faced with more than one name for the same type of work, 
Wage and Hour must determine whether the workers with the various job 
titles in question perform the same basic duties, in which case the 
data for such work will be combined for the purpose of determining the 
prevailing classification and issuing a single prevailing rate for the 
particular work performed. In other cases, Wage and Hour might 
determine that it is the prevailing practice in a certain area for 
workers under a more specific job title (e.g., drywall hanger) to 
perform a subset of the duties of a more generalized craft (e.g., 
carpenter), and thus issue a separate wage rate for the specific job 
title where the data indicate that the specialized classification 
prevails for such work in the area. Thus, Wage and Hour does not 
automatically accept job titles as submitted by employers, but rather 
analyzes job content, as appropriate, as part of the wage determination 
process.
    The problem with gathering data for helper classifications differs 
significantly from the difficulty presented where workers in an area 
perform the same craft work, but under different job titles. A helper 
classification, even if referred to by many different names within the 
locality, could nonetheless be surveyed effectively if the duties 
performed by workers with the various job titles for a helper were 
distinct from those of other classifications and essentially the same 
under each title. The problem with identifying helpers during the wage 
determination process is that the term ``helper'' under the suspended 
rule can serve to describe a variety of workers performing many 
different types of work. The Department is additionally concerned that 
the suspended helper rule, which imposes upon the wage determination 
process a definition of a helper that was created by the Department, 
may not necessarily reflect the reality of how helpers are in fact 
utilized in any given locality. Some employers may classify workers 
performing the work of helpers under the suspended rule as journeylevel 
workers, craft workers, or semi-skilled workers, while still others may 
classify such workers as laborers, unskilled workers, or tenders. In 
this regard, the Department notes that several contractors surveyed in 
the processing of helper conformance requests during the period the 
suspended regulations were in effect indicated that they used the job 
title ``laborer'' for workers meeting the definition of ``helper'' 
under the suspended regulation. Thus, because their practices vary from 
each other and from the definition in the suspended rule, the 
Department continues to be of the view that contractors, when 
responding to Davis-Bacon wage surveys, would likely be inconsistent in 
how they classify workers as helpers. This in turn would raise 
questions regarding the reliability of any wage data received for a 
given locality concerning employment of helpers.
    The SBSC acknowledged that the suspended helper rule is a break 
from the tradition under the DBRA of identifying and differentiating 
among job classifications on the basis of tasks performed by each 
classification. SBSC commented, however, that the Wage and Hour 
Division has an outdated construction mentality and that its complaints 
about the use of helpers suggest a hesitancy to modernize its views. 
SBSC's comments also questioned the Department's concern that helpers 
will replace laborers, stating that it is a misclassification to insist 
that helpers are laborers; it ``is the old class of laborer that has 
become suspect.'' SBSC's comments provide little practical guidance on 
how to create a definition of helpers that could

[[Page 69680]]

be effectively enforced consistent with the underlying intent of the 
DBRA. In addition, the substantial number of laborers reported in the 
wage surveys in the record, as well as the comments submitted by LIUNA 
in support of the interests of laborers in this rulemaking procedure, 
do not support SBSC's view that laborers no longer constitute a viable 
worker classification on Davis-Bacon covered construction.
    The Mercatus Center acknowledged that the Department's enforcement 
and administrative concerns may be justified, but cautions that they 
must be balanced against the productivity and cost-saving benefits from 
the suspended definition of helpers. The Mercatus Center further noted 
that by proposing to eliminate the flexibility of a helper to perform 
the duties of other job classifications, the Department would eliminate 
one of the most important cost-saving features of the helper position. 
While the Department believes that cost-saving features are certainly 
desirable, they cannot be determinative where the approach in question 
(i.e., the definition of helpers under the suspended rule) cannot be 
fairly and effectively administered in a manner consistent with the 
goals of the statute to protect prevailing wages for the corresponding 
classes of work performed. Indeed, one of the principal objectives of 
the Davis-Bacon Act was to set a floor on wages so that wages would not 
be reduced below the prevailing wage as a result of competitive bidding 
for Federal construction contracts.
    The ABC stated that the absence of a significant number of 
complaints or incidents of abuse during the time the suspended rule was 
in effect should be viewed as evidence that the Department's stated 
concerns about enforcement difficulties are overstated. Neither the 
absence nor presence of complaints had a bearing on the Department's 
determination that the suspended helper rule cannot be administered and 
enforced effectively; rather, as explained in the NPRM, it was the 
difficulty encountered in attempting to develop effective enforcement 
guidelines during the implementation period that initially raised these 
concerns. The suspended helper regulations were in effect for too brief 
a period for the absence of complaints to be indicative of a lack of 
enforcement difficulties. Though the suspended rule had an 
implementation period of approximately 20 months, it was nearly a year 
after implementation before the helper provisions could begin to be 
included in DBRA-covered construction contracts, following changes to 
the Federal Acquisition Regulations and the Defense Acquisition 
Regulations. Thus, the suspended helper rule simply was not in force 
for a sufficient period of time to draw any conclusions from the number 
of complaints received during its application.
    After carefully reviewing the comments, the Department is persuaded 
that the suspended rule cannot be effectively administered and 
enforced. The suspended rule provides no objective basis for 
distinguishing between helpers and other classifications, and 
furthermore is vague and internally inconsistent. Its effect, contrary 
to the intent of the statute, would be to allow contractors and 
subcontractors on DBRA projects to assign the duties of both craft 
workers and laborers to helpers who are paid at lower wage rates, with 
virtually the only restriction being that the worker receive some 
supervision. As a result, the Department remains concerned that 
implementation of the suspended rule would lead to many instances of 
intentional and unintentional misclassification of workers and 
potential abuse of the rule, which the Department would be unable to 
prevent or remedy. None of the comments submitted provided any 
information or arguments which alleviated these concerns.
    Additionally, the Department believes it would not be able to 
collect meaningful, consistent wage data regarding use of helpers for 
wage determination purposes. The Department believes that the ambiguous 
language of the definition in the suspended rule would not give 
contractors adequate guidance and would lead to inconsistent wage 
reporting. Because there is no generally recognized practice regarding 
how helpers are used, contractors reporting wage data in accordance 
with the definition in the suspended rule in some instances probably 
would report as helpers workers whom they consider journeymen or 
laborers.
    The court of appeals, in its review of the Department's original 
rulemaking concerning helpers, stated that its deference to the 
Secretary's choice of policy ``is properly near its greatest when his 
decision turns on the enforceability of various regulatory schemes.'' 
Donovan, 712 F.2d at 629. The Department has been unable to develop a 
method for determining whether workers classified as helpers have been 
correctly classified under the suspended rule, consistent with the 
fundamental statutory goal of preserving locally prevailing wages for 
construction job classifications. Since the rulemaking record does not 
demonstrate that the suspended rule is capable of practical and 
efficient administration and enforcement to achieve the statutory goals 
under DBRA, the Department must reject implementation of the suspended 
rule.
2. Helpers Are Less Widespread Than Previously Believed
    As explained in the preamble to the proposed rule, the belief that 
a distinct class of ``helpers'' was in widespread use in the 
construction industry was a key assumption underlying the Department's 
development of the suspended helper regulation. 64 FR 17445. Although 
not a representative sample, the data submitted to the Department in 
the 78 surveys conducted during the brief period the suspended rule was 
in effect failed to substantiate that assumption. In its earlier 
rulemaking, the Department had projected that use of helpers would be 
found to be a prevailing practice in from two-thirds to 100 percent of 
all craft classifications surveyed, except where collectively bargained 
rates were found to prevail and did not provide for a helper 
classification. 52 FR 31366, 31369-70 (August 19, 1987); 54 FR 4234, 
4242 (January 27, 1989). The Department's experience with the survey 
data collected in 1992 and 1993 during the brief time that the 
suspended regulations were in effect was quite different. In the 78 
surveys conducted, the use of helpers prevailed in only 69, or 3.9 
percent of the 1763 classifications issued, and only 48 of the 69 
helper classifications, or 2.7 percent of the 1763 classifications, 
were based on the practices of non-union contractors and 
subcontractors. Furthermore, in only 20 of the 78 surveys conducted 
were any non-union helper classifications found to prevail.
    The Economic Impact and Flexibility Analysis in the proposed rule 
also provided data showing that helpers were less widespread than 
previous analyses had assumed. The 1996 Current Population Survey 
(CPS), compiled and published by the Bureau of Labor Statistics (BLS) 
and the Bureau of the Census, shows that helpers constituted only 1.2 
percent of total construction employment. Data from the Occupational 
Employment Statistics (OES) program showed that helpers comprised 8.7 
percent of the total construction work force. Because OES does not 
contain a separate classification for construction laborer, and its 
definitions of the helper classifications appear to include laborers, 
the Department believes the OES overstates the use of helpers. For this 
reason, the Department developed

[[Page 69681]]

