contractors guide to davis-bacon

8/3/2019 Contractor s Guide to Davis-Bacon

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U.S. Department of Housing and Urban DevelopmentOffice of Labor RelationsLR01.DG

CONTRACTORSGUIDE TO

DAVIS-BACONPrevailing Wage

Requirements forFederally-AssistedConstruction Projects

May 1998


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This first-ever HUD Contractors Guide to Davis-Bacon is aproduct of HUDs partnership with the Department of Labor. It isdesigned to improve our performance as public trust agents protect-ing the statutory rights of construction workers to earn prevailingwage rates on HUD-assisted projects. We have explained exactlywhat is needed to comply with Davis-Bacon prevailing wagerequirements what will be required of contractors and whatcontractors can expect from us.

A parallel goal of the HUD/Labor partnership is to eliminateexcessive paperwork, bureaucratic red tape and unnecessary delays.By launching a Davis-Bacon streamlining initiative, we havefocused on results and stripped away unproductive processes andrequirements that had accumulated over the years. This Guide offersthe most up-to-date information on our streamlining efforts.

I am pleased to offer the Contractors Guide to David-Bacon andhope you find it helpful and informative. We welcome any commentsor suggestions you may have. Please contact the HUD Labor RelationsStaff for your area if we can assist you in any way.

Working together, we can help our country meet the affordable

housing needs of low-income families, the elderly, and personswith disabilities.

Andrew Cuomo

A Message From The Secretary


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INTRODUCTION

This Guide is directed primarily to contractors performing work onconstruction projects that are assisted by HUD and subject to Davis-Baconprevailing wage requirements. This Guide does notaddress contractorrequirements involved in direct Federal contracting where HUD or another

Federal agency enters into a procurement contract directly under the Fed-eral Acquisition Regulations (FAR) found at Title 48 of the Code of FederalRegulations. While the guidance contained in this Guide is generally appli-cable to any Davis-Bacon covered project, specific questions pertaining tosuch direct contracts should be addressed to the Contracting Officer whosigned the contract for the Federal agency.

The purpose of this Guide is to explain in simple and non-bureau-cratic terms exactly what is required of contractors and subcontractorsworking on construction projects covered by Federal Davis-Bacon prevailingwage and reporting requirements. HUDs Office of Labor Relations isproviding this Guide as a service to assist you in better understanding yourlabor standards and compliance responsibilities. This Guide has been

developed in consultation with the Department of Labors Wage and HourDivision.

There are three chapters in this Guide. The first chapter provides abrief description of the laws and regulations associated with Federal laborstandards administration and enforcement and discusses both whats inyour contract that requires Davis-Bacon compliance as well as your respon-sibilities. The second chapter deals with labor standards and payroll report-ing requirements. The third chapter discusses what can happen in theevent there is a dispute about the wage rates that should be (or have been)paid and any back wages that may be due.

Not all HUD construction projects are covered by Davis-Bacon wage

rates. For the purpose of this Guide, we shall assume that a determinationhas already been made that Davis-Bacon wage rates are applicable. If youwould like assistance in determining whether Davis-Bacon wage rates applyto a particular project or if you need other related technical assistance,please consult with the HUD Labor Relations Field staff for your area. If youdont know which staff to contact, a list of Labor Relations field offices andtheir geographic areas and telephone numbers, as well as other usefulinformation can be found on HUDs Home Page at the address below.

Visit the Office of Labor Relationson the World Wide Web HUD Home Page at:

http://www.hud.gov/olr/olr.html


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TABLE OF CONTENTS

INTRODUCTION .................................................................................................... i

CHAPTER 1. LAWS, REGULATIONS, CONTRACTS AND RESPONSIBILITIES

1-1 Davis-Bacon and Other Labor Laws ......................................................... 1-1a. The Davis-Bacon Act (DBA) ................................................................. 1-1

b. The Contract Work Hours andSafety Standards Act (CWHSSA)......................................................... 1-1c. The Copeland Act (Anti-Kickback Act) ............................................... 1-1d. The Fair Labor Standards Act (FLSA) ................................................. 1-1

1-2 Davis-Bacon Regulations............................................................................. 1-1

1-3 Construction Contract Provisions.............................................................. 1-2

1-4 Responsibility of the Principal Contractor ............................................... 1-2

1-5 Responsibility of the Contract Administrator .......................................... 1-2

CHAPTER 2. HOW TO COMPLY WITH LABOR STANDARDS

AND PAYROLL REPORTING REQUIREMENTSSECTION I THE BASICS

2-1 The Wage Decision ...................................................................................... 2-1a. The work classifications and wage rates. ........................................... 2-1b. Posting the wage decision. ................................................................... 2-1

2-2 Additional Trade Classifications and Wage Rates ................................ 2-1a. Additional classification rules. ............................................................. 2-1b. Making the request. ............................................................................... 2-2c. HUD review. ........................................................................................... 2-2d. DOL decision. ......................................................................................... 2-2

2-3 Certified Payroll Reports ............................................................................. 2-2a. Payroll formats........................................................................................ 2-2b. Payroll certifications. .............................................................................. 2-3c. No work payrolls. ............................................................................... 2-3d. Payroll review and submission. ........................................................... 2-3e. Payroll retention. .................................................................................... 2-3f. Payroll inspection. .................................................................................. 2-3

2-4 Davis-Bacon Definitions .............................................................................. 2-3a. Laborer or mechanic. ............................................................................. 2-3b. Employee. ................................................................................................ 2-4c. Apprentices and trainees. ..................................................................... 2-4d. Prevailing wages or wage rates. .......................................................... 2-4e. Fringe benefits. ....................................................................................... 2-5f. Site of work. ............................................................................................ 2-5g. Overtime.................................................................................................. 2-5h. Deductions. ............................................................................................. 2-5i. Proper designation of trade.................................................................. 2-5

SECTION II REPORTING REQUIREMENTS

2-5 Completing a Payroll Report ...................................................................... 2-6a. Project and contractor/subcontractor information. .......................... 2-6b. Employee information. ......................................................................... 2-6


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c. Work classification.................................................................................. 2-6d. Hours worked. ........................................................................................ 2-6e. Rate of pay. .............................................................................................. 2-6f. Gross wages earned. ............................................................................. 2-7g. Deductions. ............................................................................................. 2-7h. Net pay. .................................................................................................... 2-7i. Statement of compliance. ..................................................................... 2-7

j. Signature.................................................................................................. 2-7SECTION III PAYROLL REVIEWSAND CORRECTIONS

2-6 Compliance Reviews.................................................................................... 2-8a. On-site interviews.................................................................................. 2-8b. Project payroll reviews. ......................................................................... 2-8

2-7 Typical Payroll Errors and Required Corrections. ................................... 2-8a. Inadequate payroll information. ......................................................... 2-8b. Missing addresses and Social Security Numbers. ........................... 2-8c. Incomplete payrolls. .............................................................................. 2-8d. Classifications. ........................................................................................ 2-8e. Wage rates. ............................................................................................. 2-8f. Apprentices and trainees. ..................................................................... 2-9g. Overtime.................................................................................................. 2-9h. Computations. ........................................................................................ 2-9i. Deductions. ............................................................................................. 2-9j. Fringe benefits. ....................................................................................... 2-9k. Signature.................................................................................................. 2-xl. On-site interview comparisons. .......................................................... 2-9

2-8 Restitution for Underpayment of Wages .................................................. 2-9a. Notification to the prime contractor. .................................................. 2-9b. Computing wage restitution. ............................................................. 2-10c. Correction payrolls. ............................................................................. 2-10

d. Employee signature. ............................................................................ 2-10e. Review of correction CPR. .................................................................. 2-10f. Unfound workers. ................................................................................ 2-10

