Davis Bacon Frequently Asked Questions
FAQs
General Questions Page 1
Certified Payroll Page 13
Contract Work Hours
And Safety Standards Act Page 36
Wage Determinations Page 36
Contract Work Hours and
Safety Standards Act Page 47
Training Page 49
Tribal Governments Page 52
Financial Assistance Page 55
Davis Bacon Frequently Asked Questions (FAQs)
General Questions
Q: Where can I access DOE's Desk Guide to the Davis-Bacon Act?
A: DOE’s Desk Guide to the Davis-Bacon Act is located on the GC-63 website
at http://www.energy.gov/gc/downloads/desk-guide-davis-bacon-act-0. The 46-
page Guide provides simple, non-technical guidance to help contractors and
subcontractors better understand their obligations under DBA.
Q: What is the reporting period for the Semi-Annual Davis Bacon Enforcement
Report? What is the Form Number?
A: The Department of Energy's (DOE) Semi-Annual Davis-Bacon Enforcement
Report is due to the Department of Labor (DOL) by April 30 and October 31 of
each year. The April 30 report is for the reporting period from October 1 through
March 31 of each year, and the October 31 report is for the reporting period from
April 1 through September 30 of each year. The Department asks for the
information by the 20
th
of the month in which it is due (i.e., April 20 and October
20), so that all reports can be combined and a final report compiled for
submission to DOL. The Department’s form number is OMB 1910-5165.
Q: If a school receives a federal grant 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?
A: Yes, the school must pay the volunteers the prevailing wage rate if the
volunteers are performing construction activities. The Department 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.” If the Davis-Bacon Related Act is silent on the subject of an exception
for volunteer labor, projects funded under that Act are subject to Davis-Bacon
coverage, the school must pay all workers the prevailing wage.
Q: Is it acceptable for DOE to contract with a DBA expert firm to perform the
monitoring and enforcement responsibilities under DBA?
A: Contracting agencies may contract some monitoring responsibilities, such as
review of certified payroll records, but cannot contract out their responsibility for
the enforcement of the DBA/DBRA requirements.
Q: Is it acceptable for DOE contractors/grantees/Borrowers to use the HUD
Davis-Bacon forms?
A: Please use the standard Department of Labor (DOL) forms, not HUD forms.
Forms are available on www.dol.gov webpage. For example, the Certified Payroll
form is found at: http://www.dol.gov/esa/whd/forms/wh347.pdf; the Request for
Additional Classification is found at:
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http://www.dol.gov/whd/govcontracts/SF1444.pdf; Standard Form for requesting
a Project Wage Determination is found at:
http://www.dol.gov/whd/programs/dbra/docs/sf308x.pdf; and the Standard Form
for Interview of Employees is SF-1445 is found at:
http://www.gsa.gov/portal/forms/download/115910.
Q: What are the roles of a Prime Contractor in the agency’s DBA compliance?
Do they include reporting and recordkeeping requirements?
A: As set forth in the Davis-Bacon Act Requirements clause and as required
under the contract, Prime contractors have a large role in ensuring compliance
with DBA requirements by subcontractors and lower tier subcontractors. These
responsibilities include reporting and recordkeeping requirements; obtaining,
maintaining, monitoring and reviewing the payroll records submitted by
contractors and subcontractors; and assisting DOE in its DBA enforcement
responsibilities. DOE is ultimately responsible for ensuring DBA compliance on
federally funded or federally assisted projects. Costs associated with the Prime’s
responsibilities for DBA compliance will usually be allowable costs in accordance
with the terms of the contract, unless the Prime acts negligently with regard to its
responsibilities.
Q: Where do I go for questions about DBA requirements?
A: For questions regarding compliance with Davis-Bacon Act (DBA)
requirements regarding a contract or grant award, please refer to your award
documents. The award document contains required DBA clauses and other
clauses that must be flowed down to contractors/subcontractors. All required
Davis-Bacon language is in the grant or contract document and the applicable
wage rates should have been included in the contract/grant. If you have
questions after you have reviewed the award document, you should contact the
Contracting Officer or Contract Specialist for assistance. You may also find
answers in the DOE Desk Guidebook located on this website or at:
http://energy.gov/gc/downloads/desk-guide-davis-bacon-act-0
Q: We have a grant and our project involves automotive mechanics completing
alternative fuel conversions on vehicles and school buses. Will DBA apply to the
automotive mechanics?
A: No, DBA is not applicable to automotive mechanics.
Q: Reading the DOE Desk Guidebook on page 32 (paragraphs d. and e.); 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.
e. The prime contractor is responsible for the timely submission to DOE of
certified payrolls for all subcontractors. The prime contractor is obligated to
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notify all subcontractors of the labor provisions of the contract and to ensure
that each subcontractor submits timely, accurate and complete certified
payrolls.
A: DOE created the "Desk Guide to the Davis-Bacon Act" 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. Whether the certified payroll record is submitted
directly to the Department, to a Prime contractor, or to a financial assistance
recipient (e.g., in the case of the Recovery Act grants, payroll records were
submitted to the grantee State/State Entity), depends upon the language in the
specific contract or financial assistance agreement.
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 the
contract or financial assistance agreement clauses control.
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.
Q: Are non-profit corporations subject to DBA?
A: For purposes of DBA, non-profit corporations are treated the same as for-
profit corporations. Therefore, when performing work on government-funded
projects, the non-profit must pay its employees the DBA prevailing wages.
Q: A subcontractor has regular, full-time employees, and performed work on a
government-funded project; however, we recently discovered that the
subcontractor continued its normal practice of paying employees every two
weeks. When I asked the subcontractor about this, the subcontractor said his
employees agreed to continue the every two week. Are there any exceptions
permitted to the “weekly” pay requirement?
A: Payment of wages every two weeks is a violation of the Davis-Bacon Act.
Employees cannot waive the weekly pay requirement. The Davis-Bacon Act
requires payment to employees “no less frequently than weekly.” Only Congress
can change this requirement by amending the Davis-Bacon Act.
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Q: I recently took a new position requiring me to review certified payroll records.
Is there any Davis-Bacon training provided by the DOL or DOE or other Federal
agency?
A: DOE has three DBA webinar trainings posted on its website at:
http://www2.eere.energy.gov/wip/davis-bacon_act.html. There is a certified
payroll webinar, a basic introduction to DBA webinar, and a DBA compliance
webinar presented by DOL. These webinars are free and can be viewed at your
desk on your computer. The presentations are also available for you to download
and use for future reference. DOL usually provides several training sessions at
different locations around the United States and you may find copies of the
presentations or upcoming training sessions at:
http://www.dol.gov/whd/govcontracts/dbra.htm under “E-Tools.”
Q: A City grantee is retrofitting street lighting in their city downtown. City workers
will remove the old fixtures and send the fixtures off site 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.
A: 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.
Q: The DBA Poster Notice regarding "Employee Rights under the Davis-Bacon
Act" indicates the following:
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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 the “Contracting Officer” is as far as this notice is
concerned?
A: The Contracting Officer means the DOE Contracting Officer found on the
Awards page of the contract or grant from DOE. The contractor should insert
either the name of the Contracting Officer or the name of the Contracting
Specialist on the Poster along with the address and telephone number.
Q: If we will be using some funds to perform energy audits, are the energy
auditors subject to the DBA if the resident chooses the auditor?
A: The DBA applies to laborers and mechanics employed at the work site. DBA
is not applicable to energy auditors, inspectors, and other personnel not
performing physical or manual work at the site of the construction work.
“The term laborer or mechanic includes at least those workers whose duties are
manual or physical in nature (including those workers who use tools or who are
performing the work of a trade), as distinguished from mental or managerial. The
term laborer or mechanic includes apprentices, trainees, helpers. . . . The term
does not apply to workers whose duties are primarily administrative, executive, or
clerical, rather than manual. Persons employed in a bona fide executive,
administrative, or professional capacity as defined in part 541 of this title are not
deemed to be laborers or mechanics. Working foremen who devote more than 20
percent of their time during a workweek to mechanic or laborer duties, and who
do not meet the criteria of part 541, are laborers and mechanics for the time so
spent.”
Q: I do not understand what the "labor standard clauses" that are to be in
subcontracts are - please explain in more detail.
A: The governing regulations at 29 CFR Part 5 require, among other things, that
certain clauses pertaining to labor standards be inserted in contracts for federally
financed and/or assisted construction. The regulations at 29 CFR 5.5(a) state, in
relevant part, that the “Agency head shall cause or require the contracting officer
to insert . . . the following clauses (or any modifications thereof to meet the
particular needs of the agency, Provided, That such modifications are first
approved by the Department of Labor).” Accordingly, the contract instrument
between DOE and the Prime requires DBA requirements to be flowed down to
subgrantees/contractors/subcontractors.
Q: Are non-federal matching funds paying for labor subject to DBRA?
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A: It depends upon the financial assistance enabling statute. The Recovery Act
DBRA provides that “all laborers and mechanics employed by contractors and
subcontractors on projects funded directly by or assisted in whole or in part” with
Recovery Act funding are subject to the DBA. Under a match requirement, all
funding associated with the match becomes part of the project budget and the
entire project (funded by the match + the grant) is subject to the DBA.
Q: As an employer paying a prevailing wage to an employee, should the
employer be receiving more for the work to compensate for the difference?
A: Employers who bid for work on a project where Davis-Bacon applies must
factor the Davis-Bacon wage rates into their bid amount. The bid solicitations for
Davis-Bacon covered projects must include the appropriate DBA wage
determination(s). The DBA wage determination in a bid solicitation (or request for
proposals for a negotiated contract) establishes the minimum wage rates plus
fringe for laborers and mechanics on the project. The rates listed are the wages
DOL has found prevailing on similar construction in the locality where the work is
to be performed. Laborers and mechanics must be paid at least the appropriate
prevailing wage (including fringe benefits, if any) listed on the wage
determination for the classification(s) of work actually performed (without regard
to skill, except as provided in the contract clause regarding apprentices and
trainees).
The employer may pay more than the DBA prevailing rates, but not less than the
amount set forth on the applicable wage determination for the classification of
work performed. Laborers or mechanics performing work in more than one
classification may be compensated at the rate specified for each classification for
the time actually worked, provided that the employer’s payroll records accurately
set forth the time spent in each classification in which work is performed.
Q: I am confused about using residential for the construction type on DOL's site
to find the required wage and benefits. Our projects are not residential. I have
noticed that the rates are lower for construction type residential than for
construction type building.
A: Do not use the residential construction classification unless the building meets
the definition of a residential building. For all work on buildings other than
residential, use the “building construction” classification.
There are four construction classification types: building, highway, residential and
heavy. The following provides a brief overview of each type:
Building Construction includes construction of sheltered enclosures with walk-
in access for the purpose of housing persons, machinery, equipment or supplies;
all construction of such structures; the installation of utilities and of equipment,
both above and below grade levels; as well as incidental grading, utilities and
paving. Such structures need not be “habitable” to be building construction. Also,
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the installation of heavy machinery and/or equipment does not generally change
the project’s character as a building.
Highway Construction includes construction, alteration or repair of roads,
streets, highways, runways, taxiways, alleys, trails, paths, parking areas, and
other similar projects not incidental to building or heavy construction.
Residential Construction includes the construction, alteration or repair of
single-family houses, and multi-family apartment or condominium buildings of no
more than four stories in height. This includes all incidental items such as site
work, parking areas, utilities, streets, and sidewalks. For residential multi-family
buildings over 4 stories in height, use the Building Construction classification.
Heavy Construction includes those projects that are not properly classified as
either “building”, “highway”, or “residential.” Unlike these classifications, heavy
construction is not a homogenous classification. Because of this catch-all nature,
projects within the heavy classification may sometimes be distinguished on the
basis of their particular project characteristics, and separate schedules may be
issued for dredging projects, water and sewer line projects, dams, bridges, and
other projects.
For additional and more detailed guidance, please refer to DOL All Agency
Memorandums (AAM) 130 and 131. All Agency Memorandums may be found at:
http://www.wdol.gov/aam.aspx.
Q: Where has requirement for semi-annual reporting been referenced?
A: All contractors, grantees, loan/loan guarantee borrowers performing DBA
covered work have DBA clauses in the contract/grant/loan documents requiring
compliance with DBA and Related Act requirements. All rulings and
interpretations of the Davis-Bacon and Related Acts contained in 29 CFR parts 1,
3, and 5 are incorporated within the clauses. DOL regulations, 29 CFR 5.7(b)
provides:
(b) Semi-annual enforcement reports. To assist the Secretary in fulfilling the
responsibilities under Reorganization Plan No. 15 of 1950, Federal agencies
shall furnish to the Administrator by April 30 and October 31 of each calendar
year semi-annual reports on compliance with and enforcement of the labor
standards provisions of the Davis-Bacon Act and its related acts covering the
periods of October 1 through March 31 and April 1 through September 30,
respectively. Such reports shall be prepared in the manner prescribed in
memoranda issued to Federal agencies by the Administrator.
As a result of the requirement in 29 CFR 5.7, made applicable to those
performing DBA covered work, those with contracts, grants, or loans/loan
guarantees must provide the information to the DOE for incorporation into the
Agency’s Semi-Annual Enforcement Report.
