CDBG Federal Labor Standards Compliance For Grant Administrators - PowerPoint PPT Presentation

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CDBG Federal Labor Standards Compliance For Grant Administrators


Title: Davis-Bacon Streamlining Author: HUDWARE II Created Date: 8/30/2001 2:17:20 PM Document presentation format: On-screen Show (4:3) Company: U.S. Department of ... – PowerPoint PPT presentation

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Title: CDBG Federal Labor Standards Compliance For Grant Administrators

CDBG Federal Labor Standards ComplianceFor Grant
Why are Labor Standards Crucial?
  • Standards guarantee fair wages and compensation
    for workers
  • Helps provide a level playing field for bidders
  • Local grantee must ensure and document compliance
  • Transgressions endanger future funding
  • Required by CDBG program and other federal laws

Todays Labor Standards Topics
  • Federal Labor Standards 101
  • UGLG Responsibilities
  • Wage Determinations Classification Issues
  • Certified Payroll Requirements
  • Compliance Principles
  • Contractor Responsibilities
  • When Things Go Awry.
  • Other Sources of Information

Key Federal Statutes
  • Davis-Bacon Act
  • Contract Work Hours and Safety Standards Act
  • Copeland Act

(No Transcript)
CDBG and Davis-Bacon Act (40 U.S.C. 276a.-5)
  • Enacted 1931, amended 1935 1964
  • HCDA requires construction contracts over 2,000
    or residential properties with 8 or more housing
    units comply with Davis-Bacon Act
  • Act is site-based
  • Includes alteration, repair, painting decorating

CDBG and Davis-Bacon Act
  • Construction work financed
  • Soft costs do not trigger DB
  • Property ? building Applies to Total of units
    in property
  • Volunteers are exempt (more later)
  • Force account workers are exempt

Use of Volunteers
  • Volunteers may work without pay on a construction
    project to which Davis-Bacon and Related Acts
    apply. An individual may not however, be paid
    for some work and volunteer for other work. It
    is permissible to cover reasonable costs of
    volunteers such as travel or other incidental
    benefits .

Contract Work Hours and Safety Standards Act
(CWHSSA) (40 U.S.C. 327-333)
  • Enacted 1962
  • Payment for all contract work exceeding 40 hours
    per week at 1½ times regular rate of pay
  • Applies to contracts exceeding 100,000
  • Liquidated damages for violations (10 per/day,

Copeland Act
  • Enacted in 1934 (40 U.S.C. 276c)
  • Prohibits kickbacks
  • Requires contractors to submit certified payrolls
    with a signed statement of compliance each week

Copeland Act
  • Regulates deductions from wages
  • FICA, federal state taxes
  • Bona fide prepayment of wages
  • Court ordered payments, fringe benefit plans, etc

CDBG and Davis - Bacon Factors of Applicability
  • All laborers and mechanics employed by
    contractors or subcontractors
  • Requires payment of at least prevailing wages
  • Requires weekly payment of wages
  • Usually applied through Related Acts

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). They can be found in Title 29 CFR Parts
    1, 3, 5, 6 and 7

Responsibilities of UGLG (Title 29 CFR Part 5)
  • Designate a Labor Standards Compliance Officer
  • Request a Wage Decision
  • Put Wage Decision and Labor Standards clauses
    (Form 4010) in contract bid documents
  • Check contractor eligibility (http//epls.arnet.go
  • Conduct a pre-construction conference (optional)

Responsibilities of UGLG (Title 29 CFR Part 5)
  • Review weekly payrolls and compliance statements
  • Conduct employee interviews
  • See that underpaid workers receive restitution
  • Maintain contract management system and
    compliance files

Davis-Bacon Wage Determinations
  • Must be included in bid documents and contract
  • Established by geographic area
  • May be modified periodically
  • Published for four types of construction

Davis-Bacon Wage Determinations Types of
  • Building - sheltered enclosures that house
    persons, machinery, equipment, etc. Also
    apartment buildings over 4 stories
  • Residential - single family houses, townhouses,
    and apartment buildings up to four stories
  • Highway - roads, highways, sidewalks, parking
    areas, and other paving work not incidental to
    other construction
  • Heavy - projects that cant be classified as
    Building, Residential or Highway

Davis-Bacon Wage Determinations Lock-In Rules
  • Competitive bidding
  • Modifications published less than 10 days before
    bid opening are not applicable if there is not
    sufficient time to notify bidders
  • Lock-in at bid opening provided contract is
    awarded within 90 days
  • Must update wage determination if contract award
    is more than 90 days
  • UGLG must verify that wage rates are current

State Labor Law Requirements
  • Insert any specific state requirements if

Employer Requirements
  • Classification
  • Pay
  • Overtime
  • Posters

Employer Requirements
  • All laborers and mechanics must
  • Be classified in accordance with the Wage
  • Be paid at rates ? those on Wage Decision

Employer Requirements Additional Classifications
  • Employer submits request in writing
  • UGLG must follow up (contact State)
  • DOL has 3 criteria for approval
  • Work is not already on the WD
  • Proposed classification is used by the industry
    in the project area
  • Proposed wage rate fringe benefits bear a
    reasonable relationship to rates on the WD

Employer Requirements Dual Classification
  • When an employee performs tasks under two or more
    distinct classifications, the employee must be
    paid the prevailing wage rate for each
  • Must be listed separately on the payroll

