- Davis Bacon Act question
- Does the Davis-Bacon Act apply to intern/fellowship work?
- Does the Davis-Bacon Act apply to training for non-profits?
- Does the Davis-Bacon Act apply to wages paid to laborers for the installation of energy-efficient lights purchased by a town with ARRA funding?
- If a state’s prevailing wage requirement is higher than the Davis-Bacon federal prevailing wage, which one applies?
- Would rebates for equipment (for example, HVAC equipment retrofit) to be installed at a commercial site be exempt from Davis-Bacon because the rebate is for the equipment?
- Applicability of Davis Bacon Act to SEP programs involving students and volunteers?
- Davis Bacon requirements for EECBG grant involving installation of heating system by vocational-technical school students
- What is the applicability of Davis-Bacon to after-the-fact Energy Efficiency Rebates for New Homes, Existing Residential Buildings, and Commercial Buildings
- What is the reporting period for the Semi-Annual Davis Bacon Enforcement Report?
- Does DBA apply to the purchase of equipment as part of a project?
- Are Davis-Bacon records subject to the Records Retention Clause?
- How do I access Davis Bacon FAQs on the new Weatherization web page?
- What is the applicability of the Davis-Bacon Act to the employees of a grantee?
- Can you confirm that Weatherization worker wage determinations cannot be applied to SEP/EECBG Weatherization projects?
- Can SEP and EECBG Program grantees performing residential weatherization use the project wage determination (WD) DOL developed for WAP?
- Are there prevailing wage and Davis Bacon compliance forms and standard contract language that EECBG grantees in any State can use?
- Can DOE supplant the DOL DBA requirement re: the submission and retention of payrolls and basic records for subrecipients and contractors?
- Three new Q&As about Davis-Bacon certified payroll retention requirement
- Are DBA wages used when determining the price schedules for contractors (specifically in our State for Weatherization agencies and utilities)?
- Are there different Davis-Bacon requirements for ARRA-supported installation of renewable/efficiency equipment on residential vs. commercial properties?
- Is it true that EECBG-supported incentives, if given to property owners after renewable or efficiency improvements have occurred, do not trigger Davis-Bacon?
- Is there a specific form that needs to be used in conducting the on-site interviews with the subcontractor's laborers?
- If the local prevailing wage rate is less than the Davis Bacon rates, wouldn't that allow a contractor to pay the lesser local prevailing wage rate?
- What is the level of payroll detail and documentation required by the Department of Energy (DOE) (not including Davis-Bacon Act requirements) to allow reimbursement for all ARRA-funded programs?
- Electronically Scanned PDF Copies of Certified Payrolls
- Is the DOL Certified Payroll Form (WH-347) sufficient documentation to allow reimbursement, or will SEP need to provide an additional timesheet document signed by each construction worker?
- Where can I access DOE's Desk Guide to the Davis-Bacon Act?
- How is rigid and foam insulation installation classified for DOL wage determinations under the SEP and EECBG program?
- Garnishment of Wages on Certified Payrolls
- GC Hotline update re overtime pay
- When collecting certified payroll, who is responsible for collecting the certified payroll and verifying the wages?
- Direct payment to contractors
- Does the Davis Bacon Act apply to work performed by offsite workers
- Employee interviews
- Davis Bacon Act certified payroll submission
- Wage determinations for SEP grants
- Child Support Deductions
- Davis Bacon Act question
- Do Davis Bacon Act requirements apply to a Recovery Act funded energy audit grant program?
- Davis Bacon Act question
- Multi-family housing rules and the Davis Bacon Act
- Davis Bacon Act question
- Certified payroll submission where subcontractor employees are paid a week later than worked
- Who is the "Contracting Officer"?
- If a contractor is suspected of violating Davis Bacon, is the EECBG subgrantee required to withhold compensation due, or is withholding compensation optional?
- Who is responsible for ensuring continued compliance with the Davis Bacon Act after funds are loaned?
- Do I have to post a Davis Bacon worksite notice at every home where work is being performed?
- Application of the Davis Bacon Act to "hands-on" training programs?
- May an employer take a deduction from an employee's wages if the employer purchases tools and uniforms and the employee reimburses those costs?
- Can wage rates listed for laborers engaged in asbestos abatement under another "construction type" be used for comparison with a state's prevailing wage rates for that labor?
- At what point do "incidental structure repairs" move from the "Laborer" classification to another (e.g., "Carpenter")?
- What information or documentation, if any, must an employer provide to a recipient or subrecipient regarding fringe benefits?
- Is the Davis Bacon Act triggered by the use of Recovery Act funds to provide payments to contractors to offset loan origination fees?
- Does the use of EECBG funds to purchase equipment to be installed by contractor or subcontractor construction workers as part of a larger project subject the entire project to Davis Bacon Act requirements?
- Could you please specify the documentation that should be submitted along with the first certified weekly payroll?
- Could you please detail the procedure for determining that a fringe benefit plan is bona fide?
- Does a self-employed subcontractor have to report Davis Bacon Act prevailing wages?
- Does the individual exception to the Davis Bacon Act also apply to individuals who own commercial property?
- Are residential homes held by a trust excluded from the "individuals" exception to the Davis Bacon Act?
- Is it acceptable under the Davis Bacon Act to conduct one employee interview per DBA worker classification per contractor and only during the first week on the job?
- Are salaried contractor employees working on ARRA projects, with job titles similar to those on the Wage Determinations, subject to Davis Bacon Act requirements?
- Questions regarding the Grantees responsibility for Davis-Bacon Act monitoring of the ESCO subcontractors
- How do you properly track employee time when an employee works on a Recovery Act funded project and a non-covered project within the same week?
- Would Davis Bacon apply if the homeowner hires a contractor, completes the energy efficiency upgrades, and the EECBG recipient pays the contractor directly after the work is completed?
- Will DBA be applicable under a Recovery Act-funded EECBG Program grant where the funding is provided to a commercial business for upgrading its building?
- For a Recovery Act funded grant project, what date should we choose a WD to apply to the project? Should the developer or contractor sign off on this date?
- Is a subcontractor required to provide an original authorization for deduction or is a copy of the supporting documents acceptable?
- A contractor indicated he can provide total number of hours spent working on a job and how much each person was paid for the job. What should I do this does not fully comply with DBA?
- Several questions regarding the Certification Section of the Department of Labor optional form WH-347
- Is there a cost or penalty to be imposed on the subcontractor for late filing of the weekly, certified payrolls?
- Is the wage determination stating workers receive 10 paid holidays each year met if workers are allowed to exchange a non-holiday work day for a holiday?
- Are there exceptions permitted to the right to be paid Davis-Bacon Act wages once a week if the employees agree to be paid less frequently?
- Overtime Pay for Travel Time
- If we use convict/prisoner labor for Recovery Act-funded projects, do we have to pay them Davis Bacon wages?
- We have a proposed project that would use Recovery Act-funded SEP funds for a window replacement project in a building that is undergoing major remodeling under a contractually separate construction project. These two separately contracted projects would run concurrently from a scheduling standpoint, however, there would not be any overlap of funds for material or labor costs between them. Would the Davis Bacon and Buy American provisions then be applied to the entire building remodel even though the ARRA-SEP-funded portion is contractually separate?
- Would you please tell me where to find a form to use for the Davis-Bacon Employee Interview Questionnaire?
1. We have several jobs that are not listed on the WD table for our State from the WDOL website. It is my understanding that the contractor requests the additional classification & rate once he agrees to the contract with the local government. Is this correct or is there another way to get this completed?
The contractor completes the standard form (SF) 1444 detailing the classification(s) needed and proposed wage rate(s). The contractor submits the form to the subrecipient (if there is one) who forwards to the recipient, who will submit the form to the DOE Contracting Officer (CO). The DOE CO will agree or disagree, if the CO agrees the classification is needed, the CO will submit the form to the DOL. The process is reversed once DOL makes a determination as to the proper classification and wage rate. The CO will forward to the new classification(s) and wage rate(s) to the recipient along with any modification to the grant.
2. One of our program areas involves workforce development for people who will work in energy efficiency and renewable energy. Part of that program is intended to be an internship/fellowship program intended to place current students in organizations that are doing EE/RE work. The questions being posed are: Q1. In proposing a student internship and fellowship program, is it OK to restrict eligibility to students who are either permanent residents of NC or attending a NC institution of higher learning? Q2. In the event an intern/fellow will perform work such as sealing ductwork in a home, or performing audits on commercial or industrial buildings, will this trigger Davis-Bacon reporting requirements?
Answer to Q1. There is nothing in the State energy Program or Energy Efficiency and Conservation Block Grant programs that would prohibit restricting an internship to State residents or attendees of a North Carolina institution of higher learning. However, you should confirm with his project officer that there are no general financial assistance requirements that would be applicable.
Answer to Q2. We assume that the intern/fellowship is being funded by a grant awarded under the American Recovery and Reinvestment Act of 2009 (ARRA).
Under the ARRA, the DBA applies to laborers and mechanics employed by contractors and subcontractors at a DBA-covered construction work site. Auditors, inspectors, and other personnel not performing physical or manual work at the site of the work are not subject to DBA requirements. An intern working in a bio-fuels processing plant learning the operations would not be subject to DBA requirements and neither would others performing energy audits.
The only time an intern would have to be paid DBA prevailing wage is if the intern performs work on a DBA-covered construction project (e.g., sealing ductwork in a home or installing other energy efficiency equipment on an ARRA-funded project). It is construction work that triggers DBA requirements; if an ARRA-funded construction project is DBA-covered all DBA reporting requirements must be fulfilled. If work such as work with a local Habitat for Humanity is not federally funded, the DBA would not apply.
3. One of our ARRA supported programs involves a project where we will hire a third party contractor to work with non-profit organizations that own buildings. The administrator would provide basic training to the staff of the non-profit organizations regarding simple energy efficiency work they can do in their own buildings. The administrator will also provide materials for the non-profits to use in their building(s). The intent is that the non-profit's staff will do the basic energy efficiency retrofits as volunteers. Because some non-profits also pay their staff, there is potential that their staff would be paid by the non-profit for time spent doing basic retrofits. Do either of these scenarios trigger Davis-Bacon?
(1) Under ARRA, the DBA requirements apply only to laborers and mechanics employed by contractors and subcontractors on construction projects funded in whole or in part by ARRA. If a project does not involve ARRA-funded construction, the DBA is inapplicable. The DBA applies to laborers and mechanics employed at the work site. Auditors, inspectors, training instructors, and other personnel not performing physical or manual work at the site of the work are not covered by DBA. Therefore, hiring a third-party contractor to provide basic training to the staff of non-profit organizations would not be subject to the DBA requirements.
(2) If an ARRA-funded grant is only used for the purchase of materials, the DBA would not be applicable to the grant because no ARRA funds are being used for a construction project. The DBA does not apply where the principal purpose is for the procurement of items such as materials, supplies, and equipment. Therefore, the purchase of the materials to be given to and installed by the non-profit would not be subject to the DBA requirements.
4. A town will be installing energy efficient LED street lighting. The town is using ARRA EECBG funds for only the purchase of the LED lights (equipment purchase), while using other funding to pay for the actual erection of light poles and installation of the LED lights. Does Davis-bacon apply to the wages paid the laborers for the installation of the lights? It is my understanding that if the town uses municipal employees to do the installation work that this would be 'Force Account' and that Davis-Bacon would not apply to the municipal employees. However, I believe the town will be using contracted workers for the installation.
Under the Recovery Act, the DBA requirements apply only to laborers and mechanics employed by contractors and subcontractors on construction projects funded in whole or in part by the Recovery Act. If a project does not involve construction, the DBA is inapplicable. In this situation, the Recovery Act-funded EECBG grant is being used for the purchase of the LED lights, but the installation of those lights will be necessary to complete the "installation of energy efficient LED street lighting. Such installation may be considered construction – especially where there is erection of light poles and where new fixtures are required.
If the town used Recovery Act funding for the purchase of the equipment, the project will have been “assisted by” the Recovery Act and DBA would be applicable to the installation. However, if the municipality uses its own employees to install the poles and lights, that work would not be subject to the DBA because State and local units of government are not considered contractors under the DBA when the construction is performed by their own employees. However, the work would be subject to the DBA requirements where Recovery Act-funding is used for the installation of the lights and the State and local units of government hires contractors and subcontractors to perform the work.
5. If a state has a prevailing wage requirement that has wage rates higher than the corresponding Davis-Bacon federal prevailing wage rates, does a contractor have to pay the higher of the two on a project funded by both state and federal stimulus dollars?
Under the American Recovery and Reinvestment act of 2009 (ARRA), Davis-Bacon Act (DBA) requirements apply only to laborers and mechanics employed by contractors and subcontractors on construction projects funded in whole or in part by ARRA. If a project involves ARRA-funded construction, the DBA is applicable. Assuming that the project at issue is for construction, the Recipient of an ARRA-funded grant first should review the applicable state statute to determine whether the project is subject to the State’s prevailing wage rates. If the State’s prevailing wage is applicable to the project, the State’s wage rate is higher than the corresponding Davis-Bacon prevailing wage, and the project is being funded by both ARRA and State funds, the contractor must pay the higher of the two wage rates (in this case the State’s wage rate).
6. I am confused because DOE guidance has indicated that rebates to residential customers are exempt from Davis Bacon, with the implication being that commercial rebate customers would NOT be exempt from complying with DB requirements. However, on the DOE’s State Energy Program - Davis Bacon FAQ website, #44-part 2, states that:
"If an ARRA funded grant only is only used for the purchase of materials, the DBA would not be applicable to the grant because no ARRA funds are being used for a construction project. The DBA does not apply where the principal purpose is for the procurement of items such as materials, supplies, and equipment. Therefore, the purchase of the materials to be given to and installed by the nonprofit would not be subject to the DBA requirements."
