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Read 260744 contractor text.pmd
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A Contractor's Guide to Prevailing Wage Requirements for Federally-Assisted Construction Projects
June 2006 U.S. Department of Housing and Urban Development
his Guide has been prepared for you as a contractor performing work on construction projects that are assisted by the Department of Housing and Urban Development and subject to Davis-Bacon prevailing wage requirements. This Guide does not address contractor requirements involved in direct Federal contracting where HUD or another Federal agency enters into a procurement contract. In this latter case, the Federal Acquisition Regulations (FAR) are applicable. While the guidance contained in this Guide is generally applicable to any Davis-Bacon covered project, specific questions pertaining to direct Federal contracts should be addressed to the Contracting Officer who signed the contract for the Federal agency. Our objective here is to provide you with a guide which is simple and nonbureaucratic yet comprehensive and which will help you better understand and comply with Davis-Bacon labor standards. HUD's Office of Labor Relations worked closely with the Department of Labor's Wage and Hour Division to make sure that the labor standards provisions in your contract and the specifics of complying with them represent the latest information. It is the Department of Labor which has general administrative oversight of all Federal contracting agencies, such as HUD, which administer the day-to-day responsibilities of enforcing Davis-Bacon provisions in construction contracts they either fund or assist in funding. There are three chapters in this Guide. The first chapter offers a brief description of the laws and regulations associated with Federal labor standards administration and enforcement and discusses both what's in your contract that requires Davis-Bacon compliance and your responsibilities. The second chapter deals with labor standards and payroll reporting requirements. The third chapter discusses what can happen in the event there is a dispute about the wage rates that should be (or have been) paid and any back wages that may be due. Finally, not all HUD construction projects are covered by Davis-Bacon wage rates. For the purpose of this Guide, we are assuming that a determination has already been made that Davis-Bacon wage rates are applicable. Should you wish assistance in determining whether Davis-Bacon wage rates apply to a particular project or if you need other related technical assistance, please consult with the HUD Labor Relations Field staff for your area. If you don't know which staff to contact, a list of Labor Relations field offices and their geographic areas and telephone numbers can be found on HUD's Home Page at the address below.
Visit the Office of Labor Relations on the World Wide Web HUD Home Page at:
http://www.hud.gov/offices/olr
Obtain additional copies of this Guide and other publications at our web site or by telephone from HUD's Customer Service Center at (800) 767-7468.
Introduction ............................................................................................... i
CHAPTER 1. Laws, Regulations, Contracts and Responsibilities
1-1 Davis-Bacon and Other Labor Laws .................................. 1-1
a. The Davis-Bacon Act (DBA) ........................................................ 1-1 b. The Contract Work Hours and Safety Standards Act (CWHSSA) ................................................................................... 1-1 c. The Copeland Act (Anti-Kickback Act) ........................................ 1-2 d. The Fair Labor Standards Act (FLSA) .......................................... 1-2
1-2 Davis-Bacon Regulations ........................................................ 1-2 1-3 Construction Contract Provisions ...................................... 1-2 1-4 Responsibility of the Principal Contractor ..................... 1-3 1-5 Responsibility of the Contract Administrator .............. 1-3
CHAPTER 2. How to Comply with Labor Standards and Payroll Reporting Requirements
SECTION I -- THE BASICS 2-1 The Wage Decision ................................................................... 2-1
a. The work classifications and wage rates ..................................... 2-1 b. Posting the wage decision ............................................................ 2-2
2-2 Additional &quot;Trade&quot; Classifications and Wage Rates ........................................................................... 2-2
a. b. c. d. a. b. c. d. e. f. Additional classification rules ....................................................... 2-2 Making the request ....................................................................... 2-2 HUD review ................................................................................. 2-3 DOL decision................................................................................ 2-3 Payroll formats ............................................................................. 2-3 Payroll certifications ..................................................................... 2-4 &quot;No work&quot; payrolls ...................................................................... 2-4 Payroll review and submission ..................................................... 2-4 Payroll retention ........................................................................... 2-4 Payroll inspection ........................................................................ 2-5
2-3 Certified Payroll Reports ........................................................ 2-3
2-4 Davis-Bacon Definitions .......................................................... 2-5
a. b. c. d. e. f. g. h. i. Laborer or mechanic. ................................................................. Employee .................................................................................... Apprentices and trainees ............................................................ Prevailing wages or wage rates .................................................. Fringe benefits ............................................................................. Overtime ..................................................................................... Deductions .................................................................................. Proper designation of trade ........................................................ Site of work ................................................................................. 2-5 2-5 2-5 2-6 2-7 2-7 2-7 2-8 2-8
SECTION II -- REPORTING REQUIREMENTS 2-5 Completing a Payroll Report ................................................ 2-8
a. b. c. d. e. f. g. h. i. j. Project and contractor/subcontractor information ................... 2-9 Employee information ................................................................. 2-9 Work classification ...................................................................... 2-9 Hours worked ............................................................................. 2-9 Rate of pay .................................................................................. 2-9 Gross wages earned ................................................................. 2-10 Deductions ................................................................................ 2-10 Net pay ..................................................................................... 2-10 Statement of compliance .......................................................... 2-10 Signature ................................................................................... 2-11
SECTION III -- PAYROLL REVIEWS AND CORRECTIONS 2-6 Compliance Reviews .............................................................. 2-11
a. On-site interviews ..................................................................... 2-11 b. Project payroll reviews ............................................................. 2-11
2-7 Typical Payroll Errors and Required Corrections. ................................................. 2-11
a. b. c. d. e. f. g. h. I. j. k. l. Inadequate payroll information ................................................. 2-12 Missing addresses and Social Security Numbers .................... 2-12 Incomplete payrolls .................................................................. 2-12 Classifications ............................................................................ 2-12 Wage rates ................................................................................. 2-12 Apprentices and trainees .......................................................... 2-12 Overtime ................................................................................... 2-12 Computations ............................................................................ 2-13 Deductions ............................................................................... 2-13 Fringe benefits ........................................................................... 2-13 Signature ................................................................................... 2-13 On-site interview comparisons ................................................ 2-13
2-8 Restitution for Underpayment of Wages ..................... 2-13
a. b. c. d. e. Notification to the employer/prime contractor ..................... 2-13 Computing wage restitution ..................................................... 2-14 Correction payrolls ................................................................... 2-14 Review of correction CPR ........................................................ 2-14 Unfound workers ...................................................................... 2-14
CHAPTER 3. Labor Standards Disputes, Administrative Reviews, Withholding, Deposits and Escrow Accounts, and Sanctions
3-1 Introduction ................................................................................. 3-1 3-2 Administrative Review on Labor Standards Disputes ..................................................... 3-1
a. Additional classifications and wage rates ...................................... 3-1 b. Findings of underpayment ............................................................ 3-2
3-3 Withholding .................................................................................. 3-2 3-4 Deposits and Escrow Accounts ............................................ 3-3 3-5 Administrative Sanctions ....................................................... 3-4
a. DOL debarment ........................................................................... 3-4 b. HUD sanctions ............................................................................. 3-4
3-6 Falsification of Certified Payroll Reports ......................... 3-4 Index ........................................................................................................ A-1 Acronyms and Symbols ................................................................... A-3 Davis-Bacon ­ Related Web Sites ............................................... A-3 Exhibits
HUD-4720, Project Wage Rate Sheet ............................................. A-4 WH-347, Payroll Form ..................................................................... A-5 Statement of Compliance .................................................. A-6
he following paragraphs describe what the labor standards laws and regulations actually say and what they mean to you on HUD projects:
1-1 Davis-Bacon and Other Labor Laws
a. The Davis-Bacon Act (DBA) The Davis-Bacon Act requires the payment of prevailing wage rates (which are determined by the U.S. Department of Labor) to all laborers and mechanics on Federal government and District of Columbia construction projects in excess of $2,000. Construction includes alteration and/or repair, including painting and decorating, of public buildings or public works.
