15k Application of Overtime Standards Under CWHSSA

15k APPLICATION OF OVERTIME STANDARDS UNDER CWHSSA

15k00 Overtime standards.

CWHSSA applies to laborers, mechanics, guards, and watchmen for the time spent on covered contract work only (i.e., total up all time each employee spent working on covered contracts (exclude all commercial, non-government work)). CWHSSA requires the payment of time and one-half the basic rate of pay for all hours worked in excess of 40 hours in a week. (The daily overtime requirement under CWHSSA was repealed in 1986.)

15k01 Basic rate of pay.

• The CWHSSA contains no monetary wage standards; monetary warate determinations, or the FLSA minimum wage. The basic rate of pay under CWHSSA is the straight time hourly rate and cannot be less than the basic hourly rate required in an applicable wage determination. Under DBRA, amounts paid as fringe benefits (both contributions to bona fide benefit plans and cash payments made to meet wage determination fringe benefits requirements) are excluded in computing overtime obligations under CWHSSA.
• If an employee worked in more than one classification and at different rates on covered contracts during a workweek, the overtime premium is computed based on the regular rate of pay. The regular rate is the weighted average of the rates; that is, the total earnings (except statutory exclusions) at the different rates are divided by the total number of hours worked in the workweek. Overtime may be computed based on the rate in effect during the hours worked over 40 in the workweek provided the provisions of FLSA 7(g)(1) or (2) are met. See 29 CFR 778.6, 29 CFR 778.115, and 29 CFR 778.415 -419.

15k02 (Reserved.)

15k03 Hours worked.

• The principles governing the determination of what constitutes working time for purposes of the FLSA are followed in determining hours worked by laborers and mechanics performing work subject to CWHSSA. However, the application of the overtime provisions under the CWHSSA differs from the FLSA in that only the hours actually spent on a covered contract or combination of covered contracts need be considered in computing the overtime pay.
• In the case of an employee working for two or more employers, all hours worked under the same contract are to be counted for purposes of CWHSSA overtime even though the employers are disassociated or otherwise separate, such as a contractor and a subcontractor.
• An employee working for the same contractor on two or more separately awarded contracts subject to the CWHSSA is entitled to have the hours worked on all such covered contracts combined and to receive overtime for all such hours worked in the workweek in excess of 40.
• When an employee performs two or more types of work for which different hourly rates are applicable (i.e., different classification, DBRA or SCA work which is all covered by CWHSSA or noncovered work, etc.), the CWHSSA overtime premium is computed under FLSA principles ( see FOH 32b05 and FOH 32h).
• CWHSSA does not have a site of work limitation on coverage. All hours worked on covered contracts (even at a fabrication shop away from the site) are combined for determining CWHSSA compliance. For example, if an employee starts the day performing covered work at the fabrication shop and then travels to the work site, the time at the fabrication shop and the travel time between the fabrication shop and the work site is hours worked covered by CWHSSA.

15k04 Computation of overtime when other premium payments are involved.

• Employees may receive an additional premium payment for employees performing hazardous, arduous, or dirty work. Such premium payments are not creditable as premium overtime work and must be included as part of the basic or regular rate in computing overtime under the CWHSSA in the same manner as under the FLSA. On the other hand, where the parties have agreed on premium rates for work qualifying as overtime under FLSA sections 7(e)(5), (6), or (7) which are computed as a multiple of the base rate specified by the agreement, the extra compensation paid for such overtime which is in excess of the statutory regular rate may be credited, under section 7(h) of the FLSA, toward the 50 percent premium compensation for overtime which is required by the act’s provision for an overtime rate of “not less than one and one-half times” the statutory regular rate. A like rule applies under the CWHSSA.
• For example, an agreement provides for a rate of pay of $13 an hour for a crane operator with double-time for work in excess of 8 hours/day or 40 hours a week. A crane operator works 9 hours a day 5 days a week. Under the agreement, the crane operator is entitled to $585 (45 x $13) in straight time compensation and $65 (5 x $13 for agreed double-time overtime rate) in overtime compensation for a total of $650. The overtime premium due under the FLSA is $32.50 (5 hours x .5 x $13) and the employer paid $65. Since the employee received a creditable premium, the employee is paid in compliance.

