Chapter 4 DAVIS-BACON COMPLIANCE PRINCIPLES AND …

1 Chapter 4 Handbook Rev 24-12/2012 Chapter 4 DAVIS-BACON COMPLIANCE PRINCIPLES AND COMPLIANCE PRINCIPLES involve the payment to allconstruction laborers and mechanics of not less than the prevailing wage rateestablished in the wage decision for the type (classification) of work and the hoursof work they actually of and subcontractors and anylower-tier subcontractors (employers) are required to pay all laborers andmechanics employed or working on the site of the work unconditionally andnot less often than once a week, the full amount of wages and bona fide fringebenefits computed at rates not less than those contained in the wage must prepare, certify and submit weekly payroll reports reflectingall the laborers and mechanics (employees) engaged in construction on the siteof the work. Employers may also be required to submit related documentationin order to demonstrate COMPLIANCE with these of the principal (prime) principal contractor(also referred to as theprimecontractor) is responsible for the full complianceof all employers (itself, subcontractors, and any lower-tier subcontractors)with the labor standards provisions applicable to the project.

2 For ease inreference, the term prime contractor shall mean the principal contractor,the term subcontractor shall mean all subcontractors and lower-tiersubcontractors, and the term employer shall mean any contractor,subcontractor or lower-tier subcontractor that has engaged the services oflaborers or mechanics on the and and mechanics."Laborers" and "mechanics" are thoseindividuals, whose duties are manual or physical in nature, includingworkers who are performing the work of a trade ( , Electrician). Theseterms include apprentices, trainees and helpers and, for contracts subject toCWHSSA, watchmen and or supervisors that performconstruction work and devote more than 20% of their time as alaborer or mechanic are treated, for labor standards purposes, as"laborers" or "mechanics" for their time spent working as a laborer Rev 2 Chapter 44-22 whose duties are primarily administrative,managerial or clerical are not laborers or person who performs the work of a laborer or mechanic is"employed" regardless of any contractual relationship that may be alleged toexist between a contractor or subcontractor and such who perform the work oflaborers or mechanics and who represent themselves to be owners ofbusinesses, sole proprietors, or self-employed arenotexempt fromprevailing wage requirements.

3 These laborers and mechanics are employed and are entitled to the prevailing wage for the type ofwork they perform and must be reported on CPRs for their craft,hours of work, and wages paid. (SeeLabor Relations Letter LR-96-01, Labor Standards Requirements for Self-Employed Laborers andMechanics, for further guidance concerning wage and reportingrequirements concerning working subcontractors.) permits administrativeallowances concerning payroll reporting and certificationrequirements relating to the following (also described inLaborRelations Letter LR-96-01) of Businesses Working with Their of Power of "apprentice" is a person employed and individuallyregistered in a bona fide apprenticeship program, includingStep-Upapprenticeship programs designed for DAVIS-BACON construction work. Bonafide programs are those that have been registered with DOL, Employmentand Training Administration, Office of Apprenticeship Training, Employerand Labor Services, Bureau of Apprenticeship and Training (BAT) or with aBAT-recognized State apprenticeship agency (SAC).

4 Person in the first 90 days ofprobationary employment as an apprentice in a bona fideapprenticeship program but who has not yet been formally registeredin such program may be considered an "apprentice"providedthat theBAT or SAC has certified that such person is eligible forprobationary employment as an person who is employed as a "pre-apprentice",that is, in a preparatory position which may result in registration in anapprenticeship programis notconsidered to be an "apprentice." Chapter 4 Handbook Rev 24-32 "trainee" is a person registered and receiving on-the-job trainingin a construction occupation pursuant to a training program approved inadvance by the classification of laborer and mechanic shall beclassified in accordance with the work classifications listed on the wagedecision and the actual type of work he/she performs, and shall be paid theappropriate wage rate and fringe benefits for the classification regardless oftheir level of and mechanics that perform work in morethan one classification may be compensated at the rate specified for eachclassificationprovidedthat the employer maintains time records thataccurately set forth the time spent in each classification in which the workwas performed.

5 If accurate time records are not maintained, the employeeshall be compensated at the highest of all wage rates for the classifications inwhich work was term "wages" means the basic hourly rate of pay plus anycontribution irrevocably made by an employer to a bona fide fringe benefitfund, plan or benefits may , vacation or holiday pay; to defray expenses of apprenticeship or similar programs; or hospital care; unemployment benefits; insurance; on retirement or death; for injuries or illness resulting from occupationalactivity; bona fide fringe benefits; to provide any of the addition, fringe benefits may reflect the rate of costs to the employer thatmay be reasonably anticipated in providing bona fide fringe benefits pursuantto an enforceable commitment to carry out a financially responsible benefitsdo notinclude employer contributions or payments requiredby other Federal, State or local law, such as FICA, workers compensation, orunemployment Rev 2 Chapter 44-42 hours are defined as all hours worked in excess of 40hours in any workweek.