Most HUD construction work is not covered by the DBA itself since HUD seldom contracts directly for construction services. Most often, if Davis-Bacon wage rates apply to a HUD project it is because of a labor provision contained in one of HUD's &quot;Related Acts&quot; such as the U.S. Housing Act of 1937, the National Housing Act, the Housing and Community Development Act of 1974, the National Affordable Housing Act of 1990, and the Native American Housing Assistance and Self-Determination Act of 1996. The Related Acts are often referred to as the Davis-Bacon and Related Acts or DBRA.
b. The Contract Work Hours and Safety Standards Act (CWHSSA) CWHSSA requires time and one-half pay for overtime (O/T) hours (over 40 in any workweek) worked on the covered project. The CWHSSA applies to both CWHSSA does not apply to prime contracts of $100,000 or less. In direct Federal contracts and addition, some HUD projects are not covered by CWHSSA because to indirect Federally-assisted some HUD programs only provide loan guarantees or insurance. contracts except where the CWHSSA also does not apply to construction or rehabilitation assistance is solely in the contracts that are not subject to Federal prevailing wage rates (e.g., nature of a loan guarantee or Davis-Bacon wage rates, or HUD-determined rates for operation of insurance. CWHSSA violapublic housing and Indian block grant-assisted housing). However, tions carry a liquidated even though CWHSSA overtime pay is not required, Fair Labor damages penalty ($10/day per Standards Act (FLSA) overtime pay is probably still applicable. (See violation). Intentional violaalso Labor Relations Letter SL-95-01, CWHSSA Coverage threshold for tions of CWHSSA standards overtime and health and safety provisions, available on-line at the HUD can be considered for Federal Labor Relations Library at: www.hud.gov/offices/olr/library.cfm) criminal prosecution.
c. The Copeland Act (Anti-Kickback Act) The Copeland Act makes it a Federal crime for anyone to require any laborer or mechanic (employed on a Federal or Federallyassisted project) to kickback (i.e., give up or pay back) any part of their wages. The Copeland Act requires every employer (contractors and subcontractors) to submit weekly certified payroll reports (CPRs) and regulates permissible payroll deductions. d. The Fair Labor Standards Act (FLSA) The FLSA contains Federal minimum wage rates, overtime (O/T), and child labor requirements. These requirements generally apply to any labor performed. The DOL has the authority to administer and enforce FLSA. HUD will refer to the DOL any possible FLSA violations that are found on HUD projects.
1-2 Davis-Bacon Regulations
The Department of Labor (DOL) has published rules and instructions concerning Davis-Bacon and other labor laws in the Code of Federal Regulations (CFR). These regulations can be found in Title 29 CFR Parts 1, 3, 5, 6 and 7. Part 1 explains how the DOL establishes and publishes DBA wage determinations (aka wage decisions) and provides instructions on how to use the determinations. Part 3 describes Copeland Act requirements for payroll deductions and the submission of weekly certified payroll reports. Part 5 covers the labor standards provisions that are in your contract relating to Davis-Bacon Act wage rates and the responsibilities of contractors and contracting agencies to administer and enforce the provisions. Part 6 provides for administrative proceedings enforcing Federal labor standards on construction and service contracts. Last, Part 7 sets parameters for practice before the Administrative Review Board. These regulations are used as the basis for administering and enforcing the laws.
DOL Regulations are available on-line on the World Wide Web: http://www.dol.gov/dol/ allcfr/Title_29/toc.htm
1-3 Construction Contract Provisions
Each contract subject to Davis-Bacon labor standards requirements must contain labor standards clauses and a Davis-Bacon wage decision. These documents are often bound into the contract specifications. a. The Labor Standards Clauses The labor standards clauses describe the responsibilities of the contractor concerning Davis-Bacon wages and obligate the contractor to comply with the labor requirements. The labor standards clauses also provide for remedies in the event of violations, including withholding from payments due to the contractor to ensure the payment of wages or liquidated damages which may be found due. These contract clauses enable the contract administrator to enforce the Federal labor standards applicable to the project. HUD has standard forms that contain contract clauses. For example, the HUD-2554, Supplementary Conditions to the Contract for Construction, which is issued primarily for FHA multifamily housing and other construction projects administered by HUD; the HUD-4010, Federal Labor Standards Provisions, which is used for CDBG and HOME projects, and the HUD-5370, General Conditions of the Contract for Construction ­ Public and Indian Housing Program.
HUD program labor standards forms are available on-line at: www.hudclips.org/cgi/ index.cgi
b. Davis-Bacon Wage Decisions The Davis-Bacon wage decision (or wage determination) is a listing of various construction work classifications, such as Carpenter, Electrician, Plumber and Laborer, and the minimum wage rates (and fringe benefits, where prevailing) that people performing work in those classifications must be paid.
Davis-Bacon wage decisions are established by the DOL for various types of construction (e.g., residential, heavy, highway) and apply to specific geographic areas, usually a county or group of counties. Wage decisions are modified All current Davis-Bacon wage from time to time to keep them current. In most decisions can be accessed on-line cases, when the contract is awarded or when construcat no cost at: tion begins, the wage decision is &quot;locked-in&quot; and no www.wdol.gov future modifications are applicable to the contract or project involved.
1-4 Responsibility of the Principal Contractor
The principal contractor (also referred to as the prime or general contractor) is responsible for the full compliance of all employers (the contractor, subcontractors and any lower-tier subcontractors) with the labor standards provisions applicable to the project. Because of the contractual relationship between a prime contractor and his/her subcontractors, subcontractors generally should communicate with the contract administrator only through the prime contractor. (See Contract Administrator, below.)
To make this Guide easier to understand, the term &quot;prime contractor&quot; will mean the principal contractor; &quot;subcontractor&quot; will mean all subcontractors including lower-tier subcontractors; and the term &quot;employer&quot; will mean all contractors as a group, including the prime contractor and any subcontractors and lower-tier subcontractors.
1-5 Responsibility of the Contract Administrator
The contract administrator is responsible for the proper administration and enforcement of the Federal labor standards provisions on contracts covered by Davis-Bacon requirements. We use this term to represent the person (or persons) who will provide labor standards advice and support to you and other project principals (e.g., the owner, sponsor, architect), including providing the proper Davis-Bacon wage decision (see ¶2-1, The Wage Decision) and ensuring that the wage decision and contract clauses are incorporated into the contract for construction. The contract administrator also monitors labor standards compliance (see ¶2-6, Compliance Reviews) by conducting interviews with construction workers at the job site and reviewing payroll reports, and oversees any enforcement actions that may be required. The contract administrator could be an employee or agent of HUD, or of a city or county or public housing agency. For HUD projects administered directly by HUD staff, usually FHA-insured multifamily projects, the contract administrator will be the HUD Labor Relations field staff. But many HUD-assisted projects are administered by local contracting agencies such as Public Housing Agencies (PHAs),
Indian tribes and tribally-designated housing entities (TDHEs), and States, cities and counties under HUD's Community Development Block Grant (CDBG) and HOME programs. In these cases, the contract administrator will likely be local agency staff. In either case, the guidance for you remains essentially the same. The DOL also has a role in monitoring Davis-Bacon administration and enforcement. In addition, DOL has independent authority to conduct investigations. A DOL investigator or other DOL representative may visit Davis-Bacon construction sites to interview construction workers or review payroll information.
Now that you know you're on a Davis-Bacon project and you know some of the legal and practical implications, what's next?