Given that response, wouldn't rebates for equipment (for example, HVAC equipment retrofit) to be installed at a commercial site be exempt from DB because the rebate is for the equipment?
The answer provided on the State Energy Program DBA FAQ website was intended to cover any program, residential or commercial, in which the ARRA-funded grant/ rebate is only for the purchase of materials, supplies, and equipment. A rebate only for the purchase of HVAC equipment would be exempt from the DBA requirements because no ARRA funds are being used for construction/installation of the equipment at either a residential or commercial site.
7. If a school receives a State Energy Program (SEP) grant from the State Energy Office for several projects involving energy efficiency conservation and uses volunteers to install some of the energy efficiency retrofits and contractors to install other retrofits, would the school have to pay the volunteers prevailing wages?
Yes, the school would have to pay the volunteers the prevailing wage rate if the volunteers and contractor workforce are performing the work at the same time. The Departmnet of Labor states in its Field Operations Handbook (§15e23): “There are no exceptions to Davis-Bacon coverage for volunteer labor unless an exception is specifically provided for in the particular Davis-Bacon Related Act under which the project funds are derived.” The Davis-Bacon Related Act for the American Recovery and Reinvestment Act of 2009 (ARRA) is silent on this subject of an exception for volunteer labor. Therefore, on ARRA-funded projects subject to Davis-Bacon coverage, the school must pay all workers the prevailing wage.
Our state is going to provide two ARRA-funded SEP gants for training programs. The students will be learning about photovoltaic systems (“PV systems” or “solar power systems”). The first part of the training program involves educational theory and then there will be a hands-on workshop where students attending the class will participate in the installation of a PV system. The grant covers training and cost of the PV system materials. This is a “learning while doing” kind of training program/opportunity that we find worth funding. The first grant involves training conducted by the regional electric journeyman apprenticeship training center. The PV system will be owned by the training center and the training center is providing the cost share to the grant. The second grant involves training conducted by a private consultant and the PV systems will be installed on public school buildings. Would the students have to be paid prevailing wages for the time they are installing the PV system?
Under the ARRA, the DBA applies to laborers and mechanics employed by contractors and subcontractors at a DBA-covered construction work site. The installation of a PV system paid for by ARRA funds would be subject to the DBA. Students/trainees/apprentices in a program approved by a State apprenticeship agency or DOL’s Office of Employment and Training may be employed on the project in accordance with the hourly wage contained in the approved program, expressed as a percentage of the DBA wage. If the training program is not a DOL or State approved training program, the students would have to be paid the full DBA prevailing wage while installing the PV system.
8. A town will be using their EECBG grant for the purchase and installation of a new heating system in a town building. Installation is to be done by the regional vocational-technical school (a state institution) -students would perform the installation under the supervision of their instructors. All instructors are licensed by the State to perform this type of work. As the instructors and students would not receive payment for their services (it's an educational opportunity) the question is whether Davis-Bacon would apply in this situation. I was led to believe that the town would make some type of pro forma payment to the school for undertaking this work.
Under the ARRA, the DBA applies to laborers and mechanics employed by contractors and subcontractors at a DBA-covered construction work site. The installation of a new heating system paid for by ARRA funds would be subject to the DBA. Students/trainees/ apprentices in a program approved by a State apprenticeship agency or DOL's Office of Employment and Training may be employed on the project in accordance with the hourly wage contained in the approved program, expressed as a percentage of the DBA wage. If the training program is not a DOL or State approved training program, the students would have to be paid the full DBA prevailing wage while installing the new heating system.
9. Our State's new home program will offer after-the-fact cash incentives of $2,000 to $3,000 depending on the level of energy efficiency achieved. To qualify for a $2,000 incentive the home must have a Home Energy Rating System (HERS) rating of 70 or lower. To qualify for a $3,000 incentive the home must meet the level under the now-expired federal tax credit -- 50% or less of the energy for heating and cooling as compared to a base 2004 IECC home.
To qualify for either will require a Home Energy Rating by a Residential Energy Services Network ( RESNET) certified Home Energy Rater and the homes must have first occupancy after the start of the program. The program is rewarding individuals for something already completed prior to applying for the cash incentive. The state has no involvement in the construction process, provides no input into how the HERS rating is to be achieved or what level of performance is reached, i.e., what specific materials and equipment are used. The State is simply documenting the level of performance with a mandatory Home Energy Rater by a private-sector rater.
Will builders constructing multiple homes or individual homeowners submitting multiple homes under this program fall under Davis-Bacon Act (DBA)?
Under ARRA, the DBA requirements apply only to laborers and mechanics employed by contractors and subcontractors on construction projects funded in whole or in part by ARRA. If a project does not involve ARRA-funded construction, the DBA is inapplicable. The DBA applies to laborers and mechanics employed at the work site. Auditors, inspectors, Home Energy Raters, and other personnel not performing physical or manual work at the site of the work are not covered by DBA.
In this case, the cash incentive to individual home owners would not be subject to the DBA. An individual homeowner may be eligible for multiple new home program incentives and would not be subject to the DBA, provided that the individual homeowner owns the new homes in his/her capacity as an individual and not as a company or corporation.
Builders constructing multiple homes would not be subject to the DBA because the incentive is based entirely upon the level of energy efficiency achieved for a residential home and must achieve a specific HERS rating to receive the incentive.
QUESTION 2: Our State also has an existing home program. Residential building owners will receive an after-the-fact cash incentive for increasing the energy efficiency level of their existing residential buildings. The incentive is based solely on energy savings, expressed as kWh. The incentive is $0.05 per kWh savings for 15 years up to a maximum of $3,000.
The kWh savings will be calculated using a HERS pre and post improvement rating conducted by a private-sector RESNET certified Home Energy Rater. Again, the program is rewarding individuals for something they have already done. The state has no involvement in the home improvement process. The program will not dictate how the savings are achieved or any specific materials or equipment used.
Will entities making improvements to multiple residential units under this program fall under Davis-Bacon?
ANSWER 2: Based upon the information provided above, the residential building owners will be receiving the ARRA-funded incentive payment based upon the level of energy efficiency achieved for a building. As such, the improvements the building owners make to obtain such efficiency is not subject to the DBA.
QUESTION 3: Commercial building owners will be offered after-the-fact cash incentives for improving the efficiency of their commercial buildings. The incentive is based solely on energy savings, expressed as kWh. The incentive is $0.05 per kWh savings for 15 years up to a maximum of $5,000. The kWh savings will be calculated using a pre and post improvement energy audit conducted by either a private-sector RESNET certified Home Energy Rater or a licensed, registered Engineer or Architect.
Again, the building owners will be rewarded after the fact for actions they take to reduce their energy use. The state has no involvement in the building improvement process. The program will not dictate how the savings are achieved or any specific materials, equipment or contractors used.
Will individual building owners who participate in this program fall under Davis-Bacon? Will entities making improvements to multiple commercial units under this program fall under Davis-Bacon?
ANSWER 3: Based upon the information provided above, the commercial building owners will be receiving the ARRA-funded incentive payment based upon the level of energy efficiency achieved for a building. As such, the improvements the building owners make to obtain such efficiency is not subject to the DBA.
The Department of Energy's (DOE) Semi-Annual Davis-Bacon Enforcement Report is due to the Department of Labor (DOL) by April 30, 2010. This reporting period is from October 1, 2009 through March 31, 2010. The next reporting period will run from April 1, 2010 through September 30, 2010 and will be due to the Department of Labor on October 29, 2010.
The Department has asked for the information from grant Recipients to be provided by April 19, 2010, so that all reports can be combined and a final report compiled for final submission to the DOL.
11. We are a State Agency with an ARRA-funded SEP grant. We are considering providing grant contracts for large capital intensive energy efficiency and renewable energy projects. We are considering making a grant to be used only for a percentage of the materials and equipment on a project. The information contained in one of the DBA FAQs leads us to believe that if we use the following language in our contract template we would not trigger the DBA.
Grantee, located at ________ shall purchase and have delivered to its facility the following custom-built to specification equipment and materials. Lists the equipment and materials:
Can you confirm this understanding?
In all cases a decision as to whether the DBA applies is made by the contracting officer on a case-by-case basis. While the FAQs are offered as guidance they are general in nature. In order to determine whether the DBA applies, the overall "project" must be considered. The SEP/EECBG Program grants are funded by the ARRA and all such grants are subject to the Davis-Bacon Act. The DBA requires "all laborers and mechanics employed by contractors and subcontractors on projects funded directly by or assisted in whole or in part by" by the ARRA be paid the prevailing wages in the locality of the project. While the DBA is not applicable to the purchase of equipment and materials, if the purchase of the equipment and materials "assists the project" in whole or in part the DBA is applicable.
In your question you indicate that your grants will be for a percentage of the equipment and materials to be used on "capital intensive energy efficiency and renewable energy projects." Thus, it appears that the project is not the purchase of equipment and materials, but the project requires the installation of the equipment and materials purchased with an ARRA-funded grant in order to be completed. It also appears that the installation of such equipment and materials will be significant and not incidental to the purchase of the equipment and materials. As a result, in the case the DBA would be applicable to the entire project.
12. Can you please confirm the EECBG/SEP grantee's and subgrantee's Davis Bacon Act (DBA) records retention requirements. Is it from the time the grant ends? If so, what is the end date (given that the grant terms and conditions envision payment extending beyond 2012)? This question is prompted by the language in OMB Circular A-110/10CFR 600.242 that requires "all financial and programmatic records, supporting documents, statistical records, and other records of grantees or subgrantees" to be retained for three years from the day the grantee submits its final expenditure report.
Grantees and subgrantees must maintain DBA records pursuant to OMB Circular A-110/10 CFR 600.242. Even though the Department of Labor regulations provide the records are to be kept for 3 years from the end of the contract, the DOE grant award terms tell the grantees to follow 10 CFR 600.242 (by reference), which requires the grantee to maintain all supporting documentation for 3 years after the submission of the final cost report - usually 90 days after the end of the Grant Project Period. Since contracts/sub-grants fall within the overall Grant Agreement Project Period, the recipient would need to maintain the DBA payroll records for the potentially longer period of the Grant award and not just 3 years after the contract/subgrant ends.
Grantees and subgrantees must maintain DBA records pursuant to OMB Circular A-110/10 CFR 600.242. Even though the Department of Labor regulations provide the records are to be kept for 3 years from the end of the contract, the DOE grant award terms tell the grantees to follow 10 CFR 600.242 (by reference), which requires the grantee to maintain all supporting documentation for 3 years after the submission of the final cost report - usually 90 days after the end of the Grant Project Period. Since contracts/sub-grants fall within the overall Grant Agreement Project Period, the recipient would need to maintain the DBA payroll records for the potentially longer period of the Grant award and not just 3 years after the contract/subgrant ends.
13. I have been utilizing your Weatherization Web page that provided FAQ's specific to ARRA funded Weatherization and compliance with Davis Bacon wages. I just discovered the site has been changed and can no longer find the information that was previously available. This was a great tool and I am hoping the FAQ's have been moved and I am just not able to find the information on your website. Can you please let me know if the information is still available and where I can locate this on your website?
The website for the Energy Efficiency and Renewal Energy (EERE) Office of Weatherization and Intergovernmental Programs (OWIP) has been changed; however, the information is still available. If you paste this link: http://www1.eere.energy.gov/eere_faq/default.aspx?pid=10&spid=2 into your browser you will be taken directly to the new FAQ page. You can pick the program you are interested in from the drop down box, choose Davis-Bacon as the category, and then put in words for searching. If you need additional assistance, please contact Elizabeth Meckes at email@example.com.
14. Concerning our SEP ARRA-funded program whereby funds are provided for energy efficiency retrofits on multi-family public housing projects, it is clear to us that Davis-Bacon applies to all contractors working on the ARRA-funded project. However, the question remains in our mind as to whether Davis-Bacon would apply to employees of the grantee such as maintenance workers or building supervisors that are installing items purchased with the ARRA funds in a scenario where hiring a contractor is not necessary.
As an example, if ARRA funding is used to purchase 100 energy efficient light bulbs as part of a larger energy efficiency retrofit, can the grantee's maintenance workers screw in those light bulbs without those maintenance workers having to be paid Davis-Bacon wages for the time spent screwing in the light bulbs. Davis-Bacon would cause obvious complications in this scenario, as the grantee would have to take his maintenance workers off of the regular company payroll for that time spent, and instead treat them as contractors subject to Davis-Bacon for that portion of their work week. The grantee is not a government entity, so we don't believe the Davis-Bacon exemption for employees of government agencies would apply in this case. Can you please provide any guidance?
Where the ARRA-funded SEP grant is providing for energy efficiency retrofits on a multi-family public housing project all the installation work will be subject to the DBA, including installation of items that are usually considered replacement/routine maintenance items. If the replacement of an old incandescent light bulb with a new energy efficient light bulb was the only work to be performed, the installation would not be subject to the DBA as regularly-recurring, routine maintenance is not covered by the DBA. However, where the installation of the energy efficient items is part of a larger energy efficiency retrofit, the DBA will apply to the maintenance workers if they perform the installation work.
15. The following link lists the Wage Determination for Weatherization workers in any of the 50 States: http://www.dol.gov/whd/recovery/dbsurvey/weather.htm. The Weatherization Worker wage rates are based on a specific determination request, and are separate from the existing general wage determinations, located at http://www.wdol.gov. The existing general wage determinations are broken down by construction type, with buildings that are greater than 4 stories triggering "Building" wage rates, and those with 4 or fewer stories triggering "Residential" wage rates. However, the determination for Weatherization Workers does not distinguish between different building types. Is the Weatherization Determination applicable to both "Building" and "Residential"? Through our SEP ARRA-funded program, we will have weatherization work being done to buildings that are greater than 4 stories and buildings fewer than 4 stories, with both building types possibly being part of the same overall project. Will the same Weatherization wage rate be applicable to both?