For another example assume the same employee works under an agreement that provides a rate of $12 an hour for a crane operator, with double time based on such rate for work in excess of 8 hours a day or 40 hours a week and an additional $1 an hour for a crane with a boom length of over 275 feet. Under the agreement, an operator of a crane with such a boom length who works 9 hours a day, 5 days a week is entitled to $645 for the week ($480 for 40 hours at $12, plus $45 for 45 hours long-boom rate of $1, plus $120 for 5 overtime hours at $24). If paid in accordance with such an agreement the employee is paid in compliance with the FLSA and the CWHSSA. Under both acts, the regular rate or basic rate is $13 an hour, which includes the $1 per hour for the long-boom time. An additional payment of not less than $6.50 an hour as extra compensation for weekly overtime is required for 5 of the 45 hours worked (5 x 6.50 = $32.50 required overtime premium). Thus, the statutory requirements are met by payment of $60 (5 hours x $12 agreed double-time overtime premium rate). The agreed double-time overtime payment which is creditable (5 x $12 = $60) is more than enough to satisfy the statutory overtime pay requirement (5 x $6.50 = $32.50).

15k05 Computation of overtime under CWHSSA when wage rate is higher than that required under DBRA or SCA.

The wage rate actually paid an employee for non-overtime work, when it exceeds the applicable DBRA or SCA monetary wage rate, is the basic rate of pay on which not less than time and one-half for overtime must be computed under CWHSSA (see 29 CFR 5.32(c)(1) and (2)). The basic rate under CWHSSA is the rate on which time and one-half overtime compensation is computed and paid under section 7 of the FLSA.

15k06 Computation of overtime when fringe benefits are involved.

• Any SCA or DBA fringe benefit payments which are excludable from the regular rate under section 7(e) of the FLSA, or their cash equivalent, may be excluded in the computation of the basic rate under CWHSSA, as provided in 29 CFR 4.182 and 29 CFR 5.32, respectively.
• A question of fact may arise as to whether or not a cash payment made to laborers or mechanics to whom a DBRA wage determination is applicable is actually a cash equivalent made in lieu of fringe benefit or is simply part of the straight-time cash wage. In the latter situation, the cash payment is not excludable in figuring overtime compensation. See 29 CFR 5.32(c)(1).

15k07 FLSA overtime exemptions and CWHSSA.

An employee may perform work in a workweek within the scope of an FLSA overtime exemption and also perform work covered by the CWHSSA. In such cases, during any such workweek in which the employee works more than 40 hours per week on contract work subject to CWHSSA, the employee must be paid additional half-time overtime for all such contract hours in excess of 40 per week. However, during any such workweek in which the employee does not work more than 40 hours on contract work subject to CWHSSA, an otherwise applicable FLSA overtime exemption will not be defeated.

15k08 FLSA section 7(f) plans and CWHSSA.

An FLSA section 7(f) plan which is found to be valid may continue to operate during periods in which the work of an employee is subject to CWHSSA provided that during those periods the employee is paid in compliance with the overtime provisions of CWHSSA.

15k09 Use of the fluctuating workweek under CWHSSA.

An employer may compensate employees who are subject to the overtime standards of CWHSSA on the basis of the fluctuating workweek method of payment provided:

• the criteria set forth in 29 CFR 778.114 are met;
• the employees’ regular rate of pay in any workweek does not fall below the applicable prevailing or minimum hourly rate required under the DBRA, SCA, and/or FLSA as applicable; and
• additional half-time overtime is paid for hours of work in excess of 40 per week.

15k10 Computing liquidated damages under CWHSSA.

The CWHSSA requires that “liquidated damages shall be computed, with respect to each individual employed as a laborer or mechanic in violation of any provision of this Act, in the sum of $10 for each calendar day on which such individual was required or permitted to work in excess of the standard workweek of 40 hours without payment of the overtime required by this Act.”

15k11 Computation examples.

