Labor Standards Training US Department of HUD Office of Labor Relations

Contact Information United States Department of Housing and Urban Development Midwest Regional Office of Labor Relations 77 West Jackson Blvd, Room 2307 Chicago, IL 60604 www.hud.gov Deborah Diez Labor Relations Michigan Specialist (Chicago Regional Office) (312) 913-8127 deborah.a.diez@hud.gov Roxanne Volkmann Labor Relations Illinois Specialist (Chicago Regional Office) (312) 913-8438 roxanne.volkmann@hud.gov

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...

Davis-Bacon Act Enacted 1931, amended 1935 & 1964 Federal construction contracts >$2,000 Sets minimum hourly wage rates for workers The Act is “site-based” Includes alteration, repair, painting & decorating

Davis-Bacon Act Applies 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 wages Requires weekly payment of wages

DB Related Acts Community Development Block Grants HOME Public Housing Tribally-Designated Housing Authorities FHA Multi-Family Housing

Contract Work Hours and Safety Standards Act (CWHSSA) Enacted 1962 Requires overtime at 1½ times the basic hourly rate of pay for all work 40 hrs/week Applies to contracts $100,000 Liquidated damages apply to violations ($10 per day, per violation)

Copeland Act Enacted 1934, regulates deductions from wages Prohibits “kick-backs” of pay Requires submission of certified weekly payrolls and accompanying signed Statement of Compliance

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).

PHA Factors of Applicability Routine Maintenance Non-Routine Maintenance Development (Davis-Bacon)

Routine Maintenance Work that involves the regular upkeep and preservation of buildings, grounds, and facilities Routine maintenance wage rates are determined or adopted by HUD Applicable to all laborers and mechanics engaged in covered work, including force account, contractors, temporaries, residents

Routine Maintenance Determining the Wage Rates Agencies collect local wage data and submit HUD 4750 to Labor Relations Specialist on an annual basis Labor Relations reviews and works with HA to determine the Maintenance Wage Rate Determination A HUD 52158 is issued for all work classifications (force account and anticipated contracts)

Maintenance Wage Rate Determination HUD 52158

Maintenance Wage Rate Determination HUD 52158 (Cont’d)

Posting Requirements-Routine and Non-Routine Maintenance 52158 - In employee common area (lunch room, office, etc) 52158 - Incorporate into routine maintenance contracts

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

Non-Routine Maintenance Involves expenditures that would otherwise materially distort the level trend of maintenance expenses Includes the replacement of equipment and materials rendered unsatisfactory because of normal wear and tear by items of substantially the same kind

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 I Maintenance contracts (including non-routine maintenance) over $2,000 but not more than $100,000–Use Section II Maintenance contracts (including non-routine maintenance) greater than $100,000 – Use Section I and II

CONTRACT ADMINISTRATION Exclusions from HUD-Determined requirements Certain professional services are excluded from HUD-determined wage requirements Periodic inspections or testing of equipment Testing for lead-based paint Pest control Installation, service or maintenance of leased equipment, fixtures or appliances

Development (Davis-Bacon) New construction Reconstruction A substantial improvement in the quality or kind or original equipment and materials Remodeling that alters the nature or type of housing units falls within the purview of “development” (24 CFR 968.203)

DEVELOPMENT WAGE RATES DB wages determined by DOL Agency gets DB rates on-line or from HUD OLR Applicable to all laborers and mechanics engaged in covered work, including force account, contractors, temporaries, residents CWHSSA applies to contractors after 40 hours

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 decision Federal labor standards clauses HUD-5370 PHA Programs – Contracts greater than $100,000 HUD-5370-EZ Contracts greater than $2,000 but not more than $100,000

PHAs ARE REQUIRED TO … (Routine and Non-Routine Maintenance) Ensure ALL maintenance laborers and mechanics are paid a prevailing wage Create and maintain documents demonstrating compliance Ensure permissible deductions as allowed by law or regulation Conduct employee interviews (HUD-11) Comply with Labor Relations Letter LR 2004-01

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)

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

DAVIS-BACON WAGE DECISION BASICS Must be incorporated in prime contracts & sub-contracts Identifies work classifications, basic hourly wages, fringe benefits Must be posted at the job site May be modified periodically Published for 4 types of construction

CHARACTER OF CONSTRUCTION RESIDENTIAL Single family houses, townhouses Apartment buildings less than 5 stories BUILDING Sheltered enclosures for the purpose of housing persons, machinery, and equipment Apartment buildings more than 4 stories Commercial buildings

CHARACTER OF CONSTRUCTION HIGHWAY Roads Highways Sidewalks Parking areas Other paving work not incidental to other construction HEAVY Projects which cannot be classified as Building, Residential, or Highway