an alternative estimate, adjusting the OES data by utilizing the 
percentage of laborers in the CPS workforce. The adjusted OES data 
resulted in an estimate that helpers constituted 3.4 percent of the 
total construction workforce.
    In their comments, the Building Trades stated that the Department's 
data on helper use are consistent with the 1996 Current Population 
Survey (CPS) compiled by BLS and the Bureau of the Census, which showed 
that helpers only account for 1.2 percent of total construction 
industry employment. The Building Trades believes that these data 
support its longstanding contention that the underlying purpose of the 
suspended helper regulation was not to reflect locally prevailing 
practices, but to ``artificially interject'' a non-prevailing 
classification of construction workers into Davis-Bacon covered 
projects as a means of undercutting prevailing wages.
    The ABC questioned the appropriateness of the Department's 
consideration of whether the use of helpers in the construction 
industry is ``widespread.'' The ABC stated that the proper test for 
determining the existence of helper classifications under the statute 
is not whether the use of helpers is ``widespread,'' but rather whether 
it ``prevails.'' The Department acknowledges that a basic prerequisite 
to issuing wage rates for classifications under Davis-Bacon, including 
helper classifications, is a determination of whether such 
classifications and corresponding pay rates prevail in the particular 
locality where the project is to be performed. However, the Department 
believes its consideration of the overall extent of helper use in the 
construction industry, i.e., whether helper use is ``widespread,'' is 
appropriate as part of a broad inquiry concerning the advisability of 
implementing the suspended regulations. As the Department stated in the 
NPRM, ``[t]he belief that a distinct class known as `helpers' was in 
widespread use in the construction industry was a key assumption 
underlying the Department's development of the helper regulation.'' 64 
FR 17445. It is appropriate for the Department to determine, before 
taking further regulatory action, if the original underlying assumption 
concerning the extent of helper use, which provided the impetus for the 
suspended rule, was borne out by the data collected during the period 
the regulations were in effect, or by any other more recent, relevant 
data available to the Department. The Department believes this is a 
particularly significant consideration where there is so little 
consensus on a definition of helpers or how helpers are used.
    Several commenters expressed their belief that the Department has 
underestimated the prevalence of helpers in the construction industry. 
Representative Norwood and the congressmen who joined in his comments 
state that ``[o]ver 75 percent of all construction in the private 
sector are performed by contractors who use semi-skilled helpers. One 
study found that on a given open-shop job, 35-50 percent of the workers 
in each craft are likely to be helpers.'' The source for these data was 
not identified, and therefore, the Department is unable to weigh this 
information against the data already available to the Department 
concerning the prevalence of helpers. These data, furthermore, do not 
indicate to what extent helper classifications actually prevail in the 
construction industry.
    The AGC stated that more recent BLS survey data contradict the 
Department's conclusions regarding employment of helpers. In support, 
the AGC cites the NCS test surveys discussed above for Jacksonville and 
Tucson, which, according to the AGC, showed that helpers comprise 13.6 
percent and 14.8 percent, respectively, of the total number of 
construction craft workers in those two localities.
    The AGC is referring to four fringe benefit pilot surveys in 
Tucson, Arizona; Jacksonville, Florida; Salt Lake City, Utah; and 
Toledo, Ohio, which BLS conducted pursuant to its National Compensation 
Survey (NCS) program to test the feasibility of collecting detailed 
fringe benefit data for occupations within the construction industry. 
In these surveys, helpers \5\ constituted 9.6 percent, 8.3 percent, 4.2 
percent, and 2.5 percent, respectively, of the total construction 
workforce.\6\ Laborers constituted 14.3 percent, 6.9 percent, 9.9 
percent, and 10.1 percent, respectively, of the total workforce. 
Combined, helper employment in these areas was 5.8 percent of total 
construction employment.
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    \5\ ``Helpers, construction trades'' were defined by the 
National Compensation Survey as ``[s]emi-skilled workers who assist 
other workers of usually higher levels of competence or skill. 
Helpers perform a variety of duties such as furnishing another 
worker with materials, tools, and supplies; cleaning work areas, 
machines, and equipment; feeding or offbearing machines; holding 
materials and tools; and performing routine duties. Helpers 
specialize in a particular craft or trade. A helper may learn a 
trade but does so informally and without contract or agreement with 
the employer.''
    The AGC mistakenly refers to the helper definition used in the 
NCS surveys as the OES definition. The OES definition is set forth 
infra at note 15. In the future, NCS surveys (and OES surveys) will 
use the new Standard Occupational Classification (SOC) definition. 
Under the SOC definition, helpers are described as follows: ``Help 
[craft worker] by performing duties of lesser skill. Duties include 
using, supplying or holding materials or tools, and cleaning work 
area and equipment.''
    \6\ The percentage figures cited by the AGC are considerably 
higher than those previously cited by the Department because those 
cited by AGC reflect the elimination of supervisory construction 
workers from the total number of construction workers surveyed. The 
percentage of helpers in relation to the entire construction 
workforce is the appropriate percentage to compare to the data 
utilized in the NPRM.
---------------------------------------------------------------------------

    It is important to note that the four pilot surveys, which included 
Jacksonville and Tuscon, were not designed to collect data on the 
employment of helpers, and do not report helpers by craft. In addition, 
because the NCS studies obtained data for only four geographic areas, 
the information produced by these studies cannot be projected to a 
nationwide estimate of the percent of helpers relative to the 
construction workforce as a whole. The Department believes that the 
information provided by these surveys is generally in line with the 
estimates used for the cost impact analysis provided in the NPRM.
    The helper data reported in these four pilot studies also reflect 
inconsistencies between the level of skill associated with the 
``helper'' and their compensation levels. Logically, a semi-skilled job 
would be expected to command a higher wage than an unskilled one, but 
this was not borne out by the NCS survey data. Helpers are defined, for 
purposes of these surveys, as ``semi-skilled'' workers; however, Table 
2 of the NCS surveys shows that ``semi-skilled'' helpers are paid 
approximately the same wage as ``unskilled'' non-union laborers.\7\ 
This inconsistency lends credence to the view that there is a widely 
disparate use of ``helpers'' in the construction industry.
---------------------------------------------------------------------------

    \7\ The NCS surveys actually show that the average wage rates 
reported for helpers are below the wage rates reported for 
``unskilled'' construction laborers. However, the lower average wage 
rate paid helpers in these NCS surveys appears to be due to the fact 
that the laborer's rates are an average of wage rates paid to both 
union and non-union workers, while the helper's rates are based only 
on non-union data.
---------------------------------------------------------------------------

    The ABC stated that the Occupational Employment Statistics (OES) 
data show as many as 500,000 helpers currently working in the 
construction industry. As explained in the NPRM, the OES survey did not 
include a separate construction laborers definition, and the helper 
definition appears to encompass laborers where they assist craft 
workers. It is likely therefore that the OES figures include many 
laborers and other

[[Page 69682]]

unskilled workers in the helper category. For this reason, the 
Department believes that OES figures overstate the use of helpers in 
the construction industry.
    The ABC also noted that the Department, when first publishing the 
suspended rule in 1982, relied upon earlier BLS estimates that helpers 
constitute between 3 and 9 percent of the total workers in the 
industry, and stated that these estimates do not differ greatly from 
the statistics cited in the most recent NPRM. In the preamble to its 
1982 Final Rule, the Department stated that BLS survey data of large 
metropolitan areas indicated that the estimated helper share of 
employment in the construction industry was between 3.2 percent and 5.6 
percent. 47 FR 23650. However, the Department indicated that this 
estimate might be understated because the survey was limited to areas 
that were ``heavily unionized.'' Id. To correct this understatement, 
the Department assumed that the true union share of Davis-Bacon 
employment was 50 percent and, accordingly, adjusted the estimate of 
the helper share of employment in the construction industry to between 
5.98 and 9.4 percent. Id. The Impact Analysis in the 1987 proposed rule 
utilized the OES survey as the basis for its assumption that 15 percent 
of employees in construction will be helpers. 52 FR 31368-31369. As 
discussed in the Impact Statement published in the NPRM, the Department 
now believes these estimates overstate the percentage of helpers in 
construction employment.
    However, none of these surveys and studies shows the degree to 
which the use of helper classifications is actually prevailing within 
the meaning of the DBRA.\8\ As discussed above, the 1987/1989 
rulemaking projected helper classifications would prevail in two-thirds 
to 100% of all non-union craft classifications. The Department's 
limited experience, as reflected in the data collected during the 
implementation period, does not support these projections.
---------------------------------------------------------------------------

    \8\ In this regard, the AGC commented that ``[t]he percentage of 
helpers in the `construction industry' is likely to underestimate 
their numbers and reveals nothing about their employment with 
respect to a particular craft.''
---------------------------------------------------------------------------

    Several commenters stated that the 78 wage surveys conducted in 
1992-93, upon which the Department relied in part to assess the extent 
of helper use, constituted too small a sample to be a reliable measure 
of the extent of helper employment throughout the construction 
industry. The AGC and the ABC cited a GAO audit of the Davis-Bacon wage 
survey process as the basis for their opinion that the Davis-Bacon 
surveys are unreliable and should not be used as a basis for estimating 
the extent of helper employment. GAO/HEHS-96-130 (May 1996). The ABC 
suggested that these survey results might also be unreliable because a 
large number of non-union contractors either did not voluntarily 
participate in the survey process or were not aware that helpers should 
be reported during the implementation period. Dr. Thieblot also 
expressed his belief that factors other than scarcity explain why 
relatively few helper rates were determined to prevail during the 
implementation period. Dr. Thieblot stated that the Department's 
inability to find helper rates prevailing during this period was due to 
the type of surveys conducted, where they were conducted, and how the 
results were interpreted.
    The Department agrees with the comments that the 78 surveys were 
not a statistically valid sample and are not a reliable measure of the 
extent of helper employment in the industry. However, the Department 
has found its 1992-1993 survey data to be consistent with the 
relatively low incidence of helpers reflected in the other available 
data sources discussed in the Impact Analysis. The Department believes 
that a sufficient number of surveys were conducted to provide evidence 
that the earlier estimates of the extent to which use of helpers 
prevails were overstated. It is also worth noting that most of the 
surveys were selected to target areas where the Department believed 
that use of helpers would likely be found to be prevailing.\9\
---------------------------------------------------------------------------

    \9\ The Department also reopened unpublished surveys that were 
conducted before the helper rules were in effect in order to include 
helper data.
---------------------------------------------------------------------------

    While the report from the GAO raises the possibility that some 
prevailing wage decisions issued during this period might be affected 
by the submission of erroneous data, there is no evidence that the data 
collected by the Department concerning prevalence of the use of helpers 
were inaccurate or skewed by the submission of erroneous data.\10\ 
Erroneous reporting of an employee's classification is not a typical 
error mentioned in the GAO report.\11\ Thus, the GAO findings are not 
relevant to the issue of prevalence of the use of helpers and cannot be 
used to support the conclusion that the surveys conducted during the 
time that the semi-skilled helper rule was in effect are an unreliable 
source of information on that issue. The Department also disagrees with 
the comment that contractors were not made aware that they should be 
reporting helper employment during the implementation period. Specific 
instructions were included on the WD-10 survey forms to inform 
contractors of the definition of ``helper'' and that workers falling 
within that definition should be listed as helpers, regardless of job 
title.
---------------------------------------------------------------------------

    \10\ As the Department stated in the Final Rule, continuing the 
suspension of the ``semi-skilled'' helper regulations, ``It is 
inappropriate to draw conclusions concerning the accuracy of survey 
results based on the GAO report. The report did not examine or 
verify the accuracy of wage determination data, survey response 
rates, or calculation of prevailing wages. It focused on the 
policies and procedures utilized to prevent the use of inaccurate 
data, and proposed changes to strengthen those policies and 
procedures.'' 61 FR 68641, 68645.
    \11\ The typical errors mentioned in the GAO report concerning 
data submissions include:
    <bullet> Reporting the wrong peak week,
    <bullet> Reporting a slightly incorrect wage or fringe benefit 
rate (e.g., reporting the rates currently being paid rather than the 
rates that were paid during the peak week that occurred ten months 
previously), or
    <bullet> Reporting an average wage rate rather than the wage 
rate paid to each individual worker within the classification (e.g., 
an employer might report five electricians paid one average rate 
when in fact each electrician was paid a slightly different rate).
---------------------------------------------------------------------------

    Dr. Thieblot re-analyzed the non-union data on helper use, 
discarding all surveys which, based on the areas in which the surveys 
were performed and the type of construction surveyed, he did not 
believe would be likely to produce helper classifications. He then 
proceeded to eliminate all classifications that he believed would not 
ordinarily utilize helpers, such as truck drivers and equipment 
operator classifications. After paring down the data in this manner, 
Dr. Thieblot concluded that helper use prevails in 14.5% (48 of 331) of 
those non-union classifications he believed could possibly use helpers.
    The assumptions on which Dr. Thieblot's analysis was based, 
regarding which geographic areas and which types of construction and 
classification are likely to produce helper classifications, appear to 
be speculative and inconsistent with the data in the surveys.\12\ In 
any event, this total is much less than the two-thirds to 100% of all 
(non-union) craft classifications in which the Department previously 
estimated helpers would prevail.
---------------------------------------------------------------------------

