LCA Flexibility for Labor Standards Responsibilities

While some aspects of labor standards administration are inflexible, such as which wage decision is applicable to a specific project, the following aspects are not. For these, HUD leaves the preference of how to achieve end results with the LCA.

  1. LCAs may obtain wage decisions directly from HUD expects that LCAs have the capacity to select the correct Davis-Bacon wage decisions from the web site for most projects they will undertake and to determine whether the wage decision is current for the appropriate lock-in date. LCAs that wish to continue obtaining wage decisions from HUD can make the request by telephone, fax, mail or email. HUD can send the applicable wage decision back to the LCA by any of these means also. LCAs can obtain wage decisions immediately from the website and, in most cases depending on the form of delivery requested by the LCA (e.g., email), LCAs should be able to obtain wage decisions from HUD within 24 hours or less.
  2. Preconstruction Conferences for labor standards purposes are optional. HUD acknowledges there are many good reasons to hold a preconstruction conference (PCC) such as discussing construction inspections, progress and contractor payment requirements, Section 3 employment and training and other issues particular to the project. However, HUD has determined that the time and resources used to conduct and document PCCs for labor standards purposes do not yield measurably better results.

    Many contractors have prior Davis-Bacon contract experience and have demonstrated successful performance. These contractors don’t require the repetitive basic training such as provided at most PCCs. Basic training for contractors new to Davis-Bacon projects can be provided more efficiently through printed material such as HUD’sContractor’s Guide to PrevailingWage Requirements for Federally-Assisted Construction Projects. Contractors who intend to comply can become familiarized with the fundamentals through the Guide and can contact the contract administrator concerning any questions specific to the project. Contractors who understand the requirements and who choose not to comply, will in all likelihood not be persuaded to fully comply just because they attended a PCC.
  3. Project Wage Rate Sheets may be offered for Davis-Bacon projects.

    Davis-Bacon wage decisions are incorporated into the construction contract to obligate the full compliance of the prime contractor and any subcontractors. There are three important uses for the applicable Davis-Bacon wage decision. One is for the contractor’s and subcontractors’ understanding about the specific wage rates that must be paid. The second is for posting at the job site so that the laborers and mechanics know what they are supposed to be paid. The third is for contract administrator’s use in reviewing certified payroll reports. A Project Wage Rate Sheet (HUD-4720) is a one-page, easy to read listing of the work classifications and wage rates that are applicable to the project. This one-page listing is much more user-friendly than the full-text wage decision for these three uses:

    1. A Project Wage Rate Sheet spells out more clearly the work classifications and wage rates contained in the wage decision for the contractor and subcontractors.
    2. A Project Wage Rate Sheet is much easier for laborers and mechanics to understand so that they can determine whether they are paid properly.
    3. A Project Wage Rate Sheet - a one-page listing - is more helpful as a ready reference for contract administrators reviewing payroll reports.
    LCAs can prepare a Project Wage Rate Sheet for contracts using the on-screen fillable versions in either the HUD Forms or Office of Labor Relations websites. The Project Wage Rate Sheet should be prepared only after the wage decision has been “locked-in” by contract award or start of construction, as applicable. HUD Labor Relations staff is available to provide assistance to LCAs in preparing Project Wage Rate Sheets. HUD strongly recommends incorporation of the full wage decision text into bid solicitations and contracts, either in hard-copy or by specific reference. (See also Labor Relations Letter LR-96-03.)
  4. LCAs may develop their own labor standards file system. HUD believes that LCAs can best determine how to maintain their files provided that certain minimum requirements are met. The minimum requirements include compliance with DOL regulations that certified payrolls and basic records relating to the payrolls are preserved not less than three years after completion of the project and the resolution of any enforcement actions which may carry over after completion. In addition, the files must be maintained in such a way that the LCA can utilize them to demonstrate its own compliance with its labor standards administration and enforcement responsibilities. For example, the LCA must, at HUDs request, demonstrate how it has documented that the eligibility of the prime contractor was verified for each contract.
  5. LCAs may target on-site interviews with laborers and mechanics. HUD is interested in using on-site interviews as a proactive enforcement tool rather than as a means to meet a “representative sampling” quota. Instead of conducting interviews randomly for the sake of assembling a sample, LCAs are encouraged to target interviews to projects or groups of workers where violations are suspected or alleged. In this way, on-site interviews can be used to support a specific on-going enforcement action(s). HUD realizes that this approach may mean that less on-site interviews may be conducted randomly; and HUD considers targeting a far more efficient and effective means of utilizing on-site interview resources.
  6. Payroll reviews may be limited to spot-checks and HUD-11 comparison; the Goal: to detect falsification. HUD believes that serious violations involving underpaid workers and significant wage restitution may be overlooked because the contract administrator is over-tasked with HUD-mandated payroll review minutiae. HUD recognizes that it is not possible to conduct 100% payroll reviews; therefore, it is not possible to identify and correct every discrepancy and underpayment. It is also the case that the violations disclosed behind falsified payrolls are much more egregious (both in terms of affected workers and the amount of underpayment) than violations that appear on the face of the payroll records. Accordingly, HUD has prioritized payroll reviews so that the objective is to detect falsification and so that our enforcement activities will yield the greatest impact. HUD has developed guidance on how to detect falsification through spot-checks and HUD-11 interview comparison. (See Willful violations/Falsification Indicators in the Appendix, page 44.)
  7. Routine payroll review results may be communicated to the prime contractor by telephone and documented with a record to the file. Many times, the types of deficiencies which come to the attention of the contract administrator can be handled more efficiently and just as effectively with good informal communication (e.g., a telephone call, email, etc.) with the employer/prime contractor rather than with formal letters. Examples of the types of issues that could easily be addressed informally - assuming the cooperation of both sides - include a missing payroll report or missing apprenticeship certificates, requests for employee authorizations for deductions, small underpayments that appear on the face of the payroll, and similar matters. With the prime contractor’s cooperation, these matters can be disposed of quickly with a telephone call and a brief note to the contract file documenting the call. If the employer/prime contractor does not respond appropriately to this type of communication, it may be necessary to resort to more formal means.

Consulting Services We Provide

  • Review public works preconstruction contracts
  • Monitor DIR contractor/subcontractor certified payrolls
  • Audit labor classification for each worker employed
  • Review DIR pre-DAS 140/142 submissions
  • Review CAC training fund contributions form CAC-2
  • Review DIR Fringe Benefits Statement PW-26
  • Monitor DIR wage determinations
  • Audit fringe benefits allowances
  • Review DIR holiday payment requirements
  • Audit DIR travel & subsistence requirements
  • Caltrans Labor Compliance
  • County of Sacramento Labor Compliance
  • City of Los Angeles Labor Compliance
  • Los Angeles Unified School District Labor Compliance
  • Federal Davis-Bacon Project Monitoring
  • Federal DBE Implementation & Review
  • Federal FAA AIP Goal Setting
  • DIR & Davis-Bacon Training
  • DIR Civil Wage Penalty Review
  • Local-Hire Review (e.g., San Francisco)
  • Skilled and Trained Workforce

Give us a call to discuss your labor compliance requirements: 916-234-3958.

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