The Department of Labor (DOL) has decided that SEP and EECBG program grants must use the existing general wage determinations (WD) listed on the DOL wage determination website found at www.wdol.gov. The separate WD for Weatherization Workers was developed by DOL strictly for the Weatherization Assistance Program (WAP) based upon a survey of local community action agency wage rates and SEP and EECBG Program grantees may not use that WD. The "Residential" wage rates are applicable to residential buildings with 4 or fewer stories and the "Building" wage rates are applicable to residential buildings with 5 or more stories.
The DOL has informed DOE that if one were using the residential WD for the SEP and EECBG programs, contractors would select wage rates for plumbers (installation of hot water heaters) and other classifications, such as carpenters, electricians, and roofers. In many cases, the laborer classification contained in the residential WD will be the appropriate classification for most of the tasks performed by the weatherization worker defined in the WAP WD. These activities could include minor repairs, batt insulation, blown insulation, window and door repair, and weather stripping, solar film installation, air sealing, caulking, minor or incidental structural repairs, duct sealing, air sealing, installation of light bulbs, and installation of smoke detectors.
However, a one size fits all approach cannot be applied in all situations. Local area practice determines the applicable classification for specific work activities. Area practice is determined by the firms whose wage rates were found to be prevailing in the geographic area covered by the WD. In many cases, the residential WD will provide guidance as to the area practice as it applies to a specific classification. In these situations, the contractor must follow the local area practice in classifying its workers, and not classify all weatherization-type work under the laborer classification.
16. We have SEP and EECBG Program grantees that will be performing residential weatherization work. May we use the project wage determination (WD) DOL developed for the Weatherization Assistance Program?
No. The Department of Labor (DOL) has decided that SEP and EECBG program grantees/recipients ARE NOT ALLOWED to use the WD for the Weatherization Assistance Program (WAP). The SEP and EECBG program grantees/recipients MUST USE the existing general wage determinations (WD) listed on the DOL wage determination website found at www.wdol.gov. The separate WD for weatherization workers was developed by DOL strictly for the Weatherization Assistance Program (WAP) based upon a survey of local community action agency wage rates and SEP and EECBG Program grantees may not use those WDs. For SEP/EECBG Programs, the "Residential Construction" wage rates are applicable to residential buildings with 4 or fewer stories and the "Building Construction" wage rates are applicable to residential buildings with 5 or more stories.
To obtain a residential construction wage determination, follow these instructions:
- Access www.wdol.gov and select the link "Selecting DBA WDs".
- Select the state, county, and pick residential construction from the drop down box. For a residential building over four stories, pick building construction.
- At the bottom of the inset box - there is a link for a "printer friendly version".
- Choose the appropriate wage classifications and rates for the work to be performed.
The DOL has informed DOE that if one were using the residential WD for the SEP and EECBG programs, contractors would select wage rates for plumbers (installation of hot water heaters) and other classifications, such as carpenters, electricians, and roofers. In many cases, the laborer classification contained in the residential building WD will be the appropriate classification for most of the tasks performed by the weatherization worker defined in the WAP WD. These activities include minor repairs, batt insulation, blown insulation, window and door repair, and weather stripping, solar film installation, air sealing, caulking, minor or incidental structural repairs, duct sealing, air sealing, installation of light bulbs, and installation of smoke detectors.
However, a one size fits all approach cannot be applied in all situations. Local area practice determines the applicable classification for specific work performed in the locality of the wage determination. In many cases, the residential WD will provide guidance as to the area practice as it applies to a specific classification. In these situations, the contractor must follow the local area practice in classifying its workers, and not classify all weatherization-type work under the laborer classification. An example would be the installation of insulation during a weatherization project. A quick review of the applicable residential wage determinations reveals that batt insulation is performed by a number of classifications and the rates vary accordingly:
- Choctaw County, Oklahoma: The WD contains an Insulator hourly rate of $7.25, with no fringe benefits.
- Pulaski County, Arkansas: The WD contains a Batt Insulator hourly rate of $9.09 with no fringe benefits.
- Alexander County, Illinois: The WD contains a Carpenter/Drywall Hanger, Including batt insulation CBA hourly rate of $27.21 + $11.55 in fringe benefits.
- Campbell County, South Dakota: The WD contains a Carpenter, Including Form Setting/Building and Batt Insulation hourly rate of $10.56 with no fringe benefits.
- Benton County, Oregon: The WD contains a Batt Insulator hourly rate of $18.57 with no fringe benefits.
If the contractor/subcontractor used only the rate for general laborer for all weatherization activities in these counties, and insulation was installed, the contractor would have paid the worker installing insulation the wrong wage rates for the hours spent performing that work (i.e., installing insulation (blown or batt) in Choctow County and batt in the other counties). The contractor should review the work that the worker is performing and ensure that workers are paid the appropriate rate, as set forth on the WD, for the appropriate hours worked performing weatherization type activities.
17. My State has prevailing wage requirements. I am trying to find out if there are prevailing wage and Davis Bacon compliance forms and standard contract language that EECBG Grantees in my State can use. We are left in a position of having much higher levels of administration and confusion due to having to comply with both State and Federal law. Also, it's unclear to me how I am supposed to document this compliance for the purpose of audit.
For questions regarding compliance with Davis-Bacon Act (DBA) requirements regarding an EECBG award, please refer to your grant instrument. That instrument will provide DBA language and other clauses that must be flowed down to subgrantees/contractors/ subcontractors. All the required DB language can be found in the Special Terms and Conditions and the applicable wage rates should have been included in the official grant file.
The State agency or department that oversees labor standards in your state may be able to provide you with compliance information. The Department of Labor (DOL) also provides compliance information at: http://www.dol.gov/compliance/guide/dbra.htm#records. For more specific assistance in complying with the DBA, you may contact your local DOL Wage & Hour Division.
Your State is not unique in having its own prevailing wage laws and requirements as numerous other states also have such laws. All recipients of EECBG grants are required to follow all applicable State and Federal laws in administering their grants. The DOE Office of General Counsel (OGC) cannot provide legal advice regarding the obligations of your office concerning State prevailing wage compliance requirements. However, the following is provided for your consideration.
It is our understanding that State recipients of a Federal grant must pay State prevailing wages where those wages are higher than Department of Labor (DOL) prevailing wage rates. Also, you must determine whether State law requires contractors and subcontractors to pay time and one-half to employees who work over 8 hours in a day or 40 hours in a week. The DOL regulations require only that time and one-half be paid for hours over 40 in a work week (seven consecutive days).
DOL Option Form WH-347 provides the type of information required by the DOL to be maintained for inspection. Under DOL regulations, covered contractors must maintain payroll and basic records for all laborers and mechanics during the course of the work and for a period of three years thereafter. Records to be maintained include:
- Name, address, and unique identifying number (i.e., last four digits of the Social Security number) of each employee
- Each employee's work classifications
- Hourly rates of pay, including rates of contributions or costs anticipated for fringe benefits or their cash equivalents
- Daily and weekly numbers of hours worked
- Deductions made
- Actual wages paid
- If applicable, detailed information regarding various fringe benefit plans and programs, including records that show that the plan or program has been communicated in writing to the laborers and mechanics affected
- If applicable, detailed information regarding approved apprenticeship or trainee programs
In many States, the record requirements are similar to those required by the DOL. Under the DBA, each covered contractor and subcontractor must, on a weekly basis, provide Federal agency or its designee a copy of all payrolls providing the information listed above under for the preceding weekly payroll period. Each payroll submitted must be accompanied by a “Statement of Compliance.” The contractor, subcontractor or the authorized officer or employee of the contractor or subcontractor who supervises the payment of wages must sign the weekly statement. Statements of Compliance are to be made on the form WH-347 (payroll for option use) or on any form with identical wording. This must be completed within seven days after the regular pay date for the pay period. EECBG program grant recipients must maintain the original of the certified payroll.
18. The Final Davis Bacon Act (DBA) Requirements approved by DOL on 8-20-09 were incorporated into our state DOE Weatherization grant via a modification, which replaced our Terms & Conditions to include these final DBA Requirements. The specific sections of these DBA Requirements that I am referring to is D. Payrolls and Basic Records, subsection (2)(a) and (b). (2)(a) provides: 'The Contractor shall submit weekly for each week in which any Contract work is performed a copy of all payrolls to the Subrecipient. The Subrecipient shall submit weekly for each week in which any Subaward or Contract work is performed a copy of all payrolls to the Recipient'.
Also, in subsection (b) it states, 'The Recipient is responsible for the ensuring that all Subrecipients and Contractors submit copies of payrolls and basic records as required by paragraph D, Payrolls and Basic records, of this Clause. The Subrecipient is responsible for ensuring all Contractors, including lower tier subcontractors submit copies of [payrolls and basic records as required by Paragraph D, Payrolls and Basic records, of this clause'.
We have been informed that the DOE General Counsel's Office has recently prepared a legal paper indicating that 'copies' of payrolls should continue to be the requirement and not 'originals' under the DBA Requirements. Can DOE, the contracting federal agency (other than DOL) supplant the DBA Requirements with their own DBA Requirements or must changes to the DBA come from DOL only? DOE is now requesting (8 months into our grant) that we as the Recipient require that 'original' payrolls be submitted by the contractor to the Subrecipient and the Subrecipient submits these 'original' payrolls to the Recipient. This would create an administrative nightmare for us, our subgrantees, contractors and subcontractors.
The Department of Labor (DOL) approved the Department of Energy's (DOE's) modified Davis-Bacon clauses on August 20, 2009. In September 2009 DOL informed DOE that its Recipients must maintain the original certified payroll on behalf of DOE for all American Recovery and Reinvestment Act of 2009 (Recovery Act)-funded grants. The DOE immediately prepared a "Frequently Asked Question" (FAQ) that was posted on the Weatherization Assistance Program's website. Further, during a meeting of the National Association for State Community Services Programs held September 15-18, 2009, Mr. Tim Helm, Chief, Branch of Government Contracts Enforcement at DOL, specifically addressed questions about whether scanned or faxed copies of the certified payroll could be maintained by the recipient. The answer was that the subrecipient was to maintain a copy and forward the original to the state recipient to be maintained on behalf of DOE.
This requirement that the state maintain the original copy of the payroll record is a requirement of the DOL. No agency, other than DOL, can supplant DBA requirements. DOL may, however, approve modifications to the DBA contract clauses, which it did for DOE's contract clause modifications on August 20, 2009. The DOL may also provide approval for an Agency to require an entity other than itself to maintain DBA records on behalf of the Agency. DOL approved DOE's request to allow it to require the grant recipients to maintain the records on its behalf on August 5, 2009. The contracting officers thereafter inserted the "Recipients Requirements" clause in the grants requiring that the recipients maintain the DBA records on behalf of the DOE. The Contracting Officer may also require a recipient to perform certain functions in a certain manner or risk defaulting under the terms of the grant.
[In the case prompting this question, the state was not maintaining the original payroll record and the project officer found the State to be out of compliance when he made a monitoring visit. The project officer immediately contacted the Program Lead, the Office of General Counsel, and the Contracting Officer. The Contracting Officer agreed to allow the state to maintain a copy of the original certified payroll for the period it was out of compliance with DOL requirements - providing it immediately changed its process so as to make sure the recipient received the original payroll documents.] DOE cannot, however, guarantee that DOL will not cite the state for failing to maintain the original copies of the payroll records.
The DOE continues to work with the DOL on the issue of allowing subrecipients to maintain the original certified payroll records and provide the recipient with a "scanned pdf copy" of the records. DOE's endeavor to date has been met with resistance.
19. It appears that recipients need to collect certified payroll originals from subrecipients, is this required for all ARRA DOE funded projects or only weatherization projects?
ANSWER #1: The requirement for the recipient to maintain the original weekly certified payroll is for all Recovery-Act funded DOE grant programs. Department of Labor (DOL) approved the Department of Energy's (DOE's) modified Davis-Bacon clauses on August 20, 2009. In September 2009 DOL informed DOE that its Recipients must maintain the original certified payroll on behalf of DOE for all American Recovery and Reinvestment Act of 2009 (Recovery Act)-funded grants. The DOE immediately prepared a "Frequently Asked Question" (FAQ) that was posted on the Weatherization Assistance Program's website (and later posted to the State Energy Program (SEP) and Energy Efficiency and Conservation Block Grant (EECBG) websites). Further, during a meeting of the National Association for State Community Services Programs held September 15-18, 2009, Mr. Tim Helm, Chief, Branch of Government Contracts Enforcement at DOL, specifically addressed questions about whether scanned or faxed copies of the certified payroll could be maintained by the recipient. The answer was that the subrecipient was to maintain a copy and forward the original to the state recipient to be maintained on behalf of DOE.
This requirement that the recipient maintain the original copy of the payroll record is a requirement of the DOL. No agency, other than DOL, can supplant DBA requirements. DOL may, however, approve modifications to the DBA contract clauses, which it did for DOE's contract clause modifications on August 20, 2009. The DOL may also provide approval for an Agency to require an entity other than itself to maintain DBA records on behalf of the Agency. DOL approved DOE's request to allow it to require the grant recipients to maintain the records on its behalf on August 5, 2009. The contracting officers thereafter inserted the "Recipients Requirements" clause in the grants requiring that the recipients maintain the DBA records on behalf of the DOE. The Contracting Officer may also require a recipient to perform certain functions in a certain manner or risk defaulting under the terms of the grant.
QUESTION #2: Do the certified payrolls need to be sent in each week or would it be acceptable to ask the sub recipient to send in an original certified payroll at the start of the project (i.e., first week's payroll to confirm prevailing wage/ Davis Bacon compliance) and allow them to hold any remaining certified payrolls and submit them at the conclusion of the project? The second option would simplify the workload and reduce costs for sub recipients and recipients.