CHAPTER 3. LABOR STANDARDS DISPUTES, ADMINISTRATIVE REVIEWS,WITHHOLDING AND DEPOSITS AND ESCROW ACCOUNTS

3-1 Introduction................................................................................................... 3-13-2 Administrative Review on Labor Standards Disputes ........................... 3-1

a. Additional classifications and wage rates. ......................................... 3-1b. Findings of underpayment. ................................................................. 3-1

3-3 Withholding................................................................................................... 3-1

3-4 Deposits and Escrow Accounts .................................................................. 3-13-5 Debarment ..................................................................................................... 3-1

INDEX .................................................................................................................... A-1

TABLE OF ACRONYMS AND SYMBOLS .................................................... A-2

EXHIBITS .............................................................................................................. A-3

WH-347, Payroll Form ................................................................................. A-3

WH-348, Statement of Compliance .......................................................... A-4


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CHAPTER 1. LAWS, REGULATIONS, CONTRACTS AND RESPONSIBILITIES

The following paragraphs describe what thelabor standards laws and regulations actually sayand what they mean to you on HUD projects:

1-1 DAVIS-BACONAND OTHER LABOR LAWS.

a. The Davis-Bacon Act (DBA). The Davis-

Bacon Act requires the payment ofprevailing wage rates (which are deter-mined by the U.S. Department of Labor)to all laborers and mechanics on Federalgovernment construction projects inexcess of $2,000. Construction includesalteration and/or repair, includingpainting and decorating, of publicbuildings or public works.

Most HUD construction workis notcoveredby the DBA itself since HUD seldom contracts

directly for construction services. Most often,if Davis-Bacon wage rates apply to a HUDproject it is because of a labor provisioncontained in one of HUDs Related Actssuch as the U. S. Housing Act of 1937, theNational Housing Act, the Housing andCommunity Development Act of 1974, theNational Affordable Housing Act of 1990, andthe Native American Housing Assistance andSelf-Determination Act of 1996. TheRelatedActs are often referred to as the Davis-Baconand Related Acts orDBRA.

b. The Contract Work Hours and SafetyStandards Act (CWHSSA). CWHSSArequires time and one-half pay forovertime (O/T) hours (over 40 in anyworkweek) worked on the coveredproject. The CWHSSA applies to bothdirect Federal contracts and to indirectFederally-assisted contracts exceptwherethe assistance is solely in the nature ofa loan guarantee or insurance. CWHSSAviolations carry a liquidated damagespenalty ($10/day per violation). Inten-tional violations of CWHSSA standardsare considered a Federal criminal mis-demeanor.

The CWHSSA does not apply to contracts of$100,000 or less. In addition, some HUD projectsare not covered by CWHSSA because someHUD programs only provide loan guaranteeor insurance. The CWHSSA also does not

apply to construction or rehabilitation con-tracts that are not subject to Federal prevailingwage rates (e.g., Davis-Bacon wage rates, orHUD-determined rates for operation of publichousing and Indian block grant-assistedhousing). However, even though CWHSSAovertime pay is not required, Fair LaborStandards Act (FLSA) overtime pay is probablystill applicable. (See also Labor Relations LetterSL-95-01, CWHSSA Coverage threshold forovertime and health and safety provisions.)

c. The Copeland Act (Anti-Kickback Act).The Copeland Act makes it a crime foranyone to require any laborer ormechanic (employed on a Federal orFederally-assisted project) to kickbackany part of their wages. The CopelandAct also requires every employer (con-tractors and subcontractors) to submitweekly payroll reports (CPRs).

d. The Fair Labor Standards Act (FLSA).The FLSA contains Federal minimumwage rates and overtime (O/T) require-

ments. These requirements generallyapply to any labor performed and maybepre-empted by other Federal stan-dards such as the DBRA prevailing wagerequirements and CWHSSA O/T provi-sions. Only the DOL has the authorityto administer and enforce FLSA. HUDwill refer to the DOL any possible FLSAviolations that are found on HUDprojects.

1-2 DAVIS-BACON REGULATIONS.The Department of Labor has published

rules and instructions concerning Davis-Bacon and other labor laws in the Code ofFederal Regulations (CFR). These regula-tions can be found in Title 29 CFR Parts 1, 3,5, 6 and 7. Part 1 explains how the DOLestablishes and publishes DBA wage deter-


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minations and provides instructions onhow to use the determinations.Part 3describes Copeland Act requirements forpayroll deductions and the submission ofweekly certified payroll reports.Part 5covers the labor standards provisions thatare in your contract relating to Davis-BaconAct wage rates and the responsibilities of

contractors and contracting agencies toadminister and enforce the provisions.Part 6 provides for administrative proceed-ings enforcing Federal labor standards onconstruction and service contracts. Last,Part 7sets parameters for practice before theWage Appeals Board (renamed Administra-tive Review Board). These regulations areused as the basis for administering andenforcing the laws.

DOL Regulations are available on-line on the

World Wide Web:

http://www.dol.gov/dol/esa/public/regs/cfr/whdcfr.htm.

1-3 CONSTRUCTION CONTRACT PROVISIONS.Each contract subject to Davis-Bacon laborstandards requirements must contain laborstandards clauses and a Davis-Bacon wagedecision. These documents are normallybound into the contract specifications.

a. The labor standards clauses. The laborstandards clauses describe the responsi-bilities of the contractor concerningDavis-Bacon wages and obligate thecontractor to comply with the laborrequirements. The labor standardsclauses also provide for remedies in theevent of violations, including with-holding from payments due to thecontractor to ensure the payment ofwages or liquidated damages whichmay be found due. These contractclauses enable the contract administrator

to enforce the Federal labor standardsapplicable to the project. HUD hasstandard forms that contain contractclauses. For example, the HUD-2554,Supplementary Conditions to theContract for Construction, which isissued primarily for FHA multifamily

housing and other construction projectsadministered by HUD; the HUD-4010,Federal Labor Standards Provisions,which is used for CDBG and HOMEprojects, and the HUD-5370, GeneralConditions of the Contract for Construc-tion Public and Indian Housing Pro-gram.

b. Davis-Bacon Wage Decisions. TheDavis-Bacon wage decision is a listingof various construction work classifica-tions, such as Carpenter, Plumber, andElectrician, and the minimum wagerates (and fringe benefits, where prevail-ing) that people performing work inthose classifications must be paid.

1-4 RESPONSIBILITYOFTHEPRINCIPAL CONTRACTOR.The principal contractor (also referred to as

theprime orgeneral contractor) is respon-sible for the full compliance of all employers(the contractor, subcontractors and anylower-tier subcontractors) with the laborstandards provisions applicable to theproject. Because of the contractual relation-ship between a prime contractor and his/hersubcontractors, questions to, or from, orabout subcontractors should always bechanneled through the prime contractor.

To make this Guide easier to understand,

the term prime contractorwill mean theprincipal contractor; subcontractorwillmean all subcontractors including lower-tiersubcontractors; and the term employerwillmean all contractors as a group, including theprime contractor and any subcontractors andlower-tier subcontractors.