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Davis Bacon Frequently Asked Questions (FAQs)
Q: You mentioned the semi-annual report. Is there a form for this report?
A: DOE’s Form 1910-5165 provides the format for the report. Approximately one-
month prior to the date due, your DOE point of contact will request the
information.
Q: We have a local prevailing wage ordinance, which is based on State
prevailing wage law. We require all projects to comply. However, we do not
collect weekly payrolls. With an upgraded HVAC unit installation where there is
some duct work, but not much - how much is 'incidental'? If some duct work, but
not a lot, do we still have to collect the certified payrolls?
A: Contractors and subcontractors must comply with State and Federal
prevailing wage laws. The contractor/subcontractor must complete weekly
certified payrolls and submit them to the Agency or as directed by the Agency.
Each specific contract/loan/grant must be reviewed on a case-by-case basis for a
determination as to whether the installation of equipment is covered by the
Davis-Bacon Act. The Davis-Bacon Act includes “altering, remodeling, installation
(where appropriate) on the site of the work of items fabricated off-site.” 29 C.F.R.
5.2(j)(1)(i). Where a Recovery Act-funded grant includes funding for both the
purchase of equipment and installation, and installation requires substantial
amounts of construction, reconstruction, alteration, or repair work (as compared
to being incidental to the purchase of equipment), the DBA would be applicable.
Factors to be considered in determining whether installation requires substantial
amounts of construction include the extent to which structural modifications to
buildings are needed to accommodate the equipment (i.e., widening entrances,
relocating walls, or installing electrical wiring), and the cost of the installation
work - either in terms of absolute amount or in relation to the cost of the
equipment and the total project cost. For a definitive decision on whether the
DBA would apply to the installation of the HVAC equipment, please contact the
Contracting Officer or Contracting Specialist.
Q: Where do we get form 1413? I cannot find it on www.wdol.gov.
A: You may download Standard Form 1413 from the General Services
Administration website at: http://www.gsa.gov/portal/forms/download/115794.
Q: As an employer paying a prevailing wage to an employee, should the
employer be receiving more for the work to compensate for the difference?
A: Employers who bid to work on a project where Davis-Bacon applies must
factor the Davis-Bacon wage rates into their bid amount. The bid solicitations for
DB-covered projects must include DBA wage determinations. The DBA wage
determination in a bid solicitation (or request for proposals for a negotiated
contract) establishes the minimum wage rates required to be paid to laborers and
mechanics to be employed on the project. The rates listed are the wages DOL
has found prevailing on similar construction in the locality. Laborers and
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mechanics must be paid at least the appropriate prevailing wage (including fringe
benefits, if any) listed on the wage determination for the classification(s) of work
actually performed (without regard to skill, except as provided in the contract
clause regarding apprentices and trainees).
The employer may pay more than the DBA prevailing rates but may not pay less
than the amount set forth on the applicable wage determination for the
classification of work performed. Laborers or mechanics performing work in
more than one classification may be compensated at the rate specified for each
classification for the time actually worked therein, provided that the employer’s
payroll records accurately set forth the time spent in each classification in which
work is performed.
Q: If a business owner performs work on a DBA covered project, for example
hanging drywall, performing electrical work, or installing sheetmetal, is he/she
exempt from DB reporting requirements?
A: The DBA requirements apply to “laborers and mechanics.” The DBA itself
and DOL rules published in Title 29 of the Code of Federal Regulations (CFR)
provide longstanding regulatory definitions of terms that apply in the
administration and enforcement of the Davis-Bacon and related Acts. The
language of the Davis-Bacon Act demonstrates a Congressional objective to
ensure that individuals performing the work of laborers and mechanics are
guaranteed the prevailing wage rates included in the contract specifications
“regardless of any contractual relationship which may be alleged to exist between
a contractor or subcontractor and such laborers and mechanics.” Because of
this express intent, individuals who perform work on a contract subject to the
Davis-Bacon labor standards and who meet the regulatory definition of a laborer
or mechanic found at 29 CFR 5.2(m) must be compensated at the prevailing
wage rate by the contractor for any work so performed.
Section 5.2(m) defines laborers and mechanics as those workers whose duties
are manual or physical in nature, including those who use tools or perform a
trade. The definition of laborers and mechanics excludes workers whose duties
are primarily administrative, executive, or clerical, rather than manual. Therefore,
where the prime contractor is an individual owner who is operating his or her own
bona fide business and performs the work of a laborer or mechanic on the
project, that individual need not pay him or herself the applicable prevailing wage
rate for the classification of work performed. (The owner would not be a “laborer
or mechanic.”) This policy would also apply to a prime contractor, which is a
bona fide partnership consisting of substantially equal partners who each are
actively engaged in the management thereof and share in its profits and losses,
and also performing laborer or mechanic work on the project. On the other hand,
“partners” of a business association whose only contribution to the partnership is
their labor and whose sole compensation is wages or a draw fixed by the
dominant partner or partners must be compensated at the prevailing wage of
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laborers or mechanics on covered contracts even when the association functions
as the prime contractor.
The regulatory definition of the term “laborer or mechanic” specifically states that
persons employed in a bona fide executive, administrative, or professional
capacity as defined in 29 CFR Part 541 are not laborers or mechanics. Under
the “541 regulations,” a special rule for business owners provides that an
employee who owns at least a bona fide 20-percent equity interest in the
enterprise in which employed, regardless of the type of business organization
(e.g., corporation, partnership, or other), AND who is actively engaged in its
management, is considered a bona fide exempt executive. See 29 CFR
541.101-102. Therefore, such an individual would not be a “laborer” or
“mechanic” under the DBA.
If the business owner is a sole proprietor, the contracting entity must determine
that the person they are contracting with is truly a bona fide sole proprietor of a
company. The contracting entity must maintain a record of the company Federal
Tax ID number and a copy of the business license in the contracting file.
Additionally, prior to awarding the contract, ask whether the sole proprietor plans
to have anyone else assist with the work, as others brought on to perform laborer
or mechanic work will be subject to the DBA. Such a bona fide sole proprietor is
exempt from DBA and that individual is not required to submit a certified payroll
for weeks in which he or she does not employ others in the performance of work
on the contract/project. However, DOE recommends that owners of a business
who also perform construction work list themselves on a certified payroll and
under the column for “Work Classification” insert the word “owner.”
Remember that laborers and mechanics classified as independent contractors or
“1099 workers” are generally covered by the DBA and must be paid the DBA
wages and listed on the contractor’s certified payroll record.
Q: Is record retention required for 3 years after the "project completion date" or
the "grant period completion date"? Some of these projects will only take a few
months and will not last for the duration of the grant period.
A: Contractors must retain the payroll records and all supporting documentation
for a period of 3 years after the project completion date. Contractors must
maintain the DBA records as required by their contract. Grantees must maintain
DBA records pursuant to OMB Circular A-110 and 10 CFR 600.242. Although
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 grantee would
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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.
Q: Would you explain the Form 1413 a little more? Do we need to have one of
these on file for every contractor and sub-contractor they are using?
A: SF-1413, Statement and Acknowledgment, is prescribed for use in obtaining
contractor acknowledgment of inclusion of required clauses in subcontracts. The
contractor and subcontractors at any tier are required to submit a fully executed
SF 1413 upon award of each subcontract.
Q: Is the Agency required to post the wage rate in the Invitation for Bid or simply
list the link to the DOL? Is it the Public Agency's responsibility or the
Contractors?
A: The Public Agency must inform potential bidders that the work will be subject
to the DBA, and may either attach the wage decision in the bid documents or
incorporate it by reference to the appropriate website: www.wdol.gov.
Q: If routine maintenance is not subject to DB, are lighting retrofits considered to
be routine maintenance?
A: In most cases, lighting retrofits that require exchanging ballasts, new wiring, or
installation of new fixtures, is not considered “routine maintenance.” Routine
maintenance would include a simple exchange of an incandescent bulb for a new
energy efficient bulb. If you have specific questions with regard to whether DBA
is applicable to a specific project, please contact your Contracting Officer or
Contracting Specialist.
Q: We are drilling some bore holes for the purpose of obtaining data to be used
in gather data to determine the best area to build geothermal energy systems. Is
this covered by DBA?
A: Exploratory drilling for the purpose of obtaining data to be used for planning of
a project, the actual construction of which has not been authorized and for which
funds have not been appropriated, is not covered by DBA. However, where the
overall design of these wells is such that the wells are being constructed so that
they can become an integrated component of the public work, where the design
and construction techniques for these wells are detailed and sophisticated (and
require multiple crafts) more than one would normally use for drilling of test wells,
the work will be subject to DBA.
DOL has several examples in their Field Operations Handbook at 15d05. Drilling
work is generally considered construction work, unless it truly is for exploration.
Q: Is warranty work that occurs after the construction has concluded covered by
the Davis-Bacon Act?
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A: If the warranty work is performed after the construction contractor and
subcontractors have finished, left the site, and the contracting agency has
accepted construction of the project, the work would not be covered by DBA.
Generally, a certificate of final completion of construction occurs once all
necessary testing to establish operational status at the site has occurred and the
project has become operational. At this point, the construction financed by the
government is complete, and any warranty work rising to the level of construction
would not be a part of the DBA-covered construction project because it is not
work closely related in purpose (repairing equipment already in operational
status, as opposed to construction associated with build-up of the equipment) or
time (segregated by the certificate of completion date).
Certified Payroll Records
Q: What is a certified payroll record and where can I find a copy with instructions
for completing it?
A: Contractors must pay laborers and mechanics employed on the work site at
least once a week. Covered employers must submit a certified payroll on a
weekly basis. The employer must sign the certified payroll, affirming that the
information is complete and accurate. Falsification of the certified payroll record
can result in debarment from future contracts for up to three years and/or criminal
penalties. You find a copy of a certified payroll form (WH-347) on the Labor
Department's Wage and Hour Division website at:
http://www.dol.gov/whd/forms/wh347.pdf and the instructions for completing the
form is at: http://www.dol.gov/whd/forms/wh347instr.htm.
Q: What makes a payroll record "certified?"
A: Each payroll submitted must be accompanied by a “Statement of
Compliance,” signed by the contractor or subcontractor or his or her agent who
pays or supervises the payment of those employees paid under the contract.
The certification statement is required by the DBA contract clause set forth in the
contract or grant. The DOL certification statement form is available at:
http://www.dol.gov/whd/forms/wh347.pdf, on the second page of the WH-347
form. The contractor or subcontractor must submit a signed copy of the second
page or a form with the identical language, even where the contractor/
subcontractor uses a payroll print-out or form other than the WH-347 for
submittal of weekly payroll.
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Q: My understanding is that the person signing the compliance form is the one
who did the payroll. Is there another form to appoint the signer, Fed Form 105 or
106?
A: The DOL regulations require that the “Statement of Compliance” be signed by
the contractor or subcontractor or his or her agent who pays or supervises the
payment of the person employed under the contract. The DOL has stated that
the authorized agent should be an officer or manager of the company with
authority to sign on behalf of the contractor or subcontractor. This signature is
the “certification” because the person signing the report is guaranteeing that the
information being reported is accurate and correct.
Q: Do the certified payrolls need to be sent in each week or would it be
acceptable to ask the subcontractor 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?
A: The certified payrolls must be submitted by the contractor to the Department
or its Prime Contractor within 7-days of the date the contractor pays the
employees. The contractor submits the original to the Department/Prime on a
weekly basis. The Department/Prime must review contractor records on an
ongoing basis.
Q: A subcontractor has regular, full-time employees and performed work on a
DBA covered 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?
A: Payment of wages every two weeks is a violation of the Davis-Bacon
Act. Employees may not waive the right to be paid weekly and there are no
exceptions permitted. The Davis-Bacon Act itself requires that employees be
paid no less frequently that weekly and, therefore, only Congress may change
this requirement.
Q: A subcontractor failed to submit the certified weekly payrolls. When asked,
the subcontractor immediately completed, signed, and submitted all of the
delinquent weekly payrolls; however, all certifications have the same date. Is
there a cost or penalty to impose on the subcontractor for the late filing of the
certified payrolls or is the matter closed now that the subcontractor is caught up
and remains in compliance?
A: If the contractor continues to work, it is advisable to perform employee
interviews to ensure the contractor paid employees correctly and as set forth on
all the payroll records. Where the contractor has paid correctly, and now
complied with the Department of Labor (DOL) regulations requiring submission of
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the weekly-certified payroll records (CPRs), there are no cost or penalty to the
subcontractor. Had the subcontractor failed to comply with the requirement and
refused to do a catch-up, the DOL would require the contractor to pay any back
wages owed and fine the subcontractor for its failure to submit the Davis-Bacon
Act weekly as required. DOL may also take action to debar the contractor from
award of a contract for work on a government-funded project for a period of up to
three years.
Q: Is it acceptable for the contractor weekly payroll to be bundled and provided to
the grantee on a monthly basis?
A: No, it is not acceptable to bundle payrolls. A contractor bundling the weekly
payrolls and forwarding on a monthly basis would be in violation of the DBA
requirements. The DOL Regulations at 29 CFR § 3.4 specifically state: “(a) Each
weekly statement required under § 3.3 shall be delivered by the contractor or
subcontractor, within seven days after the regular payment date of the payroll
period, to a representative of a Federal or State agency. . .”
