Labor Standards Compliance

1. Labor Standards Compliance Jeff Kormann Labor Standards Specialist CDBG Program

2. LAWS AND REGULATIONSDAVIS-BACON ACT • Enacted by Congress in 1931 (amended 1935 & 1964) Intent was to protect local/area wage scales from common practice of “importing” low-cost labor Applies to Federal contracts > $2000 Sets prevailing wage rates for laborers/mechanics while working on job site

3. LAWS AND REGULATIONSDAVIS-BACON ACT • Includes alteration, repair, painting, decorating • Requires weekly payment of wages • Extended to Federally-assisted projects through various “Related Acts” • Applies to construction work financed “in whole or in part” through CDBG program

4. LAWS AND REGULATIONSCOPELAND “ANTI-KICKBACK” ACT • Enacted in 1934 • Prohibits “kickbacks” of pay (hence the name) • Requires weeklycertified payrolls • Regulates payroll deductions from wages

5. LAWS AND REGULATIONSCONTRACT WORK HOURS AND SAFETY STANDARDS ACT • Enacted in 1962 • Overtime pay for all work > 40 hours/week • Applies to construction contracts > $100K • Liquidated damages assessed for violations

6. CONTRACT PROVISIONSREQUIRED DOCUMENTS • Federal Labor Standards Provisions (HUD/OLR Form 4010 revised 06/2009) • CDBG General Conditions—Items 37-54 • Contractor/subcontractor certifications (LS & PW) • Applicable Davis-Bacon Wage Decision

7. DAVIS-BACON WAGE DECISIONSHOW THEY “DETERMINE” THE RATES • Data collection—voluntary contractor surveys • Sets “prevailing wage rates” by classification or trade for defined geographic areas • Modified as new information is received • Covers cash wages and fringe benefit programs

8. WAGE DECISION COMPONENTS • Wage Decision # • Modification # • Modification date • State and County • Wage decision type • Trade classifications • Basic wage rate • Fringe benefit rate

9. WHICH DECISION DO WE USE??TYPE OF CONSTRUCTION--BUILDING • SHELTERED ENCLOSURES FOR PERSONS, MACHINERY, EQUIPMENT (subject to “80/20” rule) • NEW CONSTRUCTION OR RENOVATION OF COMMERCIAL BUILDINGS • NEW CONSTRUCTION OR RENOVATION OF APARTMENT BUILDINGS > FOUR STORIES • DEMOLITION (followed by new Building construction)

10. WHICH DECISION DO WE USE?TYPE OF CONSTRUCTION-RESIDENTIAL • NEW CONSTRUCTION OR RENOVATION OF SINGLE-FAMILY HOUSES /TOWNHOUSES • NEW CONSTRUCTION OR RENOVATION OF APARTMENT BUILDINGS < FIVE STORIES • DEMOLITION OF RESIDENTIAL UNITS (when followed by new Residential construction)

11. WHICH DECISION DO WE USE?TYPE OF CONSTRUCTION-H/H • HEAVY • DREDGING • WATER SYSTEM • SEWER SYSTEM • STORMWATER • PARKS/REC AREAS • FLOOD CONTROL • HIGHWAY • STREETS/ROADS • SIDEWALKS • PARKING AREAS • OTHER PAVING (non-incidental scope of work) • DEMOLITION (followed by new H/H construction)

12. WAGE DECISION “LOCK-IN” • BID OPENING DATE (including a grace period of up to 10 days to allow for bidder notification and adjustment) • CONTRACT AWARD DATE (if >90 days elapses following bid opening) • CONSTRUCTION START DATE (if >90 days elapses following contract award)

13. ADDING CLASSIFICATIONS • REVIEW DECISIONS EARLY TO IDENTIFY MISSING CLASSIFICATIONS • DISCUSS WITH CONTRACTORS AT PRE-BID MEETING (IF APPLICABLE) OR PRE-CON • SUBMIT INFORMATION TO DED FOR REQUEST THROUGH HUD/USDOL (use Form 4230A)