ANSWER #2: The certified payrolls must be submitted by the contractor to the subrecipient within 7-days of the date the contractor pays the employees. The subrecipient must submit the original to the recipient on a weekly basis. The recipient must review contractor records on an ongoing basis. Pursuant to the grant the recipient maintains the original DBA payroll records on behalf of DOE. The recipient is not required to submit any of the documents to DOE unless the Contracting Officer makes a specific request for records. The records must be maintained so as to be easily accessed by DOE and DOL representatives. DOE recommends that recipient maintain the original weekly payrolls and attached documentation by contract number, contractor, and payroll number. Additional information may be found on the Energy Efficiency and Renewable Energy website at: http://www1.eere.energy.gov/eere_faq/default.aspx?pid=10&spid=2.
QUESTION #3: If an EECBG project is a portion of a larger project, is it necessary to obtain certified payrolls for the entire project or just labor that is performed with EECBG funds?
ANSWER #3: The Recovery Act provides that "laborers and mechanics on projects funded directly by or assisted in whole or in part" with Recovery Act funding must be paid the prevailing wage as set forth by the Secretary of Labor. Therefore, if the EECBG-funded project is part of a larger project, the entire project is subject to the DBA requirements. If the entire project is subject to the DBA requirements, weekly certified payrolls would be required for the entire project. If you have specific questions about whether the DBA applies to your project, please contact the Contracting Officer awarding your grant.
20. Are DBA wages used when determining the price schedules for contractors (specifically in our State for Weatherization agencies and utilities)? Do the price schedules account for the higher Davis-Bacon wages?
I am assuming from your question that a price list was developed for local weatherization agencies to use when hiring contractors and that the price list was based upon the project wage determination developed by the Department of Labor (DOL) specifically for the low income Weatherization Assistance Program (WAP). The WAP project wage determinations may not be used for State Energy Program (SEP) and Energy Efficiency and Conservation Block Grant (EECBG) program. A price list developed from the WAP project wage determinations cannot be used for contractors working on Recovery Act-funded SEP and EECBG program grants, because contractors must pay their employees the Davis-Bacon Act (DBA) prevailing wages for the work performed and the wage rates are, in most cases, higher under the DOL prevailing wage determinations than they are under the DOL Weatherization Assistance Program wage determinations. In the WAP, contractors must pay the wages set forth in the project wage determinations developed by DOL specifically for the WAP. If the contractors will be working on Recovery Act-funded SEP and EECBG programs and performing work on single residential housing units or multi-family residential housing - 4 stories or less - the appropriate category would be "residential construction"; for multi-family residential housing 5 stories or more, the appropriate category would be "building construction."
If the state/city wants to use a pricing schedule for the work to be performed under either the SEP or EECBG program, the state/city must develop a pricing schedule using the DBA wage determinations found at the www.wdol.gov website. Please note that the wage determinations change periodically and that the minimal wages may be different depending upon the county in which the work is to be performed. In any case, the contractor must pay, at a minimum, the appropriate DBA wages to employees performing work on WAP/SEP/EECBG program projects.
21. I have heard that financing (through an EECBG-supported revolving loan fund) to residential property-owners in order to install renewable energy systems and energy efficiency equipment does not require compliance with Davis-Bacon Act (DBA) because it would create an undue hardship for the participating resident. However, renewable energy and energy efficiency at commercial properties (funded through an EECBG-supported revolving loan fund) does require compliance with Davis-Bacon Act. Can you please verify these statements?
These statements are correct, but not because DBA would create an undue hardship for individual residents. The Office of Management and Budget (OMB) regulations regarding implementation of the American Recovery and Reinvestment Act of 2009 (Recovery Act) Section 1606 (Davis-Bacon wage requirements) make clear that the requirements of the Recovery Act - particularly the requirements applicable to recipients and subrecipients of Recovery Act funds - do not apply to individuals. Therefore, programs that are provided to individuals are not subject to the DBA, providing the individual contracts for the improvements. The OMB regulations do not exempt business and other commercial entities from the DBA requirements and as such, those entities are subject to the DBA.
22. I have heard that EECBG-supported incentives (based on a per kWh or therm basis) given to residential or commercial property-owners after energy efficiency and renewable energy improvements have occurred does not trigger Davis-Bacon because the City is not funding the construction project, rather it is just supporting the end result. Can you please verify these statements?
Yes, this is true. In a program where the after-the-fact incentive is based solely on energy savings, expressed as kWh or therm, the DBA will not apply to residential or commercial buildings. A program, posted on the Energy Efficiency and Renewable Energy website under the DBA at: http://www1.eere.energy.gov/eere_faq/default.aspx?pid=10&spid=2, awards commercial and residential building owners through a cash incentive for improving the efficiency of their buildings. The incentive is $0.05 per kWh savings up to a maximum of $5,000. The commercial or residential building owners will be receiving the Recovery Act-funded incentive payment based upon the level of energy efficiency achieved for a building. As such, the improvements the building owners make to obtain such efficiency are not subject to the DBA.
23. Is there a specific form that needs to be used in conducting the on-site interviews with the subcontractor's laborers? Is SF 1444 acceptable?
The Department of Labor regulations do not specify the use of any form or procedure to be used when conducting an employee interview; however, DOE recommends the use of SF-1445, Labor Standards Interview Form. There is no requirement that you use SF-1445 when conducting the employee interviews, but you may find it helpful. The SF-1444, Request for Authorization of Additional Classification and Rate, would not be helpful as it would not allow you to obtain the type of information needed to assure contractors are paying their employees properly.
24. I have read that the purpose of the Davis Bacon Wage Act is to ensure that local prevailing wage rates are met or exceeded on federally funded contracts over $2,000.00. If the local prevailing wage rate is less than the Davis Bacon rates, wouldn't that allow a contractor to pay the lesser local prevailing wage rate?
The Davis-Bacon Act requires all contractors and subcontractors to pay laborers and mechanics employed on a covered contract (grants funded by the American Recovery and Reinvestment Act of 2009 (Recovery Act) wages and fringe benefits determined by the Secretary of Labor to be prevailing for corresponding classes of employees engaged on similar projects in the locality. The Secretary of the Department of Labor (DOL) is the only one with the authority to determine the locally prevailing wage to be used on federally funded projects. No other agency has such authority and contractors have no authority to pay a wage different than what is determined by DOL. Contractors shall pay laborers and mechanics the wage rates set forth by DOL.
25. What is the level of payroll detail and documentation required by the Department of Energy (DOE) (not including Davis-Bacon Act requirements) to allow reimbursement for all ARRA-funded programs?
The DOE does not require any payroll detail or documentation above that required by the DOL for verification of the payment of the correct wages under the Davis-Bacon Act (DBA) requirements to allow reimbursement for Recovery Act-funded programs. The DOL provides payroll form WH-347 (for contractor's optional use). DOE recently provided a Frequently Asked Question (FAQ) on the GC Hotline, WAP, SEP, and EECBG program websites regarding the records required to be maintained. Those FAQs may be found at the Energy Efficiency and Renewable Energy (EERE) website: http://www1.eere.energy.gov/eere_faq/default.aspx?pid=10&spid=1
26. I have a question relative to using electronic capabilities (i.e., scanning a hardcopy into the computer system) to transmit Davis-Bacon Act (DBA) certified payroll documents to Recipients. Is it possible to get some relief from the requirement that Recipients maintain the original paper copy of the payroll record? For example, our State is about to issue 116 sub-grants and maintaining all the paper certified payroll documents is a big burden. Has there been anything of late allowing electronic transmission of ensuing weekly payrolls to Recipients?
The Department of Labor (DOL) recently provided updated guidance to the Department of Energy (DOE) on this subject. Subrecipients/Subgrantees may submit scanned electronic copies to Recipient/Grantees under certain circumstances as described below.
- Upon approval of a Recipient/Grantee, a Subrecipient/Subgrantee that is a State or local unit of government may receive an original certified payroll from a contractor or subcontractor and scan the document into an electronic pdf document and forward that electronic copy to the Recipient/Grantee. The Subrecipient must have a facility to maintain the original certified payroll records in an appropriate manner so as to protect and preserve the payroll records, as required under its subgrant, and allow for easy access to the original document should DOE or DOL require the documents for auditing, review, or other purposes. The Recipient must then review the electronic pdf documents submitted by the Subrecipient.
For example: Under the EECBG program, the State (Recipient) receives a grant and awards a subgrant to a small town (Subrecipient) for energy saving improvements. The Subrecipient contracts with a contractor to perform energy savings upgrades/retrofits to town buildings. The Subrecipient may scan the contractor's original certified payrolls and send them to the Recipient/State electronically, if it has the facilities to maintain the original documents.
- A Subrecipient/Subgrantee that is NOT a State or local unit of government may NOT scan an original certified payroll into an electronic pdf document and forward that electronic copy to the Recipient/Grantee. DOL's position is that entities that are not State or local units of government are in the same position as a contractor and are required under DOL regulations (see 29 C.F.R. 5.5(a)(3)(ii)(A) as well as 29 C.F.R 3.3 and 3.4) to submit a certified payroll record to a government agency. A State or local unit of government is not considered to be a contractor for purposes of these regulations.
For example: Under the Weatherization Assistance Program, a Subrecipient is a local community action agency (not a unit of State or local government) and it has its own employees and/or subcontracts work to perform weatherization activities. In this case, the Subrecipient must submit all original certified payrolls to the Recipient/State Energy Office.
27. The Davis-Bacon Act requires the contractors to complete a Certified Payroll Form (WH-347) that displays the employees name, job classification, hours, wage & fringe and total compensation. This form is verified and signed by the contractor. According to our state policies, the WH-347 form will not be sufficient. Grantees and contractors have different ways to report time and labor information. SEP thinks that a certified document is sufficient to approve reimbursement. Will SEP be required by DOE to provide an additional timesheet document signed by each construction worker? If signed timesheets are required, can the sub-grantees and contractors keep them in their records/archives and, if needed, that information can be available for audit verification by SEP or DOE? Can the Davis-Bacon "Certified Payroll Form" be considered sufficient documentation to allow reimbursement?
DOE and DOL only require a certified weekly payroll document. The DOL WH-347 form or an electronic payroll form is sufficient for DOE and DOL purposes. SEP is not required by DOE to provide an additional timesheet document signed by each construction worker. If the State decides that contractors should have timesheets signed by each worker, the State may require such additional documentation; however, it is not a DOE or DOL requirement. The State may allow those individually signed contractor employee timesheet documents to be maintained by the contractor or subrecipient.
28. Where can I access DOE's Desk Guide to the Davis-Bacon Act?
An important new resource has been recently published on the GCHotline FAQ website: A Desk Guide to the Davis Bacon Act. The 47-page Guide provides simple, non-technical guidance to help contractors and subcontractors better understand their obligations under DBA.
29. Is rigid & foam installation also included in the type of insulation installation allowed under the classification of "laborer" when performing weatherization activities under the SEP and EECBG programs using the DOL Residential Construction Wage Determination?
The installation of rigid and foam insulation is included under the classification of "laborer" for weatherization activities performed under SEP and EECBG program grants where there is no specific classification for the installation of insulation on the Wage Determination.
30. A subcontractor's employee has his weekly wages garnished (by a court order) and the garnishment is listed under the "Other" deduction column on the weekly certified payroll. Do I need a copy of the court order to verify his wages are being garnished correctly? Do I need a letter from the employee's company stating what this "other" deduction is? Basically, do I need to attach any documentation to the weekly certified payroll to show that his "other" deduction is for a court-ordered garnishment?
A copy of the court ordered garnishment should not be obtained because such garnishments contain personal information concerning the employee. The appropriate documentation would consist of a letter from the employer indicating the receipt of a garnishment order and the amount to be withheld - no reason for the garnishment should be stated. The employee should also sign a statement indicating the employee is aware of the garnishment and understands the employer must withhold the stated amount. The statement from the employee could be made at the bottom of the employer's letter. The letter should be attached to the first payroll in which the garnished amount is withheld. No further documentation is needed for that specific garnishment on other weekly certified payrolls.
31. Are we required to pay overtime on the prevailing wage and fringe? Say the prevailing wage is $36.00 and the fringe is $11. Should overtime be calculated based on the total wage determination of $47? Or is it only calculated on the base wage of $36?
Where employees work more than 40 hours on DBA covered contracts during a period of seven consecutive days (workweek), pursuant to the Contract Work Hours and Safety Standards Act (CWHSSA), contractors and subcontractors are required to pay these employees one and one-half times their basic rates of pay for all hours over 40 worked on covered contract work. Overtime payments are based upon the prevailing wage rate. The DBA fringe benefit is excluded from the overtime calculation. In your example, the overtime rate should be based upon the $36.00 base wage for an overtime rate of $54.00 per hour. You should be aware that where an employee is paid a higher wage than the applicable DBA rate, the actual basic rate of pay is the one upon which the employee's overtime computation must be made. Therefore, if the employee was actually paid $40.00 per hour, then the overtime rate would be $60.00 per hour.
33. When collecting certified payroll, who is responsible for collecting the certified payroll and verifying the wages? For example, if a City receives Recovery Act funds and hires a contractor to do work, it is assumed the City collects the certified payroll. What if the State Energy Office awards a ARRA subgrant to a City? Is the City responsible for collecting the certified payroll and the State is responsible for monitoring the City's compliance; Or is the State responsible for collecting the certified payroll?