SECTION 1 -- THE BASICS
2-1 The Wage Decision
Davis-Bacon labor standards stipulate the wage payment requirements for Carpenters, Electricians, Plumbers, Roofers, Laborers, and other construction work classifications that may be needed Remember, the wage decision for the project. The Davis-Bacon wage decision that is contained in the contract applies to the project contains a schedule of work classifispecifications along with the cations and wage rates that must be followed. If you don't labor standards clauses. See ¶1-3, have it already (and by now you should), you'll want to get Construction Contract Provisions. a copy of the applicable Davis-Bacon wage decision. a. The Work Classifications and Wage Rates A Davis-Bacon wage decision is simply a listing of different work classifications and the minimum wage rates that must be paid to anyone performing work in those classifications. You'll want to make sure that the work classification(s) you need are contained in the wage decision and make certain you know exactly what wage rate(s) you will need to pay. Some wage decisions cover several counties and/or types of construction work (for example, residential and commercial work) and can be lengthy and difficult to read. Contact the contract administrator (HUD Labor Relations field staff or local agency staff) if you have any trouble reading the wage decision or finding the work classification(s) you need.
To make reading lengthy wage decisions easier for you, the contract administrator may prepare a Project Wage Rate Sheet (HUD-4720). This Sheet is a one-page transcript that will show only the classifications and wage rates for a particular project. A blank copy of a Project Wage Rate Sheet is provided for you in the appendix. Also, a fillable version of this form is available on-line at HUDClips (see web address in the Appendix). Contact the contract administrator monitoring your project for assistance with a Project Wage Rate Sheet. 2-1
b. Posting the Wage Decision If you are the prime contractor, you will be responsible for posting a copy of the wage decision (or the Project Wage Rate Sheet) and a copy of a DOL poster called Notice to All Employees (Form WH-1321) at the job site in a place that is easily accessible to all of the construction workers employed at the project and where the wage decision and poster won't be destroyed by wind or rain, etc. The Notice to All Employees poster is available on-line at HUDClips (see address in the Appendix).
2-2 Additional &quot;Trade&quot; Classifications and Wage Rates
What if the work classification you need isn't on the wage decision? If the work classification(s) that you need doesn't appear on the wage decision, you will need to request an additional classification and wage rate. This process is usually very simple and you'll want to start the request right away. Basically, you identify the classification you need and recommend a wage rate for DOL to approve for the project. There are a few rules about additional classifications; you'll find these rules in the DOL regulations, Part 5, and in the labor clauses in your contract. The rules are summarized for you here: a. Additional Classification Rules Additional classifications and wage rates can be approved if: 1) The requested classification is used by construction contractors in the area of the project. (The area is usually defined as the county where the project is located). 2) The work that will be performed by the requested classification is not already performed by another classification that is already on the wage decision. (In other words, if there already is an Electrician classification and wage rate on the wage decision you can't request another Electrician classification and rate.) 3) The proposed wage rate for the requested classification &quot;fits&quot; with the other wage rates already on the wage decision. (For example, the wage rate proposed for a trade classification such as Electrician must be at least as much as the lowest wage rate for other trade classifications already contained in the wage decision.) And, 4) The workers that will be employed in the added classification (if it is known who the workers are/will be), or the workers' representatives, must agree with the proposed wage rate. b. Making the Request A request for additional classification and wage rate must be made in writing through the contract administrator. (If the contract administrator is a local agency, the agency will send the request to the HUD Labor Relations staff.) If you are a subcontractor, your request should also go through the prime contractor. All you need to do is identify the work classification that is missing and recommend a wage rate (usually the rate that employer is already paying to the employees performing the work) for that classification. You may also need to describe the work that the new classification will perform.
c. HUD Review The HUD Labor Relations field staff will review the requested classification and wage rate to determine whether the request meets the DOL rules outlined in paragraph 2-2(a), above. If additional information or clarification is needed, the staff will contact the prime contractor (or contract administrator for local agency projects) for more information, etc. If the Labor Relations review finds that the request meets the rules, the staff will give preliminary approval on the request and refer it to the DOL for final approval. The staff will send to you a copy of the preliminary approval/ referral letter to the DOL. If the HUD Labor Relations staff doesn't think the request meets the rules and if agreement can't be reached on the proper classification or wage rate for the work described, the HUD Labor Relations staff will not approve the request. In this case, the staff will send your request to the DOL with an explanation why HUD believes that the request shouldn't be approved. The DOL still has final decision authority. You will receive a copy of the disapproval/ referral letter to the DOL. d. DOL Decision The DOL will respond to HUD Labor Relations in writing about the additional classification and wage rate request. HUD Labor Relations will notify you of the DOL decision in writing. If the DOL approves the request, the prime contractor must post the approval notice on the job site with the wage decision. If the DOL does not approve the request, you will be notified about what classification and wage rate should be used for the work in question. You will also receive instructions about how to ask for DOL reconsideration if you still want to try to get your recommendation approved.
It's always a good idea to talk to the contract administrator before submitting an additional classification and wage rate request. The contract administrator can offer suggestions and advice that may save you time and increase the likelihood that DOL will approve your request. Usually, the contract administrator can give you an idea about what the DOL will finally decide.
2-3 Certified Payroll Reports
You'll need to submit a weekly certified payroll report (CPR) beginning with the first week that your company works on the project and for every week afterward until your firm has completed its work. It's always a good idea to You are not required to use Payroll number the payroll reports beginning with Form WH-347. You are welcome to #1 and to clearly mark your last payroll for use any other type of payroll, such as the project &quot;Final.&quot; a. Payroll Formats contains all of the information that is required on the WH-347. The easiest form to use is DOL's WH-347, Payroll. A sample copy of the WH-347 is included in the back of this Guide. You may access a fillable version of the WH-347 on-line at HUDClips (see web address in the Appendix). Also, the contract administrator can 2-3 provide a few copies of the WH-347 that you can reproduce.
computerized formats, as long as it
b. Payroll Certifications The weekly payrolls are called certified because each payroll is signed and contains language certifying that the information is true and correct. The payroll certification language is on the reverse side of the WH-347. If you are using another type of payroll format you may attach the certification from the back of the WH-347, or any other format which contains the same certification language on the WH-347 (reverse).
DOL's website has Payroll Instructions, and the Payroll Form WH-347, in a &quot;fillable&quot; PDF format at this address: www.dol.gov/esa/programs/dbra/ forms.htm and at HUDClips.
c. &quot;No Work&quot; Payrolls &quot;No work&quot; payrolls may be submitted whenever there is a temporary break in your work on the project, for example, if your firm is not needed on the project right now but you will be returning to the job in a couple of weeks. (See Tip Box, below, for &quot;no work&quot; payroll exemption!) However, if you know that your firm will not be working on the project for an extended period of time, you may wish to send a short note to the contract administrator to let them know about the break in work and to give an approximate date when your firm will return to the project. If you send a note, you do not need to send &quot;no work&quot; payrolls. d. Payroll Review and Submission The prime contractor should review each subcontractor's payroll reports for compliance prior to submitting the reports to the contract administrator. Remember, the prime contractor is responsible for the full compliance of all subcontractors on the contract and will be held accountable for any wage restitution that may be found due to any laborer or mechanic that is underpaid and for any liquidated damages that may be assessed for overtime violations. All of the payroll reports for any project must be submitted to the contract administrator through the prime contractor.
If you number your payroll reports consecutively, you do not need to submit &quot;no work&quot; payrolls!