1-5 RESPONSIBILITYOFTHECONTRACT ADMINISTRATOR.The contract administratoris responsible forthe proper administration and enforcement

of the Federal labor standards provisions oncontracts covered by Davis-Bacon require-ments. We use this term to represent theperson (or persons) who will provide laborstandards preconstruction advice and supportto you and other project principals (e.g.,the owner, sponsor, architect), including


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providing the proper Davis-Bacon wagedecision (see 2-1, The Wage Decision) andensuring that the wage decision and con-tract clauses are incorporated into thecontract for construction. The contractadministrator also monitors labor standardscompliance (see 2-6, Compliance Reviews)by conducting interviews with construction

workers at the job site and reviewing pay-roll reports, and oversees any enforcementactions that may be required.

The contract administrator could be anemployee of HUD, or of a city or county, orpublic or Indian housing authority. ForHUD projects administered directly byHUD staff, usually FHA-insured multifamilyprojects, the contract administratorwill bethe HUD Labor Relations field staff. But

many HUD-assisted projects are adminis-tered by local contracting agencies such asPublic and Indian Housing Authorities(PHAs and IHAs), Indian tribes and tribally-designated housing entities (TDHEs), andcities and counties under HUDs Commu-nity Development Block Grant (CDBG)and HOME programs. In these cases, the

contract administratorwill likely be localagency staff. In either case, the guidance foryou remains essentially the same.

The DOL also has a role in monitoringDavis-Bacon administration and enforce-ment. A DOL investigator or other DOLrepresentative may visit Davis-Bacon con-struction sites to interview constructionworkers or review payroll information.

All communications to or from the prime contractorconcerning the labor standards applicable to a particularcontract, or concerning compliance with those standards,should go through the contract administrator.


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WHERETO START?Now that you know youre on a Davis-Bacon project and you know some ofthe legal and practical implications, whats next?

SECTION I THE BASICS

CHAPTER 2. HOW TO COMPLY WITH LABOR STANDARDSAND PAYROLL REPORTING REQUIREMENTS

2-1 THE WAGE DECISION.Davis-Bacon labor standards stipulate thewage payment requirements for Carpenters,Electricians, Plumbers, Roofers, Laborers,and other construction work classificationsthat may be needed for the project. TheDavis-Bacon wage decision that applies to theproject contains a schedule of work classifi-cations and wage rates that must be followed.If you dont have it already (and by nowyou should), youll want to get a copy of theapplicable Davis-Bacon wage decision.

Remember, the wage decision is contained inthe contract specifications along with the laborstandards clauses. See 1-3, ConstructionContract Provisions.

a. The work classifications and wage rates.A Davis-Bacon wage decision is simply alisting of different work classificationsand the minimum wage rates that mustbe paid to anyone performing work inthose classifications. Youll want to makesure that the work classification(s) youneed are contained in the wage decisionand make certain you know exactly whatwage rate(s) you will need to pay. Somewage decisions cover several countiesand/or types of construction work (forexample, residential and commercialwork) and can be lengthy and difficult toread. Contact the contract administrator(HUD Labor Relations field staff or localagency staff) if you have any troublereading the wage decision or finding the

work classification(s) you need.

To make reading lengthy wage decisions easierfor you, the contract administrator may pre-pare a Project Wage Rate Sheet. This Sheet is aone-page transcript that will show only theclassifications and wage rates for a particularproject. Contact the contract administratormonitoring your project for assistance with aProject Wage Rate Sheet.

b. Posting the wage decision. If you are theprime contractor, you will be responsiblefor posting a copy of the wage decision(or the Project Wage Rate Sheet) and acopy of a DOL poster calledNotice toEmployees at the job site in a place thatis easily accessible to all of the construc-tion workers employed at the projectand where the wage decision and posterwont be destroyed by wind or rain, etc.TheNotice to Employees poster is alsoavailable with Spanish text.

2-2 ADDITIONAL TRADE CLASSIFICATIONSAND WAGE RATES.What if the work classification you need isnton the wage decision? If the workclassification(s) that you need doesntappear on the wage decision, you will needto request an additional classification andwage rate. This process is usually verysimple and youll want to start the requestright away. Basically, you identify theclassification you need and recommend awage rate for DOL to approve for theproject. There are a few rules about addi-tional classifications; youll find these rulesin the DOL regulations, Part 5, and in thelabor clauses in your contract. The rules aresummarized for you here:

a. Additional classification rules. Addi-tional classifications and wage rates canbe approved if:

1) The requested classification is usedby construction contractors in thearea of the project. (The area isusually defined as the county where

the project is located).

2) The work that will be performed bythe requested classification is notalready performed by anotherclassification that is already on thewage decision. (In other words, ifthere already is an Electrician classi-fication and wage rate on the wagedecision you cant request anotherElectrician classification and rate.)


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3) The proposed wage rate for therequested classification fits withthe other wage rates already on thewage decision. (For example, thewage rate proposed for a tradeclassification such as Electrician mustbe at least as much as the lowestwage rate for other trade classifica-

tions already contained in the wagedecision.) And,

4) The workers that will be employedin the added classification (if it isknown who the workers are/will be),or the workers representatives, mustagree with the proposed wage rate.

b. Making the request. A request foradditional classification and wage ratemust be made in writing through thecontract administrator. (If the contract

administrator is a local agency, theagency will send the request to theHUD Labor Relations staff.) If you are asubcontractor, your request should alsogo through the prime contractor. All youneed to do is identify the work classi-fication that is missing and recommenda wage rate (usually the rate thatemployer is already paying to theemployees performing the work) forthat classification. You may also need todescribe the work that the new classifi-cation will perform.

c. HUD review. The HUD Labor Relationsfield staff will review the requestedclassification and wage rate to deter-mine whether the request meets theDOL rules outlined in paragraph 2-2(a),above. If additional information orclarification is needed, the staff willcontact the prime contractor (or contractadministrator for local agency projects)for more information, etc. If the LaborRelations review finds that the requestmeets the rules, the staff will give

preliminary approval on the request andrefer it to the DOL for final approval.The staff will send to you a copy of thepreliminary approval/referral letter tothe DOL.

If the HUD Labor Relations staff doesntthink the request meets the rules and ifagreement cant be reached on theproper classification or wage rate for the

work described, the HUD Labor Rela-tions staff will notapprove the request.In this case, the staff will send yourrequest to the DOL with an explanationwhy HUD believes that the requestshouldnt be approved. The DOL stillhas final decision authority. You willreceive a copy of the disapproval/

referral letter to the DOL.

d. DOL decision. The DOL will respond toHUD Labor Relations in writing aboutthe additional classification and wagerate request. HUD Labor Relations willnotify you of the DOL decision inwriting. If the DOL approves the re-quest, the prime contractor must postthe approval notice on the job site withthe wage decision.

If the DOL does notapprove the request,

you will be notified about what classifi-cation and wage rate should be used forthe work in question. You will also receiveinstructions about how to ask for DOLreconsideration if you still want to try toget your recommendation approved.

Its always a good idea to talk to the contractadministrator before submitting an additionalclassification and wage rate request. Thecontract administrator can offer suggestionsand advice that may save you time and

increase the likelihood that DOL will approveyour request. Usually, the contract admin-istrator can give you an idea about what theDOL will finally decide.

2-3 CERTIFIED PAYROLL REPORTS.Youll need to submit a weekly certifiedpayroll report beginning with the first weekthat your company works on the projectand for every week afterward until yourfirm has completed its work. Its always agood idea to number the payroll reports

beginning with #1 and to clearly mark yourlast payroll for the project Final.

a. Payroll formats. The easiest form to useis DOLs WH-347,Payroll. A samplecopy of the WH-347 is included in theback of this Guide. Also, the contractadministrator can provide a few copiesof the WH-347 that you can reproduce.