The Recipient of the Recovery Act funds is responsible for obtaining and maintaining the original of the certified payroll and making sure the subgrantees/contractors are complying with the DBA. If a City receives a Recovery Act-funded grant and hires a contractor, the City will receive the certified payroll from the contractor and the City is responsible, as the Recipient, for reviewing and maintaining the original certified payroll. If the State Energy Office (SEO) awards a Recovery Act-funded subgrant to the City and the City hires a contractor, the City will receive the certified payroll from the contractor and the City is responsible for reviewing and assuring it is accurate; however, in this case the City will forward the original to the SEO because the SEO is the Recipient of the Recovery Act-funded grant from DOE. The City is responsible for monitoring the contractors compliance in both cases, but in the case where the City receives a subgrant, the State is responsible for monitoring the City's compliance and for reviewing and maintaining the original certified payrolls.
34. In the past, the GC Hotline has provided clear guidance that rebates, grants, and loans to individuals are not subject to the DBA - providing the individual directly contracts for the improvements. The City is establishing a Revolving Loan Fund in which individuals receiving loans will contract directly with contractors for the improvements (i.e., City is not a party to the contract), but the City was wondering if it could make payments directly to the contractors (once the individual has reported that the improvements were satisfactorily installed) without triggering DB Act requirements?
The OMB regulations make clear that the requirements regarding implementation of the Recovery Act DBA provisions do not apply to individuals. In your example, the City would set up a program wherein a Revolving Loan Fund provides a loan to an individual homeowner to use for energy efficiency work on their home, the individual will contract with the contractor of their choice, and once the work is completed the City will use the loaned funds to pay the contractor directly. As set forth in the example, the DBA will not be applicable to this program because the individual is the beneficiary and the City is not contracting with the contractor.
35. A subrecipient is retrofitting street lighting in their city downtown. City workers will remove the old fixtures and send the fixtures offsite to be retrofitted. Offsite workers will retrofit the fixtures with new components and then ship the lights back to the City. City workers will then install the retrofitted fixtures. Question is whether DBA extends to the work performed by the offsite workers?
The DBA limits coverage to laborers or mechanics on the "site of work". The DOL Field Operations Handbook (FOH), Section 15b04(b)(1), provides that the 'Site of work' is limited to the physical place or places where the construction called for in the contract will remain when work on it has been completed and . . . other adjacent or nearby property used by the contractor or subcontractor in such construction which can reasonably be said to be included in the 'site' because of proximity."
The retrofitting facility would not be included in the "site of work" because its location and continuance in operation are determined wholly without regard to this particular federally-assisted contract project. The DOL FOH, Section 15b04(b)(3), indicates that "even though mechanics and laborers working at such an establishment may repair or maintain machinery used in contract performance, . . . while continuing normal commercial work, . . . the activities performed as such establishments" are not subject to the DBA wage determination "because they do not constitute the "site of work."
Once the "site of work" has been determined, here the city lights downtown, the wage determination is applicable only to those mechanics and laborers employed by a contractor or subcontractor within such limits. In this case, because the city employees will remove the old fixtures and then install the retrofitted fixtures, the DBA will not be applicable to this project because State and local units of government are not considered contractors under the DBA when the construction is performed by their own employees.
36. How often must the employee interviews be done? Must an interview be done for every job, or would it be possible to do them quarterly? The reason I ask is because we are producing approximately seventy to eighty houses a month.
The answer to this question assumes one contractor will perform work on more than one house and that the term "job" means one house. It is recommended that employee interviews be conducted at least once for each contractor working on a contract. Interviews are not necessary for each house completed. Where the contractor's contract is small and lasts for a short time (less than three months), once may be sufficient; however, if errors/inaccuracies are found during the interviews, then follow-up interviews are necessary. For contractors with larger contracts performing an interview quarterly may be sufficient if no inaccuracies/misclassifications are found and everything appears to be in order. The interviews must be sufficient in number to establish the adequacy and accuracy of the payroll records and the nature and extent of any violations. The interviews should be representative of all classifications of employees on the project under investigation. Employees should be questioned regarding other employees they worked with and the duties performed by those employees. The subrecipient or the contracting entity should perform the employee interviews and compare what is learned during the interview with what is appearing on the certified payroll records. Employees should be informed that the information given is confidential and that his/her identify will not be disclosed to the employer with the employee's written permission (See 29 C.F.R. 5.6(a)(5)). Employees should not be interviewed in the presence of the employer, another employee, or any other person. Employees may be interviewed during working hours on the job, in accordance with 29 C.F.R. 45.5(a)(3)(ii). If a contractor has significant turnover, or employees fear reprisals or intimidation, or it appears there is misclassification and/or falsification of payroll records, the local DOL Wage and Hour Office should be immediately notified along with the Recipient and DOE Project Officer.
37. Reading the Desk Guide to DBA on page 32 (see below), it says that the DBA certified payroll is submitted to DOE. Is that right?
d. The due date for each certified payroll to be submitted to DOE, as the contracting agency, or to the financial assistance recipient in accordance with the contract, is no later than one week after each weekly pay date. (For information regarding penalties for failure to submit certified payrolls or for falsification of payroll information, see Section 4-4b of this Desk Guide.)
e. The prime contractor is responsible for the timely submission to DOE of certified payrolls for all subcontractors. The prime contractor is obligated to notify all subcontractors of the labor provisions of the contract and to ensure that each subcontractor submits timely, accurate and complete certified payrolls.
The "Desk Guide to the Davis-Bacon Act" was created to assist contractors and subcontractors performing construction work covered by the Davis-Bacon Act (DBA), as well as grantees, subgrantees and federal personnel, with understandable explanations of DBA requirements to assist all of these entities with DBA compliance issues pursuant to Recovery Act funded awards.
Awards for Recovery Act funded work for the Weatherization Assistance Program, State Energy Program and Energy Efficiency and Conservation Block Grant program include clauses that address DBA requirements that include a clause entitled "Recipient Functions." This clause provides, in part, that on behalf of the Department of Energy, Recipients must perform certain functions, including obtaining, maintaining and monitoring all DBA payroll records submitted by Subrecipients and Contractors at any tier under the award.
The first page of the Desk Guide includes the following statement in bold letters: "The guidance provided in this document does not constitute legal advice or substitute for full and careful review of the contract or agreement requiring application of DBA provisions, and compliance with applicable statutes and regulations."
The purpose of this statement was to emphasize to readers that Recipients and Subrecipients are to consult the DBA provisions in their awards, which include the "Recipient Functions" clause. In addition, Section 1-3(a)(2) of the Desk Guide states: "DBA- and DBRA-covered contracts resulting from grants, cooperative agreements, technology investment agreements, loans, or loan guarantees, will specifically identify the responsibilities of recipient, subrecipients, local agencies, guaranteed parties, and contractors to administer and enforce the provision of DBA, including reporting and recordkeeping requirements; obtaining, maintaining, monitoring, and reviewing payrolls; and assisting DOE in its DBA enforcement responsibilities."
Statements in the Desk Guide that reference requirements for contractors to submit payrolls to DOE reflect standard DBA legal requirements. This requirement has been modified in the Recovery Act DBA clauses to assist DOE with administration of Recovery Act funded awards.
39. An employee (of one the subcontractors) is voluntarily having their child support deducted from their pay. Does this require a signed letter of authorization by the employee?
Yes. The appropriate documentation would consist of a copy of a written signed letter from the employee to the employer requesting that the employer make the child support deduction from his/her weekly wages and set forth the amount to be withheld. The letter should be attached to the first payroll in which the amount is withheld. No further documentation is needed for that specific deduction on other weekly certified payrolls.
40. We are trying to find a way to implement our Door to Door campaign. The team told us last week about Davis Bacon applying even to volunteers who would be installing the energy saving devices we would be giving away. The installation is only a small part of what they would be doing; most of it is an informal energy audit and education process. We are hearing from shut-ins that they are not able to do this work themselves so we need to find some way to help them get the items installed. One option is for the county to hire an OPS (temporary) employee (rather than contracting out to a private or nonprofit organization to implement) but we would need verification that DBA does not apply to local government employees.
Local government employees, such as county employees are not subject to the DBA. The fact that the employee is a temporary employee is not important as long as the employee is in-fact an employee of the County. When the county contracts out the work, the DBA is applicable to the employees of the contractor.
QUESTION: Another option is to limit what the volunteers or staff actually install versus just give away, so could I please get guidance on which of the following items, when installed, would trigger Davis Bacon?
- Compact fluorescent light bulbs - would not be covered by DBA
- Low flow faucet aerators - may be covered
- Caulking (rope caulk) - may be covered
- Wall outlet insulation gaskets - may be covered
- Smart power strips - probably would not be covered by DBA, if only plugging in the power strip
ANSWER: For a project such as this, it is very difficult to make an overall decision as to the coverage by DBA of specific items. Additionally, the installation of all these items may be considered incidental to the overall project of providing energy audits and educational materials, but a contracting officer decision would be necessary to answer that question. The decision as to whether DBA applies is usually not based on the installation cost for each house, but rather the overall cost of the entire cost of the installation for the entire project.
QUESTION: Another option is to give the kits away to the individual homeowner, but somehow facilitate another organization to come by separately to help install them. If all we did was connect the individual with a separate organization not receiving any ARRA funds could that work?
ANSWER: If the installation is separate from the provision of the energy saving kit that is given to individual homeowners and at a later time an organization that is not Recovery Act-funded provides the installation, the DBA would not be applicable. The individual homeowners are not subject to the DBA and may accept the installation of the energy savings products from volunteers.
41. Our county has a Recovery-Act funded grant and one of the activities we will be undertaking is energy audits on our county government buildings. Can you verify for us that the Davis Bacon requirement does not apply in this activity?
The DBA applies to laborers and mechanics employed at the work site. Energy auditors, inspectors, and other personnel not performing physical or manual work at the site of the work are not covered by DBA.
42. A religious colony wants to bid on a project that is paid with EECBG funds. The colony does not pay its laborers directly; rather, the money would go into the communal account and each member would benefit from the work done. Is it possible for the colony members to comply with the Davis Bacon Act? If so how would they fill out the certified payroll form?
In order to comply with the Davis Bacon Act, the colony would be required to pay each worker the prevailing wage and complete the certified payroll. The Act expressly provides that all construction contractors on public construction projects are required to pay the "prevailing" wages to laborers and mechanics employed directly on the site of the work and that such wage must be paid "without subsequent deduction or rebate on any account . . . regardless of any contractual relationship which may be alleged to exist between the contractor or subcontractor and such laborers and mechanics . . . ." See 40 U.S.C. § 3142(c)(1).
In addition, the Copeland "Anti-Kickback" Act requires the Secretary of Labor to prescribe "regulations for contractors and subcontractors engaged in constructing, carrying out, completing, or repairing . . . buildings or works that at least partly are financed by a loan or grant from the Federal Government." 40 U.S.C. § 3145(a). More specifically, the Act requires a regulation providing "that each contractor and subcontractor each week must furnish a statement on the wages paid each employee during the prior week." Id. In addition, the Copeland Act imposes criminal penalties on anyone who "by force, intimidation, or threat of procuring dismissal from employment or by any other manner whatsoever induces any person employed in the construction, prosecution, completion or repair of any . . . building or work financed in whole or in part by loans or grants from the United States, to give up any part of the compensation to which he is entitled under his contract of employment . . . ." 18 U.S.C. § 874. The Department of Labor has issued regulations implementing both the Davis Bacon and Copeland Acts. See 29 C.F.R. § 3.1.
If the colony meets these requirements, and it appears it should be able to do so consistently with its religious beliefs, it would be able to comply with the Davis Bacon and Copeland Acts. However, the certified payroll must reflect that prevailing wages were in fact paid to all laborers and mechanics employed on the site of the work, as the payment of such wages is mandatory.
This guidance addresses only the requirements for statutory compliance with the Davis Bacon and Copeland Acts. The Department encourages the colonists to consult with counsel regarding any First Amendment or other legal concerns they may have.
43. We are considering using ARRA-funded financing activities such as interest rate buy-downs, underwriting activities, loan loss reserves, insuring loans and possibly rebates for multi-family energy/conservation retrofits. All work is to be contracted through property owner with 3rd party financing. Multi-family rules are confusing when it comes to the application of Davis-Bacon. When is a multi-family unit considered Residential for purposes of Davis-Bacon and when is it considered Building? Perhaps a completed table, such as the following, would be helpful.
We have completed the table and hope everyone finds it helpful.
Type of ownership
# of units
|One individual owns all units||6||2||No||Residential|
|One individual owns all units||6||5||No||Building|
|One individual owns all units||10||2||No||Residential|
|One individual owns all units||10||5||No||Building|
|One individual owns all units||100||2||No||
|One individual owns all units||100||5||No||Building|
|Small business or corporation owns all units||6||2||Yes||Residential|
|Small business or corporation owns all units||6||5||Yes||Building|
|Small business or corporation owns all units||10||2||Yes||Residential|
|Small business or corporation owns all units||10||5||Yes||Building|
|Small business or corporation owns all units||100||2||Yes||Residential|
|Small business or corporation owns all units||100||5||Yes||Building|
44. We have a Recovery Act-funded SEP grant and our project involves automotive mechanics completing alternative fuel conversions on vehicles and school buses. Will DBA apply to the automotive mechanics?
No, DBA is not applicable to automotive mechanics completing the alternative fuel conversions on the vehicles and school buses.
45. According to the instructions from DOL, contractors are required to submit weekly copies of all payrolls. A potential contractor raised questions regarding a situation where its subcontractors outsource payroll and employees are paid a week later than worked. In this scenario, the contractor would report the weekly payroll, but that payroll would be for hours worked two weeks prior to the payroll report. For example, if employees worked the week of August 23-27. They would be paid on September 3. Their wages/hours (certified payroll records) would be reported to the subrecipient/recipient on Tuesday, September 7. Is that acceptable and consistent with Davis Bacon requirements?