Q: Are “No Work” payrolls mandatory?
A: No. A certified payroll report is not required for a week in which a contractor
performs no work. When there is no work, the contractor simply inserts the
correct payroll report number on the next certified payroll record submission. If it
is anticipated that a long period of no work will occur, it would be a good practice
to attach a note to the last payroll stating there is no work anticipated for a period
of weeks (for example 6 weeks). It is also a best practice to provide a statement
when the work ends to make it easier for an auditor to understand a lapse or to
know when that contractor’s work is complete. This is especially true on large
projects with several contractors and subs.
Q: What do I do about a contractor that has family members helping them on
occasion? Our contractor keeps referring to wages being paid in "cash." Is it
okay for those contractors with family members helping to pay them cash (i.e., no
withholding tax)?
A: Contractors must pay DBA wages to all laborers and mechanics performing
DBA-covered work and all must be entered on the weekly certified payroll,
regardless of whether any individual is also a family member. Covered workers
must be paid the correct wages and appropriate taxes withheld and paid by the
contractor. Contractors must follow all applicable laws for their employees,
regardless of whether someone is a family member, and this includes paying the
appropriate withholding taxes.
Q: A contractor lists fourteen owners of the company. I found that the contractor
splits the money earned for each job between all the people that work on the job
– the “owners.” What should I do?
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A: Bona fide owners or partners are exempt from payment of DBA prevailing
wage and the contractor need not comply with the DBA requirements. An
employee who owns at least a bona fide 20-percent equity interest in the
enterprise in which employed, regardless of the type of business organization
(e.g., corporation, partnership, or other), and who is actively engaged in its
management, is considered a bona fide exempt executive. The salary and salary
basis requirements do not apply to the exemption of business owners under 29
C.F.R. § 541.101. An individual with a 20 percent or greater interest in a
business, who is required to work long hours, makes no management decisions,
supervises no one, and has no authority over personnel, does not qualify for the
executive exemption. To qualify for the exemption, a minority owner with at least
a bona-fide 20 percent interest in the business must be actively engaged in
management. See 29 C.F.R. § 541.101.
The company must provide documentation that an individual it claims to be an
owner is a bona fide owner and exercises the required management
responsibilities. It is impossible for 14 owners to each have a 20 percent equity
interest in the company. Therefore, in this case, the contractor must pay each of
the “owners” the required DBA wages.
Q: 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: A copy of the court ordered garnishment should not be sent with the certified
payroll record because such garnishments contain personal information
concerning the employee. The appropriate documentation would consist of a
memo/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
memo/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.
Q: 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.
A: Where employees work more than 40 hours on DBA covered contracts during
a period of seven consecutive days (workweek), pursuant to the Contract Work
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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 hour, the CWHSSA is not
applicable. However, these contractors and subcontractors are probably subject
to the Fair Labor Standards Act (FLSA), which 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, stating the
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.
Example:
• 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 or 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.
Q: 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?
A: The Contract Work Hours and Safety Standards Act (CWHSSA) requires
contractors and subcontractors to pay employees who work over 40 hours in a a
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period of seven consecutive days (workweek), 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.
Q: I have a certified payroll report where the actual DB hours are 20.32 and they
have 5.5 hours of overtime. Should the 5.5 hours of overtime be paid at the
overtime rate?
A: Based upon this example, it appears that the employee worked on both DBA-
covered and non-DBA covered work during the pay period and worked 5.5 hours
more than 40 in the workweek. Because the 5.5 hours is entered on the time
sheet, the premium pay would be due under CWHSSA for the individual in that
workweek at one and one-half times the DBA wages plus fringe at the straight
fringe rate.
Q: Is a weighted average wage + fringe amount required on overtime when an
employee has two or more classifications?
A: When the employee works more than 40 hours at two or more rate
classifications on a DBA-covered project, the contractor should pay the employee
overtime for all hours worked over 40 at the weighted average rate, as set forth in
29 CFR 778.115.
Q: I have a payroll that shows a contractor paid an employee overtime when he
worked more than 8 hours a day, even if the employee did not reach 40 hours yet
for the week – is this acceptable?
A: The DBA requires that all laborers and mechanics employed on the job site be
paid at least the wages listed in the applicable wage determination for the work
performed by the various classes of laborers and mechanics for all hours worked.
There is no federal daily overtime pay requirement on projects subject to DBA
requirements. However, such requirements may apply to such projects under
state (or local) laws.
Two federal laws may require premium pay for overtime hours – in excess of 40
hours in a workweek. Compliance with the federal overtime pay requirements
(both CWHSSA and FLSA) is achieved if each laborer and mechanic is paid at
least the applicable overtime pay for the number of hours he or she works over
40 hours in each workweek. A workweek, which can begin on any day of the
week, is 7 consecutive 24-hour periods or 168 consecutive hours. Congress
repealed the daily overtime pay requirement under CWHSSA in 1986. However,
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under some state laws and under the terms of some collective bargaining
agreements, overtime pay after 8 hours in a day may be required. Thus, some
payrolls may reflect that a contractor is complying with requirements other than
those that apply under applicable federal laws.
Q: Who is responsible for collecting certified payroll records and verifying the
proper wages have been paid.
A: The Department or its Prime Contractor is responsible for obtaining and
maintaining the original of the certified payroll and making sure the
subgrantees/contractors are complying with the DBA.
Q: Does the owner of a company have to list him/herself on the certified payroll
record if the owner also performs the work of a laborer or mechanic at the work
site? Are owners subject to DBA?
A: Bona fide owners who are exempt pursuant to Department of Labor
regulations, 29 CFR Part 541, are not laborers and mechanics and are not
subject to the DBA. However, the owner must provide evidence to the Prime
proving ownership and that the owner meets the exemption requirements (in
cases where there are more than one owner). DOE recommends owners of a
business who also perform construction work, list themselves on the certified
payroll and under the column for "Work Classification" insert the word "owner."
Additionally, the owner of a contracting or subcontracting company, or authorized
officer or employee who supervises the payment of wages must sign the
Statement of Compliance for the certified payroll.
Q: What if certified payroll lists the classification as "laborer"? Shouldn't it have
an actual title listed in the wage determinations?
A: You need to refer to the Wage Determination that applies to the project in
question. Often Wage Determinations do include a classification of “laborer.”
Take care to determine the correctness of classifications and to determine
whether there is a disproportionate employment of “laborers.” You should
conduct employee interviews to determine exactly what work the “laborer” is
performing. The actual work performed is the basis for determining the proper
classification, and the scope of work for a job classification is determined
according to the locally prevailing practice.
Q: We have a subcontractor that is hesitant to provide original signed
authorizations for deductions because they wish to keep the originals in their file.
A: 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.
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Q: 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?
A: 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. A copy of 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.
Q: Are we required to review 100% of certified payrolls submitted by contractors
and subcontractors?
A: Neither DOE nor DOL requires a 100% review of all certified payrolls.
However, there should be a review of at least the first four or five weeks of
submitted certified payrolls for accuracy from each contractor and subcontractor
on a project. Once it is established that a contractor and subcontractors are
submitting timely and accurate payrolls, a random representative sample (based
on the dollar amount of the project and number of contractors involved) should
be part of the routine monitoring for DBA compliance. The size of the sampling
may be driven by whether the contractor is an established “compliant” contractor
(few if any violations or errors noted in prior payrolls) or whether the contractor
routinely has problems with classifications, errors in reporting, missing payrolls,
etc. Some judgment must be exercised to (a) ensure compliance; and (b) not
become the contractor's bookkeeper. Remember also that checking payrolls and
math is only a small part of a compliance program - periodic interviews and
reviewing some daily site reports will help confirm that all of the workers working
on the site are listed, classified properly, and paid the amount reported on the
payroll.
Q: If a subcontractor goes out of business during or after construction, but prior
to final closeout of the construction project, who would be responsible for
obtaining missing payroll records from a defunct contractor?
A: The prime contractor/General Contractor is responsible for assuring that all
subcontractors comply with DBA requirements. If the contractor goes out of
business, the prime must withhold contract funds from the contractor in order to
make sure the employees are properly paid for all work performed. Additionally,
the prime/general contractor must immediately notify the contracting officer of the
event, so that DOE can notify DOL. The prime/general contractor must obtain all
payroll information, including any information necessary to ensure the proper
payment of wages and fringe to subcontractor employees for all work performed.
Q: Is it a requirement for contractors and the prime to maintain the social security
numbers of all workers covered by DBA?
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A: The contractor must maintain full social security number, home address, and
telephone numbers of all employees for a period of at least 3-years after
completion of a covered project, should an audit become necessary. This
information is not submitted on the weekly-certified payroll record.
On December 19, 2008, the DOL issued its Final Rule, 73 FR 77504, entitled,
Protecting the Privacy of Workers: Labor standards Provisions Applicable to
Contracts Covering Federally Financed and Assisted Construction. This Final
Rule (the Rule) revised DOL’s regulations issued pursuant to the Davis-Bacon
and Related Acts and the Copeland Anti-Kickback Act to protect the personal
privacy of laborers and mechanics employed on covered construction contracts.
The effective date of the Rule was January 18, 2009, and changed the
regulations at 29 C.F.R 5.5(a)(3)(i), (ii). The DOL decided certified payrolls no
longer require complete social security numbers and home addresses for
individual workers and that not including such information would better protect
the personal information of the workers.
As a result, 29 CFR 5.5(a)(3)(ii)(A) specifically provides for submission of the
certified payroll "shall set out accurately and completely all information required
to be maintained under 29 CFR 5.5(a)(3)(i), except that full social security
numbers and home addresses shall not be included on weekly transmittals.
Instead the payrolls shall only need to include an individually identifying number
for each employee (e.g., the last four digits of the employee's social security
number)."
Q: Is it acceptable for the Prime to redact or change anything on the certified
payroll (e.g., redact the first five digits of a social security number (SSN), when
the certified payroll is submitted with the entire SSN)?
A: No, it is not acceptable for anyone other than the employer submitting the
certified payroll record to redact or change anything on the original certified
payroll record. The DBA labor standards regulations and the WH-347 specifically
DO NOT permit the inclusion of full social security numbers on the certified
payroll records. If the Prime or DOE receives a payroll with the full social security
number, the payroll record must immediately be returned to the contractor for
correction. The contractor must submit a revised certified payroll with only the
last 4 digits of the social security number. Do not accept a certified payroll record
with the full social security number on it.
Q: How should a contractor/employer make a correction on a payroll record, if
the contractor has noticed an error and does not want to completely start over
with a new WH-347?
A: The contractor/employer may draw a single line through the error, initial, and
date the line and insert a correction. There should be no correction fluid or tape
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used on the form. If there is more than one error, the contractor should start over
as the form will become too difficult to review and enforce.
Q: If a contractor makes a mathematical error and overpays an employee on a
weekly payroll report may the contractor take a deduction for the overpayment on
a subsequent weekly payroll? If so, may the contractor/employer call it a “wage
overpayment correction” in the deductions section of the payroll record?
A: Yes, the contractor may take a deduction for over payment or prepayment of
wages. The DOL regulations at 29 CFR 3.5(b) provides:
Any deduction of sums previously paid to the employee as a bona fide
prepayment of wages when such prepayment is made without discount or
interest. A bona fide prepayment of wages is considered to have been made
only when cash or its equivalent has been advanced to the person employed
in such manner as to give him complete freedom of disposition of the
advanced funds.
Therefore, where a contractor makes a mathematical or clerical error and
overpays an employee on a weekly payroll, the contractor/employer may take a
deduction for the overpayment on a subsequent weekly payroll and may call that
a "wage prepayment." The contractor should provide a narrative report attached
to the payroll explaining the need for the wage prepayment correction.
Q: We are a subcontractor to an Agency Prime. The Prime is requiring all my
subs to provide certified payroll forms, but they are all sole proprietors. I
understand that a sole proprietor is exempt from DBA and there is no
requirement for certified payrolls, but the Prime’s representative has requested
that we have the forms completed. Knowing the above rule about sole
proprietors, they want the hours worked and the days worked as well as the
payroll form. It is our concern that requiring sole proprietors to complete the form
would be falsification of the document.
A: It would not be falsification of the form for the sole proprietor to complete the
form honestly. The sole proprietor enters his/her name and identifying number
and hours worked and the days worked. Under “Classification,” the contractor
enters "Sole Proprietor" or “owner” and is not required to pay him/herself the
DBA wages providing the sole proprietor meets the definition of a bona fide
owner of a business. The sole proprietor signs the certification indicating that the
payroll information submitted is correct. While a sole proprietor is not required to
complete the form for DOE or Department of Labor (DOL) purposes, the Prime
may require additional information from a contractor that is not required by DOL
or DOE.
The contractor must make sure the person with whom the contractor enters into
a contract is a bona fide sole proprietor of a company. The contractor must
maintain, and provide to the Prime if requested, a record of the company Federal
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Tax ID and a copy of the business license or proof of incorporation from the state
where incorporated. Additionally, the contract to the sole proprietor must include
the DBA clauses and the sole proprietor notified that all workers hired by the sole
proprietor must receive the applicable DBA wage plus fringe.