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You are not required to use Payroll FormWH-347. You are welcome to use any othertype of payroll, such as computerized formats,as long as it contains all of the information thatis required on the WH-347.

b. Payroll certifications. The weeklypayrolls are called certified because eachpayroll is signed and contains languagecertifying that the information is trueand correct. The payroll certificationlanguage is on the reverse side of theWH-347. If you are using another typeof payroll format you may attach thecertification from the back of the WH-347,or you can use the WH-348, Statement ofCompliance (same certification languageas on WH-347), or any other formatwhich contains the same certification

language on the WH-347 (reverse)or WH-348. A copy of the WH-348 isincluded in the back of this Guide.Copies of the WH-348 are also availablefrom the contract administrator.

c. No work payrolls. No work payrollsmay be submitted whenever there is atemporary break in your work on theproject, for example, if your firm is notneeded on the project right now but youwill be returning to the job in a coupleof weeks. (See Tip Box, below, for no

work payroll exemption!) However, ifyou know that your firm will not beworking on the project for an extendedperiod of time, you may wish to send ashort note to the contract administratorto let them know about the break inwork and to give an approximate datewhen your firm will return to theproject. If you send a note, you do notneed to send no work payrolls.

If you number your payroll reports

consecutively, you do notneed to submitno work payrolls!

d. Payroll review and submission. Theprime contractor should review eachsubcontractors payroll reports forcompliancepriorto submitting thereports to the contract administrator.Remember, the prime contractor is

responsible for the full compliance of allsubcontractors on the contract and willbe held accountable for any wage resti-tution that may be found due to anylaborer or mechanic that is underpaidand for any liquidated damages thatmay be assessed for overtime violations.All of the payroll reports for any project

must be submitted to the contract admin-istrator through the prime contractor.

An alert prime contractor that reviews sub-contractor payroll submissions can detectany misunderstandings early, prevent costlyunderpayments and protect itself fromfinancial loss should underpayments occur.

e. Payroll retention. Every contractor(including every subcontractor) must

keep a complete set of their own pay-rolls and other basic records such astime cards, for a Davis-Bacon project forat least 3 years after the project is com-pleted. The prime contractor must keepa complete set of all of the payrolls forevery contractor (including subcontrac-tors) for at least 3 years after completionof the project.

f. Payroll inspection. In addition to sub-mitting payrolls to the contract admin-istrator, every contractor (including

subcontractors) must make their owncopy of the payrolls available for reviewor copying to any authorized represen-tative from HUD or from DOL.

2-4 DAVIS-BACON DEFINITIONS.Before we discuss how to complete theweekly payroll forms, we need to review acouple of definitions. These definitions canhelp you understand what will be requiredof you:

a. Laborer or mechanic. Laborers and

mechanics mean anyone who isperforming construction work on theproject, including trade journeymen(carpenters, plumbers, sheet metalworkers, etc.), apprentices, traineesand, for CWHSSA purposes, watchmenand guards. Laborers and mechanicsare the two groups of workers thatmust be paid not less than Davis-Baconwage rates.


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1) Working foremen. Foremen orsupervisors that regularly spendmore than 20% of their time per-forming construction work and donot meet the exclusions in paragraph2) below are covered laborers andmechanics for labor standardspurposes for the time spent per-

forming construction work.

2) Exclusions. People whose duties areprimarily administrative, executiveor clerical are not laborers or me-chanics. Examples include superin-tendents, office staff, timekeepers,messengers, etc. (Contact the con-tract administrator if you have anyquestions about whether a particularemployee is excluded.)

b. Employee. Every person who performs

the work of a laborer or mechanic isemployedregardless of any contrac-tual relationship which may be allegedto exist between a contractor or sub-contractor and such person. This meansthat even if there is a contract between acontractor and a worker, the contractormust make sure that the worker is paidat least as much as the wage rate on thewage decision for the classification ofwork they perform.

For more information about working subcon-tractors, ask the contract administrator or yourHUD Labor Relations Field Staff for a copy ofLabor Relations Letter LR-96-01,Labor standardscompliance requirements for self-employedlaborers and mechanics. Labor Relations Lettersand other helpful Labor Relations publicationsare available at HUDs web site (seeIntroductionat the beginning of this Guide).

c. Apprentices and trainees. The onlyworkers who can be paid less than the

wage rate on the wage decision for theirwork classification are apprenticesand trainees registered in approvedapprenticeship or training programs,including Step-Up apprenticeshipprograms designed for Davis-Baconconstruction work. Approved programsare those which have been registeredwith the DOL, Bureau of Apprentice-ship and Training (BAT) or with a BAT-

recognized State Apprenticeship Agency(SAC). Apprentices and trainees are paidwage rates in accordance with the wageschedule in the approved program.

Most often, the apprentice/trainee wage rate isexpressed as a series of percentages tied to the

amount of time spent in the program. Forexample, 0-6 months: 65%; 6 months - 1 year:70%; etc. The percentage is applied to thejourneymans wage rate. On Davis-Baconprojects, the percentage must be applied to thejourneymans wage rate on the applicablewage decision for that craft.

1) Probationary apprentice. A proba-tionary apprentice can be paid asan apprentice (less than the rate onthe wage decision) if the BAT or

SAC has certified that the person iseligible for probationary employ-ment as an apprentice.

2) Pre-apprentice. A pre-apprentice,that is, someone who is not regis-tered in a program and who hasntbeen BAT- or SAC-certified forprobationary apprenticeship is notconsidered to be an apprenticeand must be paid the full journey-mans rate on the wage decisionfor the classification of work they

perform.

3) Ratio of apprentices and traineesto journeymen. The maximumnumber of apprentices or traineesthat you can use on the job site cannot exceed the ratio of apprenticesor trainees to journeymen allowedin the approved program.

d. Prevailing wages or wage rates. Prevail-ing wage rates are the wage rates listedon the wage decision for the project.

The wage decision will list a minimumbasic hourly rate of pay for each workclassification. Some wage decisionsinclude fringe benefits which are usuallylisted as an hourly fringe rate. If thewage decision includes a fringe benefitrate for a classification, you will need toadd the fringe benefit rate to the basichourly rate unless you provide bona fidefringe benefits for your employees.


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1) Piece-work. Some employees arehired on a piece-work basis, that is,the employees earnings are deter-mined by a factor of work produced.For example, a Drywall Hangersearnings may be calculated basedupon the square feet of sheetrockactually hung, a Painters earnings

may be based upon the number ofunits painted. Employers maycalculate weekly earnings basedupon piece ratesprovided theweekly earnings are sufficient tosatisfy the wage rate requirementbased upon actual hours, includingany overtime, worked.Accurate timerecords must be maintained for anypiece-work employees. If the weeklypiece rate earnings are not sufficient,the employer must recomputeweekly earnings based upon theactual hours worked and the rate onthe wage decision for the workclassification(s) involved.