The employer/contractor has seven (7) calendar days from the end of the work-week/payroll period to pay employees. The work-week and payroll period are both 7 consecutive days and the terms may be used interchangeably and a payroll period for checks may not be more than 7 consecutive days. The employer/contractor has 7 days from the date the employees are paid to submit the certified payroll to the Recipient/Subrecipient. Therefore, in your example, the employees perform covered work August 23 - 27 (assuming the workweek is August 22 - 28) and the employer/contractor must pay those employees by September 4th. Therefore, paying the employees on the 3rd of September falls within the requirements. The employer/contractor has 7 calendar days from the date the employees are paid to file the certified payroll with the Recipient/Subrecipient which would be by the 10th of September in this example. Therefore, by submitting the certified payroll records to the Recipient/Subrecipient on the 7th of September, the employer/contractor would be in compliance with the Davis-Bacon Act requirements.
If you do not receive proper pay, or require further information on the applicable wages, contact the Contracting Officer listed below:
or contact the U.S. Department of Labor's Wage and Hour Division.
Can you tell me who is the "Contracting Officer" as far as this notice is concerned?
The Contracting Officer means the DOE Contracting Officer found on the Recipient's grant from DOE. You may insert either the name of the Contracting Officer or the name of the Contracting Specialist on the Poster. If you are a sub-recipient, you should request the name of the DOE Contracting Officer and Contracting Specialist from the recipient.
47. If a contractor is suspected of violating Davis Bacon, is the EECBG subgrantee required to withhold compensation due, or is withholding compensation optional? The only DOE "guidance" I have found concerning this issue is on page 44 of the DOE DBA Desk Guide 06-16-2010.
The first course of action is to immediately notify the DOE Contracting Officer/Contracting Specialist and then make an attempt to obtain payment for the employees from the employer. The terms of the grants require the recipient to notify the DOE Contracting Officer when any non-compliance is found (pursuant to the Recipient Responsibilities clause). Do not wait to notify the DOE Contracting Officer until the employer refuses to pay. If the employer refuses to pay, then the contracting entity (State or Local Government or Recipient) should withhold contract funds remaining due the contractor in order to pay the amounts due the employees. DOE will notify DOL of the need to perform an enforcement investigation. If the Recipient/subrecipient fails to withhold the amounts due from the employer's contract and a violation is found by the DOL, the DOE Contracting Officer will be required to withhold the amount from the Recipient's funding to pay the employees the amount found owing.
48. It is our understanding that with respect to revolving loan funds, Federal requirements such as Davis Bacon remain for the lifetime of the fund. In other words even though the money is considered spent once, the money is loaned out for the first time, the obligations with respect Federal rules would remain in effect on subsequent loans. The way we are structuring our program a City agency is passing the money to a non-profit (a sub-recipient) that will be responsible for operating the loan fund. Is the City agency responsible for ensuring continued compliance with these Federal rules? Or is the sub-recipient responsible? Will there be a reporting requirement and/or will the responsible party be subject to audits of their compliance?
The City agency will remain responsible for ensuring continued Davis-Bacon Act (DBA) compliance. The sub-recipient will remain responsible for ensuring that the DBA clauses are flowed down to businesses receiving subsequent loans and for receiving the original certified payrolls from the contractors and subcontractors of the businesses receiving loans. The non-profit sub-recipient must forward the original certified payroll to the City agency and the City agency will remain responsible for compliance audits by the DOE and Department of Labor.
49. Our grant officer has informed us that we need to include the Davis Bacon poster at every worksite where Davis Bacon applies. We are performing over 300 home energy retrofits with our funding, and I would like to know-does this mean we will have to post this sign at each participating household while work is being performed?
Yes, the poster and wage determination must be displayed at each work site while work is being performed. The poster may be found at http://www.dol.gov/whd/regs/compliance/posters/fedprojc.pdf. Every employer performing work covered by the labor standards of the Davis-Bacon and Related Acts must post a notice (the poster provides all the information required), including any applicable wage determination, at the site of the work in a prominent and accessible place where it may be easily seen by employees. The DOL has indicated that when working on individual homes under residential programs, that the employer may display the poster and wage determination on a work truck or other equipment, at each of the residential units, rather than on the building itself. The poster may be displayed anywhere - at each work site - as long as all the employees are aware of the poster and the information is accessible to all employees. The State may designate an individual to be contacted and the name of that individual and telephone number is to be entered onto the poster. If the State has not designated an individual for contractor employees to contact, the name of the DOE Contracting Officer or Contracting Specialist should be entered on the poster.
50. I have several questions concerning the application of the Davis-Bacon Act (DBA) to "hands-on" training programs. The training provided may occur in a classroom, warehouse, or in a productive laboratory type setting where students will receive "hands-on" training on how to install energy efficiency, water efficiency or renewable energy-related equipments. One of the proposed "hands-on" training exercises includes the installation of components for a concentrating solar power (CSP) parabolic trough.
(1) Is the community college required to pay participating students prevailing wages under the DBA if ARRA SEP funds are not used to purchase the CSP parabolic trough, but only used to pay for the workforce training program?
In this case, the community college received a donation of the CSP parabolic trough, which is the project the students will be assembling, and which is not funded by the Recovery Act. Therefore, the community college would not be required to pay participating students the prevailing wages under the DBA because the construction activities the students perform are not on a project funded in whole or in part by the Recovery Act. If, however, the students were taken to a project funded through the Recovery Act, the contractor for that project would be required to pay the students the prevailing wages under the DBA.
(2) Is the community college required to pay participating students prevailing wages under the DBA if ARRA SEP funds are used to pay for any of the pylon design or foundation work needed to support the CSP parabolic trough, such as the construction of concrete footings? Under the facts of this question ARRA SEP funds would be used to pay for both the pylon design and foundation work and the subsequent "hands-on" student training.
In this case, the community college would use Recovery Act SEP funds to pay for pylon design or foundation work, such as construction of concrete footings. The engineering/design work would not be subject to DBA. However, where any of the construction work project is funded in whole or in part with Recovery Act funding, the DBA is applicable to all the construction work performed on that project. Therefore, if the foundation work such as construction of the concrete footings is funded through the SEP grant, the community college must pay all students performing construction activities/including installation of the CSP parabolic trough the appropriate DBA wages for time spent performing such work.
(3) Is the answer to question 1 or 2 affected by the community college's use of the CSP parabolic trough? For example, if the CSP parabolic trough is used to generate electricity, which the community college uses on-site to offset its electrical load and thereby reduce its electrical costs, does this use affect the determination of whether DBA applies to either question 1 or 2?
The fact that the community college uses the CSP parabolic trough for other purposes does not change the answers provided above under question 1 and 2.
51. May an employer take a deduction from an employee's wages if the employer purchases tools and uniforms and the employee reimburses those costs?
No, the employer may not take such deductions from the weekly payment of wages. In almost all such cases a deduction would not be for the benefit of the employee, but would rather be a benefit for the employer to have the employee purchase tools and uniforms. Deductions from wages for the benefit of the employer are not allowed. If the employer is able to purchase tools at a discount as a benefit to the employee, because an employee wants to buy them for his/her own personal use, it is possible that a deduction from wages may be allowed; however, since these are items not covered under DOL regulations regarding deductions, found at 29 CFR 3.5, a request must be submitted and approval received from the Department of Labor, Wage and Hour Office of Enforcement in Washington, DC, before any deduction may be taken.
52. A contractor is being hired for asbestos abatement and demolition in residential construction in two counties. There are DBA WDs for "Laborers" who are specifically engaged in asbestos abatement, but not under the "construction type" "Residential." Can the wage rates listed for laborers that are engaged in asbestos abatement under another "construction type" ("Building" or "Highway") be used for comparison with the state's prevailing wage rates (higher of the 2) for that labor?
You may not use the wage rates found under another construction category; however, the rates found under another construction type (such a Building Construction) may be helpful in determining the appropriate wage rate to pay. If you are missing a classification of worker needed in the performance of the contract, the contractor initiates a request for the missing classification by preparing an SF-1444, Request for Authorization of Additional Classification and Rate, at the time of employment of the unlisted classification. (See FAR 22.406-3 and 52.222-6(c), and 29 CFR 5, Section 5.5(a)).
The Contractor submits the request to the Recipient and the Recipient will forward to the DOE Contracting Officer who reviews the request for completeness and signs the form designating the contracting agency's concurrence or disagreement with regard to the contractor's proposal.. The Contracting Officer then submits the proposal with all attachments to DOL for approval. The Contractor is obligated to pay the proposed wage and benefit rates pending a response from DOL. The conformance request will be reviewed by DOL. If the proposed rate is found to bear a reasonable relationship to the other rates listed on the decision, DOL will approve the requested classification and the proposed rate of pay or DOL will provide a conformed rate that can be paid. Where DOL provides a conformed rate, the DOL rate must then be paid retroactive to the beginning of the project.
53. In using the "Laborer" classification for SEP projects (or Wx Worker for WAP projects), at what point does "incidental structural repairs" move from that classification to, say, Carpenter when: A company is installing wall insulation (blown) and has to remove siding (& later re-install it) before and after blowing the insulation into the walls. The process is to remove two rows siding for each side of the house per story. Do we have to separate the labor of the siding removal and re-install as "Carpenter" for DB or can that labor be considered part of the "minor or incidental structural repairs" of the WAP Wx Worker and SEP Laborer tasks? Several holes are drilled around the house as well.
Under the Weatherization Assistance Program such incidental repair work as removing and then re-installing a couple siding panels and drilling holes in the house to blow in the insulation would be the duties of a weatherization worker. The DOL has indicated that for most localities that the general laborer classification is equivalent to the types of work the Weatherization worker performs. Therefore, as described above under your SEP weatherization program projects, such incidental repair work occurring during a weatherization project would be the work of the general laborer and would not rise to the level of a carpenter.
54. The DOL instructions for Form WH-347 (certified weekly payroll) do not direct the employer to provide (1) additional information regarding the payment of fringe benefits or (2) any information regarding the type of fringe benefit plans and how such is communicated to employees. Some of the DOE guidance, however, indicates that an employer should provide such information along with the certified weekly payroll. (Examples are inserted below for your reference.) Could you please clarify what information or documentation, if any, an employer must provide to a recipient or subrecipient regarding fringe benefits?
There is no DOL regulatory requirement that contractors submit information regarding the type of fringe benefits the contractor provides to his/her employees with the certified payroll record. The DOE guidance and FAQs are designed to provide the greatest assistance to grantees/subgrantees in reviewing the certified payroll records. If the contractor indicates he/she is providing fringe benefits but does not provide that information to the grantee/subgrantee with the first certified payroll, the grantee/subgrantee reviewer of the certified payroll has no way to verify that the contractor is actually providing bona fide fringe benefits and that the information has been communicated to the contractors employees. As a result, the reviewer of the certified payroll records will be required to take the extra step to contact the contractor, either by letter or telephone, in order to obtain the information from the contractor to ensure the benefits are bona fide. This extra step in the process will take additional time on behalf of the reviewer of the certified payroll records. DOE believes that requiring the contractor to provide the information with the first payroll provides notice to the contractor that only legitimate fringe benefits are acceptable and provides the information the grantees/subgrantees need to fulfill their responsibilities in assuring the contractors and subcontractors comply with all DBA requirements.
55. The State Energy Program's "Home Performance with Energy Star" (HPwES) program seeks the guidance of the General Counsel whether use of Recovery Act funds to provide payments to contractors of up to $500 to offset loan origination fees would trigger Davis Bacon. In this arrangement, a contractor establishes an account with a lender. When a homeowner is approved for a loan, the lender deposits the balance directly into the account of the contractor, less a loan fee. The homeowner repays the lender the loan amount per the terms of the loan. The contractor is reimbursed by the HPwES program for the loan fee up to $500 - clear documentation of the loan fee is required. The individual homeowner is not required to pay the loan fee. This approach enables contractors to dramatically shorten the home retrofit sales cycle by offering clients an affordable and complete combination of services and financing.
The HPwES program will provide a payment to individual homeowners' contractors to offset the cost of the loan origination fees that the contractor incurs on behalf of the individual homeowner. The program is set up such that the contractor will assist the individual in obtaining a loan for energy efficiency work and the contractor pays the loan origination fees to the lender on behalf of the individual. The contractor will be reimbursed the costs of the loan origination fee and the individual homeowner will not be required to pay those loan origination costs. The program is set up to encourage homeowners to contract for energy savings improvement work on the home, because the homeowner will not be required to pay loan origination fees for financing the work, and also will assist contractors to increase home energy savings work by offering clients a complete combination of services and financing.
A program that pays the loan origination fees on behalf of the individual homeowner is a direct benefit to an individual, and Office of Management and Budget (OMB) regulations make clear that such programs are not subject to DBA. The program payment may be made to the contractor, where the contractor incurs those costs on behalf of the individual homeowner and receives reimbursement after the loan is made to the individual. The agreement between the lender and the individual homeowner must be structured such that the individual homeowner requests the lender pay the contractor directly. Such an agreement between the individual homeowner and the contractor for payment by the lender directly to the contractor will not be subject to DBA.
56. Our County is in the process of building a new $60 million dollar jail. We have applied for and been approved to receive a Energy Efficiency and Conservation Block Grant of approximately $110,000. It is my understanding that the money will be used to purchase equipment (florescent lighting dimming equipment including ballasts, control panels, conduit and wiring; and a domestic hot water heat pump) that will be installed as part of the new jail building project. The equipment will be installed by contracted and subcontracted construction contractors that are contracted to build the new jail. It appears that by taking the $110,000 grant, Davis-Bacon would apply to the whole $60 million dollar jail project. Am I correct in coming to the conclusion that Davis-Bacon would apply and Davis-Bacon would apply to the entire $60 million dollar project?