    \12\ For example, although Dr. Thieblot eliminated highway 
construction and truck drivers from his count on the assumption that 
these types of construction and classifications would not use 
helpers, the Department found 6 instances in which truck driver 
distributor helpers prevailed and 3 instances in which mechanics' 
helpers prevailed on highway construction.
---------------------------------------------------------------------------

    Dr. Thieblot also questioned what he termed the Department's 
``unexplained rejections of helper rates as prevailing

[[Page 69683]]

* * *.'' However, the Department followed the suspended rules at 29 CFR 
1.7(d) for determining the circumstances in which a helper 
classification is found to prevail. For example, where the union 
electrician's rate was found to prevail, an electrician's helper 
classification would not be found to be prevailing unless it was the 
practice for union contractors to hire electrician's helpers. Where the 
electrician's rate was based on an average of wages paid, the 
determination of whether use of electrician's helpers prevailed was 
based on a comparison of the number of craft workers (journeymen, 
apprentices, trainees and helpers) working on projects utilizing 
electrician's helpers with the number of craft workers (journeymen, 
apprentices, and trainees) working on projects without helpers. 
Finally, the Department's data sufficiency guidelines in effect at the 
time required that the Department not list a classification and wage 
rate where the number of helpers used (or any other classification), or 
the number of contractors using helpers was not sufficient to determine 
a prevailing wage.\13\
---------------------------------------------------------------------------

    \13\ Wage and Hour procedures in effect at the time required 
that, in order for a prevailing rate to be issued, there must be at 
least 6 workers employed by at least 3 contractors if the 
contractor-response rate was less than 50 percent, and at least 3 
workers employed by at least 2 employers if the response rate was 50 
percent or more.
---------------------------------------------------------------------------

    After review of the comments, the Department continues to believe 
that helpers are not as widespread as it had previously assumed.
3. The Suspended Regulation Could Have a Negative Impact on Formal 
Apprenticeship and Training Programs
    Although not its primary concern in this rulemaking, the Department 
believes that the potential impact of the suspended rule on formal 
apprenticeship and training programs merits discussion, given the 
Secretary's broad authority to protect and promote the welfare of 
workers, including the authority under the National Apprenticeship Act 
of 1937, 29 U.S.C. 50, et seq. (also known as the Fitzgerald Act) to 
promote apprenticeship. As stated in the NPRM, the Department believes 
that the suspended helper regulations could undermine effective 
training in the construction industry if contractors are permitted to 
use helpers, who may never become journeylevel workers, in lieu of 
apprentices and trainees participating in formal programs that place 
ratio limits on their use, assure that they receive full training, and 
lead to jobs at the journey level.
    Several commenters were concerned about the negative impact the 
suspended helper rule would have on formal apprenticeship and training 
programs. Congressional Representatives Clay, Owens, and Clyburn stated 
that minority and female workers would suffer reduced earning 
opportunities and/or lost wages and benefits if the suspended helper 
regulation were implemented. These congressmen expressed concern that 
the suspended rule would trap younger workers, including a 
disproportionate share of minority workers, in the new helper 
classifications; as a result these workers would never enter 
apprenticeship programs, which are the primary route to obtaining 
decent wages and fringe benefits. Representatives Schakowsky and Weiner 
echoed these concerns, stating that the suspended rule, which contains 
no requirement that contractors provide any training to helpers, would 
have an adverse impact on construction worker training and 
apprenticeship programs, thus exacerbating the current skills shortage 
in the construction industry. These congressmen also stated their 
belief that the suspended regulation would reduce opportunities 
available to minority and female workers within the construction 
industry by relegating them to helper status.
    The Building Trades commented that, in the NPRM, the Department 
greatly understated the long-term negative impact the suspended 
regulation would have on formal apprenticeship and training programs. 
The Building Trades stated that the suspended helper regulations would 
permit almost unfettered use of low-paid semi-skilled helpers on DBRA-
covered projects, thus offering contractors and subcontractors savings 
in labor costs without the quid pro quo of investing in apprenticeship 
training. The Building Trades stated that contractors and 
subcontractors who participate in and provide financial support for 
formal apprenticeship and training programs would be placed at a 
competitive disadvantage vis-a-vis contractors using helpers, thus 
undermining their continued participation in such programs. The 
Building Trades also expressed its concern that the suspended rule's 
failure to encourage formal craft training would eventually lead to a 
severe shortage of skilled craft workers in the industry.
    LIUNA cited the GAO's finding that a ``major incentive'' for 
contractors to use apprentices has been the ability to pay less than 
the prevailing wage on DBRA projects. GAO/HRD-92-43 (1992), p. 11. 
LIUNA stated that the reduced apprenticeship opportunities that would 
accompany the suspended rule would result in additional costs for 
training workers, a long-term shortage of skilled workers, fewer 
genuine training opportunities for women and minority craft workers, 
and an increase in construction injuries, since most injuries occur to 
new, entry-level workers who are untrained or inadequately trained.
    MESMA noted that prevailing wage laws support the funding and 
viability of many labor-management apprenticeship programs that provide 
state-of-the-art training and produce the most productive workers in 
the industry. MESMA stated that the overuse of helpers could lead to a 
reduction in skills and diminishing quality of construction, as well as 
an increase in industrial accidents, because helpers generally receive 
little or no safety training.
    The NJATC commented that helpers under the suspended definition 
would likely perform the same role that apprentices now perform on the 
jobsite, only at a lower cost. The NJATC stated its belief that this 
practice would result in fewer indentured apprentices, as contractors, 
in competition to win federal construction contracts, would replace 
``journeymen-in-training'' apprentices with lower-paid helpers in 
continually increasing numbers. NJATC stated that, within five to ten 
years, this replacement of apprentices with helpers on DBRA projects 
would result in an acute shortage of skilled construction workers.
    The IBEW commented that, if use of helpers is allowed extensively 
on DBRA projects, contractors would no longer be motivated in a 
competitive setting to spend 2 percent or more of their payroll on 
training, and use an apprenticeship system requiring ratios, when they 
could use helpers and avoid such requirements.
    On the other hand, both the ABC and the AGC commented that there is 
no basis for the Department's concern that increased recognition of 
helper classifications may have a detrimental effect on apprenticeship 
and training programs. The ABC stated that, over the last decade, 
funding and participation by open shop contractors in apprenticeship 
and training programs has increased significantly, independent of the 
Davis-Bacon regulatory process. The ABC stated that the Department's 
policies regarding apprenticeship programs and ratio requirements have 
made apprenticeship training unavailable to some workers who desire to 
enter the construction industry in semi-skilled jobs. The ABC further

[[Page 69684]]

stated that the helper classification is an important point of entry 
into the construction industry for young people, women and minorities, 
and that it is improper for the Department to refuse to recognize the 
prevailing practice of employing helpers in an effort to force into 
training programs workers who either may not be qualified or may not 
desire such training.
    While acknowledging that the helper classification cannot be used 
as an informal training program, the APWC stated that it fulfills an 
important entry-level job opportunity for many construction workers. 
The AGC of Texas, on the other hand, stated that the use of helpers 
allows contractors to utilize unskilled workers while teaching them a 
trade or skill. Dr. Thieblot expressed concern that a larger number of 
skilled journeymen will be needed to sustain the construction industry 
in the future than the number which can be provided by existing 
apprenticeship and formal training programs. Dr. Thieblot also 
expressed his belief that the suspended helper rules, to the extent 
they would allow informal, on-the-job training of semi-skilled workers, 
would provide a necessary alternative to formal apprenticeship and 
training programs for training and upgrading workers to journeyman 
status.
    The Mercatus Center expressed its belief that the increased 
employment of helpers under the suspended rule would provide greater 
employment and training opportunities for minorities and women. The ABC 
recommended more study on the potential impact on minorities and women 
prior to issuance of the proposed rule. The APWC stated that it is 
inappropriate for the Department, in analyzing the merits of the helper 
regulations, to express a preference for formal training, such as 
provided under union-sponsored apprenticeship plans, over the informal 
training methods utilized in the non-union sector.
    The Department continues to believe that formal structured training 
programs are more effective than informal on-the-job training alone. 
The Department's encouragement of formal training is reflected in the 
provisions of the Secretary's DBRA regulations that currently allow 
laborers and mechanics classified as ``apprentices'' or ``trainees'' to 
be paid less than the prevailing wage rate on Davis-Bacon covered 
projects only if they are enrolled in a bona fide apprenticeship 
program registered with the Department's Office of Apprenticeship, 
Training Employer and Labor Services (ATELS) (formerly, Bureau of 
Apprenticeship and Training (BAT)) or a State Apprenticeship Agency 
recognized by ATELS, or a bona fide training program approved by the 
Department's Employment and Training Administration.
    The Department views any increases in funding and participation in 
formal training programs in the open-shop construction community as a 
positive development, but this does not address the concerns expressed 
by several of the commenters that the implementation of the suspended 
rule would discourage the growth of such programs and result in the 
replacement on DBRA-covered projects of apprentices and trainees 
enrolled in formal programs, by helpers who could perform the same work 
as apprentices and trainees at a lower cost to the construction 
contractor and without any restrictions as to how helpers are used. The 
Department shares this concern, along with the additional concern that 
workers employed as helpers--and particularly, young, minority and 
female workers--will not receive the type of training necessary to 
become higher skilled, better paid workers. The Department notes that 
the Congressional Budget Office (CBO) has also recognized that the 
suspended rule might have a negative impact on apprenticeship and 
training programs.\14\
---------------------------------------------------------------------------

    \14\ The CBO stated in its Study: ``Modifying the Davis-Bacon 
Act: Implications for the Labor Market and the Federal Budget,'' 
July 1983 at page 42: ``Contractors who would have been induced to 
provide approved training and apprenticeship programs, because doing 
so was the only way of paying less than journeymen's wages on 
federal projects, might now reduce the number of apprentices in 
favor of helpers and informal trainees. To the extent that this 
adjustment occurred, less-skilled workers might receive less 
training of the type that would qualify them for entry into the 
skilled crafts--possibly reducing minority access to these crafts 
and limiting the supply of skilled labor in the future.''
---------------------------------------------------------------------------

    Although not the paramount concern in this rulemaking, the 
Department is of the view that the increased use of helpers under the 
suspended rule poses a significant risk that formal apprenticeship and 
training programs on DBRA-covered projects would be undermined.