Workers classified as “independent contractors” or “1099 workers” are
covered by DBA and must be paid the DBA wages and listed on the contractor’s
certified payroll record.
NOTE: If the contractor/subcontractor hires an individual who is “self-
employed,” but not a “sole proprietor,” the contractor/subcontractor must
pay the independent contractor the DBA wages and complete the certified
payroll.
Q: Our contractor is calling a worker a 1099 for tax purposes and not filling out
the tax deduction section of the WH-347. When asked, the contractor said it is
because the worker is paying their own taxes. Is that OK?
A: Generally, workers classified as independent contractors or “1099
workers” are covered by the DBA and must be paid the DBA wages and listed
on the contractor’s certified payroll record if they are laborers or mechanics as
defined in 29 CFR 5.2(m). Taxes must be paid in accordance with applicable
federal State and local tax laws. IRS rules apply. However, failure to pay taxes
appropriately is not a DBA issue. Questions regarding proper payment of taxes
should be addressed to the Internal Revenue Service.
Q: We have a contract to upgrade a building leased by a DOE contractor.
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?
A: 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
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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.
Q: Would you please tell me where to find a form to use for the Davis-Bacon
Employee Interview Questionnaire?
A: 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.
While there is no requirement for a form, the interviewer must document the
interview, and the SF-1445 highlights the types of information that are relevant to
ensuring compliance with the applicable labor standards. Interviews with
employees must be taken in confidence. When completing the employee
interview, the interviewer must request the employee’s permanent mailing
address, and may request the employee’s Social Security Number. The
employee may be working on the project and only in the area temporarily. Try to
obtain the best address for contacting the worker at a future time. However, it is
preferable to rely on the payrolls for the employee identifying number, and the full
social security numbers should be obtained from contractor records if potential
violations indicate that back wages may be due covered workers. These
documents will contain personal information and must be secured to protect the
privacy of the employees. DOE recommends that the Recipient/Grantee
complete the interviews on-site rather than through the mail.
Q: Our standard practice for federal contracts and federal grants subject to DBA
is to conduct one employee interview per DBA worker classification per
contractor during their first week on the job. Is that acceptable?
A: 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 assurance
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 process should require an interview of as many employees as
possible in each employee classification. If there is only one or two employees in
a classification, then interview all employees on the construction site over a few
days. Second, performing employee interviews prior to receipt of the first certified
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payroll will provide limited information and not allow for preparation in advance of
the site visit. The purpose of the interview is to determine whether the contractor
is reporting accurately the hours worked and wages paid to employees. While a
visit during the first week on the contract will provide the 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. Additional interviews of employees will be required following review 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 and payment of time and one-half for those
hours worked can only be addressed after a period of time on the job and receipt
of wages. The information from the interview is compared with the payroll
information to determine whether the payrolls are complete and accurate.
Q: How often are employee interviews required to be done? Must an interview
be done for every contractor?
A: 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 Department or Prime Contractor 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 without 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
DOE Contracting Officer and Contractor Human Resource Specialist.
Q: What should you do if you interview an employee who was not documented
on the payroll?
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A: Such information suggests that the contractor may not be paying and
reporting covered workers in compliance with DBA. You should perform an
investigation and require the contractor to retroactively pay the covered workers
any back wages due, require an amended payroll showing the additional
employees, and obtain documents showing the wages have been paid.
Additionally, notify the DOE Contracting Officer of the non-compliance. If the
contractor is unwilling to correct the non-compliance, DOE will coordinate with
DOL to determine appropriate enforcement action.
Q: What if information on payroll does not match up with information provided
from an employee interview?
A: If information on the certified payroll and that provided by employees during
the interviews differ, there is likely DBA non-compliance. You should try to obtain
additional information from the contractor to clarify relevant factual information,
require the contractor to pay any wages owed to covered worker and correct the
certified payrolls (amend the certified payrolls) accordingly. Additionally, notify
the DOE Contracting Officer, to coordinate appropriate enforcement action with
DOL.
Q: If a possible violation is discovered as a result of doing a worker interview,
does the worker have the right to request that the interviewer not pursue the
matter? (This can happen in a situation where the worker is concerned about
confidentiality and the possibility that his/her employer will learn of the workers
complaint).
A: An employee may decide not give his/her permission for you to use the
interview to prove a violation. If that happens, the interviewer should try to
document the violation based on information other than the employee’s interview.
Please notify the DOE Contracting Officer of the suspected non-compliance, so
that we may notify DOL for immediate assistance in determining the best way to
handle the situation.
Q: 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?
A: 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
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the certified payroll to the Agency/Prime. 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 Prime or the
Agency, which would be by the 10th of September in this example. Therefore, by
submitting the certified payroll records to the Agency or Prime on the 7th of
September, the employer/contractor would be in compliance with the Davis-
Bacon Act requirements.
Q: If a contractor has salaried employees working on a DBA covered project who
have similar job titles to the worker classifications on the Wage Determinations,
such as electricians, are those workers subject to the DBA requirements? The
on-site workers will be salaried employees of the company with whom we will
have a contract.
A: 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 paid time and one-half for hours worked
over 40 in a workweek. Additional information regarding FLSA Part 541
exemption criteria may be found at www.dol.gov/elaws/overtime.html.
Q: With regard to fringe benefits, could you please detail the documentation that
contractors should submitted to the Department or Prime?
A: The contractor should provide information regarding benefits the contractor
provides to employees (e.g., a list of the benefits and calculation of fringe credit).
The contractor/employer is not required to submit a copy of the benefit plans or
the entire new employee packet, but should provide information explaining the
benefits. Additionally, information should include employee costs of the benefit
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Davis Bacon Frequently Asked Questions (FAQs)
(cost of employee’s share of health insurance or a matching contribution to a
401(k) plan). The contractor may provide a narrative document explaining this
information is included in the “information packet” or “employee handouts,” etc.
employees receive 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 benefits. The information the contractor
provides is to enable a reviewer of the certified payroll to confirm that the
contractor provides bona fide benefits, the employer’s calculation of the credit for
providing those benefits is accurate, and the employer’s process for conveying
information about the benefits.
Q: 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?
A: 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 those reviewing the certified payroll records. If
the contractor indicates he/she is providing fringe benefits, but does not provide
that information with the first certified payroll, the 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, by letter, telephone, or in
person 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 reviewers need to fulfill their responsibilities in assuring the
contractors and subcontractors comply with all DBA requirements.
Q: Please provide information about hours worked, sick leave, vacation time, and
overtime for DBA.
A: The DBA requires payment of at least the minimum wage, as set forth on a
DBA Wage Determination issued by the Department of Labor, to all covered,
nonexempt employees for all hours worked. The Contract Work Hours and
Safety Standards Act (CWHSSA) also provides that covered employees who
work more than 40 hours in the workweek must receive at least one and one-half
times their regular rate of pay for the overtime hours (hours worked over 40 in a
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workweek). A workweek, which can begin on any day of the week, is 7
consecutive 24-hour periods or 168 consecutive hours. The amount of pay due
an employee cannot be determined without knowing the total number of hours
actually worked by that employee in each workweek. A contractor must pay an
employee the DBA wages for all of the hours worked on the site of the project.
All time, including hours worked off the site of the project, is counted when
determining whether overtime is required. Hours worked for pur
poses of overtime
include all the time during which an employee is required or allowed to perform
work for an employer, regardless of where the work is performed, whether on the
employer’s premises, at a designated work place, at home, or at some other
location. Unless set forth on the Wage Determination from the DOL, the DBA and
CWHSSA do not require employers to give their employees time off for holidays,
vacations, or sick leave - either with or without pay. If the contractor allows an
employee time off
for a holiday, a vacation, or because he or she is sick, the time
off, even though the employee is paid for the time, is not hours worked and need
not be included in the total hours worked for overtime purposes. The gross
wages are set forth on the certified payroll, as are deductions, but only the actual
number of DBA hours worked are entered on the Certified Payroll Form. Often
specific states may require pay for holidays, vacations, or sick leave and a
contractor must comply with state requirements in addition to DBA requirements.
Q: When reviewing a payroll record none of the worker had any time over 40
hours on the project (CHWSSA/DBA); however, when interviewed they said they
worked over 40 hours in the workweek – on other projects for the contractor.
Should the agency be concerned about the payment of overtime payments? Or -
if it is outside CHWSSA it would not be reviewed for DBA purposes?
A: You should be aware that apart from the CWHSSA overtime pay
requirements, other overtime pay requirements may apply. The DBA hours are
likely to count toward the Fair Labor Standards Act (FLSA) overtime
requirements and/or overtime pay requirements under state laws. The Contract
Work Hours and Safety Standards Act (CWHSSA) provides that on covered
contracts (prime contract over $150,000), each laborer and mechanic who works
more than 40 hours on the covered contract in a workweek must receive at least
one and one-half times the applicable basic rate of pay – the rate listed in the
wage determination, excluding the fringe benefit amount listed (if any) – for all
hours worked over 40 in a workweek on the covered contract (without a “site of
the work” limitation on coverage). A workweek, which can begin on any day of
the week, is a fixed and regularly recurring period of 168 hours – seven
consecutive 24-hour periods.
If a laborer or mechanic works more than 40 hours in a workweek that includes
both DBA and non-DBA work, and the work on the DBA contract does not
exceed 40 hours, then the CWHSSA overtime pay would not be due them in that
workweek. However, they are likely to be subject to the Fair Labor Standards Act
(FLSA), the federal law of most general application concerning wages and hours
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Davis Bacon Frequently Asked Questions (FAQs)
of work. The FLSA requires non-exempt employees to receive one and one-half
times their regular rates of pay for all hours over 40 worked in a workweek
(regardless of whether the work performed includes DBA-covered work). The
DOL Wage and Hour Division is responsible for enforcement of the FLSA
minimum wage and overtime pay requirements. Please notify the DOE
Contracting Officer, so that enforcement may be coordinated with DOL. A list of
Wage and Hour Division local district offices is available at:
http://www.dol.gov/whd/america2.htm.
Q: May employers take a deduction from an employee's wages if the employer
purchases tools and uniforms and the employee reimburses those costs?
A: 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 Division, Office
of Enforcement Policy, Branch of Government Contracts Enforcement, in
Washington, DC, before any deduction may be taken.
Q: 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 subcontractor 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: A contractor is required to only enter hours the employee actually performs
work on a Davis-Bacon Act (DBA) covered project. As set forth in your scenario,
the employee worked on a non-covered project for one (1) hour during the week
and that hour was not entered on the payroll record. The employee worked a
total of 40-hours on the covered project and the employer properly entered 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 or the contractor could pay the employee overtime at the full
DBA covered rate (please see U.S. Department of Labor (DOL) Regulations at
29 CFR 778.115 for additional information). 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.
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Davis Bacon Frequently Asked Questions (FAQs)
Q: I have several questions regarding the boxes on the certification section of the
Department of Labor optional form WH-347.
(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?
(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 4a or 4b
need to be checked?
(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?
(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?
(5) What information is entered in box 4c?
A(1) The contractor MUST check one of the boxes - either 4a or 4b. If the
employer is paying cash in lieu of providing actual fringe benefits (i.e., health
insurance, pension, vacation) for the benefits the contractor should ch
eck box 4b.
If the employer pays into a plan for fringe benefits, the contractor should check
box 4a. Where a majority of employees are paid cash rather than a fringe benefit,
the contractor should check box 4b and in box 4c enters 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.
A(2) The contractor must check one of the boxes. In this example, the correct
box is 4b.
A(3) 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.
A(4) The employer is paying all employees cash in lieu of providing a fringe
benefit; therefore, box 4b should be checked.
A(5) The information entered into box 4c is exceptions to 4a and 4b. As
discussed above in the answer to question 1, whenever an employee receives
fringe different from the majority of employees that information is entered into box
4c.
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Davis Bacon Frequently Asked Questions (FAQs)
Q: 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?
A: 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 owed, the issue can be closed.
Q: Once the construction work is physically completed but final payment will not
be made for several more weeks are certified payrolls still required from the
contractor and if yes how?
A: If no work is being performed, a contractor is not required to provide certified
payrolls. DOE recommends (for audit purposes) that the contractor write on the
payroll that it is the final one under the contract. If punch list or warranty work is
subsequently required, a sequentially numbered payroll with a notation of the
reason can be submitted, as appropriate.
Q: Could a subcontractor submit copies of pay stubs for their workers with the
form WH-347 as backup proof?
A: A contractor is not required to submit pay stubs; however, the contractor
should retain such documents, along with time cards, as proof should an
investigation occur. Such documentation must be maintained for a period of three
(3) years following the end of the contract.
Q: Do we need to require a signed statement from the employee authorizing any
item in the "other" deduction category?
A: DOL instructions regarding “Column 8 - Deductions” on the WH-347 optional
Payroll Form state:
Five columns are provided for showing deductions made. If more than five
deduction are involved, use the first four columns and show the balance
deductions under “Other” column; show actual total under “Total Deductions”
column; and in the attachment to the payroll describe the deduction(s) contained
in the “Other” column. All deductions must be in accordance with the provisions
of the Copeland Act Regulations, 29 C.F.R., Part 3. If an individual worked on
other jobs in addition to this project, show actual deductions from his/her weekly
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Davis Bacon Frequently Asked Questions (FAQs)
gross wage, and state that deductions are based on his gross wages.