The Recovery Act provides that "all laborers and mechanics on projects funded directly by or assisted in whole or in part" with Recovery Act funding are subject to the DBA. Where the project includes the assistance of Recovery Act-funded grant, the DBA will apply to the project. Here the county plans to use the $110,000 EECBG grant to purchase equipment such as florescent lighting dimming equipment and ballasts, control panels, conduit and wiring, and a domestic hot water heat pump to be installed as part of the new jail building project. Where, as in your project, the assistance is part of a larger project, the entire project will become subject to DBA. This is especially true where the Recovery Act-funded work is done in conjunction with the non-Recovery Act-funded work, so that all the work is ongoing at the same time.
Therefore, it is true that the acceptance of the $110,000 EECBG program grant for purchase of equipment that will be installed during the construction of the new jail will result in the whole $60 million dollar jail project becoming subject to the Davis-Bacon Act. Please contact your cognizant DOE Contracting Officer or Project Officer, if you require additional guidance on this matter.
57. With regard to fringe benefits, could you please detail the documentation (e.g. plan statements that detail the amount paid into the plan per employee, a copy of the plan "information packet", certification from employer regarding how the plan was disseminated to employees) that should be submitted along with the first certified weekly payroll?
The contractor should have information that is provided to the employees regarding benefits the contractor provides to an employee (i.e., a list on one or two sheets of paper). The contractor/employer is not required to submit a copy of the benefit plans or the entire new employee packet, but should provide a document(s) explaining what benefits are provided by the employer and any information about what the employee must pay (co-pay) for the benefit(s). The contractor may provide a narrative document explaining that this information is included in the "information packet" the employee receives the first day of employment or on the day an employee accepts employment or whenever provided to the employee. The contractor may provide additional information about the provided benefits. The information the contractor provides is to enable a reviewer of the certified payroll to confirm that the contractor provides benefits, the employer's calculation of the credit for providing those benefits is accurate, and the employer has a process by which that information is provided to the contractor's employees.
58. Could you please detail the procedure for determining that a fringe benefit plan is bona fide? If the benefits are "those common in the construction industry and are established under a usual fund, plan, or program" (29 CFR 5.29(d)), does that mean they are deemed bona fide?
If the benefit is one that the employee is assured of getting and is listed in 29 CFR 5.29(a) (i.e., medical, pensions, disability, life insurance, accident insurance, vacation and/or holiday pay) and is provided under an established fund, plan, or program (the employer pays into a fund, plan, or has a funded program to provide the benefit) the benefit would be bona fide. If the benefit is paid into a union trust or other union plan, the benefit would be considered bona fide. Where a plan is not one of the conventional types described above, the contractor must consult with the DOL for a determination as to whether the benefit is bona fide.
59. Our Town has an EECBG program grant for upgrades to our Veterans Hall. Contracts have been awarded to various prime contractors. A prime contractor has brought in a subcontractor to perform installation of heating system equipment. The subcontractor is self employed and is conducting the work himself. It appears that he may not have to report a DBA prevailing wage rate, but I am confused by the language in Section 3.1(6) in the Desk Guide. Would you please confirm whether the self-employed subcontractor has to report DBA prevailing wages?
If the subcontractor claims he/she is a sole proprietor, the prime contracting entity must determine that the person is truly a bona fide sole proprietor of a company. The contracting entity must maintain a record of the subcontractor's company Federal Tax ID number and a copy of the business license in the contracting file. If the individual is a bona fide business owner, the business owner is exempt from DBA and there is no requirement for him/her to submit certified payrolls.
Workers classified as independent contractors or "1099 workers" are covered by the DBA and must be paid the DBA wages and must be listed on the prime contractor's certified payroll record. If the prime contractor hires an individual who is "self-employed", but that individual has not taken the steps to become a business owner and is not, therefore, a "sole proprietor", the prime contractor must pay the independent contractor the DBA wages and complete the certified payroll.
The prime contractor is responsible for ensuring all "self-employed" subcontractors are bona fide business owners. If the subcontractor is not a bona fide business owner, the prime contractor must provide evidence that it paid the individual the appropriate DBA wages plus fringe for the time the individual worked and submit certified payroll reports identifying the individual on the prime's certified payroll.
60. Does the individual exception from DBA also apply to individuals who own commercial properties?
The exception for individuals who are the beneficiaries of a program under the Recovery Act's DBA requirements is applicable to such individuals who directly contract for construction on commercial buildings owned by the individual, provided that the commercial building is owned in the individual's name and not in the name of a business entity. Often individuals will create a business entity to hold title to the building to protect the individual's assets from claims, and where the building title is held by a business DBA is applicable.
61. Are residential homes which are held by a "trust" excluded from the "individuals" exception from DBA?
Where a residential home is held by a trust that allows the individual homeowner to control the assets of the trust, such as a "living trust," DBA is not applicable to the individual homeowner who directly contracts for energy savings improvements to the residential home. However, where the trust is one in which the residential home is held in trust by a business entity or the trustee is a business entity, DBA would be applicable.
62. Our agency's standard practice for all federally funded grants subject to Davis Bacon Act is to conduct one employee interview per DBA worker classification per contractor during their first week on the job? Is that acceptable?
Conducting only one employee interview per worker classification and only during the first week on the job is not an acceptable process. First, performing only one interview per employee classification immediately ends any promise of confidentiality when performing the interview. The contractor will know which employees were interviewed and, if so inclined, retaliate against the employee(s) should information be found indicating the contractor is not properly complying with DBA. The State's process should require an interview of as many employees as possible in each employee classification, but at a minimum at least two employees in each classification. Second, performing employee interviews prior to receipt of the first certified payroll will not provide information as to whether the contractor is in compliance with the DBA requirements. While a visit during the first week on the contract will provide the State representative with information and give the representative an opportunity to assure the contractor has the Employee Rights Poster and Wage Determinations posted, additional interviews will be required after the State receives the first certified payroll on the project. The State will need to interview employees after receipt of at least one certified payroll to compare the information set forth on the payroll record and the information received from the employees. Questions to employees about working overtime would best be addressed after receipt of the payroll information to determine whether the payrolls are complete and accurate.
63. If a contractor has salaried employees working on a Recovery Act-funded grant project who have similar job titles to the laborer categories on the Wage Determinations, such as electricians, are these workers subject to the Davis-Bacon requirements? Particularly we have the local utilities re-routing electric and gas lines to accommodate the installation of fueling facilities. The on-site workers will be salaried employees of the utilities who will have a contract with the property owner to do the work.
An employer may pay employees based upon a salaried amount; however, that salaried amount must be no less than what the employer would be required to pay the employee under the applicable wage classification. The employer must show on the certified payroll record that the salaried amount meets or exceeds the hourly rate plus fringe.
For example, assume that the rate of pay for an electrician, using the Building Construction wage determination, in the locality where the work is being performed is as follows:
ELECTRICIAN....$ 27.66 wages + fringe of 3% + $10.00 = $27.66 + $0.83 + $10.00, or a total of $38.48 per hour.
If the employer pays the employee a salary of at least $38.48 per hour or $1,539.20 per week, the employer will have met the requirements under the DBA for paying the prevailing wage. Where the employer has a salaried worker on the job site who is exempt from the overtime provisions under Fair Labor Standards Act (FLSA), 29 CFR Part 541, that employee is not a DBA covered worker. However, a working foreman or supervisor who devotes more than 20% of their time during a workweek performing DBA covered work and who do not meet the exemption criteria of 29 CFR Part 541, must be paid the applicable DBA wage rate for the time performing DBA covered work. All non-exempt employees must be paid DBA wages on a covered project and also paid time and one-half for hours worked over 40 in a workweek. Additional information regarding FLSA Part 541 exemption criteria can be found at www.dol.gov/elaws/overtime.htm.
64. I have questions regarding the Grantees responsibility for Davis-Bacon monitoring of the ESCO subcontractors as follows: Can the ESCO review and monitor the weekly payroll reports of the subcontractors on behalf of the grantee or is it the sole responsibility of the grantee to do that monitoring? Can the ESCO perform the subcontractor worker interviews? Can the ESCO be required to check for DBA Posters required at the worksite? Can the ESCO be required to verify that subcontractors are not on the Excluded Parties List website (EPLS)?
The ESCO is a private company required to be compliant with DBA, and to make sure its subcontractors are compliant with DBA, based upon its contract with the grantee. As such, the ESCO is responsible for completion of certified payroll records for its employees covered by DBA and for submission of those records to the grantee. The ESCO must perform an initial review of the certified payroll records for all of its subcontractors to assure that the certified payroll records are completed correctly, and that based upon the ESCO's knowledge of the work being performed, that the correct wage rates are being used and paid to the laborers and mechanics employed on the job. The ESCO must forward the original certified payroll records of its subcontractors to the grantee. The ESCO is responsible for making sure that it does not contract with subcontractors that are on the Excluded Parties List and also for assuring that the poster and wage determination(s) are posted on the work site. The ESCO CANNOT perform employee interviews of its or its subcontractor employees as this is the responsibility of the grantee (where the grantee is a governmental entity).
While it is not the sole responsibility of the grantee to review the ESCO's subcontractor certified payroll it is ultimately the grantee's responsibility to review both the ESCO's and the ESCO's subcontractors certified payroll records. As part of this review, the grantee should check that none of the subcontractors are on the Excluded Parties List. As part of the grantee's employee interview process, the grantee can check to make sure the poster and wage determination are properly posted.
65. I have a situation with a subcontractor working on a Recovery Act-funded project where a time sheet shows 39 hours regular time and 1 hour overtime on Friday. The employee worked on the project for 40 hours but on Tuesday of that week, worked 1 hour on another project. We had the sub contractor submit certified payroll sheets for the employee for both projects in order to verify the employees time. I am asking is this the correct way to track the time if an employee works on different projects within the same week?
A contractor is required to only indicate hours the employee actually performs work on a Davis-Bacon Act (DBA) covered project. As indicated in your scenario, the employee worked on a non-covered project for one (1) hour during the week and that hour was not set forth on the payroll record. The employee then worked a total of 40-hours on the covered project and the employee properly indicated that this employee was due 1 hour of overtime on Friday. The contractor could pay the employee overtime based upon the DBA wage rate or the "weighted average" since the employee worked both DBA and non-DBA covered hours during the week (please see U.S. Department of Labor (DOL) Regulations at 29 CFR 778.115 for additional information) or the contractor could pay the employee overtime at the full DBA covered rate. The contractor must maintain good records to prove that the employee was working on two different projects during the week and the hours worked at both projects.
66. Our City is proposing to offer a grant to homeowners that meet the income qualifications of the program and also perform certain energy efficiency measures on their home. Would Davis Bacon apply if the homeowner hires a contractor, completes the energy efficiency upgrades, and our program pays the contractor directly for the upgrades after the work is completed?
As set forth in the example, the DBA will not be applicable to this program because the individual is contracting with the contractor of the individual's choice, and the grant is made to the individual. However, the grant application and agreement between the City and the individual must be structured such that the individual homeowner requests that the City pay the contractor directly with the proceeds of the grant.
67. Will DBA be applicable under a Recovery Act-funded EECBG Program grant where the funding is provided to a commercial business for upgrading its building when the owner of the building hires a contractor of their choice to do energy efficiency up-grades? Can EECBG funds be used to pay the contractor directly if the request/contract is written properly?
The DBA will apply to an EECBG funded grant program where the funding goes to a commercial business for upgrading its building if the building is owned by the business rather than in the individual's own name. In most cases a commercial business will own their building in the name of the business rather than in the individual name of the owner of the business. The only exemption from DBA applicability for Recovery Act-funded grants is when the grant/rebate/loan goes to an "individual". The Office of Management of Budget Recovery Act implementing regulations specifically exclude individuals from coverage. As a result, there is no difference on DBA coverage whether the funding/grant goes directly to the business owner or the program is set up such that the business owner directs the grant/loan to the contractor, where the building to be upgraded is owned in the name of the business rather than the owner in his/her own name. Where a building is owned by an individual in his/her own name and the grant/loan goes to the individual in his/her own name, DBA would not be applicable.
68. My question is for a Recovery Act-funded grant project, what date should we choose a WD to apply to the project? Also, what is the proper way of getting these dates, should the developer or contractor sign off on this date?
As with most answers, it depends. If the contract for construction results from a closed/sealed bidding process, the WD is first chosen on the date the solicitation is released requesting bids. Then ten days prior to the date bids will be opened, the soliciting entity must check the www.wdol.gov website to see if the WD has been modified by the Department of Labor (DOL). In cases where the WD has not been modified, the soliciting entity will use the WD that was in the solicitation; however, if the WD has been modified, the soliciting entity notifies all potential bidders that a new modified WD is to be used in their bids. The WD in effect ten days prior to the opening of bids must be used for contracts that are awarded in a bidding process. One caveat to this answer is that the award must be made within 90 days of opening bids. If the contracting entity fails to award a contract within 90 days of opening the bids, the contracting entity must update the WD on the date of award of the contract or the date construction begins.
For contracts that result from negotiations, and construction will start within 90 days of signing the contract, the WD in effect on the date the contract is signed is the appropriate WD; however, if construction will not begin within 90 days of the signing of the contract, then the WD in effect on the date construction begins is the appropriate WD. A contracting entity may use the most current WD on the date construction begins. The DOL regulations at 10 CFR 1.6, sets forth the information for the use and effectiveness of wage determinations.
As to your question regarding obtaining the dates construction begins, the contractor should be tasked with notifying the contracting entity with the date construction begins to enable the contracting entity to ensure the use of the proper WD.
69. We have a subcontractor that is hesitant to provide original signed authorizations for deductions because they wish to keep the originals in their file. Is the contractor required to provide an original authorization for deduction or is a copy of the supporting documents acceptable?
