1. Don’t Let Your Bacon Get Burned! Understanding the Davis-Bacon Act Presented by: Kevin Riley, CCM, LEED AP BD+C November 18, 2013

2. RCEP Standards 2 MBP has met the standards and requirements of the Registered Continuing Education Providers Program (RCEPP). Credit earned on completion of this program will be reported to RCEPP. A certificate of completion will be issued to each participant. As such, it does not include content that may be deemed or construed to be an approval or endorsement by NCEES or RCEPP.

3. Purpose and Objectives The purpose of this presentation is to familiarize you with the requirements of the Davis-Bacon Act and other related acts and how they can affect you or your client on construction projects. At the end of this presentation you will: Understand the regulatory basis for compliance with the Davis- Bacon act. Know the owner's responsibilities. Know the contractor's roles and responsibilities. Understand the basic procedures for reviewing payrolls and conducting compliance interviews. This 50 minute presentation will provide you with one CE credit

4. Agenda Introductions Davis-Bacon Act & Other Related Acts Roles and responsibilities – Owner – Contractor Recap Questions

5. Disclaimer This presentation is intended as general information only. Every effort has been made to present timely and accurate information. However, there are no express or implied guarantees. The Federal Register and the Code of Federal Regulations remain the official source for this regulatory information and are subject to change.

6. References Code of Federal Regulations (CFR) – Title 29 (Labor) Parts 1, 3, and 5 U.S. Department of Labor – Wage and Hours Division website (www.dol.gov/whd) – Prevailing Wage Resource Book 2010 – Field Operations Handbook – 10/25/2010, Chapter 15

7. Davis-Bacon & Related Acts Origin of the Davis-Bacon Act Enacted March 31, 1931 Designed to prevent local contractor’s bids from being undercut Senator James J. Davis (R-PA) and Representative Robert L. Bacon (R-NY-1), co-sponsors of the act.

8. Davis-Bacon & Related Acts Davis-Bacon Act When and where does Davis-Bacon apply? Applies to prime contracts in excess of $2,000 for the construction, alteration, and/or repair of public buildings or public works where the U.S. or the District of Columbia is a direct party to the contract. Covers fifty states and D.C.

9. Davis-Bacon & Related Acts Davis-Bacon Act When and where does Davis-Bacon apply? Federal statutes that authorize Federal assistance in the form of contributions, grants, loans, insurance, or guarantees for programs. Examples: – National Housing Act – Housing Act of 1950 – Federal Aid to Highway Acts – Federal Water Pollution Control Act – American Recovery and Reinvestment Act of 2009 (ARRA)

10. Davis-Bacon & Related Acts Davis-Bacon Act What is Davis-Bacon? Davis-Bacon - Requires all contractors and subcontractors to pay the various classes of laborers and mechanics employed directly upon the site of the work on the contract the wages and fringe benefits listed in the contract’s Davis-Bacon wage determination to be prevailing for corresponding classes of employees engaged on similar projects in the local area of practice.

11. Davis-Bacon & Related Acts Laborers and mechanics Generally includes workers whose duties are manual or physical in nature more so than mental or managerial. Mechanics are considered to be any workers that use tools, or is performing the work of a trade. Includes apprentices, trainees, and helpers Does not apply to personnel whose duties are primarily administrative, executive, professional, or clerical

12. Davis-Bacon & Related Acts Laborers and mechanics General classifications for building trades Heat and frost insulators Bricklayers Boilermakers Carpenters Cement masons Electricians Iron workers Laborers – common Painters Pipefitters Plumbers Power equipment operators Roofers Sheet metal workers

13. Davis-Bacon & Related Acts Site of the work The place where the project called for in the contract will remain and any other site where a significant portion of the project is constructed. Includes – project dedicated job headquarters, tool yards, batch plants, borrow pits, etc. Does not include – permanent home office, branch locations, fabrication plants, etc. that do not depend on the project Does not include – fabrication plants, batch plants, job headquarters, tool yards, etc. of a commercial supplier established before the opening of bids and not located at the actual site of work.

14. Davis-Bacon & Related Acts Prevailing wage Predetermined Surveys conducted Prevailing wage – Wage rate for the majority of workers in a classification if they were paid the same or – Average of wages paid will be prevailing wage Process takes 12 – 18 months Data from metropolitan areas cannot be used to determine wages in non- metropolitan areas; and vice versa

15. Davis-Bacon & Related Acts Wage determination (WD) Predetermined wage rates Required to be included in bid specifications/contracts. Four categories – Building – Residential – Highway – Heavy Projects may require multiple wage determinations

16. Davis-Bacon & Related Acts Wage determination (WD) Two types issued – General In effect nationwide for most counties Published annually May be modified No expiration date, effective for the life of the project – Project Obtained on a case-by-case basis For use where there is no general wage determination available Effective for 180 days from the date of issue