• The following examples reflect the correct computations under DBRA and CWHSSA for an employee who worked 44 hours on a covered contract as an electrician, where the wage determination rate for an electrician is $12.00 (basic hourly rate) plus $2.50 in fringe benefits.
• If the employer paid $12.00 in cash wages and $2.50 in fringe benefits, the electrician would receive:

44 hours x 44 hours x

4 hours x ½ x

$2.50 = $12.00 = $12.00 =

$110.00 in fringe benefits $528.00 for prevailing wages $ 24.00 for CWHSSA earnings $662.00 Total

• If the employer paid $10.00 in cash wages and $4.50 in fringe benefits:

44 hours x 44 hours x

4 hours x ½ x

$4.50 = $10.00 = $12.00 =

$198.00 in fringe benefits $440.00 for prevailing wages $ 24.00 for CWHSSA earnings $662.00 Total

• The following examples provide two methods for the computation of overtime premium pay required under CWHSSA and/or FLSA for an employee who worked in different job classifications and at different rates of pay in the same workweek:

An employee is hired to perform work on a covered construction contract in two job classifications: painter and electrician. The wage determination rate for an electrician is $12.00 (basic hourly rate) plus $2.50 in fringe benefits. The wage determination rate for a painter is $10.00 (basic hourly rate) plus $3.00 in fringe benefits. The payroll shows that the worker performed painting and electrical duties as follows:

Painter hours Electrician hours

S M T W T F S 8 8 8

8 8 4

• Method 1: computation of the overtime premium based on the regular rate for the work week

Step 1: determine the straight time wages due, excluding fringe benefits

24 hours at the painter’s rate of $10.00 = 20 hours at the electrician’s rate of $12.00 =

Total straight time wages =

$240.00 $240.00 $480.00

Step 2: calculate the regular rate

($480.00 / 44 hours worked) = $10.91 regular rate

Step 3: compute the overtime premium due

½ ($10.91) x 4 overtime hours worked = $21.82

• Method 2: computation of the overtime premium basedon the rate in effect when the overtime hours were worked (see FOH 15k01)

In this example the 4 overtime hours occurred on a Saturday.

The overtime premium could be computed as follows:

½ ($12.00) x 4 = $24

Note: in some cases, a question arises over whether a cash payment made to a laborer or mechanic is paid in lieu of a fringe benefit contribution or whether it is simply part of the individual’s normal straight time wages. In the latter situation, the cash payment is not excludable in computing the overtime pay obligation.

• CWHSSA liquidated damages

Liquidated damages are computed at $10.00 per day per employee for CWHSSA violations.

Although the contracting officer is required in all violation cases to compute liquidated damages, the decision on whether to assess the damages is made by the federal agency. (Liquidated damages in excess of $500 may be waived or adjusted only with the concurrence of the WHD.)

Scenario:

M T W T Regular time 10 12 13 9

F S S Total 8 3 0 55

In the above example, no overtime premium was paid. The 15 weekly overtime hours were worked on 3 calendar days, Thursday, Friday, and Saturday. Thus, $30.00 in CWHSSA liquidated damages would be computed.

• Overtime requirements under the FLSA, as amended

Laborers and mechanics performing work subject to the predetermined minimum wages may be subject to overtime compensation provisions of other laws which may apply concurrently to them, including the FLSA. See 29 CFR 778.6.

As a general standard, section 7(a) of the FLSA, as amended, provides that an employer shall not employ any employee to work in excess of 40 hours in a workweek unless such employee receives compensation for his or her employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he or she is employed. See 29 CFR 778.101.

Unless specifically exempted, an employee who performs work on both federally funded/federally financed projects and commercial work in the same workweek must receive an overtime premium for hours worked in excess of 40 in the workweek. See 29 CFR 5.32 and in 29 CFR 778.

CWHSSA requires the payment of an overtime premium only if the laborer or mechanic works in excess of 40 hours in a workweek on covered contract(s). Overtime hours worked, which are not subject to CHWSSA, would be subject to the FLSA, unless otherwise exempted. The distinction is relevant in the assessment of liquidated damages as the FLSA does not provide for the assessment of liquidated damages.