Discussion of Other Alternatives Considered

    Except for TxDOT, which appears to favor a combination of the 
proposed alternatives, none of the commenters urged the Department to 
adopt any of the alternatives set forth below. The ABC stated that, 
while it believes that the Department should reinstate the suspended 
rule, it would support further study of any of the proposed 
alternatives. The ABC commented that each of the proposed alternatives 
is preferable to adoption of the proposed rule, and that the Department 
has not given sufficient study to the alternative approaches. On the 
other hand, both the Building Trades and LIUNA indicated their belief 
that none of the alternative approaches considered by the Department is 
viable.
    The Mercatus Center commented that the Department has not properly 
assessed the quantitative benefits of the alternatives presented in the 
NPRM. The Mercatus Center stated that, without better information on 
the costs and benefits of the alternatives, the Department places 
inordinate weight on such factors as ease of administration and 
enforcement, rather than on net social benefits. As explained in the 
NPRM, ``[e]ach alternative would likely result in greater use of 
helpers than under the proposed rule, but less than under the suspended 
rule,'' and therefore, ``the economic impact would presumably yield 
some portion but not all, of the savings anticipated under the 
suspended rule.'' 64 FR 17455. The Department also stated that it would 
not be possible to provide detailed estimates of the economic impacts 
of the alternatives because ``each alternative encompassed many 
possible variations and outcomes'' and ``there is no data source that 
would provide appropriate information on these variations and 
outcomes.'' Id.
1. Add a Ratio Requirement to the Suspended Helper Definition
    The Department stated in the NPRM that it believed that 
implementation of a ratio provision would be essential if the suspended 
rule were implemented, in order to reduce the potential for abuse. The 
Department recognized, however, that adoption of a ratio provision 
would not address or resolve the suspended rule's definitional problems 
that make it extremely difficult for contractors, as well as Wage and 
Hour and contracting agencies, to identify and distinguish helpers from 
other workers for DBRA enforcement and wage determination purposes. The 
Department also questioned whether, as a practical matter, an 
appropriate nationwide or local ratio standard could be determined, and 
expressed concern for the substantial resources that would be required 
to determine appropriate ratios based on local practices.
    The Building Trades expressed the view that any fixed nationwide 
ratio, like the ratio that was struck down in Federal court, would be 
arbitrary and capricious because it would be inconsistent with the 
underlying principle of DBRA that labor standards reflect local 
prevailing practices. LIUNA stated that the addition of a ratio 
requirement under the suspended rule

[[Page 69685]]

would not address or resolve the definitional problems inherent in the 
suspended rule, and that it would be extremely difficult to develop an 
appropriate ratio standard that would reflect local practices.
    Noting that the D.C. Circuit Court of Appeals allowed the 
Department to reinstate a ratio requirement provided that the 
Department can support such ratio with an administrative record, the 
ABC commented that the Department failed to develop such a record and 
did not attempt to set local ratios through the wage survey process.
    The Mercatus Center stated that the Department should re-evaluate 
the original rationale for including a ratio in the suspended rule. The 
Mercatus Center noted that ratios appropriate for productive 
construction efforts are subject to change with changes in production 
methods, materials, technology, and population, and that due to 
regulatory time lag, any binding ratio might be obsolete in a few 
years. The Center suggested that if a rationale for the type of abuse a 
ratio is intended to prevent could be articulated, then a ceiling that 
is non-binding, but that would prevent any feared abuse of the helper 
category, might be workable.
    TxDOT recommended that the Department adopt a combination of 
measures, including the addition of a ratio requirement to the 
suspended definition to prevent abuse of the helper classification. 
TxDOT suggested that varying the ratio requirement, depending on the 
type of work performed, might be a way of validating the ratio 
provision.
    None of the commenters has provided the Department with specific 
guidance as to how an appropriate nationwide or local ratio standard 
could be determined. As noted in the NPRM, a nationwide ratio would not 
accord with local practices, whereas locally developed ratios would 
present significant administrative and enforcement concerns and would 
require substantial resources for implementation.
    The difficulty with determining locally prevailing ratios begins 
with deciding how that ratio should be calculated. The easiest method 
would be to compare the total number of helpers to the total number of 
journeyworkers reported for the classification. This methodology, 
however, does not measure the typical ratio of helpers to 
journeyworkers on any particular job. For example, four hypothetical 
data submissions might report carpenters and carpenter helpers as 
follows:

------------------------------------------------------------------------
                                                  Number of
                    Project                      carpenter     Number of
                                                  helpers     carpenters
------------------------------------------------------------------------
 A............................................           1            2
 B............................................           1            2
 C............................................           6            1
 D............................................           1            2
                                               -------------------------
       Totals.................................           9            7
------------------------------------------------------------------------

    In this example, the prevailing jobsite ratio of carpenter helpers 
to carpenters is clearly 1:2 (i.e., on three of the four projects, 
contractors used one helper for every two carpenters). However, if the 
ratios are averaged, the resulting ratio would be almost 2:1 (1.875), 
and a ratio derived by dividing the total number of helpers by the 
number of carpenters would be greater than 1:1 (i.e., 9:7 or 1.286). 
Therefore, either of these approaches could frequently yield a 
distorted picture of the true prevailing ratio.
    Collecting and verifying data on the ratio of helpers to 
journeyworkers for each jobsite is likewise a difficult task. 
Currently, Wage and Hour collects data for each classification based on 
the ``peak week'' of employment on the project. This ``peak week'' may 
differ for each classification. Since one may find that the peak week 
of employment for carpenters is a different week than that for the 
carpenters' helpers, the ratio would vary as well. It is not clear how 
the peak week concept should be applied in this situation. Any solution 
to this question could be administratively costly and time-consuming 
for Wage and Hour and for contractors, thereby impacting the 
Department's ability to obtain the cooperation of contractors to 
collect accurate data.
    The Department remains of the view that adding a ratio requirement 
would be essential to reduce the potential for abuse from the excessive 
use and misclassification of helpers if the suspended rule were 
implemented. The D.C. Circuit Court of Appeals also recognized the 
importance of a ratio provision to the effective administration and 
enforcement of the suspended helper rule when it stated that ``the 
Secretary has increased the likelihood that gross violations will be 
caught, or at least that evasion will not get too far out of line, by 
putting the forty-percent cap on the use of helpers. * * * [T]he 
existence of some cap at least increases our confidence that the 
Secretary has considered the enforcement problems of the new definition 
and responded to them.'' Donovan, 712 F.2d at 630.
    More importantly, the Department continues to believe the addition 
of a ratio provision to the suspended helper rule--although it might 
curb the worst abuses--would not address or resolve the problems 
inherent in the suspended rule's definition, which, as discussed above, 
make it extremely difficult to identify helpers for DBRA enforcement 
and wage determination purposes.
2. Change the Suspended ``Helper'' Definition To Emphasize the Semi-
Skilled Nature of the Classification
    In the NPRM, the Department stated that it believed that amending 
the ``helper'' definition to emphasize its semi-skilled nature would 
help assure that the helper classification would be a true ``semi-
skilled'' classification rather than a broad catch-all classification 
that could perform everything from laborer duties to an undefined and 
potentially unlimited assortment of skilled tasks overlapping the work 
of journeyworkers. The Department suggested that this approach would 
aid in distinguishing helpers from laborers by emphasizing the ``semi-
skilled'' nature of helpers, as distinguished from the unskilled duties 
in the definition in the suspended rule. Under this approach the 
definition would elaborate on the supervisory relationship between the 
helper and the journeyworker and the craft-specific assistance 
provided, and expressly limit the unskilled work the helper could 
perform. The Department noted, however, that this alternative would not 
resolve the administrative and enforcement problems that stem from the 
overlap of duties between journeyworkers and helpers, and that it might 
result in helper classifications being used to replace, rather than 
supplement, the use of apprentices and trainees registered in bona fide 
training programs.
    The Building Trades commented that, even under this modified 
definition of a helper, it would not be possible to distinguish a 
helper from a laborer because laborers also assist craft workers and 
many use tools of the trade to perform certain duties. The Building 
Trades also noted that a laborer working under the supervision of a 
journeylevel worker could be classified as a lower-paid helper under 
this definition, simply by adding to his or her duties a few relatively 
low-skilled tasks using tools of the trade.
    LIUNA stated that this alternative would not prevent the 
substitution of helpers for laborers, because laborers perform not only 
unskilled duties, but a wide array of semi-skilled duties as well. 
LIUNA further stated that, because laborers generally earn higher wages 
than helpers, this alternative would

[[Page 69686]]

result in misclassification of laborers just as would the suspended 
rule.
    The ABC stated that the Department's rejection of this alternative 
on the grounds that helpers would continue to have overlapping duties 
with journeymen is inappropriate. The ABC stated that, if the 
prevailing practice is to employ helpers to perform duties overlapping 
with those of journeylevel workers, it is the Department's statutory 
obligation to recognize that practice.
    The Department continues to believe that this alternative would not 
resolve the administrative and enforcement problems that would stem 
from the overlap of duties between journeyworkers and helpers. The 
Department remains of the view that the emphasis on semi-skilled duties 
under this approach might result in helper classifications being used 
to replace, rather than supplement, the use of apprentices and trainees 
registered in bona fide training programs. Furthermore, it appears that 
this alternative might not even resolve the problems of overlap of 
duties between helpers and laborers.
3. Define ``Helpers'' Based on the Bureau of Labor Statistics, 
Occupational Employment Statistics (OES) Dictionary of Occupations, 
Which Focuses on Unskilled Duties and the Worker's Interaction With 
Journeylevel Craft Workers \15\
---------------------------------------------------------------------------

    \15\ The OES Dictionary of Occupations classification scheme 
includes a broad category titled ``Helpers, Laborers, and Material 
Movers, Hand, Exclud[ing] Agricultural and Forestry Laborers.'' The 
work of helpers in the construction industry is described as 
follows: ``Help workers in the construction trades, such as 
Bricklayers, Carpenters, Electricians, Painters, Plumbers and 
Surveyors. Perform duties such as furnishing tools, materials, and 
supplies to other workers; cleaning work areas, machines, and tools; 
and holding materials or tools for other workers.''
---------------------------------------------------------------------------

