Investigation Procedures

DOL has sole enforcement authority under the SCA (unlike the Davis-Bacon Act). The WHD applies the procedures described below in conducting investigations under the SCA, CWHSSA, FLSA, and other laws within its scope of enforcement responsibility.

The WHI will identify himself/herself and present official credentials. The WHI will explain the investigation process and the types of records required during the review.

Generally, a WHD investigation may consist of the following steps:

  1. Examination of records to determine which laws or exemptions apply. These records include, for example, those showing the employer's annual dollar volume of business transactions, involvement in interstate commerce, and work on government contracts. Information from an employer's records will not be revealed to unauthorized persons.
  2. Examination of payroll and time records, and taking notes or making transcriptions or photocopies essential to the investigation.
  3. Interviews with certain employees in private. The purpose of these interviews is to verify the employer's payroll and time records, to identify workers' particular duties in sufficient detail to decide which exemptions apply, if any, and to confirm that minors are legally employed. Interviews are normally conducted on the employer's premises. In some instances, present and former employees may be interviewed at their homes or by mail or telephone.

In a full SCA investigation, the WHI will include the following compliance issues in the investigation:

  1. Has the employer posted the "Notice to Employees Working on Government Contracts" (WH Publication 1313)?
  2. Did the federal agency incorporate the correct wage determination(s) in the contract?
  3. Did the employer post the wage determination or make it available to each employee?
  4. Are service employees paid the applicable prevailing wage(s) rate for the class(es) of work performed?
  5. Are service employees properly classified based on the work performed on a covered service contract?
  6. Has the employer kept accurate records of employees' hours of work, rate(s) of pay, payments made or costs incurred for fringe benefits, gross wages earned, and job classification(s)?
  7. Did individual service employees perform work in more than one classification; if so, was the work segregated in the employer's time and payroll records?
  8. If fringe benefits were not paid in cash, did the employer incur the appropriate costs to provide fringe benefits?
  9. Was overtime properly paid under either CWHSSA and/or FLSA?
  10. Are service employee(s) covered by a WHD certificate(s) that allows for the payment of special minimum wages to workers with disabilities under Section 14 of the FLSA?

Initial Employer Conference

  1. The WHI will contact a responsible official of the firm at the start of the investigation.
  2. Normally, the WHI will advise the official of the various steps that the investigation includes: the initial employer conference, contact with the federal contracting agency and prime contractor (if applicable), examination of the contract documents, examination of the basic payroll records, employee interviews, site inspection, and final conference.
  3. The contractor will be asked to provide information, such as the firm's legal name and responsible company officials, trade name(s) if any, address of the firm's headquarters, and federal tax identification (FEIN) number.
  4. Generally, the investigation covers a two-year period, but this period can be extended in certain instances. The contractor will be asked to make available basic time and payroll records for that period. (An FLSA investigation may be conducted concurrently with the SCA/CWHSSA investigation.)

Review the Prime Contract

The contracting agency and/or the contractor will be asked to identify:

  1. The contracting agency/prime contractor, name and telephone number of the contracting officer, contract number, amount of contract, purpose of contract, date of contract award, period(s) of performance (start and ending dates, if known), place(s) of performance.
  2. The WHI may request copies of the contract award letter, the labor standards clauses, wage determination(s) in the contract, conformance actions, contract modifications by which the federal contracting agency exercised options and/or extended the contract, and the e98 (if applicable) the federal contracting agency submitted to DOL to obtain SCA wage determination(s) for the contract. The WHI may review/duplicate portions of the scope of work from the contract.
  3. The WHI will review the contract to determine in particular:
    1. Are required SCA contract stipulations in the contract?
    2. Is the correct wage determination(s) in the contract?
    3. Does the wage determination(s) apply to the geographic area(s) of contract performance?
    4. Did the federal agency obtain and incorporate new wage determination(s) in the contract initially and/or at the execution of an option and/or extension of the contract term? 29 C.F.R. § 4.5(a)(2) and 29 C.F.R. § 4.6(b)(3).
    5. Is a section 4(c) collective bargaining situation applicable to this contract?
    6. Do employees considered to be outside the SCA definition of "service employees" because they are professional, administrative or executive employees meet the requirements for exemption under 29 C.F.R. Part 541? See SCA § 8 and 29 C.F.R. §§ 4.113 and 4.156.
    7. Are all the classes of service employees who are employed on the contract listed in the contract wage determination and/or conformance actions approved by DOL? 29 C.F.R. §§ 4.6(b)(1)-(2).

Subcontracts

  1. The WHI will review documents or information regarding labor standards and wage determinations that were provided by the prime contractor to the subcontractor. The subcontractor will be asked to provide a copy of the subcontract and any other relevant documents.
  2. The SCA contract clauses included in the prime contract require the prime contractor to insert the SCA stipulations and applicable wage determinations in any subcontract subject to the SCA. 29 C.F.R. § 4.6(j).
  3. The prime contractor is responsible for violations by subcontractors. 29 C.F.R. § 4.114(b).
  4. When a subcontractor is investigated, typically the WHI will notify the prime contractor at the beginning of the investigation.

Contracts that do not contain the SCA contract clauses

  1. If an WHI finds that a service contract in excess of $2,500 does not contain SCA stipulations and/or the applicable wage determination(s), the investigation may be suspended until the contract is amended by the contracting agency.
  2. Where appropriate, the WHD will advise the contracting agency to insert SCA stipulations and/or the applicable wage determination into the contract, and subsequently proceed with the investigation. The WHD may require retroactive application of the wage determination. 29 C.F.R. § 4.5(c).

Examination of Basic Payroll Records

  1. The WHI will examine the contractor's payroll records. The recordkeeping requirements of the SCA are stated in the SCA contract clauses. The contractor is required to maintain records for each employee subject to the SCA and to make these records available for inspection and/or transcription on the request of an authorized WHD representative. These records must be maintained for three years from the completion of the work. 29 C.F.R. § 4.6(g). Also, the contractor may be required to maintain and provide the basic time and payroll records required under the FLSA. 29 C.F.R. § 516.2.

Employee Interviews

  1. As stipulated in the SCA contract clauses, the contractor must permit authorized representatives of the WHD to conduct interviews with employees at the work site during normal working hours. 29 C.F.R. § 4.6(g)(4).
  2. Employee interview statements are confidential and therefore must be conducted in an area that provides privacy.
  3. The WHI may interview current and/or former employees.

Review of Conformance Actions 29 C.F.R. § 4.6(b)(2).

  1. If the WHI finds that the contractor employs classes of workers not listed on the wage determination, the WHI will:
    1. Determine whether conformance procedures were followed for the unlisted class(es).
      1. If the contractor has not received a response to a request for approval of a conformance action, the WHI will determine whether a conformance action was initiated, completed, approved, denied and/or returned to the agency for transmittal to the contractor.
      2. If the contractor and contracting agency have not taken appropriate action to submit a conformance request, the WHI can request the contractor to submit a request. In addition, the WHD, upon discovery of a failure to follow the contract requirements regarding the submission of conformance requests, can determine a conformed classification, wage rate, and or fringe benefits that will apply retroactively to the date each affected class of employees commenced work on the contract. 29 C.F.R. § 4.6(b)(2)(vi).
  2. The investigator generally will wait until after the WHD conformance determination is made before proceeding to compute back wages due, if any, and complete the investigation.


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