For payroll deductions in the “other” category, DOE recommends the employer
submit a letter briefly explaining the reason for the deduction and the amount
withheld (i.e., a court ordered wage garnishment or child support, savings bonds,
share of health insurance premium, union dues, etc.). The reason for the detailed
reporting regarding deductions is to ensure compliance with DBA and the
Copeland “Anti-Kickback” Act.
Q: What if the employer takes deductions for fuel and tools (kept by the
employee if they left), but still is paying above prevailing wage. Would the
deduction than be allowed?
A: If the employer is paying above the prevailing wage, after the deductions, the
deductions would be allowed. Generally, the employer may not take such
deductions as, in almost all such cases, such deductions are not f
or the benefit of
the employee, but rather benefit the employer. The rules regarding allowable
payroll deductions are published at 29 CFR Part 3, sections 3.5 and 3.6.
Deductions from wages for the benefit of the employer are not allowed, unless
the employer is paying the prevailing wage after the deduction. 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, such a deduction is not among
the “Payroll deductions permissible without application to or approval of the
Secretary of
Labor” listed in 29 CFR 3.5. Thus, a request must be submitted and
approval received from the Department of Labor, Wage and Hour Division,
Branch of Government Contracts Enforcement in Washington, D.C., in
accordance with 29 CFR 3.6, before such a deduction can be taken.
Q: May we allow contractors to use a certified electronic payroll system?
A: Yes. The Department of Labor allows the filing of certified payrolls via
electronic payroll systems that meet certain requirements. The main requirement
is that the contractor submitting the payroll uses an official digital signature,
typically a unique PIN number that verifies the identity of the contractor. Certified
electronic payroll systems allow for electronic submissions of both payroll
documents and certification statements.
Q: When you say digital signatures are you talking about adding a digital
signature in a completed pdf form of WH-347 or the electronic payroll form?
A:
A digital signature is only available through an electronic payroll system. If you
complete the WH-347 on line, it must be printed out and hand signed. Once the
WH-347 is in paper form, it remains in paper form and the original certified
payroll must be sent to the Agency.
Q: What if certified payroll lists the classification as "laborer"? Shouldn't it have
an actual title listed in the wage determinations?
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A: You will need to refer to the Wage Determination that applies to the project in
question. Often Wage Determinations do include a classification of “laborer.”
Care should be taken to determine the correctness of classifications and to
determine whether there is a disproportionate employment of “laborers.” You
should conduct employee interviews to determine exactly what work the “laborer”
is performing. The actual work performed is the basis for determining the proper
classification, and the scope of work for a job classification is determined
according to the locally prevailing practice.
Q: Are there reduced trainee wages for a period of time (i.e., 90 days) that can
be used while new laborers are becoming familiar with the work process or while
they are in training?
A: The DBA applies to laborers and mechanics employed by contractors and
subcontractors at a DBA-covered construction work site. Apprentices and
trainees are laborers and mechanics, as defined under the DBA. See 29 CFR
5.2(m) and (n). The DBA contract clauses set forth in the Special Terms and
Conditions of the DOE grant Agreement, which must be used by the Recipient in
any Requests for Proposals or Requests for Bids and subsequent contracts,
include specific rules that apply to apprentices and trainees on covered projects.
Workers must be paid the full Davis-Bacon hourly wage even if the workers are
in training, if the training is not in an approved DOL program (or a properly
approved apprenticeship program) in accordance with the rules stated in the
DBA contract clauses. For further information on establishing approved trainee
and apprenticeship programs, DOL contacts are available at:
http://www.doleta.gov/oa/regdirlist.cfm
Q: Please confirm that the Davis Bacon reporting is for construction workers. I
have a project that has a consultant to perform evaluations and a trainer. I
assume renewable energy installers would be included under DBA?
A: Davis-Bacon applies to “all laborers and mechanics” on construction projects
funded directly by or assisted in whole or in part with financial assistance from an
Act with a DBRA prevailing wage requirement. Consultants and energy auditors
are not considered laborers and mechanics and would not be covered by DBA.
Trainers who do not perform laborer or mechanic work on the job site would not
be subject to the DBA requirements. Workers installing renewable energy
systems generally would be laborers or mechanics covered by DBA. The
applicable definition of laborers and mechanics is stated in DOL regulations at 29
CFR 5.2(m), as follows:
“The term laborer or mechanic includes at least those workers whose duties
are manual or physical in nature (including those workers who use tools or
who are performing the work of a trade), as distinguished from mental or
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Davis Bacon Frequently Asked Questions (FAQs)
managerial. The term laborer or mechanic includes apprentices, trainees,
helpers. . . . The term does not apply to workers whose duties are primarily
administrative, executive, or clerical, rather than manual. Persons employed
in a bona fide executive, administrative, or professional capacity as defined in
part 541 of this title are not deemed to be laborers or mechanics. Working
foremen who devote more than 20 percent of their time during a workweek to
mechanic or laborer duties, and who do not meet the criteria of part 541, are
laborers and mechanics for the time so spent.”
Q: How aggressive do we need to be about "checking the math" on these payroll
reports? Many times the number of hours of DB work does not easily correlate to
gross wages, because the workers have worked on other DB and non-DB jobs in
the same week.
A: The primary thing is to check the math on the form and make sure there are
no errors, that only legal deductions are taken, and that everything computes
properly. If the employee worked DB and non-DB covered jobs, look at overtime
payments. Look at the number of hours of DB covered work and the gross paid
for DB work and subtract that number from the total gross wages, does it appear
that the employee is being paid properly or would the amount left be low for an
individual working 40 hours? If there are questions, contact the contractor for
additional clarification.
Q: I heard that installation of equipment is not covered by DBA. Is that correct?
A: A blanket statement that installation of equipment is not DBA covered cannot
be made. Each specific contract/loan/grant must be reviewed on a case-by-case
basis for a determination as to whether the DBA applies and this also goes for
installation of equipment. In some cases installation of equipment may not be
covered by the Davis-Bacon Act, but such a decision has to be made on a case-
by-case basis.
The Davis-Bacon Act includes “altering, remodeling, installation (where
appropriate) on the site of the work of items fabricated off-site.” 29 C.F.R.
5.2(j)(1)(i). Where a contract or DBRA grant includes funding for both the
purchase of equipment and installation, and installation requires substantial
amounts of construction, reconstruction, alteration, or repair work (as compared
to being incidental to the purchase of equipment), the DBA would be
applicable. Factors to be considered in determining whether installation requires
substantial amounts of construction include the extent to which structural
modifications to buildings are needed to accommodate the equipment (i.e.,
widening entrances, relocating walls, or installing electrical wiring), and the cost
of the installation work - either in terms of absolute amount or in relation to the
cost of the equipment and the total project cost.
The Department of Labor (DOL) has repeatedly held that bolting furniture,
equipment, or other fixtures to the floors, walls and/or ceilings is installation
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covered by the DBA. It may be there will be no structural modifications to a
building, where there will
be bolting equipment to the floors and running electrical
wiring for the equipment, the installation is covered. The cost of the installation
must also be considered and the time required completing the installation.
The actual decision as to whether the DBA is applicable to a specific award/grant
is made on a case-by-case basis by the Contracting Officer (CO) for that specific
award/grant.
Wage Determinations
Q: Do Project Wage Determinations (WDs) expire?
A: The effective and expiration dates that appear on a Project Wage
Determination are dates established by DOL and only apply to the agency
Contracting Officer. The DOE Contracting Officer (CO) is required to
award/incorporate the wage determination into a contract or financial assistance
agreement by the expiration date set on the Wage determination. If the CO does
not award or modify a contract by the expiration date, the CO must request an
extension of the issued WD or a new WD. A General Wage Determination does
not expire and, once incorporated into a contract or financial assistance
agreement, is valid for the entire length of the contract.
Q: If a wage determination is modified or superseded during a contract period
must the contractor change his/her rate of pay to conform to the newer wage
determination?
A: Once incorporated in a contract that calls for construction work, a wage
determination generally remains effective for the life of the contract (except, for
example, if a clearly wrong determination was applied, if the contract is amended
to require significant additional construction requirements, (or where a term
contract provides an option for its term to be extended and such an option is
exercised. DOL modifications to a wage determination published after award of
the contract do not apply to the project. Therefore, the contractor and
subcontractors on the project would continue to use the wage determination
included in the prime contract. The DBA contract clauses require the prime
contractor and all subcontractors to flow down the wage determination, along
with the contract clauses, to their subcontractors.
Q: If a new wage determination is issued while out to bid, what is the guidance
for issuing an addendum to include the new wage determination? In other words
what is the cut off for including a new wage determination in a bid package that is
out to bid, how many days? When does the wage determination "lock in?”
A: The DOL Regulations provide the following information at 29 CFR 1.6(c)(3):
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All actions modifying a general wage determination received by the
agency before contract award (or the start of construction where there is
no contract award) shall be effective except as follows:
(i) In the case of contracts entered into pursuant to competitive bidding
procedures, a modification, notice of which is published less than 10
days before the opening of bids, shall be effective unless the agency
finds that there is not a reasonable time still available before bid
opening, to notify bidders of the modification and a report of the finding
is inserted in the contract file. A copy of such report shall be made
available to the Administrator [of Labor] upon request. No such report
shall be required if the modification is received after bid opening.
(ii) If under paragraph (c)(3)(i) of this section the contract has not been
awarded within 90 days after bid opening, . . . any modification, notice
of which is published on WDOL prior to award of the contract or the
beginning of construction as appropriate, shall be effective with respect
to that contract unless the head of the agency or his or her designee
requests and obtains an extension of the 90-day period from the
Administrator
Therefore, if a modification occurs between the 10 day point and the
opening of the bids you will be required to make a determination as to
whether there is reasonable time to notify the bidders of the modification
so that they may adjust their bids. If a decision is made there is no time,
put a report into the contract file. After the bids are opened, the wage
determination in the Bid request remains in effect - providing the contract
is awarded within 90 days from the date of bid opening.
Q: Is the Residential Construction the correct construction category for multi-
family building construction/alteration/repair?
A: The answer depends upon the number of levels in the building. If the
contractor will be working on a DBA covered project where the residential
housing unit is 4 stories or less, the “residential construction” category is correct;
however, where the multi-family building is 5 stories or more, the appropriate
category is “building construction.”
Q: We have several job classifications not listed on the WD table for our project
from the WDOL website. It is my understanding that the contractor requests the
additional classification following award. Is this correct or is there another way to
get this completed?
A: 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 Prime (if there is one) who forwards to the DOE Contracting Officer
(CO). The DOE CO will agree or disagree with the requests for an additional
classification. If the CO agrees, the CO will submit the form to the DOL. The
process reverses when DOL makes a determination as to the proper
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classification and wage rate. The CO will forward to the new classification(s) and
wage rate(s) to the Prime along with any needed modifications to the contract.
This is called a Conformance.
The DOL provides copies of the SF-1444 on their website at this link:
http://www.wdol.gov/docs/sf1444.pdf and directions are at
http://www.wdol.gov/db_conformance.aspx.
Q: It is my understanding that Line 16 on the SF-1444 should be signed by an
employee working in the Job Classification that is being requested. Is this your
understanding?
A: If present, employees or their designated representative must sign block 16
noting their concurrence or disagreement with the contractor's proposed wage
and benefit rate. If the employee disagrees with the contractor's proposal, he
must provide a statement supporting a recommendation for different rates.
“Designated representative” is generally a union representative. It is not the
contractor’s personnel officer or other contractor representative.
Q: Regarding the Conformance request, if a State has a prevailing wage rate for
a classification can that rate be used or do we still have to submit a conformance
request to the DOE.
A: If there is no DBA wage rate for a specific classification, a conformance
request must be submitted (SF-1444). The State wage rate may be suggested as
the correct wage rate and until the DOL responds to the conformance request,
that wage rate may be used. If, however, the DOL returns the conformance
request with a higher wage rate, then an adjustment must be made retroactive to
the date the individuals in that classification began work on the project. Always
make a comparison between the DBA and the State prevailing wage rates
(unless the State prevailing wage law defers from the DBA) to make sure that
DBA-covered workers are paid the appropriate wages.
Q: 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
dollars?
A: If a project involves financially funded construction, and the financial funding
has a prevailing wage clause, the DBA is applicable. Assuming the project at
issue is for construction, the Recipient of a grant should review the applicable
state prevailing wage 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 funded by both federal and State funds, the
contractor must pay the higher of the two wage rates (in this case the State’s
wage rate).
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Q: 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?
A: The Davis-Bacon Act requires all contractors and subcontractors to pay
laborers and mechanics employed on a covered contract (and financial
assistance agreements funded by an Act containing a Davis-Bacon prevailing
wage requirement) 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.
Q: 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?
A: 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 for a new
proposed classification. 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 DOE Contracting Officer who reviews
the request for completeness and necessity. The Contracting Officer will review
the form deciding the Department’s concurrence or disagreement with regard to
the contractor's proposal. The Contracting Officer reviews the SF-1444 to
determine whether the proposed classification is performed by a classification in
the wage determination and the proposed wage rate bears a “reasonable
relationship” to the wage rates in the wage determination. (See DOL All Agency
Memorandum 213.) The Contracting Officer signs signaling Agency concurrence
and submits the proposal with all attachments to DOL for approval via WHD-
CBACONFORMANCE_INCOMING@dol.gov.