6 Where governed by Federal labor standards,overtime hours shall be compensated at not less than one and one-half timesthe regular rate of basic pay plus the straight-time rate of any required employer may make payroll deductions as permitted byDOL Regulations 29 CFR Part 3. These regulations prohibit the employerfrom requiring employees to "kick-back" any of their earnings. Deductionsmay include employee obligations for income taxes, Social Securitypayments, insurance premiums, retirement, savings accounts, and any otherlegally permissible deduction authorized by the employee. Deductions mayalso be made for payments on judgments and other financial obligationslegally imposed against the of "site of work" is limited to the physical place or placeswhere the construction called for in the contract will remain when work on ithas been completed. "Site of work" includes other adjacent or nearbyproperty used by the contractor/subcontractor in the construction of theproject ( , fabrication sites) provided they are dedicated exclusively ornearly so to the performance of the contract or project, and are so located inproximity to the actual construction location that it would be reasonable toinclude prevailing wage prevailing wage ratesgenerally appear as a basic hourly rate plus fringe benefits, if Prevailing wage is made up of two interchangeable components: the basichourly wage and fringe benefits.

7 The total of the basic hourly wage andfringe benefits comprises the prevailing wage obligation. This obligationmay be met by any combination of cash wages and creditable bona fide fringe benefits provided by the employer. For example:The DAVIS-BACON wage decision requires:Basic Hourly Rate$ Benefits$ Prevailing Wage$ may comply by paying:1. $ in cash wages;2. $ plus $ in bona fide fringe benefits; or3. Any combination of wages and benefits that totals $ per 4 Handbook Rev 24-52/20124-4 Use of apprentices and and trainees may be compensated atrates less than those prescribed by the wage decision for their craft only inaccordance with the following apprentice or trainee shall be individually registered in abona fide program certified by the BAT or a SAC. (Note:See (C) concerning probationary apprentices and pre-apprentices.) apprentice and trainee shall not be paid less than thespecified rate in the registered program for his/her level of progress.

8 If therate specified is represented as a percentage of the journeyworker rate forthat craft, the percentage shall be applied to the corresponding wage ratecontained in the applicable wage and trainees must receive fringe benefits asspecified in the approved apprenticeship or trainee program. If the programis silent as to fringe benefits for apprentices/trainees, the apprentices/traineesmust receive the full fringe benefit specified on the applicable wage decisionfor their to maximum number of apprentices or traineesemployed on the site of work may not exceed the ratio of apprentices ortrainees to journeyworkers permitted to the employer by the BAT/SACcertified program. Apprentices or trainees who are employed at the site inexcess of the allowable ratio shall be paid the wage rate contained on theapplicable wage decision for the classification of work actually a contractor has both an apprentice and a trainee program, the traineesmust be counted together with the apprentices in determining compliancewith the allowable ratio ( , the journeymen may not be counted twice).

9 COMPLIANCE with the allowable ratio shall generally be met on a day-to-daybasis. However, back wages need not be assessed for minor, temporary, andinadvertent ratio imbalances which are promptly the event the BAT or SAC withdraws approval of anapprenticeship or trainee program, the employer shall no longer be permittedto utilize apprentices/trainees at less than the predetermined rate for the typeof work performed,unless or untilan acceptable program is reestablishedand and other reporting and basic records relating tosuch payrolls shall be maintained by each employer with respect to his/her ownworkforce employed on the site of the work. The prime contractor shall maintainsuch records relative toalllaborers and mechanics working on the site of the Rev 2 Chapter 44-62/2012 Payrolls and related records shall be maintained during the course of theconstruction work and preserved by the agency (HUD or LCA), the prime contractorand all employers for at least three years following the completion of the records shall name and a individually identifying 4-digit number for each laborer andmechanic;Note:Employers must maintain each employee s address and full socialsecurity number (SSN) at all times during the construction of the project andfor no less than three years following its completion.

10 This information mustbe made available to the prime contractor, HUD and/or the LCA or her correct work classification(s); rates of pay, including rates of contributions or costs anticipated forfringe benefits; and weekly number of hours worked, including any overtime hours; earnings, deductions made, and actual net wages paid; pertaining to any fringe benefit programs; of the approval of any apprenticeship or trainee program, theregistration of each apprentice or trainee, and the ratios and wage ratescontained in the payroll certifiedpayroll reports (CPRs) shall besubmitted for each week any contract work is performed. Each employer shallprepare and certify such payroll reports to demonstrate COMPLIANCE with the laborstandards information may be submitted in any format providedthat the LRS can reasonably interpret the information to monitor employercompliance with the labor standards.