Employer Requirements
  • All laborers and mechanics must
  • Be paid not less often than once a week
  • Receive at least 1½ times regular rate of pay for
    all hours worked over 40 per week
  • Each employer must
  • Submit weekly certified payrolls reflecting all
    hours worked

Employer Requirements
  • Two Posters
  • Wage Determination
  • DOL Notice to Employees
  • http//
  • Posted in a conspicuous place, protected from the

UGLG Compliance/Monitoring
  • On-site employee interviews should be used as a
    proactive enforcement tool
  • Grantees are encouraged to focus interviews to
    projects or groups of workers where violations
    are suspected or alleged
  • Each employer must
  • Maintain full documentation, including payrolls
    and related records, for at least 3 years
    following completion

UGLG Compliance/Monitoring
  • Interviews can be used to support a specific
    on-going investigation
  • Fewer on-site interviews may be conducted
    randomly but HUD considers focusing a far more
    effective means of utilizing on-site interview

Davis-Bacon Compliance
  • Wage Classifications and Pay
  • Site of the Work
  • Truck Drivers
  • Apprentices and Trainees
  • Helpers
  • Fringe Benefits

Davis Bacon ComplianceLaborers and Mechanics
  • Laborer / Mechanic anyone performing
    construction work on the project
  • Supervisors are covered if they spend ? 20 their
    time performing manual work
  • Project Superintendents if they do work in listed
    trades, they must be paid the appropriate wage
    listed on the Wage Determination

Davis Bacon ComplianceSite of Work
  • 29 CFR 5.2(l)(1)
  • the physical place where the building or work
    called for in the contract will remain

Davis Bacon ComplianceApprentices and Trainees
  • Only apprentices trainees registered in an
    approved program may be paid less than the
    applicable wage rate
  • Approved program means a program registered
    with the DOL or a DOL- recognized State
    Apprenticeship Agency

Davis Bacon ComplianceHelpers
  • Helpers are only allowed when
  • Duties are distinct from all others
  • Use of helpers is established in the area
  • Helper not in informal training program

Davis BaconFringe Benefits
  • Allowed
  • Employer contributions to Third Party plans
  • Health / life / disability / dental insurance
  • Retirement plans
  • Costs of apprenticeship

Davis BaconFringe Benefits
  • Excludes payments required by law
  • FICA
  • Workers Compensation
  • Unemployment
  • Certified payrolls must reference how FBs are paid

Prime Contractor
  • Responsible for all employers on project
  • Subcontractors communicate through prime
  • Ensures labor provisions in all subcontracts

Prime Contractor
  • Submits certified payrolls for own employees
  • Provides subs with forms and guidance
  • Ensures access to employees on site
  • Responsible for restitution to underpaid
  • Posters

  • Submits certified payrolls each week
  • Instructs lower-tier subs of responsibilities
  • Reviews Wage Decisions, requests additional
  • Ensures access to employees on-site

Certified Payroll Requirements(Title 29 CFR Part
  • Optional Form WH-347
  • Compliance statement w/ original signature of
    corporate official, or letter of delegation
  • Payrolls are due weekly
  • Identify first and final payroll

Certified Payroll Basics
  • No Work payrolls optional but all weeks must
    be accounted for in records
  • Payrolls must be complete legible
  • Prime contractor reviews payrolls and submits to
  • Payroll record retention three years

Certified Payroll Basics Employee Information
  • Employee name, address, SSN
  • Employee work classification
  • Rate of pay
  • Straight / OT hours worked per day, per week on
    this project

Certified Payroll Basics Wages and Deductions
  • Gross wages earned
  • Deductions from wages
  • Net pay
  • Statement of compliance
  • one for each weekly payroll
  • signed by corporate official (or designee)

Correcting Violations
  • Labor Standards Officer notifies company and/or
    prime contractor of violations
  • Wage restitution must be documented
  • Submit corrected certified payroll

Correcting Violations
  • Funds may be withheld by UGLG if violations are
    not corrected promptly
  • Deposit of funds in Escrow if matter is under
    appeal, or workers cannot be found
  • Administrative sanctions
  • Limited Denial of Participation
  • Debarment

Recordkeeping Requirements
  • Copies of Wage Decisions
  • Modifications
  • Preconstruction Minutes if applicable
  • Bid Documents and Copy of Contract
  • Notification of Contract Award
  • Documentation of all enforcement actions

Recordkeeping Requirements (continued)
  • Weekly payrolls with statement of compliance
  • Employee interviews
  • Contractor clearance
  • Securing confidentiality of records

  • Violations of underpayment must be reported to
    DOL if gt1,000 or willful.
  • Semi-annual report of contracts awarded

HUD Labor Relations References
  • Making Davis Bacon Work (HUD Publication)
  • A Practical Guide for States, Indian Tribes and
    Local Agencies
  • http//
  • Making Davis Bacon Work
  • A Contractors Guide to Davis-Bacon
  • http//

HUD Labor Relations References
  • Labor Relations Forms
  • HUD Office of Labor Relations
  • HUD Regulations

Other Sources
  • Davis-Bacon Wage Determinations
  • GSAs On-Line Debarment List
  • http//

Other Sources
  • DOL DBRA Homepage
  • DOL Regulations
  • DOL Forms
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