Presentation on theme: "Labor Standards Training"— Presentation transcript:
1 Labor Standards Training US Department of HUDOffice of Labor Relations
2 Contact InformationUnited States Department of Housing and Urban DevelopmentMidwest Regional Office of Labor Relations77 West Jackson Blvd, Room 2307Chicago, IL 60604Deborah DiezLabor Relations Michigan Specialist (Chicago Regional Office)(312)Roxanne VolkmannLabor Relations Illinois Specialist (Chicago Regional Office)(312)
3 U.S. Housing Act of 1937, as amended, Section 12(a) U.S. Housing Act of 1937, Sec. 12a,(42 U.S.C. 1437j)….not less than the wages prevailing in the locality, as determined or adopted…by the Secretary, shall be paid to…all maintenance laborers and mechanics employed in the operation of the low-income housing project involved...
4 Davis-Bacon Act Enacted 1931, amended 1935 & 1964 Federal construction contracts >$2,000Sets minimum hourly wage rates for workersThe Act is “site-based”Includes alteration, repair, painting & decorating
5 Davis-Bacon ActApplies to all laborers & mechanics (workers whose duties are manual or physical in nature including those workers who use tools or who are performing work of a trade, as distinguished from mental or managerial duties).Requires payment of prevailing wagesRequires weekly payment of wages
6 DB Related Acts Community Development Block Grants HOME Public Housing Tribally-Designated Housing AuthoritiesFHA Multi-Family Housing
7 Contract Work Hours and Safety Standards Act (CWHSSA) Enacted 1962Requires overtime at 1½ times the basic hourly rate of pay for all work 40 hrs/weekApplies to contracts $100,000Liquidated damages apply to violations ($10 per day, per violation)
8 Copeland Act Enacted 1934, regulates deductions from wages Prohibits “kick-backs” of payRequires submission of certified weekly payrolls and accompanying signed Statement of Compliance
9 PHA Factors of Applicability For properties subject to a conventional Annual Contributions Contract, construction, rehabilitation, and maintenance work are covered by some type of prevailing wage to all maintenance laborers and mechanics engaged in the operation of low-income housing projects (Section 12(a) of the US Housing Act of 1937).
10 PHA Factors of Applicability Routine MaintenanceNon-Routine MaintenanceDevelopment (Davis-Bacon)
11 Routine MaintenanceWork that involves the regular upkeep and preservation of buildings, grounds, and facilitiesRoutine maintenance wage rates are determined or adopted by HUDApplicable to all laborers and mechanics engaged in covered work, including force account, contractors, temporaries, residents
12 Routine Maintenance Determining the Wage Rates Agencies collect local wage data and submit HUD 4750 to Labor Relations Specialist on an annual basisLabor Relations reviews and works with HA to determine the Maintenance Wage Rate DeterminationA HUD is issued for all work classifications (force account and anticipated contracts)
15 Posting Requirements-Routine and Non-Routine Maintenance In employee common area (lunch room, office, etc)Incorporate into routine maintenance contracts
16 Non-Routine Maintenance Work items that ordinarily would be performed on a regular basis in the course of upkeep of a property…but have become substantial in scope because they have been put off
17 Non-Routine Maintenance Involves expenditures that would otherwise materially distort the level trend of maintenance expensesIncludes the replacement of equipment and materials rendered unsatisfactory because of normal wear and tear by items of substantially the same kind
18 CONTRACT ADMINISTRATION Routine & Non-Routine Maintenance Work Each Maintenance contract MUST incorporate:Current, appropriate wage decision and Federal Labor Standards provision applicable to work being done.Federal LS HUD 5370-C (General conditions for Non- construction contracts-HUD determined)Non-construction contracts (without maintenance) greater than $100,000 – Use Section IMaintenance contracts (including non-routine maintenance) over $2,000 but not more than $100,000–Use Section IIMaintenance contracts (including non-routine maintenance) greater than $100,000 – Use Section I and II
19 CONTRACT ADMINISTRATION Exclusions from HUD-Determined requirements Certain professional services are excluded from HUD-determined wage requirementsPeriodic inspections or testing of equipmentTesting for lead-based paintPest controlInstallation, service or maintenance of leased equipment, fixtures or appliances