    The Department noted in the NPRM that this approach, by focusing on 
the role of the helper in assisting the journeyworker and eliminating 
the ``semi-skilled'' characterization from the definition of helpers, 
could provide a more practical basis for distinguishing helpers from 
journeyworkers. However, the Department expressed its concern that 
laborers may often perform the same work encompassed within the OES 
helper definition, thereby causing significant problems for Wage and 
Hour in conducting wage and area practice surveys and in enforcement 
because of the lack of clear differentiation between the 
classifications. The Department also stated that it might be difficult 
under this approach for contractors to determine whether workers 
performing similar or identical duties are ``laborers'' or ``helpers'' 
when submitting DBRA survey data and in classifying workers on DBRA-
covered projects.
    Both the Building Trades and LIUNA commented that this alternative 
would present the same problem as that presented by the suspended rule, 
viz., helpers and laborers both perform the work as described in the 
operative definition. The Building Trades and LIUNA state that it would 
be difficult for contractors to determine whether workers performing 
similar or identical duties are laborers or helpers when submitting 
Davis-Bacon survey data and in classifying workers on DBRA projects.
    The AGC commented that the OES definition of a helper is consistent 
with the definition in the suspended regulation, and can be used by 
contractors to effectively distinguish helpers from laborers and other 
craft workers. The ABC objected to the Department's characterization of 
the OES definition as ``eliminating the semi-skilled characterization'' 
from the definition of helpers. The ABC further stated that any such 
elimination would deny an essential component of helpers and would 
defeat the statutory mandate of recognizing prevailing practices.
    None of the commenters has demonstrated how helpers can be 
effectively distinguished from laborers under this approach for both 
enforcement and wage determination purposes, given that laborers would 
often perform the same work as that described in the OES helper 
definition. Moreover, the Department does not believe that focusing on 
the role of the helper in assisting the journeyworker is an effective 
means for distinguishing helpers from laborers. None of the commenters 
disputes that laborers, too, are frequently called upon in the 
performance of their regular duties to assist journeymen.
4. Explicitly Delineate the Semi-Skilled Tasks Performed by Each Helper 
Classification
    As this so-called ``job family'' approach was described in the 
NPRM, an employee who performs only lower level duties that are 
associated with a particular craft may be classified and paid at the 
lower level helper rate; however, an employee who performs some lower 
level duties and some higher level duties must be paid the higher 
journeylevel rate for all of the employee's work time. The Department 
stated that this approach, in effect, would allow for the expanded use 
of helpers, with differentiation based on the skill and knowledge 
required to perform particular duties. The Department theorized that 
once the duties or tasks that the helpers could perform were clearly 
defined, wage data could be collected on that basis, and contractors 
could reasonably be expected to comply with the wage requirements for 
the various classifications employed on their contracts, thereby 
facilitating administration and enforcement. The Department stated, 
however, that developing clear definitions of the duties or tasks that 
helpers to each journeylevel craft worker would be allowed to perform 
would be very difficult, requiring extensive occupational analyses and 
further rulemaking to promulgate helpers' duties descriptions. The 
Department further questioned whether this approach, which presumably 
would result in uniform, nationwide definitions, would be consistent 
with the underlying principle that DBRA classifications are determined 
based on local area practices.
    The Building Trades and LIUNA stated that developing clear 
definitions of the duties or tasks that helpers would be allowed to 
perform would be very difficult, requiring extensive occupational 
analyses to develop accurate and specific descriptions of helpers' 
duties. They also commented that the uniform, nationwide definitions 
that would result from application of this alternative would not 
necessarily reflect locally prevailing practices, as DBRA requires.
    TxDOT appears to favor this or a similar approach, in that it 
recommended (in conjunction with other recommendations) the use of 
standardized definitions for both journeylevel and helper 
classifications, stating that each level of classification should 
require a specific level of skill, and for those classifications where 
a specific skill is not required, the common laborer classification 
should be utilized in lieu of a helper classification. TxDOT stated 
that, under this approach, the need for a semi-skilled worker 
classification would be eliminated. The AGC of Texas provided a copy of 
its ``Standard Job Classifications'' booklet to demonstrate the use of 
standard, uniform job definitions for job classifications, including 
several helper classifications, in connection with highway, heavy, 
utility, and industrial construction projects in the State of Texas.
    TxDOT also proposed that the Department expand and define the role 
of training programs with regard to such helper classifications, thus 
allowing helpers to progress to a status of ``journeyman trainee'' and 
then

[[Page 69687]]

journeyman. However, though the Department has concern for the impact 
its helper regulations may have on apprenticeship and training 
programs, it is not within the Department's purview in the context of 
this Davis-Bacon Act rulemaking to expand and define the role of 
training programs with respect to helpers.
    The Department believes that adoption of this approach is simply 
not practicable because of the expenditure of time and resources that 
would be necessary to develop job descriptions for all the construction 
crafts. The Department also believes that this approach is inadvisable 
because it would amount to recognizing sub-classifications within each 
craft, a practice that has never been permitted under DBRA.
    Furthermore, close examination reveals that the helper definitions 
created by the AGC of Texas suffer from the same infirmities as the 
helper definition in the suspended rule. For example, the AGC of Texas 
booklet provides the following job description for a ``Carpenter 
Helper, Rough'' classification: \16\
---------------------------------------------------------------------------

    \16\ The definition for a ``Carpenter Helper, Rough'' is fairly 
representative of all of the helper definitions contained in the AGC 
of Texas booklet. They generally all begin with the phrase, ``A 
learner or worker semi-skilled in this craft''; require supervision 
by the journeyworker; provide a list of specific duties; and 
conclude with the phrase, ``Performs other related duties.'' Though 
the specific duties vary from craft to craft with respect to each 
helper classification, they are basically unskilled duties that a 
laborer could perform.

    A learner or worker semi-skilled in this craft who assists a 
rough carpenter by expediting materials, keeping work area clean, 
sawing lumber to size specified, and assisting in constructing 
wooden structures, under the direction of a Rough Carpenter. 
---------------------------------------------------------------------------
Performs other related duties.

    Like the suspended helper definition, this definition uses the 
undefined term ``semi-skilled'' to describe the carpenters' helper 
classification without explaining what it means to be ``semi-skilled.'' 
Additionally, this definition is internally inconsistent in that it 
defines the carpenters' helper as ``semi-skilled,'' but specifically 
lists duties that might commonly be performed by unskilled laborers. 
The definition not only allows the duties of a helper to overlap with 
those of a journeyworker, but also provides no limitation on the duties 
a carpenter's helper can perform by including the open-ended phrase 
``[p]erforms other related duties.'' Lastly, this definition, by 
referring to a carpenter helper as a ``learner,'' poses perhaps an even 
greater risk than the suspended helper definition that helpers will be 
substituted for apprentices and trainees participating in formal 
programs that lead to workers achieving journeylevel status.

The Proposed Rule--Helpers as a Distinct Class With Clearly Defined 
Duties Which Do Not Overlap With Laborer or Journeyman Classifications

    Congressional Representatives Norwood, Goodling, Ballenger, 
Boehner, Hoekstra, McKeon, and Paul opposed the Department's proposed 
helper regulations, stating that they would tend to discourage rather 
than facilitate the use of helpers on DBRA projects. They commented 
that the proposed regulations are deficient because they do not reflect 
current industry practice and are not responsive to the needs and 
practices of the vast majority of the construction industry. These 
congressmen also stated that the proposed helper rule, in contrast to 
the suspended rule, will not encourage access by low-skilled workers to 
valuable entry-level jobs. They further stated that opening more helper 
jobs under the suspended rule would attract workers to the construction 
industry, which suffers from a serious shortage of skilled workers.
    Representatives Clay, Owens, and Clyburn supported the proposed 
rule on the basis that it not only better reflects the current 
practices of Davis-Bacon contractors, but also ensures that minority 
workers will be paid locally prevailing wages and fringe benefits. They 
further commented that the proposed rule will ensure that the Federal 
government, through its procurement practices, will not act to 
undermine the living standards of workers, and will promote continued 
access to the kinds of apprenticeship programs that are essential if 
new workers in the construction industry are to better themselves.
    Representatives Schakowsky and Weiner also urged the Department to 
adopt as final the proposed rule because it recognizes the need for a 
clear delineation and limitation on the use of helpers on DBRA-covered 
projects. They stated that the proposed rule will encourage proper 
training for young, minority and female workers by promoting formal and 
effective apprenticeship programs. They also commented that the 
proposed rule will enhance the presence of more skilled and productive 
workers on Davis-Bacon projects, thus reducing the costs resulting from 
job-related injuries and improving the economic situation of the entire 
community.
    The AGC, the ABC, Dr. Thieblot, and the SBSC all opposed the 
Department's proposed rule and advocated implementation of the 
suspended rule. These commenters, as well as the APWC, stated that 
where the use of helpers prevails, they should be recognized by the 
Department in accordance with its statutory mandate to reflect 
prevailing practices. For example, the ABC commented that, if it is the 
prevailing practice to employ helpers in a given locality to perform 
overlapping duties with journeymen, the Department of Labor has an 
obligation to recognize that practice. The AGC echoed this point, 
stating that even if helpers prevail in only 3.9 percent or 2.7 percent 
of surveyed job classifications, as surmised by the Department in its 
NPRM, helper classifications should nonetheless be recognized in those 
instances where they are found to prevail. The ABC also urged the 
Department to delay issuance of the proposed rule until the upgrade of 
the Department's survey and data collection processes has been 
completed and a fair and objective study of the helper issue is 
conducted.
    The AGC of Texas supported restoring the increased use of helpers 
under the suspended rule, stating that for more than 35 years helper 
classifications have been recognized in Texas and are still being used 
on projects that have no Federal funds. The Mercatus Center generally 
opposed adoption of the proposed rule, primarily based on economic 
considerations. Elcon specifically objected to the Department's refusal 
under its current policy to approve the elevator helper classification 
negotiated by the International Union of Elevator Constructors. Elcon 
stated that the Davis-Bacon Act should not be used to make new rules 
that would reduce competition, unnecessarily inflate costs on Federal 
construction projects, provide unfair advantages for nonunion 
organizations, and create separate job definitions for Federal 
projects.
    The Building Trades and LIUNA both urged the Department to adopt 
the proposed rule. They favored the proposed rule because it 
reestablishes the duties-based classification approach, provides an 
objective basis for administration and enforcement, including clear 
criteria that facilitate contractor compliance, and is consistent with 
the statutory intent to assure that workers employed on DBRA projects 
receive the prevailing wages paid to workers performing similar work on 
similar construction in the same area. They also stated that the 
proposed rule's lack of overlapping duties will discourage contractor 
misclassification and abuse and that the requirement that helpers be 
separate and distinct from

