CDBG Federal Labor Standards Compliance For Grant Administrators

1
CDBG Federal Labor Standards ComplianceFor Grant
Administrators
2
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

3
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

4
Key Federal Statutes

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

5
(No Transcript)
6
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

7
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

8
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 .

9
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,
  per/violation)

10
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

11
Copeland Act

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

12
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

13
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

14
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
  v/)
• Conduct a pre-construction conference (optional)

15
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

16
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
• www.wdol.gov

17
Davis-Bacon Wage Determinations Types of
Construction

• 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

18
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

19
State Labor Law Requirements

• Insert any specific state requirements if
  applicable

20
Employer Requirements

• Classification
• Pay
• Overtime
• Posters

21
Employer Requirements

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

22
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

23
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
  classification
• Must be listed separately on the payroll

24
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

25
Employer Requirements

• Two Posters
• Wage Determination
• DOL Notice to Employees
• http//www.dol.gov/esa/regs/compliance/posters/pd
  f/fedprojc.pdf
• Posted in a conspicuous place, protected from the
  elements

26
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

27
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
  resources

28
Davis-Bacon Compliance

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

29
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

30
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

31
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

32
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

33
Davis BaconFringe Benefits

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

34
Davis BaconFringe Benefits

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

35
Prime Contractor

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

36
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
  employees
• Posters

37
Subcontractor

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

38
Certified Payroll Requirements(Title 29 CFR Part
3)

• 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

39
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
  UGLG
• Payroll record retention three years

40
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

41
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)

42
Correcting Violations

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

43
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

44
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

45
Recordkeeping Requirements (continued)

• Weekly payrolls with statement of compliance
• Employee interviews
• Contractor clearance
• Securing confidentiality of records

46
Reporting

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

47
HUD Labor Relations References

• Making Davis Bacon Work (HUD Publication)
• A Practical Guide for States, Indian Tribes and
  Local Agencies
• http//www.hud.gov/offices/adm/hudclips/forms/fil
  es/4813-LR.pdf
• Making Davis Bacon Work
• A Contractors Guide to Davis-Bacon
• http//www.hudclips.org/sub_nonhud/cgi/pdfforms/4
  812-LR.pdf

48
HUD Labor Relations References

• Labor Relations Forms
• www.hud.gov/offices/olr/olrform.cfm
• HUD Office of Labor Relations
  www.hud.gov/offices/olr
• HUD Regulations
• www.access.gpo.gov/nara/cfr/cfr-table-search.html

49
Other Sources

• Davis-Bacon Wage Determinations
  http//www.wdol.gov
• GSAs On-Line Debarment List
• http//epls.arnet.gov

50
Other Sources

• DOL DBRA Homepage www.dol.gov/esa/programs/dbra/i
  ndex.htm
• DOL Regulations
• www.dol.gov/esa/regs/cfr/whdcfr.htm
• DOL Forms
• www.dol.gov/libraryforms/