An alert prime contractor that reviews subcontractor payroll submissions can detect any misunderstandings early, prevent costly underpayments and protect itself from financial loss should underpayments occur.
e. Payroll Retention Every contractor (including every subcontractor) must keep a complete set of their own payrolls and other basic records such as time cards, tax records, evidence of fringe benefit payments,
for a Davis-Bacon project for at least 3 years after the project is completed. The prime contractor must keep a complete set of all of the payrolls for every contractor (including subcontractors) for at least 3 years after completion of the project. f. Payroll Inspection In addition to submitting payrolls to the contract administrator, every contractor (including subcontractors) must make their own copy of the payrolls and other basic records available for review or copying to any authorized representative from HUD or from DOL.
2-4 Davis-Bacon Definitions
Before we discuss how to complete the weekly payroll forms, we need to review a couple of definitions. These definitions can help you understand what will be required of you: a. Laborer or Mechanic &quot;Laborers&quot; and &quot;mechanics&quot; mean anyone who is performing construction work on the project, including trade journeymen (carpenters, plumbers, sheet metal workers, etc.), apprentices, trainees and, for CWHSSA purposes, watchmen and guards. &quot;Laborers&quot; and &quot;mechanics&quot; are the two groups of workers that must be paid not less than Davis-Bacon wage rates. 1) Working foremen. Foremen or supervisors that regularly spend more than 20% of their time performing construction work and do not meet the exclusions in paragraph 2 below are covered &quot;laborers&quot; and &quot;mechanics&quot; for labor standards purposes for the time spent performing construction work. 2) Exclusions. People whose duties are primarily administrative, executive or clerical are not laborers or mechanics. Examples include superintendents, office staff, timekeepers, messengers, etc. (Contact the contract administrator if you have any questions about whether a particular employee is excluded.) b. Employee Every person who performs the work of a laborer or mechanic is &quot;employed&quot; regardless of any contractual relationship which may be alleged to exist between a contractor or subcontractor and such person. This means that even if there is a contract between a contractor and a worker, the contractor must make sure that the worker is paid at least as much as the wage rate on the wage decision for the classification of work they perform. Note that there are no exceptions to the prevailing wage requirements for relatives or for self-employed laborers and mechanics.
For more information about working subcontractors, ask the contract administrator or your HUD Labor Relations Field Staff for a copy of Labor Relations Letter LR-96-01, Labor standards compliance requirements for self-employed laborers and mechanics. Labor Relations Letters and other helpful Labor Relations publications are available at HUD's Labor Relations web site (see the list of web site addresses in the Appendix).
c. Apprentices and Trainees The only workers who can be paid less than the wage rate on the wage decision for their work classification are &quot;apprentices&quot; and &quot;trainees&quot; registered in approved apprenticeship or training
programs, including Step-Up apprenticeship programs designed for Davis-Bacon construction work. Approved programs are those which have been registered with the DOL or a DOLrecognized State Apprenticeship Council (SAC). Apprentices and trainees are paid wage rates in accordance with the wage schedule in the approved program.
Most often, the apprentice/trainee wage rate is expressed as a series of percentages tied to the amount of time spent in the program. For example, 0-6 months: 65%; 6 months ­ 1 year: 70%; etc. The percentage is applied to the journeyman's wage rate. On Davis-Bacon projects, the percentage must be applied to the journeyman's wage rate on the applicable wage decision for that craft.
1) Probationary apprentice. A &quot;probationary apprentice&quot; can be paid as an apprentice (less than the rate on the wage decision) if the DOL or SAC has certified that the person is eligible for probationary employment as an apprentice. 2) Pre-apprentice. A &quot;pre-apprentice&quot;, that is, someone who is not registered in a program and who hasn't been DOL- or SAC-certified for probationary apprenticeship is not considered to be an &quot;apprentice&quot; and must be paid the full journeyman's rate on the wage decision for the classification of work they perform. 3) Ratio of apprentices and trainees to journeymen. The maximum number of apprentices or trainees that you can use on the job site can not exceed the ratio of apprentices or trainees to journeymen allowed in the approved program. d. Prevailing Wages or Wage Rates Prevailing wage rates are the wage rates listed on the wage decision for the project. The wage decision will list a minimum basic hourly rate of pay for each work classification. Some wage decisions include fringe benefits which are usually listed as an hourly fringe rate. If the wage decision includes a fringe benefit rate for a classification, you will need to add the fringe benefit rate to the basic hourly rate unless you provide bona fide fringe benefits for your employees. 1) Piece-work. Some employees are hired on a piece-work basis, that is, the employee's earnings are determined by a factor of work produced. For example, a Drywall Hanger's earnings may be calculated based upon the square feet of sheetrock actually hung, a Painter's earnings may be based upon the number of units painted. Employers may calculate weekly earnings based upon piece rates provided the weekly earnings are sufficient to satisfy the wage rate requirement based upon actual hours, including any overtime, worked. Accurate time records must be maintained for any piece-work employees. If the weekly piece rate earnings are not sufficient, the employer must recompute weekly earnings based upon the actual hours worked and the rate on the wage decision for the work classification(s) involved.
e. Fringe Benefits Fringe benefits can include health insurance premiums, retirement contributions, life insurance, vacation and other paid leave as well as some contributions to training funds. Fringe benefits do not include employer payments or contributions required by other Federal, State or local laws, such as the employer's contribution to Social Security or some disability insurance payments.
Note that the total hourly wage rate paid to any laborer or mechanic (basic wage or basic wage plus fringe benefits) may be no less than the total wage rate (basic wage or basic wage plus fringe benefits) on the wage decision for their craft. If the value of the fringe benefit(s) you provide is less than the fringe benefit rate on the wage decision, you will need to add the balance of the wage decision fringe benefit rate to the basic rate paid to the employee. For example, if the wage decision requires $10/hour basic rate plus $5/hour fringe benefits, you must pay no less than that total ($15/hour) in the basic rate or basic rate plus whatever fringe benefit you may provide. You can meet this obligation in several ways: you could pay the base wage and fringe benefits as stated in the wage decision, or you could pay $15 in base wage with no fringe benefits, or you could pay $12 basic plus $3 fringe benefits. You can also off-set the amount of the base wage if you pay more in fringe benefits such as by paying or $9 basic plus $6 fringe benefits; as long as you meet the total amount. The amount of the base wage that you may off-set with fringe benefits is limited by certain IRS and FLSA requirements.
f. Overtime Overtime hours are defined as all hours worked on the contract in excess of 40 hours in any work week. Overtime hours must be paid at no less than one and one-half times the regular rate of basic pay plus the straight-time rate of any required fringe benefits.
Referring to our example above where the wage decision requiring a $15 total wage obligation ($10 basic wage plus $5 fringe benefits) was met by paying $9 base wage plus $6 fringe benefits: Note that overtime rates must be based on one and one-half times the basic rate as stated on the wage decision. In the above example, the employer must pay for overtime: $15/hr ($9 basic + $6 fringe) plus $5 (one-half of $10, the wage decision basic rate) for a total of $20 per hour.
g. Deductions You may make payroll deductions as permitted by DOL Regulations 29 CFR Part 3. These regulations prohibit the employer from requiring employees to &quot;kick-back&quot; (i.e., give up) any of their earnings. Allowable deductions which do not require prior DOL permission include employee obligations for income taxes, Social Security payments, insurance premiums, retirement, savings accounts, and any other legally-permissible deduction authorized by the employee. Deductions may also be made for payments on judgements and other financial obligations legally imposed against the employee.
h. Proper Designation of Trade You must select a work classification on the wage decision for each worker based on the actual type of work he/she performed and you must pay each worker no less than the wage rate on the wage decision for that classification regardless of their level of skill. In other words, if someone is performing carpentry work on the project, they must be paid no less than the wage rate on the wage decision for Carpenters even if they aren't considered by you to be fully trained as a Carpenter. Remember, the only people who can be paid less than the rate for their craft are apprentices and trainees registered in approved programs. 1) Split-classification. If you have employees that perform work in more than one trade during a work week, you can pay the wage rates specified for each work classification in which work was performed only if you maintain accurate time records showing the amount of time spent in each classification. If you do not maintain accurate time records, you must pay these employees the highest wage rate of all of the classifications of work performed. i. Site of Work The &quot;site of work&quot; is where the Davis-Bacon wage rates apply. Usually, this means the boundaries of the project. &quot;Site of work&quot; can also include other adjacent or virtually adjacent property used by a contractor or subcontractor in the construction of the project, like a fabrication site that is dedicated exclusively, or nearly so, to the project.