14. SPECIAL COMPLIANCE CASESTRUCK DRIVERS • COVERED WHILE DRIVING WITHIN JOB SITE • COVERED WHILE LOADING & UNLOADING AT JOB SITE (NOT AT COMMERCIAL FACILITY) • NO COVERAGE WHEN DRIVING BETWEEN JOB SITE AND COMMERCIAL FACILITY • NO COVERAGE FOR SOLE PROPRIETORS DRIVING THEIR OWN COMPANY VEHICLES

15. SPECIAL COMPLIANCE CASESAPPRENTICES & TRAINEES • MUST BE REGISTERED WITH USDOL (Certification from the Union is not accepted as documentation) • CANNOT EXCEED ALLOWABLE RATIOS FOR APPRENTICES WORKING WITH JOURNEYMEN • PRE-APPRENTICES MUST RECEIVE TOTAL PREVAILING WAGE UNTIL REGISTERED

16. SPECIAL COMPLIANCE CASESOWNER/OPERATORS Working with a crew Working alone • MUST BE LISTED ON PAYROLL AND REPORT JOB CLASSIFICATION, DAILY AND WEEKLY HOURS WORKED • OWNER NOT REQUIRED TO REPORT HOURLY AND WEEKLY WAGES OR DEDUCTIONS • DOES NOT NEED TO BE SHOWN IF >80% OF TIME STRICTLY SUPERVISORY • MUST RECEIVE THE REQUIRED PREVAILING WAGE FROM PRIME CONTRACTOR, OR IN TERMS OF DIRECT CONTRACT WITH CITY/COUNTY • CANNOT SELF-CERTIFY PAYMENT/RECEIPT OF PREVAILING WAGE S

17. FRINGE BENEFITS(CFR TITLE 29, SECTION 5.20-5.31) • IRREVOCABLE CONTRIBUTIONS TO TRUSTEES OR OTHER THIRD PARTIES IN RELATION TO A BONA FIDE PLAN, FUND, OR PROGRAM THAT IS COMMON TO THE INDUSTRY • CAN INCLUDE EMPLOYER CONTRIBUTIONS TOWARD HEALTH INSURANCE PREMIUMS, RETIREMENT PLANS, LIFE INSURANCE, ETC. • PAYMENTS MUST BE DOCUMENTED TO REFLECT HOURLY EQUIVALENT AMOUNT PER EMPLOYEE OR JOB CLASSIFICATION

18. FRINGE BENEFITS(CFR TITLE 29, SECTION 5.20-5.31) • DOES NOT INCLUDE EMPLOYER PAYMENTS REQUIRED BY FEDERAL/STATE/LOCAL LAW • MAY BE PAID ALL CASH, OR COMBINED WITH CONTRIBUTION TO PLAN • METHOD OF PAYMENT MUST BE INDICATED ON PAYROLL CERTIFICATION PAGE

19. OVERTIME • REQUIRED FOR ALL HOURS WORKED >40 IN A SEVEN-DAY WORKWEEK • PAID AT 1 ½ TIMES REGULAR PAY RATE + FRINGE BENEFITS AT STRAIGHT TIME • PAID AT APPLICABLE RATE FOR THE CLASSIFICATION TRIGGERING OVERTIME

20. “PAYROLL 101”BASIC INFORMATION • SUBMIT WEEKLY • FIRST PAYROLL MUST INCLUDE FEDERAL TAX I.D. NUMBER • MUST ACCOUNT FOR EACH WEEK ON JOB, EVEN IF NO WORK PERFORMED • SUBS SUBMIT TO PRIME FOR REVIEW • PAYROLLS SHOULD BE PROVIDED WITH ALL PAY REQUESTS • FIRST PAYROLLS TO DED TO VERIFY LOCAL APPROVAL