[[Page 69688]]

journeylevel workers and laborers will facilitate collection of wage 
data used to establish prevailing wage rates on DBRA work. Finally, 
they stated that the proposed rule will provide strong incentives to 
contractors and subcontractors to establish and participate in formal 
apprenticeship and training programs.
    MESMA opposed the use of helpers without stringent enforcement by 
the Department as part of a comprehensive Davis-Bacon reform effort. 
MESMA expressed concern that the overuse of helpers could lead to a 
reduction in workforce skills, diminishing quality of construction, and 
an increase in industrial accidents. The NJATC opposed the helper 
concept in general based on its belief that the institution of helpers 
will have a negative impact on apprenticeship and training programs. 
The IBEW opposed adoption of the Department's proposed rule based on 
its general opposition to use of helper classifications, under any 
definition, on DBRA projects. The IBEW suggested that the creation of 
helper classifications may bring down wage scales, put more people in 
poverty, and force construction workers to work more than one job in 
order to survive economically. MESMA and the IBEW both questioned 
whether the helper criteria under the proposed regulation can be 
effectively administered and enforced.
    Based on careful review of the comments and further consideration 
of the alternatives, the Department has decided to adopt as a final 
rule an amendment to the regulations that will incorporate the 
longstanding policy of recognizing helpers as a distinct classification 
on DBRA-covered work only where Wage and Hour determines that (1) the 
duties of the helper are clearly defined and distinct from those of the 
craft worker and laborer, i.e., the duties of the helper are not 
routinely performed by any other classifications in a given area; (2) 
the use of such helpers is the prevailing practice in the area; and (3) 
the helper is not used as a ``trainee'' in an informal training 
program.
    The Department favors this approach because it incorporates the 
duties-based methodology for distinguishing classifications that the 
Department utilizes in identifying other classifications under the 
DBRA. By providing for the recognition of helpers based on the duties 
they perform, rather than on the worker's skill level and the existence 
of supervision, the proposed rule provides an objective basis for Wage 
and Hour to administer and enforce the statute's prevailing wage 
requirements with respect to the employment of helpers. This duties-
based approach also facilitates compliance by providing clearer 
criteria to be followed by contractors who wish to employ helpers on 
DBRA-covered projects.
    The Department also believes that, by recognizing helpers only 
where their duties are distinct and do not overlap with those routinely 
performed by other classifications, the proposed rule will discourage 
contractor misclassification and/or abuse that could result from 
contractors reclassifying journeyworkers and laborers as helpers at 
lesser rates of pay on DBRA jobs.
    The Department believes that the proposed rule provides the only 
approach that is administratively feasible. Unlike some of the other 
alternatives considered, the policy under the proposed rule does not 
require Wage and Hour, in its enforcement, to make a fact-bound inquiry 
of each worker to assess his or her skill level and the nature of the 
worksite supervision he or she receives to determine whether the worker 
will be recognized as a ``helper'' for Davis-Bacon purposes. The 
requirement that helpers have distinct duties from those of other 
classifications on the wage determination also facilitates the 
collection of wage data that more reliably reflect the prevailing wage 
rates paid for work performed by helpers on DBRA-covered construction 
work.
    Under the regulations, helpers--whatever their job title--will be 
recognized, as they are today, whenever their duties are separate and 
distinct from duties routinely performed by other classifications. For 
example, tender classifications are common on Davis-Bacon wage 
determinations. On the other hand, where helpers are just lesser 
skilled workers of a particular craft, they will be included in the 
surveys under the craft classification, and their rates averaged 
together with the journeylevel workers (where there is no rate paid to 
a majority of the workers in the classification).\17\
---------------------------------------------------------------------------

    \17\ Employers who use helpers that meet the definition under 
this final rule should report the use of helpers in response to 
Davis-Bacon prevailing wage surveys, along with a description of the 
duties or other characteristics that distinguish helpers from other 
workers. Where ``helpers'' perform the duties of another 
classification on the wage determination, the employer should report 
the ``helper'' under that classification. If helpers are listed on a 
WD-10 survey form, the Department will determine whether they are a 
separate classification, meeting the criteria of the regulations; if 
not, the Department will determine the appropriate classification 
for the work performed and include the ``helpers'' and their wage 
rates under that classification--laborer, craft worker, or 
otherwise.
---------------------------------------------------------------------------

    Additionally, this approach maintains the current incentive to 
contractors to establish and participate in structured apprenticeship 
and training programs that facilitate the advancement of lesser skilled 
workers to journeylevel status.
    The chief objection to the proposed rule expressed by commenters in 
this rulemaking is that it disregards local area practices in those 
instances where there may be a prevailing practice of employing helpers 
who do not meet the three-part regulatory test as set forth above. The 
gravamen of this objection is that the proposed rule does not accord 
with the Department's statutory obligation to provide classifications 
and wage rates that mirror locally prevailing practices.
    The Department believes that the proposed rule is fully consistent 
with the DBRA's underlying prevailing wage goals and requirements. The 
Davis-Bacon Act provides little guidance concerning the methodology the 
Secretary is to use in determining ``classes'' of laborers and 
mechanics and their respective prevailing wage. Consequently, the 
Secretary has a substantial amount of flexibility and discretion in 
devising a methodology to fulfill the Department's statutory 
obligations and responsibilities under the Act. Donovan, 712 F.2d at 
616, 629-630; Miami Elevator Company and Mid-American Elevator Company, 
Inc., ARB Case Nos. 98-086 and 97-145 (April 25, 2000), slip op. at 35.
    The Davis-Bacon Act directs the Secretary to determine the 
prevailing wage for ``corresponding classes'' of laborers and 
mechanics. It has been the longstanding practice of the Department--
with the exception of the short period during which the suspended rule 
was implemented--to utilize a duties-based approach to identifying 
classes of laborer and mechanics.\18\ Under this practice, the duties 
that a particular class of worker performs may vary somewhat from one 
area to another; and a classification may be recognized in one area and 
be subsumed under another classification in another area, in accordance 
with prevailing area practice. Thus, in one area a helper may be a 
separate class, while, in another area, it may be subsumed under 
another classification in accordance with prevailing area practice. 
Although this duties-based distinction is not mandated by the statute, 
the Department believes it is

[[Page 69689]]

fully consistent with the legislative history and statutory intent.
---------------------------------------------------------------------------

    \18\ The Department has created a regulatory exception for 
apprentices and trainees in approved programs.
---------------------------------------------------------------------------

    Furthermore, the Department believes it simply is not feasible to 
graft onto a duties-based system of classifications, one class defined 
on the basis of skill and supervision. Since the craft worker is not 
defined on the basis of skill and supervision, and the prevailing wage 
of the craft worker is based on rates paid to workers with a range of 
skills and supervision, it does not make sense to carve out certain 
workers who may have less skill and receive more supervision.
    In addition, the Department has been unable to determine how the 
suspended helper rule can be administered and enforced in accordance 
with the DBRA's prevailing wage requirement. A review of the comments 
reveals no consensus as to how helpers are used in the construction 
industry, and the commenters provided no information to aid the 
Department in identifying a generally accepted definition of a helper 
that corresponds to industry practices. Nor is there a practicable, 
reasonable way to identify helpers, when the manner in which they are 
used varies so in each and every area where DBRA-covered construction 
is taking place.
    The Department's Administrative Review Board in its recent decision 
in the case of Miami Elevator Company and Mid-American Elevator 
Company, Inc., ARB Case Nos. 98-086 and 97-145 (April 25, 2000), 
explained the Department's position. In response to an argument that 
the Department's refusal to approve an elevator helper classification 
because it did not meet the current three-part test resulted in ``a 
staffing pattern that is inconsistent with locally prevailing 
practice,'' the Board stated as follows:

    ``[W]e note that the oft-repeated declaration that the purpose 
of the Davis-Bacon Act is to `hold * * * a mirror up to local 
prevailing wage conditions and reflect * * * them' on federal 
construction projects is a simplistic and inaccurate 
characterization of the statute. [Citation omitted]
* * * * *
    ``[I]t is virtually inevitable that some laborers and mechanics 
who work in a given jurisdiction are paid less than the prevailing 
wage rates determined by the Secretary, yet the congressionally-
mandated prevailing wage scheme requires that all construction 
workers be paid not-less-than the prevailing rate when employed on a 
federal construction contract--even those workers who might 
otherwise be employed on non-Federal projects in the local 
construction industry at lower pay scales. The goal of the Act is 
not merely to replicate (or ``mirror'') the full range of local pay 
scales, but to require that workers be paid at least the prevailing 
rate.
* * * * *
    ``In sum, the prevailing wage mechanism chosen by Congress 
always has included the possibility that some construction workers 
in a locality who normally earn less than the prevailing wage might 
earn more when employed on a project subject to the Act; similarly, 
the Secretary and the Administrator have a long history of limiting 
the circumstances under which workers in a training mode would be 
allowed to work on federally-funded projects, generally insisting 
that such workers be enrolled in government-approved training 
programs designed to promote quality training and prevent abuse. The 
fact that these forces combine to produce a staffing pattern that 
may not `mirror' local practice does not mean that the 
Administrator's decisions are incorrect, either under the law or 
regulations.'' Miami Elevator Company, supra, slip op. at 33-34.

    Accordingly, the Department concludes that the proposed rule, by 
requiring that the duties of a helper be distinct from those of other 
classifications employed on the jobsite, best fulfills the fundamental 
purpose of the Davis-Bacon Act to assure that workers employed on 
federal and federally-assisted construction work be paid at least the 
wages paid to corresponding classes of workers on similar construction 
in the area.
    The Department points out that it is not its intention that a 
helper classification would never be issued simply because some workers 
in another classification occasionally perform the work in question. As 
discussed above, the Department intends to issue helper classifications 
where the duties in question are not routinely performed by another 
classification on the wage determination and it is the prevailing 
practice in the area for helpers/tenders to perform the work in 
question, provided the other criteria of the regulation are met. In 
other words, although roofers may occasionally tear off roofing or 
carry roofing materials, the Department will issue a roofer's helper 
classification in a wage determination if more roofer's helpers perform 
these tasks than roofers on the projects surveyed, provided that the 
helpers tasks are clearly defined and do not include duties that 
prevail for other classifications in the area (e.g., application of 
roofing where it is prevailing practice that roofers perform this 
work), and that the helper is not an informal trainee. Consistent with 
the Department's practice on approval of additional classifications 
under the conformance procedures at section 5.5(a)(1)(ii)(A), moreover, 
the Department will not approve an additional classification of helper 
if the helper performs any tasks that are ever performed by other 
classifications on the wage determination. Thus, in the example given, 
the Department would not approve the roofer's helper as an additional 
classification because tearing off of roof and carrying of roofing 
materials are sometimes done by roofers.
    Consistent with the above discussion, the regulations have been 
amended to delete the suspended provision at section 1.7(d), defining 
the circumstances in which use of helpers would be found to prevail. 
The Department will apply its longstanding policies in determining 
prevailing practices. Section 5.2(n)(4) has been revised to set forth 
the circumstances in which helpers will be recognized on wage 
determinations and in additional classification (conformance) requests. 
Finally, the conformance provisions at section 5.5(a)(1)(ii) have been 
revised to delete the special references to helpers from the suspended 
paragraphs, and the second conformance provision at section 
5.5(a)(1)(v), which was in effect during the period of the suspended 
regulation, has been deleted.

Additional Modifications

    The regulations are further amended to reflect the organizational 
change in the title of the Bureau of Apprenticeship and Training (BAT) 
to the Office of Apprenticeship, Training Employer and Labor Services 
(ATELS).