SECTION II REPORTING REQUIREMENTS
2-5 Completing a Payroll Report
What information has to be reported on the payroll form? The weekly payroll form doesn't ask for any information that you don't already need to keep for wage payment and tax purposes. For example, you need to know each employee's name, address and social security number; his or her work classification (who is working for you and what do they do?), the hours worked during the week, his or her rate of pay, the gross amount earned (how much did they earn?), the amounts of any deductions for taxes, etc., and the net amount paid (how much should the paycheck be made out for?). No more information than you need to know in order to manage your work crew and make certain they are paid properly. And, certainly, no more information than you need to keep for IRS, Social Security and other tax and employment purposes. You are required to submit certified payrolls to illustrate and document that you have complied with the prevailing wage requirements. The purpose of the contract administrator's review of your payrolls is to verify your compliance. Clearer and complete payroll reports will permit the contract administrator to complete reviews of your payroll reports quickly.
For many contractors, the Weekly Certified Payroll is the only Davis-Bacon paperwork you need to submit!
a. Project and Contractor/Subcontractor Information Each payroll must identify the contractor or subcontractor's name and address, the project name and number, and the week ending date. Indicate the week dates in the spaces provided. Numbering payrolls is optional but strongly recommended. b. Employee Information The first payroll on which each employee appears must contain the employee's name, address and Social Security Number. Afterward, the address and Social Security Number only need to be reported if there is a change in this information. c. Work Classification Each employee must be classified in accordance with the wage decision based on the type of work they actually perform. 1) Apprentices or Trainees. The first payroll on which any apprentice or trainee appears must be accompanied by a copy of that apprentice's or trainee's registration in a registered or approved program. A copy of the portions of the registered or approved program pertaining to the wage rates and ratios shall also accompany the first payroll on which the first apprentice or trainee appears. 2) Split classifications. For an employee that worked in a split classification, make a separate entry for each classification of work performed distributing the hours of work to each classification, accordingly, and reflecting the rate of pay and gross earnings for each classification. Deductions and net pay may be based upon the total gross amount earned for all classifications. d. Hours Worked The payroll should show ONLY the regular and overtime hours worked on this project. Show both the daily and total weekly hours for each employee. If an employee performs work at job sites other than the project for which the payroll is prepared, those &quot;other job&quot; hours should not be reported on the payroll. In these cases, you should list the employee's name, classification, hours for this project only, the rate of pay and gross earnings for this project, and the gross earned for all projects. Deductions and net pay may be based upon the employee's total earnings (for all projects) for the week. e. Rate of Pay Show the basic hourly rate of pay for each employee for this project. If the wage decision includes a fringe benefit and you do not participate in approved fringe benefit programs, add the fringe benefit rate to the basic hourly rate of pay. Also list the overtime rate if overtime hours were worked. 1) Piece-work. For any piece-work employees, the employer must compute an effective hourly rate for each employee each week based upon the employee's piece-work earnings for that week. To compute the effective hourly rate, divide the piece-work earnings by the total number of hours worked, including consideration for any overtime hours.
The effective hourly rate must be reflected on the certified payroll and the hourly rate may be no less than the wage rate (including fringe benefits, if any) on the wage decision for the classification of work performed. It does not matter that the effective hourly rate changes from week-to-week, only that the rate is no less than the rate on the wage decision for the classification of work performed.
Remember, the overtime rate is computed at one and one-half times the basic rate of pay plus any fringe benefits. For example, if the wage decision requires $10/hour basic plus $5/hour fringe benefits, the overtime rate would be: ($10 x 1½) + $5 = $20/hour.
f. Gross Wages Earned Show the gross amount of wages earned for work performed on this project. Note: For employees with work hours and earnings on other projects, you may show gross wages for this project over gross earnings all projects (for example, $425.40/$764.85) and base deductions and net pay on the &quot;all projects&quot; earnings.
Only one employee authorization is needed for recurring (e.g., weekly) other deductions. Written employee authorization is not required for income tax and Social Security deductions.
g. Deductions Show the amounts of any deductions from the gross earnings. &quot;Other&quot; deductions should be identified (for example, Savings Account or Loan Repayment). Any voluntary deduction (that is, not required by law or by an order of a proper authority) must be authorized in writing by the employee or provided for in a collective bargaining (union) agreement. A short note signed by the employee is all that is needed and should accompany the first payroll on which the other deduction appears. h. Net Pay Show the net amount of wages paid. i. Statement of Compliance The Statement of Compliance is the certification. It is located on the reverse side of a standard payroll form (WH-347). Be sure to complete the identifying information at the top, particularly if you are attaching the Statement of Compliance to an alternate payroll form such as a computer payroll. Also, you must check either 4(a) or 4(b) if the wage decision contains a fringe benefit. Checking 4(a) indicates that you are paying required fringe benefits to approved plans or programs; and 4(b) indicates that you are paying any required fringe benefit amounts directly to the employee by adding the fringe benefit rate to the basic hourly rate of pay. If you are paying a portion of the required fringe benefit to programs and the balance directly to the employee, explain those differences in box 4(c).
Only one Statement of Compliance is required for each employer's weekly payroll no matter how many pages are needed to report the employee data.
Signature Make sure the payroll is signed with an original signature. The payroll must be signed by a principal of the firm (owner or officer such as the president, treasurer or payroll administrator) or by an authorized agent (a person authorized by a principal in writing to sign the payroll reports). Signature authorization (for persons other than a principal) should be submitted with the first payroll signed by such an agent.
SECTION III PAYROLL REVIEWS AND CORRECTIONS
2-6 Compliance Reviews
The contract administrator or other inspector may visit the project site and interview some of the workers concerning their employment on the project. The DOL may also independently conduct its own reviews (see ¶1-5). In addition, the contract administrator will periodically review payrolls and related submissions, comparing the interview information to the payrolls, to ensure that the labor standards requirements have been met. You will be notified by the contract administrator if these reviews find any discrepancies or errors. You will be given instructions about what steps must be taken to correct any problems. a. On-Site Interviews Every employer (contractor, subcontractor, etc.) must make their employees available for interview at the job site with the contract administrator or other agency representative, or HUD or DOL representative. The interviews are confidential and the employee will be asked about the kind of work they perform and their rate of pay. Every effort will be made to ensure that these interviews cause as little disruption as possible to the on-going work. The interviewer will record the interview information, usually on a form HUD-11, Record of Employee Interview, and forward the interviews to the contract administrator. b. Project Payroll Reviews The contract administrator will compare the information on the interview forms to the corresponding payrolls to ensure that the workers are properly listed on the payrolls for the days, work classification and rate of pay. The contract administrator will also review the payroll submissions to make certain that the payrolls are complete and signed; that employees are paid no less than the wage rate for the work classification shown; apprentice and trainee certifications are submitted (where needed); employee or other authorizations for other deductions are submitted (where needed); etc.
