On Dec. 8, 2011, AGC completed its two-day webinar on the Davis-Bacon Act Today: What’s New for Federal Construction Contractors. The advanced-level webinar explained recent and upcoming happenings in the U.S. Department of Labor’s Wage and Hour Division (WHD) with regard to wage determinations and enforcement. AGC member Kris Talynn, HR director for Okland Construction, served as the moderator. An on-demand version of the webinar is available for purchase from the AGC Bookstore.
On the first day of the webinar, Natalie Boan, WHD’s branch chief of construction wage determinations, shared WHD’s survey plans for 2012. Specifically, surveys will be conducted in Maryland, Virginia and Washington for residential construction; in Utah, North Dakota, South Dakota, Ohio, Kentucky and Louisiana for building construction; in Arkansas, Idaho, Kansas, Maryland and Kentucky for highway construction; and in Guam for all types of construction, including heavy construction. Ms. Boan also discussed changes that WHD has made to its administrative processes in order to reach the agency’s goal of surveying each state once every three years, while encouraging contractors to participate in the survey process to ensure that actual wages paid are reflected on the wage determination. WHD shared its newly released electronic construction wage survey form, the WD-10, which offers new contractor-friendly amenities such as the ability to save and/or print a completed or partially-completed WD-10 prior to submission. “The ability to save a WD-10 will allow the submitter to submit multiple WD-10s without re-entering all information”, stated Ms. Boan. Deborah Wilder, author of AGC’s Davis-Bacon Compliance Manual – Third Edition and president of Contractor Compliance and Monitoring, Inc., offered best practices for requesting wage rates for classifications not listed on the wage determination, including tips for ensuring a response from WHD within 30-45 days. For contractors interested in seeing background data used to calculate federal prevailing wage rates, Ms. Boan announced that WHD will begin making such data available to the public on its website later in 2012.
On the second day, Timothy Helm, WHD’s government contracts branch chief in the office of enforcement, described WHD’s current and upcoming enforcement initiatives. In 2011, WHD conducted a total of 52 Davis-Bacon project investigations. Of the 52 investigations, 748 total contractor cases were opened resulting in over $5.5 million dollars in back wages paid to over 3000 employees. “The goal is to find those contractors who don’t want to play by the rules so that contractors who are intent on doing the right thing and providing a quality product to the government will prosper,” explained Mr. Helm. During the webinar, Mr. Helm also shared that the new practice of “project investigation activity,” in which WHD targets a particular government contract and investigates all of the contractors and subcontractors performing at the site of the project, will continue into 2012.
Ms. Wilder and Mr. Helm both gave several examples of common problems that are repeatedly showing up during construction contractor audits. While some common problem areas include the mishandling of apprentices and trainees, misclassification of fringe benefits, and inappropriate or illegal deductions, the most common problem appears to be the failure of contractors to flow down to subcontractors the requirements to comply with the Davis-Bacon and Related Acts. Mr. Helm advised attendees to make sure the “full labor clause, wage determination, and full Davis-Bacon provisions are flowed down to lower-tier subcontractors. Don’t reference WDOL.gov or include links to labor clauses.” Contractors are obligated, according to the labor clause in covered contracts, to include the full labor clause and wage determination in subcontractor agreements. If WHD finds during an audit that a subcontractor does not have the clauses or the wage determination in its agreement, “the contractor who failed to flow down the clause is liable for the back wages.” As a result, prime contractors are encouraged to ask for evidence of the flow down for added protection.
The webinar concluded with several tips for performing self-audits, corrective action and subcontractor training, along with best practices for preparing employees for onsite interviews during an audit.
For more information on the Davis-Bacon and Related Acts, visit AGC’s Labor & HR Topical Resources web page. Select the main category “Compensation” and the subcategory “Davis-Bacon Act.”
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