HOUSING OPPORTUNITIES COMMISSION OF MONTGOMERY COUNTY DAVIS BACON ACT GUIDELINES

Transcription

1 HOUSING OPPORTUNITIES COMMISSION OF MONTGOMERY COUNTY DAVIS BACON ACT GUIDELINES The purpose of this Davis Bacon Act Guideline ( Guideline ) is to implement the applicable provisions of the Davis Bacon Act (Public Law , ch. 411, 46 Stat. 1494), and more generally to set forth the policy of the Housing Opportunities Commission of Montgomery County (HOC). HOC commits to ensure that contractors and subcontractors are paid the approved wage determination under the Davis Bacon Act of Compliance will review Certified Payroll Reports to monitor the compliance status of contractors and sub-contractors engaged for projects covered under prevailing wage requirements. HOC will issue payments to all contractors as stipulated in the contract; provided that Certified Payrolls are correct and consistent with the rules set forth within this guideline. BACKGROUND The U.S. Department of Labor establishes the wage determination rates for the Davis Bacon Act of All Federal government construction projects in excess of $2,000 are required to adhere to the Davis Bacon Act requirements. Each contract subject to the Davis Bacon Act must contain a labor standard clause and the Davis Bacon wage decision. The labor standards clause describes the responsibilities of the contractor concerning Davis Bacon wages and the obligations to comply with the labor requirements. The Prime Contractor is responsible for the full compliance of all employers with the labor standards provisions applicable to the project. PROCEDURE Responsibilities of Compliance 1. Review the Contract Before a new contract is released for public bid, HOC s Real Estate Development Department submits a completed Project Information (PI) Form to the Compliance Department. Compliance staff reviews the scope of work and funding source of each project to determine if the project is covered under Davis Bacon requirements and if so, the appropriate wage determination sheet is applied. The contract award date determines which wage determination sheet to follow. The wage determination will remain in effect for the duration of the contract and is not subject to modification. Wage decisions for most projects are in effect at contract award or the start of construction (if there is no award), except: a. Contracts entered into pursuant to competitive bidding, the wage decision is effective on the bid opening date, provided that the contract is awarded within 90 days; b. If the contract is not awarded within 90 days, the wage decision is updated as of the date of award; or 1 Revised: February 2018

2 c. An agency may disregard modifications published less than 10 days before a bid opening, if it is found that there is not a reasonable amount of time to notify prospective bidders of the modification before bid opening. In this instance, a record of the finding is made to the contract file. The Compliance Department completes its portion of the Project Information (PI) Form and returns it to the Real Estate Development Department. The Real Estate team informs the Procurement Department of the appropriate Davis-Bacon requirements so that they may be added to the bid proposal which is released to potential respondents. Following selection of a contractor, Compliance staff must review the executed contractual documents to determine which wage determination to associate with the specific project. This includes wage determination information related to state, county, building types (public buildings, building or residential) and construction (alteration and or/repair, painting, decorating, or public works). 2. Certified Payrolls Reports Contractors and sub-contractors will send weekly Certified Payroll Reports for each week any contract work (or no work) is performed. Contractors must submit a weekly Certified Payroll Report (CPR) beginning with the first week their company works on the project and for every week afterward, until the contractor has completed work on the project. Contractors are encouraged to number the payroll reports beginning with 1, and to clearly mark the last payroll of the project Final. Contractors are not required to submit certified payrolls on the WH-347 Form; however, if the contractor uses an alternate payroll form and the document does not contain all of the necessary information that is on the optional form WH-347, the employer must resubmit the certified payrolls on an acceptable form. Regardless of the reporting methodology, all payrolls must include a Statement of Compliance. Only one Statement of Compliance is required for each employer s weekly payroll no matter how many pages are needed to report the employee data. The contractor must check one of the following items on the Statement of Compliance if the payroll indicates how fringe benefits are paid: 4a-Employer paying the required fringe benefits to approved plans or programs; or 4b-Employer paying any required fringe benefits amounts directly to employee by adding the fringe benefit rate to the basic hourly rate of pay; and/or 4c-The differences that the employer is paying. A portion of the required fringe benefit to programs and the balance directly to the employee. Note: If the wage decision contains fringe benefits but the payroll does not indicate how fringe benefits were paid [neither 4(a) nor 4(b) is marked on the Statement of Compliance, the contractor must submit a corrected certified payroll and pay wage restitution if underpayments occurred. However, if the basic hourly rates for the employees are at least as much as the total wage rate on the wage decision (basic hourly rate plus the fringe benefit rate), no correction is necessary. 2 Revised: February 2018