OBTAINING DB-WAGE DECISIONS Go On-line at: www.wdol.gov NEW – DOL renumbered wage decisions effective January 6, 2012. Contact your HUD Labor Relations Specialist

<- WD Number <- Construction Type <- Counties <- Description Mod Number & Publish Date

CLASSIFICATION RATE FRINGES

WAGE DECISION “LOCK-IN” COMPETITIVELY BID CONTRACTS Lock-in at bid opening provided contract is awarded within 90 days Must update wage decision if contract is awarded more than 90 days after bid opening Modifications published days before bid opening are applicable if there is sufficient time to notify bidders (10 days no longer applicable with online access)

Contractor Eligibility (DB) Verify prime contractor eligibility against GSA Debarred List www.sam.gov Make record of verification to contract file

Certified Weekly Payrolls

Payroll Form WH-347

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 performed Established work week Hours worked each week Gross wages and net wages properly calculated “Other” deductions Overtime computed properly Statement of Compliance – Authorized Original Signature

Reviews of Certified Payrolls Typical Errors Classification Errors Copy or Fax Statement of Compliance Inadequate or Incomplete Payroll Information Missing Addresses and SSN One Statement of Compliance for Multiple Work Weeks Other Deductions Ratio of Laborers to Mechanics Unauthorized Signature on Statement of Compliance

EMPLOYEE INTERVIEWS – HUD-11 Contractors must permit interviews Interviews may be performed at random Interviews are confidential Interviews must be checked against payrolls

Fringe Benefits Can 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 worker Do 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.)

Fringe Benefits Prevailing 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 wages Payments made or costs incurred by the contractor for “bona fide” fringe benefits may be creditable Combination of cash wages paid and “bona fide” fringe benefits may be used together

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.

Restitution

Restitution Where 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 promptly Deposit of funds may be necessary if matter is under appeal, or workers cannot be found

Restitution Computing Wage Restitution Corrected Payrolls Contract Administrator Review Document restitution on certified corrected payroll report Submit 5.7 report where restitution totals $1,000 per contractor (See LR-92-02 for instructions)

INVESTIGATIONS Funds may be withheld if violations are not corrected promptly Deposit of funds may be necessary if matter is under appeal, or workers cannot be found Administrative sanctions may be necessary Limited Denial of Participation Debarment

Work Classifications You’ll want to make sure that the work classification(s) you need are contained in the wage decision.

ADDITIONAL CLASSIFICATIONS Review and discuss the wage decision with contractor early to identify missing classifications Submit Requests immediately after contract award (HUD-4230A) HUD will respond in writing Post new classification & rate Make restitution payment if necessary

Davis-Bacon Additional Classifications Process Form HUD-4230A Request of Additional Classification and Rate AND Employer needs to send a letter on company letterhead requesting the job classification and detailing the duties the employee will be performing

HUD 4230A 4/2/02 Electrician 22.50 4.50 Do all parties agree? Community Center CD2002-24 Miami, Dade County, FL BLDG constr: rehab comm center 4/2/02 FL020001/Mod 1 HUD 4230A Electrician 22.50 4.50 Contractor, Labor Organization Do all parties agree?

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 DOL Apprentices and trainees must be registered in a Department of Labor- approved program

Apprentices and Trainees Contractor must submit a copy of registration/apprentice agreement and ratio language Apprentices/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.

Self-employed Subcontractors (Labor Relations Letter LR-96-01) All laborers and mechanics are covered regardless of any contractual relationship alleged to exist Must be paid weekly May not certify to payment of own wages (may not sign own payrolls) - Exception: Owners of business working with their crew

Semi-Annual Labor Standards Enforcement Report Instructions and Fillable Form (HUD-4710) can be found at: www.hud.gov/offices/olr/olrform.cfm

Report Deadlines Semi-Annual Labor Standards Enforcement Report - HUD 4710 Period 1 Oct 1 – Mar 31 Due April 4 Period 2 Apr 1 – Sep 30 Due October 4 Maintenance Wage Rate Determination Annual Renewal of 52158 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.

What’s New? 1344.1 Rev 2 – February, 2012 Contractor’s Guide – Jan. 2012

Internet Sites Wage Determinations – http://www.wdol.gov Wage and Hour Division – http://www.dol.gov/whd/index.htm Office of the Administrative Law Judges Law Library – http://www.oalj.dol.gov Administrative Review Board – http://www.dol.gov/arb Debarred Bidders List – http://www.sam.gov HUD – http://www.HUD.gov/offices/olr

Questions