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
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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 be paid retroactive to the
beginning of the project.
Q: I was told that 10-days prior to opening bids, I need to check the WDOL.gov
website and issue an addendum to the solicitation advising what wage
determination general decision number will apply to the project if there has been
a modification of the wage determination. Please tell me where I can find this 10-
day requirement.
A: The 10-day requirement applies where the wage determination incorporated
in the Invitation for Bid or Request for Proposals changes between the time the
competitive announcement was made and 10-days prior to the opening of the
bids. The DOL Regulations provide the following information at 29 CFR 1.6(c)(3):
(3) All actions modifying a general wage determination shall be effective with
respect to any project to which the determination applies, if notice of such
action is published before contract award (or the start of construction where
there is no contract award), except as follows:
(i) In the case of contracts entered into pursuant to competitive bidding
procedures, a modification, notice of which is published less than 10 days
before the opening of bids, shall be effective unless the agency finds that
there is not a reasonable time still available before bid opening, to notify
bidders of the modification and a report of the finding is inserted in the
contract file. A copy of such report shall be made available to the
Administrator [of Labor] upon request. No such report shall be required if the
modification is published after bid opening.
(iv) If under paragraph (c)(3)(i) of this section the contract has not been
awarded within 90 days after bid opening, . . . any modification, notice of
which is published on WDOL prior to award of the contract or the beginning of
construction, as appropriate, shall be effective with respect to that contract
unless the head of the agency or his or her designee requests and obtains an
extension of the 90-day period from the Administrator. . .
Therefore, if a modification occurs between the 10 day point and the opening of
the bids you will be required to make a determination as to whether there is
reasonable time to notify the bidders of the modification so that they may adjust
their bids. If a decision is made there is no time, put a report into the contract file.
After the bids are opened, the wage determination in the solicitation at bid
opening is effective for the length of the contract.
Q: Must the Agency post the wage rate in the Solicitation or simply list the link to
the DOL Wage Determinations Online? Is it the Public Agency's responsibility or
the Contractors?
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A: The Public Agency must inform the potential bidders/proposers that the work
will be subject to the DBA and may either attach the wage decision in the bid
documents or incorporate it by reference to the appropriate website at
www.wdol.gov.
Q: 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?
A: 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. There is a caveat to this answer - the award must be made within 90
days of opening bids to use the WD in the solicitation. 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 the 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.
Q: 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?
A: 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
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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 up to 3 years.
Q: If a wage determination is modified or superseded during the period of a
contract, must the contractor change his/her rate of pay to conform to the newer
wage determination?
A: Once incorporated in a contract that calls for construction work, a wage
determination generally remains effective for the life of the contract. An
exception, for example, where an incorrect wage determination was applied,
where the contract is amended to require significant additional construction
requirements, or where a term contract provides an option for its term to be
extended and such an option is exercised. The contractor and subcontractors on
the project would use the wage determination included in the prime contract. The
DBA contract clauses require the prime contractor and all subcontractors to flow
down the wage determination, along with the contract clauses, to their
subcontractors.
Q: We received a Wage Determination but there is not a Fringe Benefit figure.
What fringe benefit must be paid?
A: If the Wage Determination has no fringe benefit rate for some (or all)
classifications listed, DOL did not find fringe benefits prevailing in the area for
such classifications on the given type of construction in the area. In these cases,
the contractor would not need to add a fringe benefit amount to the basic hourly
rate to compute the total prevailing wage that the contractor is required to pay to
workers performing the work of such classifications. (The DBA defines the
“prevailing wage” as including both the basic hourly rate of pay and any bona fide
fringe benefits. Thus, even where the applicable wage determination does not list
fringe benefits for a given classification, the employer’s contributions/costs for
providing bona fide fringe benefits may be credited towards meeting the
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prevailing wage requirement – the combined basic hourly rate and fringe benefits
listed in the wage determination – for the listed classification).
Q: If an employer pays DB in wages and fringe benefits, but deducts a portion of
the cost of medical from employees, is the employer still in compliance with
Davis/Bacon?
A: Wages under the DBA include both the cash wages and “bona fide” fringe
benefits provided to laborers and mechanics. A contractor may discharge its
prevailing wage obligation by any combination of cash wages and creditable
“bona fide” fringe benefits. The total prevailing wage for a given classification,
including any amount listed for fringe benefits, (1) may be paid entirely as cash
wages, (2) payments made or costs incurred for “bona fide” fringe benefits may
be credited towards fulfilling the requirement, or (3) a combination of cash wages
paid and “bona fide” fringe benefits may be used together to meet the total
required prevailing wage. Examples of fringe benefits include health insurance,
pension contributions, and paid time off.
An employer may provide for employees, on a voluntary basis (or as agreed by
the terms of their collective bargaining agreement), to pay a portion of the
premium for health insurance through payroll deductions. Such employee
contributions to the fringe benefit plan can be by payroll deductions from their
wages on their behalf; however, the employer may not count the amount the
employee pays for the benefits toward the prevailing wage the employer is
required to pay to the employee. The contractor may only count the employer
contributions for health insurance as credit towards fulfilling the prevailing wage
requirement. (In the applicable rules regarding deductions, set forth in 29 CFR
3.5; “Payroll deductions permissible without application to or approval of the
Secretary of Labor,” see paragraph 3.5(d)).
Q: Can any combination of pay and fringes be used to meet the D-B base rate?
For example, if a D-B classification is $10.00/hr base rate + $1.00 in fringes =
$11.00, can the contractor $9.00/hr + $2.00 in fringes = $11.00?
A: Yes, a combination of cash wages and bona fide fringe benefits can be used
to meet the DBA rate. (The relevant DBA provision is set forth at 40 U.S.C. 3141,
available at http://www.dol.gov/whd/regs/statutes/dbra.htm. In your example
above, the DBA wage determination rate is $10/hr wage + $1/hr fringe = $11/hr
DBA rate. The contractor can pay $9/hr wage + $2/hr fringe, as that equals
$11/hr in total compensation. As long as the total compensation meets or
exceeds the DBA rate of $11/hr, then the contractor is paying in compliance with
the DBA. Please note that the CWHSSA overtime pay requirement, if applicable,
is based on the $10.00 “basic hourly rate” listed in the wage determination. Thus,
in this example, under CWHSSA, the worker would be due $11.00 + $5.00 =
$16.00 per hour worked over 40 in a workweek on the contract.
Q: Can a contractor ask for a fringe benefit amount when requesting a
conformance without having a fringe benefit plan available to their employees?
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A: The contractor may propose a fringe benefit amount when submitting a
request for an additional classification. This is appropriate if the contractor
provides the worker with bona fide fringe benefits as part of their compensation.
However, if the contractor does not provide fringe benefits to workers in a
requested classification, the request for an additional classification should reflect
the minimum wage rate that the contractor proposes to pay workers in the
proposed classification. Where the rates on the wage determination include
fringe benefit amounts, the total rates listed – including fringe benefits, if any –
should be considered in determining whether the requested rate is reasonable in
relation to the rates already listed in the wage determination, as required by the
contract clause criteria for approval of additional classifications.
Q: If a health plan is based on 40 hours a week, will the fringe benefit for
overtime require payment of the fringe in cash?
A: Employees must be paid the total prevailing wage, including fringe benefits (if
any), listed in the applicable Davis-Bacon wage determination for all hours
worked in a given classification, including overtime hours. If a contractor
computes the credit for fringe benefits on a 40-hours-per-week basis, then a
separate computation may be necessary to ensure payment of the full prevailing
wage for each hour worked over 40 in a week (as well as any applicable
premium overtime pay required under CWHSSA, the Fair Labor Standards Act,
and/or applicable State law). It is not required that fringe benefits be paid in cash
for overtime hours, but in the situation described in this instance, it may be that
additional cash will have to be paid to ensure that both the prevailing wage and
any applicable overtime pay requirements are met for any overtime hours
worked.
Q: Where is the best place to find a list of fringe benefits that may count toward
the prevailing wage rate paid?
A: The language in the Davis-Bacon Act regarding fringe benefits that can be
counted as part of the Davis-Bacon prevailing wage, is set forth in Title 40 of the
United Sates Code at 40 U.S.C. § 3141 (available at
http://www.dol.gov/whd/regs/statutes/dbra.htm), and is also described in DOL
regulations at 29 CFR 5.23. Fringe benefits to be considered include employer
contributions/costs for life insurance, health insurance, pensions, disability and
sickness insurance, vacation and holiday pay, sick leave, and for defraying the
costs of apprenticeship. The costs for fringe benefits are incurred by the
contractor/employer; they are not payroll deductions from employee pay.
Allowable payroll deductions are a separate matter, addressed separately in
applicable rules in 29 CFR 3.5 and 3.6, available at http://www.dol.gov/whd/reg-
library.htm.
Note: The use of a truck is not a fringe benefit; the use of tools, uniforms, or
cellular phones are not fringe benefits; a Thanksgiving turkey or Christmas bonus
is not a fringe benefit.
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Q: Can payments into the State Unemployment Compensation fund be counted
as a fringe benefit to meet the wage determination rate?
A: Credit may NOT be taken for any benefit required by federal, state, or local
law, such as workers compensation, unemployment compensation, or Social
Security contributions. These are generally considered taxes, and are the
employer’s responsibility, not a fringe benefit that the employer may have
discretion in providing to the workers.
Q: Because I don't see it identified on the Wage Decision, are computer
programmers who work on the site making final configurations/adjustments
considered a laborers or mechanics?
A: Computer programmers are not laborers or mechanics and are not subject to
the DBA.
Q: Just to clarify, DB Act only pertains to labor/mechanics on a construction/
renovation work site. It does not pertain to an engineer doing design work before
construction begins. Correct?
A: Yes, correct. Engineers performing design work whether before or during the
construction are not laborers or mechanics and are not subject to the DBA.
Q: Does prevailing wage pertain to consultants, architects or engineers?
A: DBA does not apply to energy auditors, consultants, architects, or engineers
working on a project.
Q: Do professional and technical expertise vendors or subrecipients fall under
Davis Bacon? For example: A non-construction organization helps implement
part of a grant-funded transportation trip reduction program?
A: DBA does not apply to professional and technical expertise vendors or
subrecipients.
Q: Does DBA apply to non-construction work? For example: A subcontractor is
developing a plan for an energy efficiency building retrofit program (for all types
of buildings – residential, commercial, etc).
A: DBA does not apply to individuals developing an energy efficiency building
retrofit program.
Q: Is it true that a driver of a truck delivering equipment to a DBA jobsite is
covered under DBA? What if the truck delivering equipment to jobsite is not
owned by the contractor?
A: The DBA requirements apply to laborers and mechanics employed on the site
of work. Time spent at the home office, picking up supplies, traveling to the work
site, etc., are not DBA hours. A truck driver who only delivers equipment to the
work site and who spends a minimal/incidental amount of time at the site
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unloading the materials is not covered by DBA. Material suppliers are not DBA-
covered if they spend only an incidental amount of time performing work at the
construction site.
Q: We have a cooling tower that we (City) purchased (with EECBG funds), but
we will hire a contractor to install this piece of equipment. Installation will require
a crane. Duration of work is about 15 days. Would this selected contractor be
required to comply with DBA requirements? Or is this considered “incidental”?
A: Installation of a cooling tower would be covered by the DBA and the
contractor will be required to comply with all DBA requirements. Incidental work
is usually less than 32 hours. Work requiring about 15 days to complete is far
from incidental.
Q: How does the DBA apply to labor performed by local government employees?
For example, does the DBA apply if Town or City employees are doing the
installation of a solar array?
A: Local units of government are not considered by DOL to be contractors or
subcontractors, and their workers are not covered by DBA. Any contracts
awarded by the local government, however, must include the DBA labor clauses
and applicable wage determination(s) for the contractor’s employees.
Q: Can you address free/volunteer labor? We heard subgrantees will be using
volunteer laborers in order to get around reporting/applying DB wages. Can you
address this?
A: The subgrantee is required to pay the “volunteers” the prevailing wage rate.
The Department 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 in this
case is the American Recovery and Reinvestment Act of 2009 (Recovery Act)
and it is silent on the subject of an exception for volunteer labor. Therefore, on
Recovery Act-funded projects subject to Davis-Bacon coverage, the
grantee/subgrantees must pay all workers the prevailing wage – no exceptions
for volunteers.
Q: Do AmeriCorps volunteers need to have Davis-Bacon wages or be registered
as apprentices or should they be exempt as they're government employees?
A: The DBA provides that it does not supersede or impair any authority otherwise
granted by Federal law to provide for the establishment of specific wage rates.
The authorizing statutes for the Youth Conservation Corps, 16 U.S.C. 1703(a)(3),
and the Public Land Corps, 16 U.S.C. 1726, for example, specifically require the
Secretaries of Interior and Agriculture to set the rates of pay or living allowances
for the Corps' participants. Other youth programs, such as the American
Conservation and Youth Service Corps (AmeriCorps), 42 U.S.C. 126551, and
Volunteers in Service to America (VISTA), 42 U.S.C. 4955, specify in the
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statutory language the living allowances and other benefits that must be provided
to each participant. Therefore, since these Federal youth programs have
established specific compensation to be paid to participants, such participants
would not be covered by Davis-Bacon labor standards.