Note that the total hourly wage rate paid toany laborer or mechanic (basic wage or basicwage plus fringe benefits) may be no less thanthe total wage rate (basic wage or basic wageplus fringe benefits) on the wage decision fortheir craft. If the value of the fringe benefit(s)you provide is less than the fringe benefit rateon the wage decision, you will need to add thebalance of the wage decision fringe benefitrate to the basic rate paid to the employee.For example, if the wage decision requires$10/hour basic rate plus $5/hour fringe benefits,you must pay no less than that total ($15/hour)in the basic rate orbasic rate plus whateverfringe benefit you may provide.

e. Fringe benefits include health insur-ance, retirement, life insurance, vacationand some contributions to trainingfunds. Fringe benefits do notincludeemployer payments or contributionsrequired by other Federal, State or locallaws, such as the employers contribu-tion to Social Security or some disabilityinsurance payments.

f. Site of work. The site of work is wherethe Davis-Bacon wage rates apply.Usually, this means the boundaries ofthe project. Site of work can alsoinclude other adjacent or virtually

adjacent property used by a contractoror subcontractor in the construction ofthe project, like a fabrication site.

g. Overtime. Overtime hours are definedas all hours worked on the site of thework in excess of 40 hours in any workweek. Overtime hours must be paid at

no less than one and one-half times theregular rate of basic pay plus the straight-time rate of any required fringe benefits.

h. Deductions. You may make payrolldeductions as permitted by DOL Regu-lations 29 CFR Part 3. These regulationsprohibit the employer from requiringemployees to kick-back any of theirearnings. Allowable deductions includeemployee obligations for income taxes,Social Security payments, insurancepremiums, retirement, savings accounts,

and any other legally-permissiblededuction authorized by the employee.Deductions may also be made forpayments on judgements and otherfinancial obligations legally imposedagainst the employee.

i. Proper designation of trade. You mustselect a work classification on the wagedecision for each worker based on theactual type of work he/she performedand you must pay each worker no lessthan the wage rate on the wage decision

for that classification regardless of theirlevel of skill. In other words, if someoneis performing carpentry work on theproject, they must be paid no less thanthe wage rate on the wage decision forCarpenters even if they arent consid-ered by you to be fully trained as aCarpenter.Remember, the only peoplewho can be paid less than the rate fortheir craft are apprentices and traineesregistered in approved programs.

1) Split-classification. If you have

employees that perform work inmore than one classification, you canpay the wage rates specified for eachclassification only if you maintainaccurate time records showing theamount of time spent in each classi-fication of work. If you do notmaintain accurate time records, youmust pay these employees thehighestwage rate of all of the classifi-cations of work performed.


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SECTION II REPORTING REQUIREMENTS

tered or approved program. A copyof the portions of the registered orapproved program pertaining to thewage rates and ratios shall alsoaccompany the first CPR on whichthe first apprentice or trainee appears.

2) Split classifications. For employeesin split classifications, list the em-ployees once for each classification,distributing the hours of workaccordingly, and reflecting the rateof pay and gross earnings for eachclassification. Deductions and netpay may be based upon the total grossamount earned for all classifications.

d. Hours Worked. The payroll shouldshow ONLY the regular and overtime

hours worked on this project. Showboth the daily and total weekly hoursfor each employee. If an employeeperforms work at job sites other thanthe project for which the payroll isprepared, those other job hoursshould notbe reported on the payroll.In these cases, you should list theemployees name, classification, hoursfor this project only, the rate of pay andgross earnings for this project, and thegross earned for all projects. Deductionsand net pay may be based upon the

employees total earnings (for allprojects) for the week.

e. Rate of Pay. Show the basic hourly rateof pay for each employee for thisproject. If the wage decision includes afringe benefit and you do notparticipatein approved fringe benefit programs,add the fringe benefit rate to the basichourly rate of pay. Also list the overtimerate if overtime hours were worked.

1) Piece-work. For any piece-work

employees, the employer mustcompute an effective hourly rate foreach employee each week based uponthe employees piece-work earningsfor that week. To compute the effec-tive hourly rate, divide the piece-work earnings by the total numberof hours worked, including consider-ation for any overtime hours.

2-5 COMPLETINGA PAYROLL REPORT.What information has to be reported onthe payroll form? The weekly payroll formdoesnt ask for any information that youdont already need to keep for wage pay-ment and tax purposes. For example, you

need to know each employees name,address andsocial security number; his orher work classification (who is working foryou and what do they do?), thehoursworkedduring the week, his or her rate of pay, thegross amount earned (how much did theyearn?), the amounts of any deductions fortaxes, etc., and the net amount paid (howmuch should the paycheck be made outfor?). No more information than you needto know in order to manage your work crewand make certain they are paid properly.And, certainly, no more information than

you need to keep for IRS, Social Securityand other tax and employment purposes.

For most contractors, the Weekly CertifiedPayroll is the only paperwork required for aDavis-Bacon project!

a. Project and contractor/subcontractorinformation. Each payroll should showthe contractor or subcontractors nameand address, the project name and

number, and the week ending date.Indicate the dates in the spaces pro-vided. Numbering payrolls is optionalbut strongly recommended.

b. Employee information. The first payrollon which each employee appears mustcontain the employees name, addressand Social Security Number. Afterward,the address and Social Security Numberonly need to be reported if there is achange in this information.

c. Work Classification. Each employeemust be classified in accordance withthe wage decision based on the type ofwork they actually perform.

1) Apprentices or Trainees. The firstpayroll on which any apprentice ortrainee appears must be accompa-nied by a copy of that apprenticesor trainees registration in a regis-


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The effective hourly rate must bereflected on the certified payroll andthe hourly rate may be no less thanthe wage rate (including fringebenefits, if any) on the wage deci-sion for the classification of workperformed. It does not matter thatthe effective hourly rate changes

from week-to-week, only that theeffective rate is no less than the rateon the wage decision for the classifi-cation of work performed.

Remember, the overtime rate is computed atone and one-half times the basic rate of payplus any fringe benefits. For example, if thewage decision requires $10/hour basic plus$5/hour fringe benefits, the overtime ratewould be: ($10 x 1) + $5 = $20/hour.

f. Gross Wages Earned. Show the grossamount of wages earned for workperformed on this project.Note: Foremployees with work hours and earningson other projects, you may show grosswages for this project over gross earn-ings all projects (for example, $425.40/$764.85) and base deductions and netpay on the all projects earnings.

g. Deductions. Show the amounts of anydeductions from the gross earnings.

Other deductions should be identified(for example, Savings Account or LoanRepayment). Any voluntary deduction(that is, not required by law or by anorder of a proper authority) must beauthorized in writing by the employee.A short note signed by the employee isall that is needed and should accom-pany the first payroll on which the otherdeduction appears.

Only one employee authorization is needed

for recurring (e.g., weekly) other deductions.Written employee authorization is not requiredfor income tax and Social Security deductions.

h. Net Pay. Show the net amount ofwages paid.

i. Statement of Compliance. The State-ment of Compliance is the certification.It is located on the reverse side of astandard payroll form (WH-347) or onform WH-348. Be sure to complete the

identifying information at the top,particularly if you are attaching theStatement of Compliance to an alternatepayroll form such as a computer payroll.Also, you must check either 4(a) or 4(b)if the wage decision contains a fringebenefit. Checking 4(a) indicates that youare paying required fringe benefits toapproved plans or programs; and 4(b)indicates that you are paying any re-quired fringe benefit amounts directlyto the employee by adding the fringebenefit rate to the basic hourly rate of

pay. If you are paying a portion of therequired fringe benefit to programs andthe balance directly to the employee,explain those differences in box 4(c).

Only one Statement of Compliance is requiredfor each employers weekly payroll no matterhow many pages are needed to report theemployee data.

j. Signature. Make sure the payroll is

signed with an original signature. Thepayroll must be signed by a principal ofthe firm (owner or officer such as thepresident, Treasurer or Payroll Adminis-trator) or by an authorized agent (aperson authorized by a principal inwriting to sign the payroll reports).Signature authorization (for personsother than a principal) should be sub-mitted with the first payroll signed bysuch an agent.