21. “PAYROLL 101”CONTRACTOR & EMPLOYEE INFORMATION • COMPANY NAME • BUSINESS ADDRESS • PROJECT I.D. INFO. • WEEK END DATE • EACH DAY/DATE IN WORKWEEK • EMPLOYEE NAME AND IDENTIFIER • EMPLOYEE WORK CLASSIFICATION • HOURLY PAY RATE • WEEKLY HOURS WORKED (STRAIGHT TIME/OVERTIME) ON COVERED PROJECT

22. “PAYROLL 101”WAGES AND DEDUCTIONS • GROSS WAGES EARNED FOR WEEK • TOTAL DEDUCTIONS FROM WAGES • NET PAY REPORTED FOR WORKWEEK • STATEMENT OF COMPLIANCE • MUST SUBMIT WITH EACH WEEKLY PAYROLL • SIGNED BY CORPORATE OFFICER/DESIGNEE

23. ENFORCEMENT RESPONSIBILITIES THE ROLE OF THE GRANT ADMINISTRATOR • ENSURE SUBMISSION OF CERTIFIED PAYROLLS FROM ALL CONTRACTORS • REVIEW EACH PAYROLL TO CONFIRM PAYMENT OF CORRECT PREVAILING WAGES/COMPLIANCE WITH APPLICABLE REGULATIONS, ETC. • CONDUCT EMPLOYEE INTERVIEWS

24. EMPLOYEE INTERVIEW METHODS“WHERE’S THE MIC AND CAMERA?” • USEFUL IN VALIDATING PAYROLL DATA • CAN BE TARGETED TO INVESTIGATE SUSPECTED VIOLATIONS • SHOULD NOT BE ORCHESTRATED OR FINDINGS SHARED WITH CONTRACTORS • INTERVIEW FORM ALSO IN SPANISH

25. PAYROLL REVIEW PROCEDURES“LEARN TO TROUBLESHOOT LIKE A PRO” • CLOSELY REVIEW INITIAL PAYROLLS FROM ALL PRIME CONTRACTORS/SUBS BEFORE SUBMITTING TO DED FOR VERIFICATION • REVIEW FOR USE OF ANTICIPATED TRADES • COMPARE PAYROLLS AGAINST EMPLOYEE INTERVIEWS AND FOLLOW UP IF NEEDED • DO ADDITIONAL INTERVIEWS IF NECESSARY

26. PAYROLL REVIEW PROCEDURES“LEARN TO TROUBLESHOOT LIKE A PRO” • IT MAY LOOK LIKE EVERYONE’S PAID THE CORRECT WAGES. BUT ALSO CHECK FOR… • IMPROPER RATIO OF LABORERS TO MECHANICS? • TOO FEW OR IRREGULAR HOURS AT THE JOB SITE? • DISCREPENCIES/ROUNDING IN WAGE COMPUTATIONS? • EXTRAORDINARY DEDUCTIONS? • NONE OF THE WORKERS KNOW WHAT THEY MAKE?

27. PAYROLL REVIEW PROCEDURES“LEARN TO TROUBLESHOOT LIKE A PRO” • CORRESPOND PROMPTLY WITH PRIME CONTRACTOR WHEN PROBLEMS ARISE • DOCUMENT ALL CORRECTIVE ACTIONS TAKEN AND FORWARD TO OUR OFFICE • KEEP INITIAL WITHHOLDINGS IN LINE WITH AMOUNT OF UNDERPAYMENT; TOUGHER ENFORCEMENT WHEN NEEDED

28. LET’S WORK TOGETHER! • EFFECTIVE COMMUNICATION AND TIMELY RESPONSE ARE KEYS TO A SUCCESSFUL LABOR STANDARDS COMPLIANCE EFFORT. • BE SURE TO CONTACT ME OR YOUR “FIELD REP” WHENEVER WE CAN HELP…THAT’S WHAT WE’RE HERE FOR! • GOOD LUCK!!