To determine whether any other Volunteer Organizations may be exempt, a
written request for a determination should be accompanied with appropriate
supporting documentation and must be sent to The Administrator, Wage and
Hour Division, 200 Constitution Avenue, N.W., Room S-3502, Washington, D.C.
20210.
Contract Work Hours and Safety Standards Act (CWHSSA) Questions
Q: What does CWHSSA require from DOE Contractors or grantees?
A: CWHSSA requires payment of overtime (1.5 times the normal wage rate) for
work in excess of 40 hours in a workweek. See 40 U.S.C. 3703.
Q: What contracts are subject to CWHSSA?
A: CWHSSA is applicable only to contracts and subcontracts that are $150,000
or greater. CWHSSA applies to government contracts and to contracts for work
financed at least in part by loans or grants from the Government under any
federal law providing for payment of prevailing wages.
Q: How are CWHSSA liquidated damages computed?
A: Computation of CWHSSA Liquidated damages is made for EACH individual
employed as a laborer or mechanic in violation of the requirement to pay
overtime and shall be equal to $10 for EACH calendar day for which the
individual was required or permitted to work in excess of 40 hours in the
workweek without payment of the appropriate overtime wages. See 40 U.S.C.
3702(c).
Q: Is there a minimum threshold for collection of CWHSSA liquidated damages?
A: As a matter of DOL administrative policy, liquidated damages are not
computed for employees whose CWHSSA back wages are less than $20.
Q: Does the DOE have the ability to waive a small amount of CWHSSA
liquidated damages?
The Department of Energy has authority to waive liquidated damages under
$500, upon an appeal from a Contractor to the Department of Energy. Requests
for such action are forwarded to the Department of Energy Labor Advisors. The
Agency head or designee can waive liquidated damages under $500 providing
the violation was inadvertent. If a contractor requests a reduction or rescission of
liquidated damages over $500, DOE must review and determine whether to
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request permission from the Department of Labor. CWHSSA liquidated damages
are submitted to the U.S. Treasury.
Q: Who reports the violation of CWHSSA on the DBA Semi-Annual Enforcement
Report?
A: The DOE Contracting Officer (DOE-CO) will make the report to the DOE
Office of General Counsel (GC-63). The report includes the number of CWHSSA
violations, the number of employees for whom the appropriate overtime wages
were not paid, the total amount of overtime payments made to those employees,
and the amount of liquidated damages collected.
Q: If a mistake is found concerning underpayment to a worker, and the employer
has provided evidence that the underpayment has been rectified via the payment
of retroactive wages, is it still necessary to collect liquidated damages?
A: The collection of liquidated damages is for the failure to pay proper overtime
under the Contract Work Hours and Safety Standards Act (CWHSSA). On DBA
covered contracts where the prime contract exceeds $150,000, CWHSSA
requires overtime pay for laborers and mechanics at a rate of one and one-half
times the basic rate of pay (the “Rate” listed in the wage determination, apart
from the fringe benefits listed, if any) for hours worked in excess of 40 in a
workweek. Where liquidated damages can be assessed, the DOE Contracting
Officer must be notified. The liquidated damages apply at a rate of $10.00 per
day per person for each day the employer failed to pay the proper overtime
compensation per employee that the contractor fails to properly pay. The
liquidated damages should be collected for all days in which the employer failed
to pay the proper overtime compensation. The DOE Contracting Officer may
notify DOL to determine whether additional enforcement actions should be taken.
Q: Are liquidated damages only calculated in the week the Overtime occurs? For
instance, if the worker is owed overtime, do liquidated damages continue for
every day it is not paid or only calculated on that week? Do you have to assess
the liquidated damages if it was not willful?
A: Liquidated damages are in addition to back wages due as a result of
underpayments of wages and/or proper overtime pay to covered workers. The
liquidated damages are computed at $10.00 per day per employee for CWHSSA
violations (i.e., with regard to each worker, $10 for each calendar day on which
the individual laborer and mechanic worked in excess of 40 hours in a given
workweek without payment of the required overtime compensation). The
assessment of liquidated damages is only for the days on which overtime pay is
due under CWHSSA (each day on which the covered worker worked beyond 40
hours in a given workweek and the worker was not paid the required proper
overtime pay). Note that underpayment of the required prevailing wage can result
in overtime pay violations, as well. Assessment of liquidated damages is a
requirement; however, the contractor may appeal to DOE, through the
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Contracting Officer. DOE has the authority to waive liquidated damages under
$500.00, depending upon the circumstances.
Training
Q: We have a construction Training Program (not an apprenticeship program)
and want to know whether the students must be paid DBA wages if they perform
some of their training on a government-funded construction site?
A: Payment of the DBA wages is required for the time spent performing work
during the students training at the government-funded job-site.
Examples: (1) Students go with a construction crew to participate in the work
while learning the particular skills of a classification. Pay students the wages
plus fringe, as set forth in the applicable DOL DBA Wage Determination (WD),
for the time spent on the work site.
(2) Students go to a DBA covered job-site for the sole purpose of observation
(i.e., no tool is picked up or used). No pay for students is required. A trainer may
provide students with a tour of the site, allow them to observe the workers in
action and demonstrate techniques as long as the students do not participate in
the activities.
(3) Students perform training work off the government-funded site after observing
the workers on a DBA covered site – DBA does not apply. If students go to a
training center or building procured for the sole purpose of training, the building is
training prop and DBA does not apply.
(4) Students participating in an Employment Training Administration (ETA)
approved program are exempt from DBA; however, students receive the wages
set forth in the certified program. Unless ETA approves all program
requirements, student work performed on a DBA covered project requires
payment of the DBA wages plus fringe for all work performed on the DBA
covered work site.
Q: One of our program areas involves workforce development for people who will
work in energy efficiency and renewable energy. Part of that program is an
internship/fellowship program intended to place current students in organizations
performing energy efficiency and energy renewal work. Our questions are as
follows:
(1) In proposing a student internship and fellowship program, is it OK to restrict
eligibility to students who are either permanent residents of our state or attending
an institution of higher learning in our state?
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(2) In the event an intern/fellow performs work such as sealing ductwork in a
home, or performing audits on commercial or industrial buildings, will this trigger
Davis-Bacon reporting requirements?
A: (1) Nothing in the program prohibits restricting an internship to State residents
or attendees of a State institution of higher learning.
(2) We assume the intern/fellowship is funded by a grant awarded under a
statute requiring payment of DBA prevailing wages, such as the American
Recovery and Reinvestment Act of 2009 (Recovery Act).
Under the Recovery Act, DBA requires contractors to pay their laborers and
mechanics performing construction type activities the wages found to be
prevailing in the locality. 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-fuel processing plant learning the
operations would not be subject to DBA requirements and neither would others
performing energy audits.
Payment of the DBA prevailing wage is required if the intern performs work on a
federally-funded project (e.g., sealing ductwork in a home or installing other
energy efficiency equipment on a federally funded project). It is the type of work
performed that triggers the DBA requirements. If a project is DBA-covered, all
DBA reporting requirements must be fulfilled. If the intern’s work occurs on non-
federally funded projects, such as work with a local Habitat for Humanity, DBA is
not applicable.
Q: Our state is going to provide two federally-funded grants 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?
A: Under DBRAs such as the Recovery Act, 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
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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.
Q: A town will be using their federal 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 will 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.
A: Under a DBRA statute, 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.
Q: 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 the components for the CSP parabolic trough are
donated, and ARRA-SEP funds are only used to pay for the workforce training
program?
(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.
(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
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electrical load and thereby reduce its electrical costs, does this use affect the
determination of whether DBA applies to either question 1 or 2?
A: (1) 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.
A: (2) 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.
A: (3) 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.
Native American and Alaskan Native Tribe Questions
Q: Are Section 17 corporations subject to DBA? What about Alaska Regional
Corporations?
A: A Section 17 corporation is a federally chartered corporation, according to the
Indian Reorganization Act of 1934, 25 U.S.C. § 477 (1993) (IRA), which permits
the tribe to incorporate and obtain its corporate charter from the Secretary of the
Interior. Under a Section 17 corporate umbrella, the tribe becomes a separate
legal entity from the corporation created. The Section 17 Tribal Corporation has
the powers to contract, to pledge assets, and to waive sovereign immunity to be
sued. A Section 17 Tribal Corporation does not qualify for the "force account"
exception and employees of the Section 17 Tribal Corporation must be paid the
DBA prevailing wages when performing work on Recovery Act-funded projects.
Q: What about Alaska Regional Corporations?
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A: Alaska Regional Corporations are also federally chartered pursuant to the
Alaska Native Claims Settlement Act of 1971, 43 U.S.C. § 1606 (ANCSA). These
regional and village corporations are now owned by Alaska Native people
through privately owned shares of corporation stock. An Alaska Regional
Corporation does not qualify for the "force account" exception and employees of
the Alaska Regional Corporations must be paid the DBA prevailing wages when
performing work on government-funded or assisted projects.
Q: Does DBA apply to a tribal corporation established for the sole purpose of
benefiting the tribe, and which does not act independently from the Tribal
Council?
A: Non-Section 17 Tribal corporations are also not the same as the Tribal
government or Tribal governmental entity/organization. Tribal corporations are
formed similarly to corporations formed under State laws. Tribal corporations are
formed subject to Tribal statutes, just as corporations may be formed pursuant to
State statutes. Tribal Corporations do not qualify for the "force account"
exception and are subject to DBA whenever these corporations perform work for
the Tribes on projects covered by DBA. Corporations that are incorporated
pursuant to Tribe or State statute, including non-profits are subject to the DBA
requirements when performing work on government-funded projects. Tribal
corporations should assume they are covered by DBA when performing work on
Recovery-Act projects. If a tribal corporation believes it is NOT subject to DBA, it
may submit evidence to the DOE Contracting Officer who will seek the
assistance of the Office of General Counsel for a determination.
Q: Our Tribe will be contracting with the housing authority from a neighboring
Tribal village for our hot water retrofit activity. Will the Tribal employees from
another village be subject to DBA when working outside their own village?
A: Tribal employees who are hired to do work for another Tribal Government (not
their own), are subject to the DBA. In this case, the Tribe is contracting with the
other village to perform the hot water heater retrofit. Employees on the payroll of
one tribe, hired to do work for another tribe are subject to DBA.
Q: Our Tribe will be contracting with the Tribes housing authority to perform DBA
covered work. Will DBA apply to the employees of the Tribes housing authority?
A: Work performed by employees of a Tribal governmental organization (political
subdivisions), such as the Tribes housing authority, is not subject to DBA. An
organization is considered a ‘subdivision’ or entity of the Tribal Government
where the Tribal organization has been formed by a formal action of the Tribal
Council.
Q: Is it true that any employee of a Tribal government, even one who is hired
temporarily, is considered an employee of the Tribal government and not subject
to the DBA requirements when performing work for the Tribal government?
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A: Employees of the Tribe, even those hired on a temporary basis, are not
subject to DBA when performing work for the Tribal government. DOL considers
temporary tribal employees and regular full-time employees as “force account”
workers. As defined by the DOL, a “force account” is essentially a “do-it-yourself”
type of construction, where the governmental entity performs work using its own
employees. Force account construction is not generally subject to DBA because
employees of the Tribal Government are not considered “contractors.” To
determine whether laborers hired by a Tribe under a force account are subject to
DBA, the focus is on whether the laborer is actually an employee of the Tribal
Government. In general, answering the following questions can help make this
determination: 1. Are the workers paid directly through the tribal entity (i.e., listed
on the tribal entity’s payroll)? 2. Are the laborers employed directly by a unit,
department, or other governmental instrumentality of the tribe or village? 3. Are
the laborers provided the same benefits as other tribal employees (e.g., health
insurance, 401(k), vacation/sick time, etc.) and, if not, are they provided the
same benefits as other temporary or “like” employees of the Tribe (e.g., all force
account employees are provided X benefits, or are not provided Y benefits). If the
answer to all three questions is ‘yes’, then DBA does not apply. In the case
where a recipient answers ‘no’ to one of the three questions, and if the grantee
feels that its force account construction work is not subject to DBA, it may submit
evidence to the DOE Contracting Officer who will seek advice from the Office of
the General Counsel.
NOTE: “Force account” workers hired by a contractor (as opposed to a Tribal
Government) are subject to DBA as employees of the contractor.
Q: We will be hiring a non-profit Tribal owned company to do our retrofit activity.
Will the DBA apply?
A: It makes no difference whether the work for the Tribe will be performed by a
non-profit or a for-profit company, the Davis-Bacon Act (DBA) will apply. Both
non-profit entities and for-profit entities must comply with all DBA requirements. A
non-profit tribal-owned company is subject to DBA.
Q: We are a Tribe who hired a contractor who provided and installed energy
efficiency materials. The contractor is an owner of his business and he
completed the installation without any employees. The certified payroll records
show “Owner” only. Does the Tribe have to submit certified payrolls for the
matching funds it provided?