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SECTION III PAYROLL REVIEWSAND CORRECTIONS

2-7 TYPICAL PAYROLL ERRORSANDREQUIRED CORRECTIONS.The following paragraphs describe commonpayroll errors and the corrective steps youmust take.

a. Inadequate payroll information. If thealternate payroll (such as a computerpayroll) does not contain all of theinformation that would be on theoptional form WH-347, the employerwill be asked to resubmit the payrolls onan acceptable form.

b. Missing addresses and Social SecurityNumbers. If the first payroll on whichan employee appears does not containthe employees address and SocialSecurity Number, the employer will

be asked to supply the missing infor-mation. A short note providing theinformation is all that is needed.

c. Incomplete payrolls. If the informationon the payroll is not complete, forexample, if work classifications or ratesof pay are missing, the employer will beasked to send a corrected payroll.

d. Classifications. If the payrolls showwork classifications that do not appearon the wage decision, the employer will

be asked to reclassify the employees inaccordance with the wage decision orthe employer may request an additionalclassification and wage rate (See 2-2). Ifreclassification results in underpayment(i.e., the wage rate paid on the payroll isless than the rate required for the newclassification), the employer will beasked to pay wage restitution to allaffected reclassified employees. (See 2-8for instructions about wage restitution.)

e. Wage Rates. If the wage rates on the

payroll are less than the wage rates onthe wage decision for the work classifi-cation reported, the employer will beasked to pay wage restitution to allaffected employees.

2-6 COMPLIANCE REVIEWS.The contract administrator or other inspec-tor may visit the project site and interviewsome of the workers concerning theiremployment on the project. In addition,the contract administrator will periodically

review payrolls and related submissions,comparing the interview information to thepayrolls, to ensure that the labor standardsrequirements have been met. You will benotified by the contract administrator ifthese reviews find any discrepancies orerrors. You will be given instructionsabout what steps must be taken to correctany problems.

a. On-site Interviews. Every employer(contractor, subcontractor, etc.) mustmake their employees available for

interview at the job site with the con-tract administrator or other agencyrepresentative, or HUD or DOL repre-sentative. The interviews are confiden-tial and the employee will be askedabout the kind of work they performand their rate of pay. Every effort will bemade to ensure that these interviewscause as little disruption as possible tothe on-going work. The interviewer willrecord the interview information,usually on a form HUD-11,Record ofEmployee Interview, and forward theinterviews to the contract administrator.

b. Project payroll reviews. The contractadministrator will compare the informa-tion on the interview forms to thecorresponding payrolls to ensure thatthe workers are properly listed on thepayrolls for the days, work classificationand rate of pay. The contract administra-tor will also review the payroll submis-sions to make certain that the payrollsare complete and signed; that employ-ees are paid no less than the wage ratefor the work classification shown;apprentice and trainee certifications aresubmitted (where needed); employeeauthorizations for other deductions aresubmitted (where needed); etc.


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f. Apprentices and trainees. If a copy ofthe employee(s) registration or approvedprogram ratio and wage schedule is notsubmitted with the first payroll onwhich an apprentice or trainee appears,the employer will be asked to submit acopy of each apprentices or traineesregistration and/or the approved pro-

gram ratio and wage schedule. If theratio of apprentices or trainees tojourneymen on the payroll is greaterthan the ratio in the approved program,the employer will be asked to pay wagerestitution to any excess apprentices ortrainees. Also, any apprentice or traineethat is notregistered in an approvedprogram must receive the journeymanswage rate for the classification of workthey performed.

g. Overtime. If the employees did not

receive at least time and one-half for anyovertime hours worked on the project,the following will occur:

1) If the project is subject to CWHSSAovertime requirements, the employerwill be asked to pay wage restitutionfor all overtime hours worked on theproject (overtime hours worked atother projects are not subject toCWHSSA). The employer may alsobe liable to the United States forliquidated damages computed at

$10 per day per violation. Or,

2) If the project is notsubject toCWHSSA, the employer will benotified of the possibleFLSA over-time violations. Also, the LaborRelations staff may refer the viola-tions to the DOL for further review.

h. Computations. If the payroll computa-tions (hours worked times rate of pay)or extensions (deductions, net pay)show frequent errors, the employer

will be asked to take greater care. Wagerestitution may be required if underpay-ments resulted from the errors.

i. Deductions. If there are any Otherdeductions that are not identified, or ifemployee authorization isnt provided,or if there is any unusual (very high, orlarge number) deduction activity, theemployer will be asked to identify thedeductions, provide employee authori-zation or explain unusual deductions, as

necessary.

j. Fringe benefits. If the wage decisioncontains fringe benefits but the payrolldoes not indicate how fringe benefitswere paid [neither 4(a) nor 4(b) ismarked on the payroll form], the em-ployer may be asked to submit correctedpayrolls and will be required to paywage restitution if underpaymentsoccurred.However, if the basic hourlyrates for the employees are at least asmuch as the total wage rate on the

wage decision (basic hourly rate plusthe fringe benefit rate), no correctionis necessary.

k. Signature. If the payroll Statement ofCompliance is not signed or is missing,the employer will be asked to submit asigned Statement of Compliance foreach payroll affected.

l. On-site interview comparisons. If thecomparison of on-site interviews to thepayrolls indicates any discrepancies (for

example, the employee does not appearon the payroll for the date of the inter-view), the employer will be asked tosubmit a corrected payroll report.

2-8 RESTITUTIONFOR UNDERPAYMENTOF WAGES.Where underpayments of wages haveoccurred, the employer will be required topay wage restitution to the affected employ-ees. Wage restitution must be paid promptlyin the full amounts due, less permissibleand authorized deductions.

a. Notification to the prime contractor.The contract administrator will notifythe prime contractor in writing of anyunderpayments that are found duringpayroll or other reviews. The notice will


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describe the underpayments and pro-vide instructions for computing anddocumenting the restitution to be paid.The prime contractor is allowed 30 daysto correct the underpayments. Note thatthe prime contractor is responsible tothe contract administrator for ensuringthat restitution is paid. If the employer is

a subcontractor, the subcontractor willusually make the computations andrestitution payments and furnish therequired documentation through theprime contractor.

b. Computing wage restitution. Wagerestitution is simply the differencebetween the wage rate paid to eachaffected employee and the wage raterequired on the wage decision for allhours worked where underpaymentsoccurred. The difference in the wage

rates is called the adjustment rate. Theadjustment rate times the number ofhours involved equals the gross amountof restitution due.

c. Correction payrolls. The employer willbe required to report the restitution paidon a correction certified payroll. Thecorrection payroll will reflect the periodof time for which restitution is due (forexample, Payrolls #1 through #6; or abeginning date and ending date). Thecorrection payroll will list each

employee to whom restitution is dueand their work classification; the totalnumber of work hours involved (dailyhours are usually not applicable forrestitution); the adjustment wage rate(the difference between the requiredwage rate and the wage rate paid); thegross amount of restitution due; deduc-tions and the net amount to be paid. Asigned Statement of Compliance mustbe attached to the correction CPR.

Employers are no longer required to submitchecks (certified or otherwise) to correctunderpayments. Restitution payments arereported and certified by the employer on acorrection payroll.

d. Employee signature. Each employeewho has received restitution signs thecorrection payroll as evidence of theirreceipt of the payment.

e. Review of correction CPR. The con-tractor administrator will review thecorrection payroll to ensure that fullrestitution was paid. The prime con-tractor shall be notified in writing ofany discrepancies and will be requiredto make additional payments, if needed,documented on a supplemental correc-

tion payroll within 30 days.

f. Unfound workers. Sometimes, wagerestitution cannot be paid to an affectedemployee because, for example, theemployee has moved and cant belocated. In these cases, at the end of theproject the prime contractor will berequired to place in a deposit or escrowaccount an amount equal to the totalamount of restitution that could not bepaid because the employee(s) could notbe located. The contract administrator

will continue to attempt to locate theunfound workers for 3 years after thecompletion of the project. After 3 years,any amount remaining in the accountfor unfound workers will be creditedand/or forwarded by the contractadministrator to HUD.