IV. Executive Order 12866; Sec. 202 of the Unfunded Mandates Reform 
Act of 1995; Small Business Regulatory Enforcement Fairness Act

Summary

    The Department determined that the proposed rule should be treated 
as ``economically significant'' within the meaning of Executive Order 
12866 and as a major rule within the meaning of the Small Business 
Regulatory Enforcement Fairness Act because the various alternatives to 
the proposed rule, including reinstatement of the suspended rule, could 
result in potential savings in excess of $100 million per year. 
Therefore, a full economic impact analysis was prepared and presented 
for comment.\19\ The principal finding of this analysis was that any 
impact resulting from the increased use of helpers under the suspended 
rule, or any of the other alternatives considered, would be relatively 
modest. The Department estimated potential savings under the suspended 
rule to be from $72.8 million

[[Page 69690]]

(utilizing Current Population Survey (CPS) data) to $296.0 million 
(utilizing Occupational Employment Statistics (OES) data). The 
Department also devised an alternative methodology that is OES-based, 
but utilizes CPS data to compensate for the likelihood that OES data 
overestimate the number of helpers and underestimate the number of 
laborers. This ``adjusted-OES data'' provided an estimate of $108.6 
million in possible savings. As discussed in the NPRM, the Department 
believes that the potential savings are likely to be closer to $72.8 
million than $296.0 million.
---------------------------------------------------------------------------

    \19\ The Department also determined, for the reasons explained 
in the NPRM, that the provisions of the Unfunded Mandates Reform Act 
of 1995 do not apply to this rulemaking. None of the commenters 
disputed this determination.
---------------------------------------------------------------------------

Discussion of Comments

    The AGC does not believe that the surveys and data sources used by 
the Department support the conclusion that the employment of helpers is 
not as widespread as previously believed. Specifically, the AGC pointed 
out that, although the OES survey used does combine laborers, helpers 
and other categories, the survey is being revised to separate the 
helpers and laborers, making it more useful in the future. The AGC 
states that independent contractors rarely bid on Federal construction 
contracts, but rather are frequently hired by the contractors that are 
awarded the contracts. It therefore disagreed with the Department's 
view that inclusion of self-employed workers in the CPS is a strength 
of the survey. Furthermore, the AGC disagreed with the Department's 
statement that the OES definition of helpers is very similar to 
laborers who assist journeymen. Finally, the AGC disagreed with the 
Department's conclusion that the OES survey likely includes laborer 
employment with helper employment, thereby overstating the number of 
helpers and stated that the Department offers no support for its view 
that contractors cannot distinguish between helpers and laborers.
    The ABC believes that the Department's economic impact and 
flexibility analysis greatly understates the economic costs of the 
proposed rule. Raising similar concerns to those raised by the AGC, the 
ABC stated that the Department's analysis is flawed by: (1) A lack of 
evidence that helpers would replace laborers and apprentices in 
proportion to the number of workers in each of those occupations; (2) 
the absence of a basis for assuming that OES statistics include large 
numbers of laborers in the estimates of helpers; (3) improper inclusion 
of self-employed workers in the universe of ``relevant'' construction 
employment; and (4) the use of flawed and distorted 1992-1993 wage 
surveys to estimate the number of classifications in which helpers 
would prevail. The ABC estimates that the proposed rule will cost 
hundreds of millions of dollars each year.
    Turning first to the CPS survey, the Department continues to 
believe that it is appropriate to include independent contractors in 
construction workforce data. As the AGC said, independent contractors 
(performing as journeylevel workers) are frequently hired by 
contractors on Davis-Bacon contracts. Furthermore, independent 
contractors performing the work of laborers or mechanics are covered by 
the Act. No other concerns have been raised regarding the 
appropriateness of the data in the CPS. Therefore, as stated in the 
NPRM (see 64 FR 17561), based principally on the fact at this time the 
OES has not published data with a separate classification for laborer, 
together with the fact that OES does not collect data on self-employed 
individuals, Wage and Hour continues to believe that the CPS data are 
more likely than the OES data to be representative of the distribution 
of employment in construction by occupation for helpers and laborers.
    The assumption that helpers would replace laborers, apprentices, 
and journeyworkers in proportion to the number of workers in each of 
these occupations is addressed in the NPRM at 64 FR 17499. The 
Department explained that the 1989 helper impact analysis assumed that 
helpers would replace only journeyworkers, and measured the wage 
differentials based only on this replacement effect. The Department now 
believes this assumption was incorrect because helpers frequently 
perform laborers' duties and laborers' wage rates would sometimes be 
higher than helpers' rates on the wage determination. The Department 
observed that comments received from some contractors surveyed in the 
processing of helper conformance requests during the period the 
suspended regulations were in effect indicated that they used the job 
title ``laborer'' for workers meeting the definition of ``helper'' 
under the suspended regulation. The Department took a ``middle ground'' 
in its impact analysis by assuming that helpers would replace laborers, 
apprentices, and journeyworkers in the same proportion as their 
relative occupational employment.\20\ The comments do not undermine the 
reasonableness of this assumption or provide a reasonable, alternative 
approach.
---------------------------------------------------------------------------

    \20\ With its ``middle ground'' approach, the Department 
calculated that the great majority of helpers would replace higher-
paid journeyworkers, thus enhancing the potential savings computed 
under the suspended definition.
---------------------------------------------------------------------------

    The assumption that large numbers of laborers are included in the 
OES helper data is based on the absence of a separate OES laborer 
classification, and the fact that the duties described in the OES 
helper definition are similar to those performed by laborers.\21\ 
Furthermore, other available surveys, such as the CPS, the Decennial 
Census, and the four NCS pilot surveys conducted by BLS show a much 
greater incidence of laborer employment than could be gleaned from the 
OES survey data. As AGC pointed out, a separate construction laborer 
classification is included in the new Standard Occupational 
Classification definitions and will be used in future OES surveys.
---------------------------------------------------------------------------

    \21\ Helpers, as defined by OES, ``perform duties such as 
furnishing tools, materials and supplies to other workers; cleaning 
work areas, machines, and tools; and holding materials or tools for 
other workers.''
---------------------------------------------------------------------------

    The ABC's contention that the 1992-1993 wage surveys were distorted 
has been discussed above. In addition, these survey results were used 
only for the assumption that helpers would be likely to ``prevail'' for 
a limited number of classes in areas representing about half the 
construction employment covered by the Davis-Bacon and Related Acts. 
\22\
---------------------------------------------------------------------------

    \22\ One or more classifications of helper (union and open shop) 
were found to prevail in 35 of 78 surveys. Open shop helpers were 
found to prevail in only 20 of 78 surveys.
---------------------------------------------------------------------------

    Representative Norwood and the congressmen who joined in his 
comments stated that the proposed rule is based on an unrealistic 
economic impact analysis, noting that the Congressional Budget Office 
(CBO) has estimated that legislation allowing the increased use of 
helpers could save the Federal government $1.4 billion over five years 
and $3.5 billion over 10 years. The CBO's precise methodology for 
estimating the reduction in discretionary outlays over five and ten 
year periods has not been provided. It is the Department's 
understanding that the CBO estimates are based on the methodology used 
by the Department to estimate savings in its original impact analysis 
conducted in 1982, with estimated percentages of savings modified (from 
1.6 percent of federal construction costs to .8 percent) to account for 
changes to certain assumptions made in the 1982 analysis.\23\ For the 
reasons set forth in the NPRM, the Department now believes, based on 
more current information and data sources that were

[[Page 69691]]

not then available, that many of those assumptions were wrong. The 
Department also points out that the CBO savings estimates are 
consistent with the high end of the savings estimates set forth in the 
Department's latest economic impact analysis, based on the OES data.
---------------------------------------------------------------------------

    \23\ A 1994 GAO report, ``Changes to the Davis-Bacon Act 
Regulations and Administration,'' (GAO/HEHS-94-95R, February 7, 
1994), noted that, as of September 1993, the use of helpers was 
found to be a prevailing practice in 23 of 73 surveys (32 percent) 
completed since the surveys were started in April 1992.
---------------------------------------------------------------------------

    The Building Trades and LIUNA both state that the Department's 
economic impact analysis overstates any possible cost savings under the 
suspended rule and that consideration of certain other factors would 
eliminate the ``modest'' savings predicted by the Department in its 
analysis. The other factors that the Building Trades and LIUNA believe 
would offset any potential savings under the suspended rule include: 
(1) Lowered productivity of construction workers as contractors employ 
more low-wage, lesser-skilled workers; (2) lowered income and sales tax 
revenues resulting from lowered worker income; (3) negative impact on 
apprenticeship programs with reduced training levels and lower skill 
levels among construction workers; (4) increased incidences of 
accidents and increased workers' compensation premiums due to the 
increase in the number of new, entry-level workers who are untrained or 
inadequately trained; and (5) the negative impact on the quality of 
public construction resulting from the increased use of lower-paid, 
lesser-skilled workers. Finally, the Building Trades and LIUNA believe 
that the suspended rule, in and of itself, would probably have no 
effect on Federal budgetary outlays, as it is unlikely that there would 
be a reduction in congressional appropriations for Federal and 
federally-assisted public building and public works projects to reflect 
the anticipated cost savings from the increased use of helpers.
    While the factors mentioned by the Building Trades and LIUNA could 
have some bearing on impact analysis estimates (the NPRM did, for 
example, note the possibility of reduced savings as a result of fewer 
apprenticeships and higher journeyworker wage rates), adequate data 
simply are not available to allow detailed consideration of these 
factors. Of the many studies cited, none provides the framework or data 
necessary for integration into an economic impact analysis. 
Furthermore, there may be offsetting factors which could neutralize the 
effects of the factors cited.
    Of the many studies cited by these commenters, none provides the 
framework or data necessary for integration into an economic impact 
analysis. For the most part, the studies cited in the union comments do 
not focus directly on the comparative costs of the two helper rules, 
but rather on the more general cost differentials associated with union 
versus open shop construction. Moreover, the Department has determined 
that comparisons would be made using only primary, direct costs for the 
following reasons: (1) Generally accepted databases maintained by 
Federal agencies should be relied upon in the comparative cost study; 
and (2) the impact of such factors as productivity, social costs/
benefits, and construction quality are not definitive, and therefore, 
consideration of these factors would invite considerable debate from 
those who have reached opposite conclusions based on their research.
    The Department therefore concludes that the belief expressed by the 
Building Trades and LIUNA that adoption of the suspended rule would 
probably have no effect on Federal budgetary outlays is too speculative 
to form an appropriate basis for their integration into a cost-impact 
analysis.

Final Regulatory Impact Analysis

    After review of the comments, the Department has concluded that 
there is no reason to change its estimates of the potential savings 
under the suspended rule and the other alternatives considered, in 
comparison to the proposed rule, as set forth in the preliminary 
regulatory impact analysis.

V. Executive Order 13132 (Federalism)

    The Department has reviewed this rule in accordance with Executive 
Order 13132 regarding federalism, and has determined that it does not 
have ``federalism implications.'' The rule does not ``have substantial 
direct effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.''