The contractor is not required to provide original signed documents supporting the deductions. While the contractor must provide an original signed certified payroll record, the accompanying supporting documentation may be a copy of the original authorization documents.
70. I was recently made aware of a contractor that lists 14 owners of the company. I have found out that the contractor splits the money earned for each job between all the people that work on the job - the "owners." I believe he will have no problem meeting the wage requirements in the case, but the contractor claims he is not able to provide weekly hours worked on the job. The contractor indicated he can provide total number of hours spent working on a job and how much each person was paid for the job, but that does not fully comply with DBA. What should I do?
Bona fide owners or partners are exempt from payment of DBA prevailing wage and the contractor would not be required to comply with the DBA requirements. However, anyone with less than a 20% ownership in the company is not considered a bona fide owner for purposes of DBA. An owner with a 20% ownership must also perform management duties in order to be exempt from DBA. The company must provide documentation that all individuals it claims are owners are truly bona fide owners. The contractor may do that by providing its Articles of Incorporation and filings with the applicable Secretary of State. If the individuals are truly bona fide owners, and no one other than a bona fide owner performed work on the project, then there is no need to submit the weekly payroll records or pay the prevailing wage. In this case, it will be impossible for 14 individuals to have the minimum 20% ownership in the company. Therefore, the contractor must provide documentation regarding the ownership share of the 14 individuals and pay those with 20% or less ownership the appropriate DBA wages. Additionally, for any owner with only 20% ownership, the contractor must also provide evidence that the individual performs management duties in the company. If such prove cannot be provided, individuals with only a 20% ownership must be paid the DBA wages. The contractor must obtain, from the individuals working on the project, the number of hours that each individual worked on the project per week. The contractor must complete the payroll record inserting the hours and amount each individual worker was paid for the week. Dividing the amount paid for the week by the number of hours worked per week, will indicate the hourly wage. If the wage was lower than the required rates on the wage determination, the contractor will owe back pay to those individuals not paid properly. If the contractor refuses to provide the evidence or complete the appropriate certified weekly payroll records, please notify the DOE Project Officer and Contracting Officer for your grant. This case may require referral to the DOL for a thorough investigation and a determination of back wages, civil or criminal penalties, and whether the contractor should be debarred.
71. Several questions regarding the boxes on the certification section of the Department of Labor optional form WH-347.
QUESTION 1: If the normal rate of pay for a contractor's employees on an EECBG project is greater than that required on the WD for rate of pay with fringe benefits included, does either box 4 a or b need to be checked on page 2 of form WH-347?
ANSWER 1: The contractor MUST check one of the boxes - either 4a or 4b. If the employer is paying cash rather than providing actual fringe benefits (i.e., health insurance, pension, vacation) for the benefits the contractor should check box 4b. If the employer pays into a plan for fringe benefits, the contractor should check box 4a. Where the employer pays the majority of the employees cash rather than a fringe benefit, the contractor should check box 4b and then in box 4c, write in the names of the employees who receive fringe benefits. If instead most of the employees receive actual fringe benefits, but some are part time, temporary, or a probationary employee, and so do not yet qualify for the fringe benefits, the contractor would check box 4(a) and then write the employees names in box 4c who receive cash in lieu of the actual fringe benefits.
QUESTION 2: The employer pays all of his/her employees more than $11.00 an hour and the rate is $10.50 + $0.50 fringe for a total of $10.50. Does either box 4 a or b need to be checked?
ANSWER 2: Yes, the contractor must check a box and the correct box in this example is 4b.
QUESTION 3: The employer pays all his/her employees more than $11.00 an hour and also contributes fringe benefits of $2.00 an hour into bona fide fringe benefit plans, should box 4a be checked?
ANSWER 3: Yes, the employer is paying into a bona fide fringe benefit plan and box 4a should be checked. The employer should provide a description of the fringe benefit plans and calculation explaining the $2.00 per hour amount.
QUESTION 4: The employer pays all of his/her employees more than $11 an hour except one. This employee's normal rate of pay is $10.25 with no fringe benefits. For hours worked on the project, his rate of pay is $10.50. In this case is box 4b checked?
ANSWER 4: In this example the employer is paying all employees cash in lieu of providing a fringe benefit; therefore, box 4b should be checked.
QUESTION 5: What information is entered in box 4c?
ANSWER 5: The information entered into box 4c are the exceptions to 4a and 4b. As discussed above in Answer 1, whenever an employee receives fringe different from the majority of employees that information is entered into box 4c.
72. A subcontractor failed to submit the certified weekly payrolls to the Recovery Act-funded project recipient. When challenged on this, the subcontractor immediately completed, signed, and submitted all of the delinquent weekly payrolls; however, all certifications are dated the same date (the date of catch-up). Is there a cost or penalty to be imposed on the subcontractor for late filing of the weekly, certified payrolls; or is the matter closed now that the subcontractor is caught up and remains in compliance?
The contractor has now complied with the Department of Labor (DOL) regulations requiring submission of the weekly certified payroll records (CPRs). Had the contractor failed to comply with the requirement and refused to do a catch-up, the DOL could fine the subcontractor for its failure to submit the Davis-Bacon Act and if there were back wages owing, could also take action to debar the contractor for a period of three years. As long as the contractor remains in compliance and back wages are not owing, the issue can be closed.
73. A wage determination states that workers should receive 10 paid holidays each year (and names the holidays). The contractor has made provisions to allow workers to exchange a non-holiday work day for a holiday, but the question is, if a worker works on a designated holiday, is not given another day off with pay for the holiday worked, but is instead paid at a rate of either time and 1/2 or double time for working that holiday, does that meet the requirements of the wage determination with regard to paid holidays? If not, what is the penalty to the employer?
The employer is required to either allow the employee an 8 hour day off with pay or pay the employee 8 hours plus regular time for working the holiday. The employee must be paid for the holiday (if the employee wishes to take another day in lieu of the actual holiday day) that is acceptable. However, if the employee works the holiday and is not given another day off with pay, then the employer must pay the employee for the holiday day plus pay the employee for the hours worked on the holiday. For example: The employee should have the Presidents' Day Holiday off, but due to work scheduling the employer needs the employee to work. The employee works 6 hours on the Holiday. The employer may offer the employee another day off, the employee may choose to accept the other day off or decide on pay in lieu of the holiday. If the employee chooses pay, then the employer must pay the employee 8 hours of straight time for the holiday plus an additional 6 hours of time for the hours worked that day. If working on the holiday results in the employee working more than 40 hours during the week, then the employee would be entitled to overtime for the number of hours actually worked over 40 in the work week. The employer must make these payments to the employees or DOL may fine the employer. If the DOL finds the employer acted willfully the DOL may levy fines plus take action to debar the contractor from performing work on government contracts for a period of 3 years.
74. A subcontractor has regular, full-time employees, and performed work on a Recovery Act-funded project; however, the subcontractor continued with its normal practice of paying employees every two weeks. This appears to violate Davis-Bacon Act (DBA), but are there exceptions permitted to the "once a week" minimum if the employees agree to be paid less frequently? And if so, what form does that agreement need to take?
Payment of wages every two weeks is a violation of the Davis-Bacon Act. Employees may not waive the right to be paid weekly. The Davis-Bacon Act itself requires that employees be paid no less frequently that weekly and, therefore, only Congress may change this requirement.
75. If workers are normally paid for travel time to and from the job site and this travel time causes the total work hours to exceed 40 hours per week, is the employer required to pay overtime wages for the travel time? For example if the workers worked on the jobsite for 40 hours and in addition had seven hours of travel time, would the employer be required by Davis-Bacon to pay overtime wages for the seven hours? In the specific case in question, the local union service agreement requires only that the travel time be compensated at the regular rate.
Where employees work more than 40 hours on DBA covered contracts during a period of seven consecutive days (workweek), pursuant to the Contract Work Hours and Safety Standards Act (CWHSSA), contractors and subcontractors are required to pay these employees one and one-half times their basic rates of pay for all hours over 40 worked on covered contract work in a workweek. If employees work more than 40 hours in a workweek that includes both DBA and non-DBA work (and the DBA work does not exceed 40 hours), the CWHSSA is not applicable. However, these contractors and subcontractors are probably subject to the Fair Labor Standards Act (FLSA), that requires employees receive one and one-half times their basic rates of pay for all hours over 40 worked in a workweek (regardless of whether it is DBA-covered work). When an employee works at two or more different rates in an overtime workweek, the weighted average is to be used for calculating the employee’s regular rate. Additional information may be found in DOL Regulations 29 CFR § 778.115, indicating this weighted average method is the method to be used when an employee works both DBA covered and non-covered hours. The following is an example of how to calculate overtime using the weighted average method. Using this methodology, the number of hours worked at each rate is multiplied by the rate of pay and the total is divided by the total hours worked in the week (including those over 40).
• DBA-covered WAP work = 40 hours @ $20.00/hour = $800.00
• Non-DBA covered work = 7 hours @ $10.00 = $70.00
• $800.00 + $70.00 = $870.00/47 hours for the week = $18.51 blended rate
• $18.51/2 = $9.26 (half time due for each overtime hour)
• $9.26 X 7 overtime hours = $64.82 (overtime premium due)
• $870.00 + $64.82 = $934.82 (total compensation due)
Where DBA-covered work and non-DBA covered work are performed in a workweek the employer may pay the rate in effect when the worker exceeds a total of 40 hours in the work week, provided specific rules in 29 CFR 778.419 are followed. These rules include: (1) notify workers of the regular non-DBA work wage at the beginning of the work week, and (2) segregate the hours to show when the DBA and non-DBA hours were performed. The contractor must be able to provide detailed documentation showing when the hours were worked to explain why the employee was not paid either the blended rate of the DBA rate on the hours worked over 40 in a work week. Using the example above, the employer may pay 7 hours of overtime at the rate of $15.00 per hour (time and one-half the $10.00 pay rate), if the employer keeps detailed records showing that the 7 overtime hours were worked on non-DBA covered work (travel would be non-DBA covered work).
76. If we use convict/prisoner labor for Recovery Act-funded projects, do we have to pay them Davis Bacon wages?
The use of prisoner labor would not be in compliance with the purposes of the Recovery Act funding, which is to provide jobs for American workers. Consequently, use of prisoners to perform work on a Recovery Act-funded project is very strongly discouraged. If, however, prisoner labor is used on an Recovery Act-funded project, the prisoner must be paid the DBA prevailing wages.
Prior to using prisoners on an Recovery Act-funded project, the grantee/subgrantee considering using the prisoners must submit such a request to use prisoner labor to the Department of Labor (DOL) with a copy to the DOE Contracting Officer. The request must indicate that the prisoners will be paid the prevailing wage, that the work-release laws or regulations of the jurisdiction allow the use of the prisoners to perform the specific work, that employment of the prisoners will not result in displacement of non-prisoner workers, and that there is a surplus of work and a shortage of available workers in the area. DOL will then make a determination as to whether the work can be performed by prisoner labor. If a grantee uses prisoner labor for a Recovery Act-funded project without having received a determination from DOL, DOE may disallow all associated labor costs on the Grant award.
Grantees are cautioned that where prisoners are used for Recovery Act-funded work (for work classifications where DBA applies), those prisoners must be paid the DBA wages for the work performed, even where local (City, County, or State) regulations may state otherwise. Therefore, it is incumbent upon the Grantee to ensure they are in compliance with State and local work-release laws or regulations PRIOR TO employing prisoner labor to perform work on a Recovery Act-funded project.
77. We have a proposed project that would use Recovery Act-funded SEP funds for a window replacement project in a building that is undergoing major remodeling under a contractually separate construction project. These two separately contracted projects would run concurrently from a scheduling standpoint, however, there would not be any overlap of funds for material or labor costs between them. Would the Davis Bacon and Buy American provisions then be applied to the entire building remodel even though the ARRA-SEP-funded portion is contractually separate?
The Recovery Act provides that "all laborers and mechanics on projects funded directly by or assisted in whole or in part" with Recovery Act funding are subject to the DBA. Where the project includes the assistance of Recovery Act-funded grant, the DBA will apply to the project. Here the grantee has a building undergoing a major renovation for which the SEP project will provide window replacements for the building. Where, as in the proposed project, the Recovery Act assistance is part of a larger project, the entire project will become subject to DBA where the Recovery Act-funded work is done in conjunction/concurrently with the non-Recovery Act-funded work, so that all the work is ongoing at the same time.
Where the work could logically be segregated into two separate and distinct projects, such that one project involves the Recovery Act-funding and another totally separate project uses the non-Recovery Act money, DBA will not apply to the non-Recovery Act funded project. To meet this requirement, there must be (1) a logical separation of the two projects - one that is assisted/funded by Recovery Act money and another than has no Recovery Act funding; (2) the work on the two separate projects is not performed together (i.e., the work using non-Recovery Act funds is completed prior to or after the Recovery Act-funded work; (3) the work crews are not working together at the same time in the same building; and (4) there are separate contracts for the two separate projects. If all these requirements are met, then the project funded with other private, state, or local governmental non-Recovery Act money would not be subject to the DBA.
As currently set forth in this example, while there is separate funding and separate contracts, the non-Recovery Act funded remodeling will be subject to DBA because the work is performed at the same time as and the crew will be working together in the same building as the Recovery Act-funded project crew. Additionally, the overall project is the major remodeling of a building and the installation of energy efficient windows would logically be part of that remodeling, so it may be difficult to logically segregate the work into two distinct projects.
78. Would you please tell me where to find a form to use for the Davis-Bacon Employee Interview Questionnaire?
The Standard Form (SF)-1445 may be used for the interviews. SF-1445 may be found at: https://www.acquisition.gov/far/html/FormsStandard65.html
Grantees are reminded that the use of the SF-1445 is optional. There is no requirement that any specific form be used for employee interviews. DOE has previously provided a form in Word format that grantees may use, but it too is optional.