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CHAPTER 3. LABOR STANDARDS DISPUTES ADMINISTRATIVE REVIEWS,WITHHOLDING, AND DEPOSITS AND ESCROW ACCOUNTS

WHAT HAPPENS WHEN THINGS GO WRONG?

1) Reconsideration. The DOL normallyidentifies the reasons for denial in itsresponse to the request. Any inter-ested person (for example, the

contract administrator, employer,representatives of the employees)may request reconsideration of thedecision on the additional classifica-tion request. The request for recon-sideration should be made in writingand should thoroughly address thedenial reasons identified by theDOL. Requests for reconsiderationshould be made through the con-tract administrator. (See 2-2(d), andalso DOL Regulations 29 CFR 1.8.)

2) Administrative Review Board. Anyinterested party may request a reviewof the Administrators decision onreconsideration by theAdministra-tive Review Board (formerly, WageAppeals Board). DOL regulations29 CFR Part 7 explain the proceduresfor such reviews. (See also 29 CFR 1.9.)

b. Findings of underpayment. Compliancereviews and other investigations mayresult in findings of underpayment. Theprimary goal in every case and at every

step in this process is to reach agree-ments about who may have been under-paid and how much wage restitutionmay be due and, of course, to deliverrestitution to any underpaid workers.The contract administrator will usuallywork informally with you to reach suchagreements. You will have an opportu-nity to provide additional information tothe contract administrator that mayexplain apparent inconsistencies and/orresolve the discrepancies.

If informal exchanges do not result inagreement, the final determination andschedule of wages due will be presented

3-1 INTRODUCTION.Even in the best of circumstances, thingscan go wrong. In a Davis-Bacon context,things going wrong usually means theres

a difference of opinion a dispute aboutwhether and to what extent underpaymentshave occurred. These disputes are usuallybetween the contract administrator and oneor more employers (the prime contractorand/or a subcontractor). The dispute mayinvolve something simple such as an addi-tional classification request that is pendingbefore the DOL; or something as significantas investigative findings following a com-plaint of underpayment. This chapterdiscusses some of what you may expect andwhat you can do to make your views knownand to lessen any delays in resolving theproblem or issue.

3-2 ADMINISTRATIVE REVIEWONLABOR STANDARDS DISPUTES.As mentioned in the Introduction above,a dispute about labor standards and com-pliance can arise for a number of reasons.The labor standards clauses in your contractand DOL regulations provide for adminis-trative review of issues where there is adifference of views between the contractadministrator and any employer. The mostcommon circumstances include:

a. Additional classifications and wagerates. Additional classification and wagerate requests are sometimes denied bythe DOL. An employer that is dis-satisfied with the denial can requestreconsideration by the DOL Wage andHour Administrator. The employermay continue to pay the wage rate, asrequested, until a final decision isrendered on the matter. When the finaldecision is known, the employer will berequired to pay any additional wagesthat may be necessary to satisfy thewage rate that is established.


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to you in writing and you will be per-mitted 30 days in which to correct theunderpayment(s) or to request a hearingon the matter before the DOL. The requestfor hearing should be made in writingand should explain what findings are indispute and the reasons. The requestshould be made through the contract

administrator. The contract administra-tor will submit a report of the findingsand the hearing request to the DOL forreview and further consideration.

1) DOL review. The DOL will reviewthe contract administrators reportand the arguments against thefindings presented in the hearingrequest. The DOL may affirm ormodify the findings based upon thematerials presented. You will benotified in writing by the DOL of the

results of its review; you will begiven an opportunity to correct anyunderpayments or to continue withthe hearing request. (See DOLRegulations 29 CFR 5.11 (b) and29 CFR Part 6, Rules of Practice forAdministrative Proceedings....)

2) Administrative Review Board.Contractors and/or subcontractorsmay request a review by the Admin-istrative Review Board of thedecision(s) rendered by the DOL

in the administrative hearing pro-cess. See DOL regulations 29 CFRPart 7 for more information aboutthis proceeding.

3-3 WITHHOLDING.The contract administrator may causewithholding from payments due to theprime contractor to ensure the payment ofwages which are believed to be due andunpaid, for example, if wage underpay-ments or other violations are not correctedwithin 30 days after notification to the

prime contractor. Withholding is consideredto be serious and is not taken unlesswarranted. Very often, the amount keptin retention is sufficient to cover any backwage liability so withholding from pay-ments is not considered necessary. How-ever, if withholding is deemed necessary,you will be notified in writing. Only theamounts necessary to meet the contractors(and/or subcontractors) liability shall bewithheld.

Remember, the prime contractor is responsibleand will be held liable for any wage restitutionthat is due to any worker employed in theconstruction of the project, including workersemployed by subcontractors and any lower-tier subcontractors. See 1-4, Responsibility ofthe Principal Contractor, and 2-8, Restitution

for underpayment of wages.

3-4 DEPOSITSAND ESCROWS.In every case, we attempt to completecompliance actions and resolve any disputesbefore the project is completed and finalpayments are made. Sometimes, correctiveactions or disputes continue after comple-tion and provisions must be made to ensurethat funds are available to pay any wagerestitution that is ultimately found due. Inthese cases, we allow the project to proceed

to final closings and paymentsprovided theprime contractor deposits an amount equalto the potential liability for wage restitutionand liquidated damages, if necessary, in aspecial account. The deposit or escrow accountis controlled by the contract administrator.When a final decision in rendered, thecontract administrator makes disburse-ments from the account in accordancewith the decision. Deposit/escrow accountsare established for one or more of thefollowing reasons:

a. Where the parties have agreed toamounts of wage restitution that are duebutthe employer hasnt furnishedevidence yet that all of the underpaidworkers have received their back wages.The deposit is equal to the amount ofrestitution due to workers lackingpayment evidence. As proper documen-tation is received, amounts correspond-ing to the documentation are returnedto the depositor. Amounts for anyworkers who can not be located are heldin the escrow account for three yearsand disbursed as described in 2-8(f) ofthis Guide.

b. Where underpayments are suspected oralleged and an investigation has not yetbeen completed. The deposit is equal tothe amount of wage restitution and anyliquidated damages, if applicable, that isestimated to be due. If the final determi-nation of wages due is less than theamount estimated and placed in the


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escrow account, the escrow will bereduced to the final amount and thedifference will be returned to the de-positor. If the parties agree to the inves-tigative findings, the amounts due to theworkers will be disbursed from theescrow account in accordance with theschedule of wages due. Amounts for

unfound workers will be retained asdescribed above (See 2-8(f) and 3-4(a)).

If the parties do notagree and an admin-istrative hearing is requested, the escrowwill be maintained as explained in 3-4(c),below.

c. Where the parties are waiting for theoutcome of an administrative hearingthat has been or will be filed contestinga final determination of wages due. Thedeposit shall be equal to the amount of

wage restitution and liquidated dam-ages, if applicable, that have beendetermined due. Once a final decision isrendered, disbursements from theescrow account are made in accordancewith the decision.

3-5 DEBARMENT.Contractors and/or subcontractors that arefound by the Secretary of Labor to be inaggravated or willful violation of the laborstandards provisions of the Davis-Baconand Related Acts (DBRA) will be ineligible(debarred) to participate in any DBRA orDavis-Bacon Act contracts for up to 3 years.