2-7 Typical Payroll Errors and Required Corrections
The following paragraphs describe common payroll errors and the corrective steps you must take.
a. Inadequate Payroll Information If an alternate payroll format used by an employer (such as some computer payrolls) is inadequate, e.g., does not contain all of the necessary information that would be on the optional form WH-347, the employer will be asked to resubmit the payrolls on an acceptable form. b. Missing Addresses and Social Security Numbers If the first payroll on which an employee appears does not contain the employee's address and Social Security Number, the employer will be asked to supply the missing information. A short note providing the information is all that is needed. c. Incomplete Payrolls If the information on the payroll is not complete, for example, if work classifications or rates of pay are missing, the employer will be asked to send a corrected payroll. d. Classifications If the payrolls show work classifications that do not appear on the wage decision, the employer will be asked to reclassify the employees in accordance with the wage decision or the employer may request an additional classification and wage rate (See ¶2-2). If reclassification results in underpayment (i.e., the wage rate paid on the payroll is less than the rate required for the new classification), the employer will be asked to pay wage restitution to all affected reclassified employees. (See ¶2-8 for instructions about wage restitution.) e. Wage Rates If the wage rates on the payroll are less than the wage rates on the wage decision for the work classifications reported, the employer will be asked to pay wage restitution to all affected employees. f. Apprentices and Trainees If a copy of the employee's registration or the approved program ratio and wage schedule are not submitted with the first payroll on which an apprentice or trainee appears, the employer will be asked to submit a copy of each apprentice's or trainee's registration and/or the approved program ratio and wage schedule. If the ratio of apprentices or trainees to journeymen on the payroll is greater than the ratio in the approved program, the employer will be asked to pay wage restitution to any excess apprentices or trainees. Also, any apprentice or trainee that is not registered in an approved program must receive the journeyman's wage rate for the classification of work they performed.
g. Overtime If the employees did not receive at least time and one-half for any overtime hours worked on the project, the following will occur: 1) If the project is subject to CWHSSA overtime requirements, the employer will be asked to pay wage restitution for all overtime hours worked on the project. The employer may also be liable to the United States for liquidated damages computed at $10 per day per violation. Or,
2) If the project is not subject to CWHSSA, the employer will be notified of the possible FLSA overtime violations. Also, the contract administrator may refer the violations to the DOL for further review. h. Computations If the payroll computations (hours worked times rate of pay) or extensions (deductions, net pay) show frequent errors, the employer will be asked to take greater care. Wage restitution may be required if underpayments resulted from the errors. i. Deductions If there are any &quot;Other&quot; deductions that are not identified, or if employee authorization isn't provided, or if there is any unusual (very high, or large number) deduction activity, the employer will be asked to identify the deductions, provide employee authorization or explain unusual deductions, as necessary.
HUD does not enforce or attempt to provide advice on employer obligations to make deductions from employee earnings for taxes or Social Security. However, HUD may refer to the IRS or other responsible agency copies of certified payroll reports that show wages paid in gross amounts (i.e., without tax deduction) for its review and appropriate action.
j. Fringe Benefits If the wage decision contains fringe benefits but the payroll does not indicate how fringe benefits were paid [neither 4(a) nor 4(b) is marked on the Statement of Compliance], the employer may be asked to submit corrected payrolls and will be required to pay wage restitution if underpayments occurred. However, if the basic hourly rates for the employees are at least as much as the total wage rate on the wage decision (basic hourly rate plus the fringe benefit rate), no correction is necessary.
k. Signature If the payroll Statement of Compliance is not signed or is missing, the employer will be asked to submit a signed Statement of Compliance for each payroll affected. If the Statement of Compliance is signed by a person who is not a principal of the firm and that person has not been authorized by principal to sign, the employer will be asked to provide an authorization or to resubmit the Statement(s) of Compliance bearing the signature(s) of a principal or other signatory. l. On-Site Interview Comparisons If the comparison of on-site interviews to the payrolls indicates any discrepancies (for example, the employee does not appear on the payroll for the date of the interview), the employer will be asked to submit a corrected payroll report.
2-8 Restitution for Underpayment of Wages
Where underpayments of wages have occurred, the employer will be required to pay wage restitution to the affected employees. Wage restitution must be paid promptly in the full amounts due, less permissible and authorized deductions. a. Notification to the Employer/Prime Contractor The contract administrator will notify the employer and/or prime contractor in writing of any underpayments that are found during
The contract administrator may communicate directly with a subcontractor when the underpayments are plainly evident and the subcontractor b. Computing Wage Restitution is cooperative. It is best to work through Wage restitution is simply the difference between the wage rate the prime contractor when the issues paid to each affected employee and the wage rate required on are complex, when there are significant the wage decision for all hours worked where underpayments occurred. The difference in the wage rates is called the adjustunderpayments and/or the subcontractor ment rate. The adjustment rate times the number of hours is not cooperative. In all cases, the involved equals the gross amount of restitution due. You may also subcontractor must ensure that the compute wage restitution by calculating the total amount of prime contractor receives a copy of the Davis-Bacon wages earned and subtracting the total amount of required corrective documentation.
wages paid. The difference is the amount of back wages due.
payroll or other reviews. The contract administrator will describe the underpayments and provide instructions for computing and documenting the restitution to be paid. The employer/prime contractor is allowed 30 days to correct the underpayments. Note that the prime contractor is responsible to the contract administrator for ensuring that restitution is paid. If the employer is a subcontractor, the subcontractor will usually make the computations and restitution payments and furnish the required documentation through the prime contractor.
In most cases, HUD no longer requires employers to submit checks or copies of checks (certified, cashiers, canceled or other) to correct underpayments. Restitution payments are reported and certified by the employer on a correction payroll.
c. Correction Payrolls The employer will be required to report the restitution paid on a correction certified payroll. The correction payroll will reflect the period of time for which restitution is due (for example, Payrolls #1 through #6; or a beginning date and ending date). The correction payroll will list each employee to whom restitution was paid and their work classification; the total number of work hours involved (daily hours are usually not applicable for restitution); the adjustment wage rate (the difference between the required wage rate and the wage rate paid); the gross amount of restitution due; deductions and the net amount actually paid. A signed Statement of Compliance must be attached to the correction payroll. d. Review of Correction CPR The contract administrator will review the correction certified payroll to ensure that full restitution was paid. The prime contractor shall be notified in writing of any discrepancies and will be required to make additional payments, if needed, documented on a supplemental correction payroll within 30 days. e. Unfound Workers Sometimes, wage restitution cannot be paid to an affected employee because, for example, the employee has moved and can't be located. After wage restitution has been paid to all of the workers who could be located, the employer must submit a list of any workers who could not be found and paid (i.e., unfound workers) providing their names, Social Security Numbers, last known addresses and the gross amount due. In such cases, at the end of the project the prime contractor will be required to place in a deposit or escrow account an amount equal to the total amount of restitution that could not be paid because the employee(s) could not be located. The contract administrator will continue attempts to locate the unfound workers for 3 years after the completion of the project. After 3 years, any amount remaining in the account for unfound workers will be credited and/or forwarded by the contract administrator to HUD.
Even in the best of circumstances, things can go wrong. In a DavisBacon context, &quot;things going wrong&quot; usually means there's a difference of opinion or a dispute about whether and to what extent underpayments have occurred. These disputes are usually between the contract administrator and one or more employers (the prime contractor and/ or a subcontractor). The dispute may involve something simple such as an additional classification request that is pending before the DOL; or something as significant as investigative findings following a complaint of underpayment. This chapter discusses some of what you may expect and what you can do to make your views known and to lessen any delays in resolving the problem or issue.