3 Contractors and sub-contractors must use the following procedures when submitting Certified Payrolls: Contractors and sub-contractors must submit Certified Payroll Reports beginning with the first week of work performed at the contracted site. Contractors and subcontractors must submit Certified Payroll Reports promptly, each week, following the close of the given pay week; and Contractors and sub-contractors must submit no work payrolls whenever there is a temporary break in work on the project. If the contractor or sub-contractor is a sole proprietor, they are not permitted to sign their own certified payrolls, even those for which no work was done during the given week. Instead, the contractor or sub-contractor completes all elements of the certified payroll except the final signature. The original certified payroll is then sent to HOC s Real Estate Department (RED), where the HOC project manager signs the payroll as the supervisor for the sole proprietor. Finally, the signed and completed certified payroll is sent to HOC s Compliance Department for review. 3. Compliance Review of Certified Payrolls HOC s Compliance Specialists must ensure the following: Payrolls do not reflect employee addresses or full Social Security Numbers (SSNs). Instead, the first payroll on which each employee appears shall include the employee s name and an individually identifying number (usually the last 4 digits of the employee s SSN). Subsequent payrolls, do not need to reflect the identifying number, unless it is necessary to distinguish between employees (i.e. if two employees have the same name); (page 2-9, Davis Bacon Labor Standards Guidebook, 2012) Employees work classification corresponds to one listed under the HUD approved wage determination. If there is an additional classification for the employee, the contractor is required to submit the HUD 4230-A Form (Additional Classifications). The contractor must reclassify the employees in accordance with the wage decision; (page 2-9/2-10/2-13, Correct hourly rates of pay, including rates of contribution or costs anticipated for fringe benefits; (page 2-10, Daily and weekly number of hours worked, including any overtime hours are calculated correctly; (page 2-10, Gross earnings, deductions made, and actual net wages paid are calculated correctly; (page 2-10/2-11, Note: Each Certified Payroll must show gross wages earned for work performed on the project. For employees with work hours and earnings on other projects, the Certified Payroll must show gross wages for the project over gross earnings for all projects (i.e. $425.40/$765.85) and base deductions and net pay on the all projects earnings. 3 Revised: February 2018

4 The Certified Payroll indicates 1099, if deductions are not taken from the gross earnings; (page 2-10, Evidence pertaining to any fringe benefit programs (fringe benefit breakdownsignature required); (page 2-10, The approval of any apprenticeship or trainee program, the registration or each apprentice or trainee, and the ratios and wage rate contained in the program are present (if applicable); Note: If the ratio of apprentices or trainees to journeymen on the payroll is greater than the ratio in the approved program, the contractor must pay wage restitution to any excess apprentices or trainees within 30 days. Also, any apprentice or trainee that is not registered in an approved program must receive the journeyman s wage rate for the classification of work they performed. (Page 2-10, If there is overtime calculated on the payroll, the overtime calculation is correct and the employees receives at least time and one-half plus any straight time and fringe benefits for any overtime hours worked on the project; (page 2-13, Davis Bacon Labor Standards Guidebook, 2012) Note: If the employee is paid cash fringe benefits, the statement above will apply. If the fringe benefits payment is within the employees benefit package, the statement above will not apply. Other deductions are identified or employee authorization is provided for unusual deduction activity. The contractor must identify the deductions, provide employee authorization or explain unusual deductions, as necessary; (page 2-13, Davis Bacon Labor Standards Guidebook, 2012) The payroll Statement of Compliance includes the original signature; (page 2-14, Note: The contractor must submit a signed Statement of Compliance for each payroll affected. An authorized person (e.g. CEO, CFO, Payroll Supervisor, etc.) must sign the Statement of Compliance. If the Statement of Compliance is signed by a person who is not a principle of the firm and that person is not authorized to sign, the contractor must submit a signature authorization or resubmit the Statement(s) of Compliance bearing the signature of a principle or other authorized signatory. (Page 2-14, The on-site interviews match the payrolls and do not contain any discrepancies (for example, the employee does not appear on the payroll for the date of the interview); (page 2-14, That documents are current and not expired; The appropriate contractor or subcontractor box is checked; (page 2-9, Davis Bacon Labor Standards Guidebook, 2012) The project name, number, and location is listed on the Certified Payroll; (page 2-9, The number of the payroll corresponds with the start of the pay week; o If payroll #1 is dated for 1/1/2016 then payroll #2 must be 1/8/ Revised: February 2018