17. Davis-Bacon & Related Acts Wage Determination

18. Davis-Bacon & Related Acts Wage determination

19. Davis-Bacon & Related Acts Wage determination

20. Davis-Bacon & Related Acts Wage determination

21. Davis-Bacon & Related Acts Wage determination

22. Davis-Bacon & Related Acts Wage determination Additional classifications – May be determined through an agreement – If agreement cannot be reached, submit request for determination

23. Davis-Bacon & Related Acts Local area of practice Same geographic area as the project

24. Davis-Bacon Related Acts Copeland “Anti-Kickback” Act - generally prohibits federal contractors or subcontractors engaged in building construction or repair from inducing an employee to give up any part of the compensation to which he or she is entitled under his or her employment contract and requires such contractors and subcontractors to submit weekly statements of compliance.

25. Copeland “Anti-Kickback” Act Certified payrolls Provide payroll information each week listing the following: – Workers on project, including work classifications – Hours worked – Wage rates – Benefits – Overtime compensation – Total wages paid – Information related to payroll deductions – Provide signed “Statement of Compliance”

26. Copeland “Anti-Kickback” Act Certified payrolls Form WH-347

27. Copeland “Anti-Kickback” Act Administrative info

28. Copeland “Anti-Kickback” Act Administrative info

29. Copeland “Anti-Kickback” Act Name ID number Withholdings Classification Multiple classifications

30. Copeland “Anti-Kickback” Act Hours worked Rate of pay Overtime pay Gross amount

31. Copeland “Anti-Kickback” Act Deductions Net wages Computations

32. Copeland “Anti-Kickback” Act Statement of compliance Form WH-347

33. Copeland “Anti-Kickback” Act Admin info

34. Copeland “Anti-Kickback” Act Statement of compliance

35. Copeland “Anti-Kickback” Act Form date

36. Copeland “Anti-Kickback” Act Fringes

37. Copeland “Anti-Kickback” Act Fringes

38. Copeland “Anti-Kickback” Act Exceptions

39. Copeland “Anti-Kickback” Act Statement of compliance

40. Copeland “Anti-Kickback” Act Certified Payroll Frequent mistakes Missing information – Payroll numbers – Contract/project numbers – Employee ID numbers – Wages, deductions, and hours worked Incorrect work classification Incorrect certified language Math errors

41. Copeland “Anti-Kickback” Act Other requirements Responsible for submission of all subcontractor certified payrolls Make payroll records available for inspection, copying, or transcription May be subject to debarment for non-compliance Maintain records for three years

42. Davis-Bacon Related Acts Contract Work Hours and Safety Standards Act (CWHSSA) Applies to contracts for construction >$100,000 Requires overtime pay for hours over 40 in a work week Overtime pay = 1 ½ times basic rate of pay – Time is computed for covered contract work only – Must use basic rate of pay – D-B fringe benefit credits are excluded – Premium pay is excluded in the computation – Premium rates for overtime in excess of the regular rate may be credited toward overtime pay

43. Davis-Bacon Related Acts Contract Work Hours and Safety Standards Act (CWHSSA) Failure to incorporate stipulations in contract does not preclude coverage Has no “site of work” limitations – all hours are covered No statute of limitations on employee suits No exclusion or exemption Liquidated damages Provides for health and safety standards

44. Davis-Bacon Related Acts Other Laws McNamara-O’Hara Service Contract Act (SCA) – covers service contracts Walsh-Healey Public Contracts Act – covers manufacturing of goods or services

45. Roles and Responsibilities Owner Provide the appropriate Davis-Bacon Wage Determination Ensure wage decision applicable clauses are in the contract Interface with U.S. Department of Labor Monitor labor standards compliance Enforce compliance Interface with federal agencies for reporting violations

46. Roles and Responsibilities - Owner Labor Standards Interview

47. Roles and Responsibilities Contractor Ensure the appropriate Davis-Bacon Wage Determination and applicable clauses are in all subcontracts and any lower tier subcontracts Ensure responsibility is met on all levels Classify all laborers and mechanics Request additional classifications Post all applicable DBA wage determinations Review and submit certified payrolls Keep and maintain accurate records

48. Roles and Responsibilities - Contractor Post all applicable DBA wage determinations

49. Roles and Responsibilities - Contractor Permit labor interviews during work hours on the job

50. Lessons Learned Adds cost to project Early involvement essential Lot of nuances No consistency DOL may not assist Unions may meddle Multiple wage determinations on project may result in leadership challenges

51. Recap Davis-Bacon Act & Other Related Acts Copeland “Anti-Kickback” Act Contract Work Hours and Safety Standards Act (CWHSSA) Roles and Responsibilities – Owner – Contractor

52. Questions?