20 Development (Davis-Bacon) New constructionReconstructionA substantial improvement in the quality or kind or original equipment and materialsRemodeling that alters the nature or type of housing units falls within the purview of “development” (24 CFR )
21 DEVELOPMENT WAGE RATES DB wages determined by DOLAgency gets DB rates on-line or from HUD OLRApplicable to all laborers and mechanics engaged in covered work, including force account, contractors, temporaries, residentsCWHSSA applies to contractors after 40 hours
22 CONTRACT ADMINISTRATION Development Work (Construction) Each covered DB contract for construction, alteration, or repair work MUST incorporate:Current, appropriate wage decision and Federal Labor Standards provision applicable to work being done.Appropriate modification or superseded wage decisionFederal labor standards clausesHUD-5370 PHA Programs – Contracts greater than $100,000HUD-5370-EZ Contracts greater than $2,000 but not more than $100,000
23 PHAs ARE REQUIRED TO … (Routine and Non-Routine Maintenance) Ensure ALL maintenance laborers and mechanics are paid a prevailing wageCreate and maintain documents demonstrating complianceEnsure permissible deductions as allowed by law or regulationConduct employee interviews (HUD-11)Comply with Labor Relations Letter LR
24 Posting Requirements-Development Wage Decision or Project Wage Rate Sheet (HUD-4720)Any Additional Classifications (HUD-4230A)The Employees Rights under the Davis-Bacon Act (WH-1321)
25 DAVIS-BACON WAGE DECISIONS 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 in those classifications
26 DAVIS-BACON WAGE DECISION BASICS Must be incorporated in prime contracts & sub-contractsIdentifies work classifications, basic hourly wages, fringe benefitsMust be posted at the job siteMay be modified periodicallyPublished for 4 types of construction
27 CHARACTER OF CONSTRUCTION RESIDENTIALSingle family houses, townhousesApartment buildings less than 5 storiesBUILDINGSheltered enclosures for the purpose of housing persons, machinery, and equipmentApartment buildings more than 4 storiesCommercial buildings
28 CHARACTER OF CONSTRUCTION HIGHWAYRoadsHighwaysSidewalksParking areasOther paving work not incidental to other constructionHEAVYProjects which cannot be classified as Building,Residential, or Highway
29 OBTAINING DB-WAGE DECISIONS Go On-line at:NEW – DOL renumbered wage decisions effective January 6, 2012.Contact your HUD Labor Relations Specialist
30 <- WD Number<- Construction Type<- Counties<- DescriptionMod Number & Publish Date
32 WAGE DECISION “LOCK-IN” COMPETITIVELY BID CONTRACTS Lock-in at bid opening provided contract is awarded within 90 daysMust update wage decision if contract is awarded more than 90 days after bid openingModifications published days before bid opening are applicable if there is sufficient time to notify bidders (10 days no longer applicable with online access)
33 Contractor Eligibility (DB) Verify prime contractor eligibility against GSA Debarred ListMake record of verification to contract file
36 Reviews of Certified Payrolls Name of employee. Address and SSN are no longer required on CPR but must be on file and available upon request.Properly classified according to the work performedEstablished work weekHours worked each weekGross wages and net wages properly calculated“Other” deductionsOvertime computed properlyStatement of Compliance – Authorized Original Signature
37 Reviews of Certified Payrolls Typical Errors Classification ErrorsCopy or Fax Statement of ComplianceInadequate or Incomplete Payroll InformationMissing Addresses and SSNOne Statement of Compliance for Multiple Work WeeksOther DeductionsRatio of Laborers to MechanicsUnauthorized Signature on Statement of Compliance
38 EMPLOYEE INTERVIEWS – HUD-11 Contractors must permit interviewsInterviews may be performed at randomInterviews are confidentialInterviews must be checked against payrolls
39 Fringe BenefitsCan include health and life insurance premiums, retirement/pension contributions, vacation irrevocably made to a trustee or third party pursuant to bona fide fringe benefits fund, plan, or program.May be paid directly to workerDo not include employer payments or contributions required by Federal, State or local laws (i.e., the employer’s contribution to Social Security, workers’ compensation insurance, etc.)