5 All three week end dates are the same (if the contractor reports hours using form WH347); The signature on Page 2 of the payroll must be signed by a supervisor of the employees identified on Page 1 of the payroll form, unless the contractor is a sole proprietor. For sole proprietors the RED project lead from HOC signs the payroll as the supervisor for the given project; Handwritten corrections are initialed; and o If the contractors submits a certified payroll fully handwritten this is acceptable. All required fields are complete and accurate. Note: Any Certified Payroll Reports containing whiteout are not accepted and the contractor must resubmit. The contractor must submit any and all changes to data on a submitted payroll report by way of a corrected certified payroll. HOC will not return the original certified payroll report to the prime contractor for revision and resubmission. Compliance Specialists must refer to the most recent Davis Bacon Labor Standards Guidebook for additional information regarding review of Certified Payroll Reports. 4. Payroll Corrections Upon receipt of the corrected Certified Payroll, the Program Assistant will match and assign incorrect and correct payrolls to the Compliance Specialist who originally reviewed the payroll. The Compliance Specialists will use the following procedures when reviewing payroll corrections: If the Certified Payroll still contains errors, the Program Assistant is responsible for requesting update and follow-up from the contractor. The contractor has 30 days to make any necessary corrections to the Certified Payroll. 5. Reporting Requirements Compliance must prepare and submit an enforcement report to the U.S Housing and Urban Development (HUD) in any case where an employer underpaid its employees by $1, dollars or more, or if there is reason to believe the violation is willful. Compliance must also submit semi-annual enforcement reports to HUD concerning all Davis Bacon labor standards. The semi-annual reports are submitted as follows: In April and October of each year, all federal agencies must report to the Department of Labor on all contracts awarded, and on all enforcement actions taken during the relevant six-month period with the Semi-Annual report form HUD Responsibilities of Real Estate Development (RED) 1. On-Site Interviews (page 2-12, Real Estate Development Project Manager s will conduct on-site interviews once a week with the construction workers on the job site. The purpose of the interview is to capture observations 5 Revised: February 2018

6 of the work performed and to get the workers analysis on the number of hours they work, the type of work they perform, and the wages they receive. The interviewer will record the interview information on form HUD-11. RED staff must ensure the following: Ensure that the site of work is limited to the physical place or places where the construction is identified in the contract; The interviewer must interview at least one person from every contractor and subcontractor company on the job site, and sign/date each interview sheet; and Information gathered during the interviews is recorded on the Form HUD-11 (Record of Employee Interview). Note: This includes other adjacent or nearby property used by the contractor/subcontractor in the construction of the project. RED staff must ensure that the contractor remains in compliance throughout construction activities as follows: The contractor displays a copy of the applicable Davis Bacon Wage Decision and Department of Labor Form WH-1321 (Davis Bacon Poster) on the job site; (page 2-2, Note: The Davis Bacon Wage Decisions document is a listing of various construction work classifications and the minimum wage rates of people performing work in those classifications. A Project Wage Rate Sheet (HUD-4720), which is a listing of only the wage rates specific to the project which are made available on every project site. (page 2-1, 2. Withholding of Payments due to the Contractor (page 3-2, Davis Bacon Labor Standards Guidebook, 2012) If wage violations are not corrected within 30 days after notification, this may result in withholding of payments due to the contractor in the amount necessary to ensure the full payment of restitution. RED staff must complete pay applications by the last Thursday of each month and use the following procedures to complete payments to contractors: The Project Manager or Financial Analyst must review submitted Certified Payrolls and reconcile pay applications within seven (7) business days; The Financial Analyst staff must submit the comparison report to the Compliance Oversight Manager within two business days of the final review of all payrolls; Within 3 business days hours of receipt of the report, Compliance will follow up with any additional questions and or/ return the report with updates; and The Financial Analyst must follow up with the contractor within 24 hours of notification of any discrepancies or corrections. Unfound/ Unpaid Workers 6 Revised: February 2018

7 It is the contractor s obligation to demonstrate proof of payment to any employee to whom wage restitution funds are owed. This includes proof of payment and a signed restitution agreement in which the employee acknowledges receipt of the owed payment. If the wages due to any employee are not paid for any reason, the contractor and HOC must adhere to the following process: 1. The contractor attempts to contact the employee to whom wage restitution is owed so that he/ she can pay him/ her and receive the signed restitution agreement. 2. If, after 90 days, the contractor is unable to make contact with the employee to whom the restitution funds are owed, he/she gives the owed funds to HOC. 3. HOC places the owed funds into an escrow account, held in the employee s name, for a term of up to three years. 4. During these three years, the contractor must continue to attempt to contact the employee to whom the restitution funds are owed. Importantly, the contractor must document their attempts to contact the unfound employee throughout these three years. 5. Once the three years conclude, if the unfound employee still has not collected the funds owed to him/her, then HOC contacts HUD and sends the contents of the escrow account to HUD. Next, HUD sends the restitution funds to the U.S. Treasury Department where they are stored in escrow indefinitely. At this time, the contractor and HOC also submit to HUD the documentation which shows the contractor s continued attempts over the last three years to contact the unfound employee. (Page 48, Making Davis-Bacon Work, September 2011) Compliance Oversight The HOC Compliance Team is responsible for the enforcement of this guideline. Compliance will review a percentage of closed pay applications to ensure that payments were made accurately and timely. Please direct any questions regarding the Quality Control review process to the Compliance Oversight Manager. RELATED DOCUMENTS 1. Davis Bacon Labor Standards: A Contractors Guide to Prevaling Wage Requirements for Federally Assisted Construction Projects Upon request, copies of this guideline are available in an accessible format to persons with disabilities. 7 Revised: February 2018