3-2 Administrative Review on Labor Standards Disputes
As mentioned in the Introduction above, a dispute about labor standards and compliance can arise for a number of reasons. The labor standards clauses in your contract and DOL regulations provide for administrative review of issues where there is a difference of views between the contract administrator and any employer. The most common circumstances include: a. Additional Classifications and Wage Rates Additional classification and wage rate requests are sometimes denied by the DOL. An employer that is dissatisfied with the denial can request reconsideration by the DOL Wage and Hour Administrator. The employer may continue to pay the wage rate, as requested, until a final decision is rendered on the matter. When the final decision is known, the employer will be required to pay any additional wages that may be necessary to satisfy the wage rate that is established. 1) Reconsideration. The DOL normally identifies the reasons for denial in its response to the request. Any interested person (for example, the contract administrator, employer, representatives of the employees) may request reconsideration of the decision on the additional classification request. The request for reconsideration must be made in writing and must thoroughly
address the denial reasons identified by the DOL. Employer requests for reconsideration should be made through the contract administrator but may be made directly to the DOL. (See ¶2-2(d), and also DOL Regulations 29 CFR 1.8.) All requests initiated by or made through the contract administrator or HUD must be submitted through the HUD Headquarters Office of Labor Relations. 2) Administrative Review Board. Any interested party may request a review of the Administrator's decision on reconsideration by DOL's Administrative Review Board. DOL regulations 29 CFR Part 7 explain the procedures for such reviews. (See also 29 CFR 1.9.) b. Findings of Underpayment Compliance reviews and other follow-up enforcement actions may result in findings of underpayment. The primary goal in every case and at every step in this process is to reach agreements about who may have been underpaid and how much wage restitution may be due and, of course, to promptly deliver restitution to any underpaid workers. The contract administrator will usually work informally with you to reach such agreements. You will have an opportunity to provide additional information to the contract administrator that may explain apparent inconsistencies and/or resolve the discrepancies. If informal exchanges do not result in agreement, the final determination and schedule of back wages due will be presented to you in writing and you will be permitted 30 days in which to correct the underpayment(s) or to request a hearing on the matter before the DOL. The request for hearing must be made in writing through the contract administrator and must explain what findings are in dispute and the reasons. In such cases, HUD is required to submit a report to DOL for review and further consideration. All requests for DOL hearing must be submitted through the HUD Headquarters Office of Labor Relations. 1) DOL review. The DOL will review the contract administrator's report and the arguments against the findings presented in the hearing request. The DOL may affirm or modify the findings based upon the materials presented. You will be notified in writing by the DOL of the results of its review; you will be given an opportunity to correct any underpayments or to request a hearing before a DOL Administrative Law Judge (ALJ). (See DOL Regulations 29 CFR 5.11 (b) and 29 CFR Part 6, Rules of Practice for Administrative Proceedings.) 2) Administrative Review Board. Contractors and/or subcontractors may request a review by the Administrative Review Board of the decision(s) rendered by the DOL ALJ in the administrative hearing process. See DOL regulations 29 CFR Part 7 for more information about this proceeding.
3-3 Withholding
The contract administrator shall cause withholding from payments due to the prime contractor to ensure the payment of wages which are
believed to be due and unpaid, for example, if wage underpayments or other violations are not corrected within 30 days after notification to the prime contractor. DOL may also direct the withholding of contract payments for alleged wage underpayments. Withholding is considered to be serious and is not taken unless warranted. If withholding is deemed necessary, you will be notified in writing. Only the amounts needed to meet the contractor's (and/or subcontractors') liability shall be withheld.
Remember, the prime contractor is responsible and will be held liable for any wage restitution that is due to any worker employed in the construction of the project, including workers employed by subcontractors and any lower-tier subcontractors. See ¶1-4, Responsibility of the Principal Contractor, and ¶2-8, Restitution for Underpayment of Wages.
3-4 Deposits and Escrows
In every case, we attempt to complete compliance actions and resolve any disputes before the project is completed and final payments are made. Sometimes, corrective actions or disputes continue after completion and provisions must be made to ensure that funds are available to pay any wage restitution that is ultimately found due. In these cases, we allow projects to proceed to final closing and payments provided the prime contractor deposits an amount equal to the potential liability for wage restitution and liquidated damages, if necessary, in a special account. The deposit or escrow account is controlled by the contract administrator. When a final decision is rendered, the contract administrator makes disbursements from the account in accordance with the decision. Deposit/escrow accounts are established for one or more of the following reasons: a. Where the parties have agreed to amounts of wage restitution that are due but the employer hasn't furnished evidence yet that all of the underpaid workers have received their back wages, e.g., some of the workers have moved and could not be located. The amount of the deposit is equal to the total amount of restitution due to workers lacking payment evidence. As these workers are paid and proper documentation is provided to the contract administrator, amounts corresponding to the documented payments are returned to the depositor. Amounts for any workers who can not be located are held in the deposit/escrow account for three years and disbursed as described in ¶2-8(e) of this Guide. b. Where underpayments are suspected or alleged and an investigation has not yet been completed. The deposit is equal to the amount of wage restitution and any liquidated damages, if applicable, that are estimated to be due. If the final determination of wages due is less than the amount estimated and placed in the escrow account, the escrow will be reduced to the final amount and the difference will be returned to the depositor. If the parties agree to the investigative findings, the amounts due to the workers will be disbursed from the escrow account in accordance with the schedule of wages due. Amounts for unfound workers will be retained as described above (See ¶2-8(e) and 3-4(a)). If the parties do not agree and an administrative hearing is requested, the escrow will be maintained as explained in ¶3-4(c), below.
c. Where the parties are waiting for the outcome of an administrative hearing that has been or will be requested contesting a final determination of wages due. The deposit shall be equal to the amount of wage restitution and liquidated damages, if applicable, that have been determined due. Once a final decision is rendered, disbursements from the escrow account are made in accordance with the decision.
3-5 Administrative Sanctions
Contractors and/or subcontractors that violate the labor standards provisions may face administrative sanctions imposed by HUD and/or DOL. a. DOL Debarment Contractors and/or subcontractors that are found by the Secretary of Labor to be in aggravated or willful violation of the labor standards provisions of the Davis-Bacon and Related Acts (DBRA) will be ineligible (debarred) to participate in any DBRA or Davis-Bacon Act contracts for up to 3 years. Debarment includes the contractor or subcontractor and any firm, corporation, partnership or association in which the contractor or subcontractor has a substantial interest. Debarment proceedings can be recommended by the contract administrator or can be initiated by the DOL. Debarment proceedings are described in DOL regulations 29 CFR 5.12. b. HUD Sanctions HUD sanctions may include Limited Denials of Participation (LDPs), debarments and suspensions. 1) LDPs. HUD may issue to the employer a limited denial of participation (LDP) which prohibits the employer from further participation in HUD programs for a period up to one year. The LDP is usually effective for the HUD program in which the violation occurred and for the geographic jurisdiction of the issuing HUD Office. HUD regulations concerning LDP's are found at 24 CFR 24.700-24.714.
Remember, if you have any questions or need assistance concerning labor standards requirements help is always available. Contact the contract administrator for the project you're working on or the HUD Field Labor Relations staff in your area.
2) Debarment and suspensions. In certain circumstances, HUD may initiate its own debarment or suspension proceedings against a contractor and/or subcontractor in connection with improper actions regarding Davis-Bacon obligations. For example, HUD may initiate debarment where a contractor has been convicted for making false statements (such as false statements on certified payrolls or other prevailing wage certifications) or may initiate suspension where a contractor has been indicted for making false statements. HUD regulations concerning debarment and suspension are found at 24 CFR Part 24.
3-6 Falsification of Certified Payroll Reports
Contractors and/or subcontractors that are found to have willfully falsified payroll reports (Statements of Compliance), including correction certified payroll reports, may be subject to civil or criminal prosecution. Penalties may be imposed of $1,000 and/or one year in prison for each false statement (see Section 1001 of Title 18 and Section 231 of Title 31 of the United States Code).