A: Where a grant required matching funds, all work covered by the grant and
match con
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Financial Assistance:
Q: We have received a matching grant; the grant is subject to the prevailing
wage requirements (DBA). The project is the installation of a steam turbine. The
installation will not occur for another 18 months; however, in the next few
months, a large non-operable boiler must be demolished to allow the new turbine
to occupy the same space as that old boiler. Grant funding will not be used for
the boiler demolition, but the demolition costs are approved as part of our
“match” in the grant agreement. Will the demolition project fall under DBA?
A: Yes, the demolition cost is part of the overall project and there will be follow-
on construction to install the steam turbine where the inoperable boiler is
currently located. A contract for demolition is usually not subject to DBA in a
case where there is no anticipation of follow-on construction or is too remote in
time; however, where the demolition is part of the “match” and/or follow-on
construction is anticipated and not too removed in time, DBA is not applicable to
the contract.
Q: Must a grantee go out for bid/proposal for installation costs of equipment
purchased for use by a City/State/County, when the unit of government has
employees to perform the work?
A: There is no requirement to compete a job that the grantee can fill in-house.
Where the grantee is a unit of government and uses its own employees to
perform the work, those employees are not subject to DBA requirements.
Q: Is the McNamara-O’Hara Service Contract Acct (SCA) applicable to grant
programs?
A: The SCA applies only to federal contracts, not to “federally assisted”
contracts. Federal Assistance includes grant programs, loans, loan guarantees,
and insurance.
Q: It is our understanding that with respect to revolving loan funds set up under a
Recovery Act funded State Energy Program or Energy Efficiency or Conservation
Block Grant (EECBG) Program grant Federal requirements such as Davis Bacon
remain for the lifetime of the revolving loan 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?
A: 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
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Davis Bacon Frequently Asked Questions (FAQs)
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 and inquiries from DOE and
Department of Labor (DOL).
Q: Our State agency has a policy of retaining Davis-Bacon records in its offices
for a period of one year and then in an off-site secure storage area for an
additional 3-years. Is the 3-year retention for the Recovery Act grants on-site or
off-site?
A: Retention of work payroll records is required for a period of 3-years after the
submission of the final cost report at the end of the grant. The State agency may
store the records at an off-site secure storage area out of its on-site offices after
it has reviewed the records for accuracy. Retention may be either on-site or off-
site for the 3-year retention period. The State agency may determine how long it
will retain the records in each location as part of its monitoring program. There is
no need to maintain the payroll records for more than a total of 3 years following
submission of the final cost report. Ease of retrieval, whether stored on-site or
off-site, is an important consideration should DOE, DOL, or authorized agents
require the records for an audit.
Q: 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.
A: 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 is located in the Special Terms and Conditions and the applicable
wage rates should be included in the official grant. The State agency or
department that oversees labor standards in your state may be able to provide
you with compliance information. You may contact your local DOL Wage & Hour
Division, for specific assistance in complying with the DBA. The Department of
Labor (DOL) also provides compliance information at:
http://dol.gov/compliance/guide/dbra.tlm#records.
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, we
provide the following for your consideration:
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It is our understanding that State recipients of a Federal grant must pay State
prevailing wages where those wages are higher than U.S. Department of Labor
(DOL) prevailing wage rates. 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 Optional 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. Contractors must maintain the following records:
Name, address, and unique identifying number (i.e., last four digits of the Social
Security number) of each employee. A contact person and number may also be
valuable should the employee later be owed back wages and cannot be located.
Each employee's work classifications and the type of tools they use.
Hourly rates of pay, including rates of contributions made or costs anticipated for
fringe benefits or their cash equivalents.
Daily and weekly numbers of hours worked.
Deductions made and the documentation requiring such deduction.
Actual wages paid
If applicable, detailed information regarding various fringe benefit plans and
programs, including records showing that the plan or program was
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, on a weekly basis each covered contractor and
subcontractor must provide the Federal agency or its designee a copy of all
payrolls providing the information listed above under for the preceding weekly
payroll period. A “Statement of Compliance” must accompany each payroll
submission. 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. The Optional Form WH-347 has a Statement of
Compliance on the second page and the contractor need only fill in the blanks.
The contractor may copy the statement and provide on a typewritten sheet or on
any form with identical wording. Submit the payroll record with the Statement of
Compliance within seven days after the regular pay date for the pay period.
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Q: A Recovery Act grant recipient has proposed a rebate program for small
businesses. The business will contract out the work and incur the actual costs.
The recipient will verify the work and issue a rebate to the small business. If the
recipient provides the option to redirect the payment to the contractor, will Davis-
Bacon apply?
A: DBA will apply to this rebate program because it is a rebate program to a
small business. For Recovery-Act funded grants, there is only one exemption
from the DBA requirements. The exemption is for “individuals” receiving a
grant/rebate/loan. It will not matter whether the funding/rebate goes directly to
the business owner or the rebate goes to the contractor, the DBA is applicable
and the small business must assure that the contractor pays the appropriate
wages to its workers, and the small business must obtain the certified payroll
from the contractor and forward those to the Recipient.
Q: 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)?
A: 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. 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 after it is constructed, and must
achieve a specific HERS rating to receive the incentive.
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Q: Our State 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. 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?
A: Based upon the information provided above, the residential building owners
will be receiving the federally-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.
Q: 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. 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?
A: Based upon the information provided above, the commercial building owners
will be receiving the federally-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.
Q.
A town will be installing energy efficient LED street lighting. The town is using
Federal Financial Assistance, that has a DBRA provision, 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.
A: Under a DBRA, 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 Financial Assistance. If a project does not involve
construction, the DBA is not applicable. In this situation, the federally funded
grant is used for the purchase of the LED lights, but the installation of those lights
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Davis Bacon Frequently Asked Questions (FAQs)
will be necessary to complete the project, which is the "installation of energy
efficient LED street lighting.” Such installation is considered construction – where
there is erection of light poles and where new fixtures are required. If the
installation simply involves the removal of the old light bulbs and the installation
of the new LED lights, that would not rise to the level of construction under DBA.
If the town used federal funding for the purchase of the equipment, the project
will have been “assisted by” the financial assistance and DBA would be
applicable to the installation. However, if the municipality uses
its own employees
to install the poles and lights, the work would not be subject to the DBA
requirements, because State and local units of government are not considered
contractors under the DBR
A when their own employees perform the construction.
However, the work would be subject to the DBA requirements where the State or
local unit of government hires contractors to perform the work of installing the
lights.
Q: 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 the regular 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?
A: Where the ARRA-funded SEP/EECBG 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 were the only work
to be performed, the installation would not be subject to the DBA as such work
does not rise to the level of construction. Also, changing out the light bulbs as
part of regularly-recurring, routine maintenance would not be covered by the
DBA.
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Davis Bacon Frequently Asked Questions (FAQs)
Q: 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 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?
A: In all cases, the contracting officer on a case-by-case basis makes a decision
as to whether the DBA applies. 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 this case DBA would be applicable to the entire project.
Q: 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.
A: Grantees and subgrantees must maintain DBA records pursuant to OMB
Circular A-110/10 CFR 600.242. Although 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
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Davis Bacon Frequently Asked Questions (FAQs)
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.
Q: If a contractor is suspected of violating Davis Bacon, is the Prime
Contractor/Grantee or DOE 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.
A: 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. 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 should withhold contract funds remaining due to the contractor
in order to pay the amounts due the employees. If after withholding funds, the
employer continues to refuse to pay, DOE will notify DOL of the need to perform
an enforcement investigation. The Prime Contractor is ultimately responsible for
payment to the employees of subcontractors.
Q: 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. Will Davis Bacon and Buy American provisions be applied
to the entire building remodel, even though the ARRA-SEP-funded portion is
contractually separate?
A: 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
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Recovery Act money and another that 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, 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 and the crews will be
working together in the same building. 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.
Q: If the SEP funds are used specifically to fund projects that directly benefit
private companies, and not on public works, does DBA apply?
A: DBA application to federal contracts is to contracts “for construction,
alteration, or repair, including painting and decorating, of public buildings and
public works ….” Under DBA, the term public building or public work is defined
as including “building or work, the construction, prosecution, completion, or repair
of which … is carried on directly by authority of or with funds of a Federal agency
to serve the interest of the general public regardless of whether title thereof is in
a Federal agency.” 29 CFR 5.2(k).
Since 1931, Congress has extended the application of Davis-Bacon prevailing
wage requirements to numerous programs that provide federal assistance for
construction through loans, grants, loan guarantees, and insurance by including
Davis-Bacon requirements in laws referred to as Davis-Bacon “related Acts,”
including the Recovery Act. The general Davis-Bacon provision in the Recovery
Act (Division A, section 1606), which applies to DOE-assisted ARRA projects,
requires “all laborers and mechanics employed by contractors and
subcontractors on projects funded directly by or assisted in whole or in part by
and through the Federal Government pursuant to this Act . . . ” to be paid at least
the wages the Secretary of Labor has found prevailing on similar construction
projects in the locality, in accordance with the DBA. The Copeland “Anti-
Kickback” Act and Reorganization Plan No. 14 of 1950 (5 U.S.C. Appendix) give
the Department of Labor responsibility for developing government-wide policies,
interpretations and procedures to implement the Davis-Bacon Act and Davis-
Bacon provisions in the Davis-Bacon “related Acts.” Applicable rules established
in DOL regulations are published in 29 CFR Parts 1, 3, 5, 6 and 7. These
include
regulatory definitions of various terms that apply to the administration and
enforcement of the Davis-Bacon and related Acts. See
29 CFR 1.2, 3.2 , 5.2 and
6.2.)
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Q: With individual home owners exempted from the DBA, what about businesses
that receive a revolving loan for energy efficiency from the grantee?
A: A business receiving a revolving loan for energy efficiency improvements is
subject to the DBA requirements. The business will be required to flow down the
DBA requirements to its contractors/subcontractors that perform the
improvement work and to forward the certified payrolls to the grantee/
subgrantee.
Q: If the energy auditors and the retrofit contractors are independent contractors
paid by the building owner and NOT Recovery Act funds - up front - BUT the
loans are backed by a Recovery Act loan loss reserve fund, do DBA
requirements apply to the auditors and contractors?
A: DBA applies to laborers and mechanics employed at the work site. Auditors,
inspectors, and other personnel not performing physical or manual work at the
site of the work are not covered by DBA.
A loan loss reserve fund, where the proceeds are neither loaned nor used to “buy
down” interest rates, is not subject to the DBA. The project funding is provided by
a third party entity. Therefore, in this example the contractors paid by the
business/building owner would not be subject to the DBA because the Recovery
Act proceeds are not being used to fund or assist the energy savings/renewable
energy project.
Q: I have received an Energy Efficiency Grant and we are upgrading old
incandescent stage lights, as well as building lighting. The first part of my
question involves the replacement of the stage lighting portable equipment.
These arrive ready to use with no install
ation required. Our unionized stagehands
place them as needed for each performance. I do not see where DBA applies to
these units. The others need to be installed and for that we are contracting a
licensed electrician, who will be contractually obligated to meet the DBA. Have I
missed anything?
A: Your analysis is correct. Where purchased equipment needs no installation,
DBA is not applicable. Where the purchased equipment requires installation,
DBA is applicable to the installation and the contractor must
comply with the DBA
requirements.
Q: Does the Davis-Bacon Act (DBA) prevailing wage requirement in the
Recovery Act apply to construction work, including alteration or repair, funded in
whole or in part by a Smart Grid Investment Grant (SGIG), which is (1)
performed
by the regular workforce employed by an investor-owned public utility or
cooperative; or (2) contracted to an outside contractor?
A: The DBA prevailing wage requirement does not apply to construction work,
including alteration or repair, funded in whole or in part by a Recovery Act SGIG,
which is performed by the regular workforce employed by an investor-owned
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Davis Bacon Frequently Asked Questions (FAQs)
public utility or cooperative. On the other hand, DBA prevailing wage
requirements apply where an investor-owned public utility or cooperative either:
(1) contracts out the work; or (2) hires a temporary workforce or hires additional
employees it does not treat as regular employees for purposes of its wage and
benefit programs, to perform any construction work, including alteration or repair,
funded in whole or in part by a Recovery Act SGIG.
Q: Does “construction, alteration or repair (including painting and decorating),”
for purposes of the Davis-Bacon Act (DBA) (Wage Rate Requirements Under
Section 1606 of the Recover Act (As Applicable) Clause of the assistance
agreement), include installation of a smart meter or energy consumption
monitoring network equipment?
A: No, the DBA would not be applicable to the routine installation of a smart
meter or energy consumption monitoring network equipment. The result is the
same whether the investor-owned public utility or coop performs the routine
installation itself or contracts out the work. Routine installation includes:
speaking with the customer; taking readings from both the old and new meters;
inspecting the old meter and the area; removing the meter cover by cutting or
unscrewing the seal, clip, lock or other device on the meter cover; removing and
inspecting the old meter; installing the new meter into the socket; and replacing
the seal, clip, lock or other device on the meter cover and the meter cover itself.
If the meter installation involves any rewiring or similar work beyond what is
needed for a routine installation or if it is beyond the skills of the meter installer,
then DBA is applicable to that work if performed by a contractor to the utility.
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