40 Fringe BenefitsPrevailing wage requirements may be met by any combination of cash wages and creditable “bona fide” fringe benefits provided by the employer.May be paid entirely as cash wagesPayments made or costs incurred by the contractor for “bona fide” fringe benefits may be creditableCombination of cash wages paid and “bona fide” fringe benefits may be used together
41 Fringe Benefits and Overtime Under Davis-Bacon, fringe benefits must be paid for ALL hours worked, including overtime hours. However, the fringe benefit amounts may be excluded from the half-time premium due as overtime compensation.
44 RestitutionWhere underpayments are found, the employer will be required to pay wage restitution to the affected employees.Must be paid promptly and in the full amounts due, less permissible and authorized deductions.Funds may be withheld if violations are not corrected promptlyDeposit of funds may be necessary if matter is under appeal, or workers cannot be found
45 Restitution Computing Wage Restitution Corrected Payrolls Contract Administrator ReviewDocument restitution on certified corrected payroll reportSubmit 5.7 report where restitution totals $1,000 per contractor (See LR for instructions)
46 INVESTIGATIONSFunds may be withheld if violations are not corrected promptlyDeposit of funds may be necessary if matter is under appeal, or workers cannot be foundAdministrative sanctions may be necessaryLimited Denial of ParticipationDebarment
47 Work ClassificationsYou’ll want to make sure that the work classification(s) you need are contained in the wage decision.
48 ADDITIONAL CLASSIFICATIONS Review and discuss the wage decision with contractor early to identify missing classificationsSubmit Requests immediately after contract award (HUD-4230A)HUD will respond in writingPost new classification & rateMake restitution payment if necessary
49 Davis-Bacon Additional Classifications Process Form HUD-4230ARequest of Additional Classification and RateANDEmployer needs to send a letter on company letterhead requesting the job classification and detailing the duties the employee will be performing
50 HUD 4230A 4/2/02 Electrician 22.50 4.50 Do all parties agree? Community CenterCDMiami, Dade County, FLBLDG constr: rehab comm center4/2/02FL020001/Mod 1HUD 4230AElectrician22.504.50Contractor, Labor OrganizationDo all parties agree?
51 Apprentices and Trainees Apprentices and trainees are persons registered and receiving on-the-job training in a construction occupation under a program which has been approved in advance by DOLApprentices and trainees must be registered in a Department of Labor- approved program
52 Apprentices and Trainees Contractor must submit a copy of registration/apprentice agreement and ratio languageApprentices/trainees that are not registered or that are utilized out of ratio must be paid the full rate (base + fringes) listed on the wage decision for the classification of work they perform.
53 Self-employed Subcontractors (Labor Relations Letter LR-96-01) All laborers and mechanics are covered regardless of any contractual relationship alleged to existMust be paid weeklyMay not certify to payment of own wages (may not sign own payrolls) - Exception: Owners of business working with their crew
54 Semi-Annual Labor Standards Enforcement Report InstructionsandFillable Form (HUD-4710)can be found at:
55 Report DeadlinesSemi-Annual Labor Standards Enforcement Report - HUD 4710Period 1 Oct 1 – Mar 31 Due April 4Period 2 Apr 1 – Sep 30 Due October 4Maintenance Wage Rate Determination Annual Renewal of HUD sends a reminder prior to the end of the Fiscal Year. The housing commission then sends in the HUD-4750, personnel policy or CBA, and job descriptions.