Debarment includes the contractor orsubcontractor and any firm, corporation,partnership or association in which thecontractor or subcontractor has a substantialinterest. Debarment proceedings can berecommended by the contract administratoror can be initiated by the DOL on its mo-tion. Debarment proceedings are describedin DOL regulations 29 CFR 5.12.

Remember, if you have any questions or needassistance concerning labor standards require-

ments help is always available. Contact thecontract administrator for the project youreworking on or the HUD Field Labor Relationsstaff in your area.


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INDEX

Acronyms ......................... ........................... ................... iv, A-2Additional classification .................................................... 2-1

Additional classification rules ............................. 2-1Additional classifications ...................................... iv, 2-1, 3-1Administrative Review Board ......................... .......... 1-2, 3-1Administrative Review on

Labor Standards Disputes ........................................... 3-1

Apprentices............................. .......... iii, 2-3, 2-4, 2-5, 2-6, 2-9Apprentices and trainees .................................................. 2-4

Pre-apprentice ....................................................... 2-4Probationary apprentice ...................................... 2-4Ratio of apprentices and trainees

to journeymen.................................................. 2-4Basic Hourly Rate ......................................... 2-4, 2-6, 2-7, 2-9

Certified Payroll reports .......................... . iii, 1-1, 2-3Payroll certifications............................ .................. 2-3Payroll formats ...................................................... 2-2Payroll inspection .................................................. 2-3Payroll retention.................................................... 2-3Payroll review and submission ........................... 2-3

No work payrolls ............................................... 2-3Compliance Reviews ......................................................... 2-8Construction contract provisions .................................... 1-2

HUD-2554 .............................................................. 1-2HUD-4010 .............................................................. 1-2Labor standards clauses ....................................... 1-2

Contract Administrator ........................ iii, 1-2, 2-1, 2-2 - 2-4,2-8, 2-9, 2-10, 3-1, 3-3

Contract Provisions ............................................... iii, 1-2, 2-1Contract Work Hours and

Safety Standards Act ........................ ....... iii, 1-1 - 1-3, A-2Copeland Act ................................................................. iii, 1-1Correction payrolls ....................... ........................... .... iv, 2-10

CPR ................................................................ iv, 2-6, 2-10, A-2CWHSSA ............................................................................. 1-1Davis-Bacon Act .......................................................... 1-1, 1-2Davis-Bacon Definitions ................................................... 2-3

Apprentices and trainees ..................................... 2-4Fringe benefits ....................................................... 2-5Laborer or mechanic............................................. 2-3Working foremen .................................................. 2-4

Davis-Bacon Regulations .................................................. 1-1Davis-Bacon Wage Decisions ........................ ................... 1-2Davis-Bacon Act .................. .................... iii, 1-1, 1-2, 3-3, A-2DBA......................................................................... iii, 1-1, A-2DBRA .................................................................... 1-1, 3-3, A-2

Debarment ......................... ........................... .................. iv, 3-3Deductions .................................................... iii, 1-2, 2-5 - 2-7,

2-8, 2-9, 2-10Deposits and Escrow Accounts....................................iv, 3-1Deposits and Escrows ....................................................... 3-2DOL .......................... ................ iii - 1-3, 2-1, 2-2, 2-3, 2-4, 2-5,

2-8, 2-9, 3-1, 3-3, A-2DOL investigator ............................................................... 1-3DOL Regulations .................................. 1-2, 2-1, 2-5, 3-1, 3-3Employee .......................... ...... iii - 1-3, 2-4, 2-5, 2-7, 2-8, 2-10

Fair Labor Standards Act ..................................... iii, 1-1, A-2Findings of underpayment ......................... ................. iv, 3-1FLSA ................................................................ iii, 1-1, 2-9, A-2Fringe Benefits ......................... ...... iii - 1-2, 2-4 - 2-5, 2-7, 2-9Gross wages ..................... .................... ..................... ...... iv, 2-7HUD......................... ............... 2, 3, 1-1, 1-3, 2-1, 2-2, 2-3, 2-4,

2-8, 2-10, 3-3, A-2

HUD Home Page ........................ ........................... ................. iHUD Labor Relations field staff ...................................... 1-3HUD-11 ............................................................................... 2-8Labor Relations Staff ........................................... 2-2, 2-8, 3-3Liquidated damages ................................................... 1-1, 3-2Local contracting agencies ............................................... 1-3Net pay .................................................................... iv, 2-7, 2-9Notice to Employees ......................................................... 2-1On-site Interviews ............................................................. 2-8Overtime ........................... ........ iv, 1-1, 2-3, 2-5, 2-7, 2-9, A-2Payroll certification ............................................................ 2-3Payroll errors ........................ ........................... ............... iv, 2-8Payroll format ..................................................................... 2-2

Payroll retention ........................................................... iii, 2-3Payroll submissions ........................................................... 2-8Piece-work ................................................................... 2-5, 2-6Posting the wage decision ........................................... iii, 2-1Prevailing wages or wage rates ....................................... 2-4Prime Contractor ........................................... iv, 1-2, 2-1, 2-2,

2-3, 2-9, 2-10, 3-1, 3-2Principal Contractor .................... ................... iii, 1-2, 1-3, 3-2

General Contractor ............................................... 1-2Project Wage Rate Sheet ................................................... 2-1Proper designation of trade ............................................. 2-5

Split-classification.................................................. 2-5Rate of Pay ........................................ iv, 2-4, 2-6, 2-7, 2-8, 2-9Site of work .................................................................... iii, 2-5Split-classification .............................................................. 2-5Statement of Compliance ................... iv - 2-3, 2-7, 2-9, 2-10Step-Up apprenticeship

programs ........................................................................ 2-4Subcontractor ................................. iii - 1-2, 2-2, 2-3, 2-4, 2-5,

2-6, 2-8, 2-10, 3-1, 3-3Lower-tier subcontractors .................................... 1-2

Trainees .................................................... iii, 2-4, 2-5, 2-6, 2-9Typical Payroll Errors ........................................................ 2-8Unfound workers ................................................ iv, 2-10, 3-3Wage Appeals Board ......................................................... 1-2Wage Decision .................... .................... ........ iii, 1-3, 2-1, 2-2,

2-4, 2-7, 2-8, 2-10Wage restitution ......................... .... iv, 2-3, 2-8, 2-10, 3-1, 3-3

Computing wage restitution ............................. 2-10Correction payrolls ............................................. 2-10Unfound workers................................................ 2-10

Withholding......................... ........................... . iv, 1-2, 3-1, 3-2Work Classification ................. iv, 2-1, 2-2, 2-4, 2-6, 2-8, 2-10Working foremen ............................................................... 2-4World Wide Web .................... .................... ..................... ........ i


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BAT Bureau of Apprenticeship and Training

CDBG Community Development Block Grant

CPR Certified Payroll Report

CWHSSA Contract Work Hours and Safety Standards Act

DBA Davis-Bacon Act

DBRA Davis-Bacon and Related Acts

DOL Department of Labor

FHA Federal Housing Administration

FLSA Fair Labor Standards Act

HUD Housing and Urban Development (Department of)

IHA Indian Housing Authority

LCA Local Contracting Agency

O/T Overtime

PHA Public Housing Agency

S/T Straight-time

SAC State Apprenticeship Council/Agency

Section

Paragraph

TABLE OF ACRONYMS AND SYMBOLS


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contractors guide to davis-bacon

Documents