VI. Regulatory Flexibility Act

    Under the Regulatory Flexibility Act, Public Law 96-354 (94 Stat. 
1164; 5 U.S.C. 601 et seq.), Federal agencies are required to prepare 
and make available for public comment an initial regulatory flexibility 
analysis that describes the anticipated impact of proposed rules that 
would have a significant economic impact on small entities. Though the 
Department determined that a regulatory flexibility analysis was not 
necessary for the proposed rule because it would not have a significant 
economic impact on a substantial number of small entities, it 
nonetheless published for comment such an analysis because of the 
interest in the rule.\24\ After review of the comments and 
consideration of the various alternatives, the Department has prepared 
the following regulatory flexibility analysis regarding this rule:
---------------------------------------------------------------------------

    \24\ The Department believed that a Regulatory Flexibility 
Analysis was not necessary because (1) the proposed regulation would 
not result in any changes in requirements for small businesses; (2) 
if Wage and Hour were to propose implementing the suspended rule or 
any of the alternatives considered, it would not be more costly than 
current regulatory requirements, and therefore, would not have a 
significant economic impact on a substantial number of small 
entities; and (3) neither the suspended rule nor any of the 
alternatives considered could be implemented in a manner that would 
accomplish the objectives of the statute.
---------------------------------------------------------------------------

(1) The Need for and Objectives of the Rule

    In 1982, Wage and Hour published final regulations which, among 
other things, would have allowed contractors to use ``semi-skilled'' 
helpers on Davis-Bacon covered projects at wages lower than those paid 
to skilled journeyworkers. These rules represented a sharp departure 
from Wage and Hour's longstanding practice of not allowing overlap of 
duties between job classifications. To protect against possible abuse, 
a provision was included limiting the number of helpers which could be 
used on a covered project to a maximum of two helpers for every three 
journeyworkers. This ratio provision was subsequently invalidated by 
the U.S. Court of Appeals for the District of Columbia.
    As discussed in greater detail above, during its existence, the 
helper rule has been the subject of considerable litigation and 
Congressional attention. The rule has been enjoined by the district 
court and modified on two occasions as a result of court of appeals 
decisions. It has twice been implemented for short periods of time. It 
has also been suspended on two occasions as the result of Congressional 
action prohibiting Wage and Hour from spending any funds to implement 
or administer the helper rule. On December 30, 1996, the Department's 
suspension of the 1982 rule was continued pending completion of this 
rulemaking.
    The helper rule was originally proposed and adopted because it was 
believed that it would result in a construction workforce on Federal 
construction projects that more closely reflected private 
construction's ``widespread'' use of helpers to perform certain craft 
tasks and, at the same time, effect significant cost savings in federal 
construction costs. It was also believed

[[Page 69692]]

that the expanded definition would provide additional job and training 
opportunities for unskilled workers, in particular women and 
minorities. The Department's subsequent efforts to develop enforcement 
guidelines led it to conclude that administration and enforcement of 
the revised helper rule would be much more difficult than anticipated, 
especially in light of the court's invalidation of the ratio provision. 
Moreover, new data has led the Department to conclude that the use of 
helpers is not as widespread as previously thought. The Department is 
also concerned about the possible negative effect of the helper 
regulations on formal apprenticeship and training programs. These 
factors led the Department to conclude that the suspended helper rule 
should not be implemented and that new regulations were needed to 
govern employment of helpers on DBRA-covered projects. The objective of 
these regulations is to establish the most appropriate approach to 
governing employment of helpers on DBRA-covered projects.

(2) Summary of Significant Issues Raised by the Public Comments in 
Response to the Initial Regulatory Flexibility Analysis

    The Department received a number of comments regarding the economic 
impact analysis prepared pursuant to Executive Order 12866. Those 
comments were discussed in the previous section containing the 
Department's economic impact analysis. The Department received no 
separate comments concerning its initial regulatory flexibility 
analysis.

(3) Number of Small Entities Covered Under the Rule

    Size standards for the construction industry are established by the 
Small Business Administration (SBA), and are expressed in millions of 
dollars of annual receipts for affected entities, i.e., Major Group 15, 
Building Construction--General Contractors and Operative Builders, $17 
million; Major Group 16, Heavy Construction (non-building), $17 
million; and Major Group 17, Special Trade Contractors, $7 million. The 
overwhelming majority of construction establishments would have annual 
receipts under these levels. According to the Census, 98.7 percent of 
these establishments have annual receipts under $10 million. Therefore, 
for the purpose of this analysis, it is assumed that virtually all 
establishments potentially affected by this rule would meet the 
applicable criteria used by the SBA to define small businesses in the 
construction industry.
    As explained above, however, the final rule would cause no impact 
on small entities since it does not propose to make any changes in 
requirements applicable to small businesses. Implementation of the 
suspended rule or any of the alternatives considered would expand the 
use of helpers and could result in some savings to the Federal 
government and to recipients of Federal assistance. The impact would 
depend upon the specifications of the alternative relative to current 
practice. Even relative to unlimited use, however, possible savings 
would be very modest, ranging from 0.239 percent of the value of Davis-
Bacon annual construction starts (CPS), to 0.359 (adjusted OES), and 
0.958 (unadjusted OES) percent and, as discussed in the Department's 
economic impact analysis in the NPRM, may very well be short-termed.

(4) Reporting, Recordkeeping and Other Compliance Requirements of the 
Rule

    There are no reporting or recording requirements for contractors 
under the final rule. Nor would there be any such requirements under 
the suspended rule or any of the alternatives considered. The 
compliance requirements under any rule regarding helpers would merely 
require contractors who use helpers to do so in accordance with a 
chosen regulatory framework and pay helpers at least the prevailing 
wages for the helper classification as set by the Department.

(5) Description of the Steps Taken To Minimize the Significant Economic 
Impact on Small Entities Consistent with the Objectives of the Davis-
Bacon and Related Acts

    The Department carefully analyzed the suspended rule, as well as a 
number of alternative approaches, to determine whether they could be 
enforced and administered in a manner consistent with the objectives of 
the Davis-Bacon and Related Acts. Based on this analysis, the 
Department concluded that the final rule, which adopts the Department's 
current policy governing employment of helpers, is the only alternative 
considered that is both consistent with the purposes of the Davis-Bacon 
and Related Acts and capable of practical and efficient administration, 
enforcement, and compliance.
    The Department also performed an economic impact analysis wherein 
the Department estimated the relative economic costs under the 
suspended rule, the various alternatives considered, and the final 
rule, respectively. As detailed above, the Department concluded from 
this analysis that any economic cost savings to the Federal government 
and recipients of Federal assistance, resulting from the increased use 
of lower-paid helpers under the suspended rule or any of the other 
alternatives considered, would be relatively modest. The Department 
therefore determined that implementation of the final rule, which 
preserves the status quo concerning employment of helpers on DBRA-
covered projects, would not have a significant economic impact on a 
substantial number of small entities.

Document Preparation

    This document was prepared under the direction and control of John 
R. Fraser, Deputy Administrator, Wage and Hour Division, Employment 
Standards Administration, U.S. Department of Labor.

List of Subjects

29 CFR Part 1

    Administrative practice and procedure, Construction industry, 
Government contracts, Minimum wages.

29 CFR Part 5

    Administrative practice and procedure, Construction industry, 
Employee benefit plans, Government contracts, Minimum wages, Reporting 
and recordkeeping requirements.

    Accordingly, for the reasons set forth in the preamble, 29 CFR Part 
1 and Part 5 are amended as set forth below:

PART 1--PROCEDURES FOR PREDETERMINATION OF WAGE RATES

    1. The authority citation for Part 1 continues to read as follows:

    Authority: 5 U.S.C. 301; R.S. 161, 64 Stat. 1267; Reorganization 
Plan No. 14 of 1950, 5 U.S.C. Appendix; 29 U.S.C. 259; 40 U.S.C. 
276a-276a-7; 40 U.S.C. 276c; and the laws listed in appendix A of 
this part.

    2. Section 1.7(d) is revised to read as follows:


Sec. 1.7  Scope of consideration.

* * * * *
    (d) The use of helpers, apprentices and trainees is permitted in 
accordance with part 5 of this subtitle.

[[Page 69693]]

PART 5--LABOR STANDARDS PROVISIONS APPLICABLE TO CONTRACTS COVERING 
FEDERALLY FINANCED AND ASSISTED CONSTRUCTION (ALSO LABOR STANDARDS 
PROVISIONS APPLICABLE TO NONCONSTRUCTION CONTRACTS SUBJECT TO THE 
CONTRACT WORK HOURS AND SAFETY STANDARDS ACT)

    3. The authority citation for Part 5 continues to read as follows:

    Authority: 40 U.S.C. 276a-276a-7; 40 U.S.C. 276c; 40 U.S.C. 327-
332; Reorganization Plan No. 14 of 1950, 5 U.S.C. Appendix; 5 U.S.C. 
301; 29 U.S.C. 259; 108 Stat. 4104(c); and the statutes listed in 
section 5.1(a) of this part.

    4. In Sec. 5.2, paragraph (n)(1) is amended by removing ``Bureau of 
Apprenticeship and Training'' each place it appears in the paragraph 
and inserting in its place ``Office of Apprenticeship Training, 
Employer and Labor Services'', and paragraph (n)(4) is revised to read 
as follows:


Sec. 5.2  Definitions.

* * * * *
    (n) * * *
    (4) A distinct classification of ``helper'' will be issued in wage 
determinations applicable to work performed on construction projects 
covered by the labor standards provisions of the Davis-Bacon and 
Related Acts only where:
    (i) The duties of the helper are clearly defined and distinct from 
those of any other classification on the wage determination;
    (ii) The use of such helpers is an established prevailing practice 
in the area; and
    (iii) The helper is not employed as a trainee in an informal 
training program. A ``helper'' classification will be added to wage 
determinations pursuant to Sec. 5.5(a)(1)(ii)(A) only where, in 
addition, the work to be performed by the helper is not performed by a 
classification in the wage determination.
* * * * *
    5. Section 5.5 is amended by removing paragraphs (a)(1)(ii)(A)(4) 
and (a)(1)(v); by removing ``; and'' from the end of paragraph 
(a)(1)(ii)(A)(3) and inserting in its place a period; by revising 
paragraph (a)(1)(ii)(A)(1) to read as set forth below; and by removing 
the phrase ``Bureau of Apprenticeship and Training'' each place it 
appears in paragraph (a)(4) and inserting in its place ``Office of 
Apprenticeship Training, Employer and Labor Services'' and removing 
``Bureau'' each time it appears in paragraph (a)(4) and inserting in 
its place ``Office''.


Sec. 5.5  Contract provisions and related matters.

* * * * *
    (a) * * *
    (1) * * *
    (ii)(A) * * *
    (1) The work to be performed by the classification requested is not 
performed by a classification in the wage determination; and
* * * * *

    Signed at Washington, D.C., on this 14th day of November, 2000.
Bernard E. Anderson,
Assistant Secretary for Employment Standards.
[FR Doc. 00-29533 Filed 11-17-00; 8:45 am]
BILLING CODE 4510-27-U