Acronyms ............................................................................................... v, A-3 Additional classifications ......................................................................... iii, 2-2 Administrative Review Board .............................................................1-2, 3-2 Administrative Review on Labor Standards Disputes ............................ v, 3-1 Apprentices .......................................................................... iv, 2-5, 2-9, 2-12 Apprentices and trainees ........................................................................... 2-5 Pre-apprentice ................................................................................... 2-6 Probationary apprentice .................................................................... 2-6 Ratio of apprentices and trainees to journeymen ............................. 2-6 Basic Hourly Rate ................................................................................2-6, 2-9 Certified Payroll reports ................................................ iii, 1-2, 2-3, 2-8, 3-4 &quot;No work&quot; payrolls ........................................................................... 2-4 Payroll certifications .......................................................................... 2-4 Payroll formats ................................................................................... 2-3 Payroll inspection ............................................................................... 2-5 Payroll retention ................................................................................ 2-4 Payroll review and submission .......................................................... 2-4 Compliance Reviews ................................................................................ 2-11 Construction Contract Provisions ............................................................. 1-2 HUD-2554 ........................................................................................ 1-2 HUD-4010 ........................................................................................ 1-2 HUD-5370 ........................................................................................ 1-2 Labor standards clauses .................................................................... 1-2 Contract administrator ....................... iii, 1-3, 2-1­2-5, 2-11, 2-14, 3-1-3-4 Contract provisions ....................................................................... iii, 1-2, 2-1 Contract Work Hours and Safety Standards Act .......................... iii, 1-1, A-3 Copeland Act .......................................................................................... iii, 1-2 Correction payrolls .............................................................................. v, 2-14 CPR ..................................................................................................... 2-3, A-3 CWHSSA ........................................................................................ iii, 1-1, A-3 Davis-Bacon Act .............................................................................. iii,1-1, 1-2 Davis-Bacon Definitions ......................................................................... iv, 2-5 Apprentices and trainees ................................................................... 2-5 Fringe benefits ................................................................................... 2-7 Laborer or mechanic ........................................................................ 2-5 Working foremen .............................................................................. 2-5 Davis-Bacon Regulations ................................................................ iii, 1-2, A-3 Davis-Bacon Wage Decisions ..................................................................... 1-3 Davis-Bacon Act ............................................................. iii, 1-1, 1-2, 3-4, A-3 DBA ....................................................................... iii, 1-1, 1-2, 3-4, A-3 DBRA ................................................................................. 1-1, 3-4, A-3 Debarment .............................................................................................. v, 3-4 Deductions ....................................................... iv, 1-2, 2-7, 2-10, 2-13, 2-14 Deposits and Escrow .............................................................................. v, 3-3 DOL .......................................... 1-2­1-4, 2-2­2-7, 2-11, 3-1­3-4, A-3, A-5 DOL investigator ....................................................................................... 1-4 DOL regulations ................................................................. 2-2, 3-1­3-4, A-3 Employee ................................................................................................ iv, 2-5 Fair Labor Standards Act ............................................................... iii, 1-2, A-3 FLSA ................................................................................................... A-3
Falsification .............................................................................................. v, 3-4 Findings of underpayment ....................................................................... v, 3-2 Fringe benefits ...................................................... iv, 1-3, 2-6, 2-7, 2-9, 2-13 Gross wages ......................................................................................... iv, 2-10 HUD Home Page ............................................................................................ i HUD Labor Relations field staff .......................................................i, 1-3, 2-2 HUD-11 ................................................................................................... 2-11 Labor Relations Staff .........................................................................i, 1-3, 2-2 Limited Denial of Participation ........................................................... 3-4, A-3 Liquidated damages .................................................................. 1-1, 2-12, 3-3 Local contracting agencies ......................................................................... 1-3 Net pay .......................................................................................iv, 2-10, 2-14 Notice to Employees ................................................................................. 2-2 On-site Interviews .................................................................................... 2-11 Overtime ...................................................... iv, 1-1, 1-2, 2-7, 2-9, 2-12, A-3 Payroll certification ................................................................................. iii, 2-4 Payroll errors ....................................................................................... iv, 2-11 Payroll format ............................................................................... iii, 2-3, 2-12 Payroll retention ..................................................................................... iii, 2-4 Payroll submissions ................................................................................ iii, 2-4 Piece-work ..........................................................................................2-6, 2-9 Posting the wage decision .......................................................................... 2-2 Prevailing wages or wage rates .................................................................. 2-6 Prime contractor ...................................................... 1-3, 2-2, 2-4, 2-14, 3-3 Principal contractor ............................................................................... iii, 1-3 general contractor ............................................................................. 1-3 Project Wage Rate Sheet ................................................................... 2-1, A-4 Proper designation of trade ................................................................... iv, 2-8 Rate of Pay .................................................................................... iv, 2-9, 2-11 Site of Work ........................................................................................... iv, 2-8 Split-classification ....................................................................................... 2-8 Statement of Compliance ............................................. 2-10, 2-13, 2-14, 3-4 Step-Up apprenticeship programs ............................................................ 2-6 Subcontractor ..................................................................... 1-3, 2-2, 2-4, 3-1 lower-tier subcontractors ................................................................. 1-3 Suspension .................................................................................................. 3-4 Trainees ................................................................................. iv, 2-5, 2-6, 2-12 Typical Payroll Errors ........................................................................... iv, 2-11 Unfound workers ..........................................................................v, 2-14, 3-3 Wage Decision .............................................. iii, 1-3, 2-1­2-3, 2-6­2-14, A-4 Wage Restitution ..........................................................v, 2-13, 2-14, 3-2­3-4 Computing wage restitution ........................................................ v, 2-14 Correction payrolls ..................................................................... v, 2-14 Unfound workers ........................................................................ v, 2-14 Withholding ..................................................................................... v, 1-2, 3-2 Work Classification ............................. iv, 2-1, 2-3, 2-6, 2-8, 2-9, 2-11, 2-14 World Wide Web ............................................................................................ i
CDBG CFR CPR CWHSSA DBA DBRA DOL FHA FLSA HUD IHA LCA LDP O/T PHA S/T SAC TDHE § ¶ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ Community Development Block Grant Code of Federal Regulations Certified Payroll Report Contract Work Hours and Safety Standards Act Davis-Bacon Act Davis-Bacon and Related Acts Department of Labor Federal Housing Administration Fair Labor Standards Act Housing and Urban Development (Department of) Indian Housing Authority Local Contracting Agency Limited Denial of Participation Overtime Public Housing Agency Straight-time State Apprenticeship Council/Agency Tribally-Designated Housing Entity Section Paragraph
Davis-Bacon ­ Related Web Sites*
HUD Office of Labor Relations: www.hud.gov/offices/olr HUD Regulations: www.access.gpo.gov/nara/cfr/cfr-table-search.html HUDClips (Forms and Publications): www.hudclips.org/cgi/index.cgi DOL Davis-Bacon and Related Acts Homepage: www.dol.gov/esa/programs/dbra/index.htm DOL Regulations: www.dol.gov/dol/allcrf/Title_29/toc.htm Davis-Bacon Wage Decisions: www.wdol.gov DOL Forms: www.dol.gov/esa/programs/dbra/forms.htm
*Web addresses active as of June 2006
U.S. Department of Housing and Urban Development Office of Labor Relations Washington, DC 20410 Official Business Penalty for Private Use $300 Return Service Requested
STANDARD MAIL POSTAGE &amp; FEES PAID HUD Permit No. G-795
Labor Relations Desk Guide LR01.DG
: 2005­321-332
260744 contractor text.pmd
Transportation Operation and Maintenance Services
Microsoft Word - firealarms.2010.June.doc
Microsoft Word - ANGDA_Rpt_R16.doc
RECORD RETENTION GUIDE FOR BUSINESS