Criteria For Approval Of Additional Classifications and Wage Rates
This section describes the detailed process for determining whether a request for an additional classification and wage rate can be approved. The criteria to be applied are:
- The work to be performed by the classification requested is not performed by a classification in the wage determination; and
- The classification is utilized in the area by the construction industry; and
- The proposed wage rate, including any bona fide fringe benefits, bears a reasonable relationship to the wage rates contained in the wage determination. 29 C.F.R. § 5.5(a)(1)(ii).
Following the criteria ensures that DOL processing of requests for approval of conformance actions can be expedited, and complications minimized in the event of reconsideration and appeal actions. Where this process is not followed by the contracting agency, delays can be anticipated in DOL processing of additional classification requests, and reconsideration and appeals of such cases may occur.
- Note: See separate guidance below for helpers, apprentices, trainees, welders, working foremen, technical and supervisory employees.
- Step 1: Is the requested classification already listed in the contract wage determination for the appropriate county and type of construction?
- If so, the classification and rate listed in the wage determination apply.
- Step 2: Can a classification in the contract wage determination - for the appropriate county and type of construction - perform the work?
- Note: If multiple wage determinations are included in the contract, reference is to work performed by classification(s) already in the wage determination on the portion of the project for which the additional classification is requested.
- Step 3: If yes, is the wage determination classification that may apply a union or non-union rate?
- If the classification in the applicable wage determination lists a union rate (the identifier above the classification will indicate the union source of the rate), then only information from the union segment of the industry for the type of construction in the area is relevant in determining whether the requested classification should be denied and the classification listed on the wage determination used for the work.
- If the classification in the applicable wage determination lists a non-union rate (indicated by a "SU . . ." identifier above the relevant classification listing), then a non-union rate for the classification has been determined to be prevailing for the given type of construction in the area, and only the practices of non-union contractors in the area may be used as a basis for determining whether the requested classification should be denied and the classification listed on the wage determination used for the work.
- If more than one classification in the applicable wage determination may perform the work, determining whether one of those classifications should be used, and the requested classification denied, depends on an examination of each in accordance with steps 3(A) and 3(B).
- Step 4: For each classification in question, is there evidence that the duties in question were performed by workers employed by contractors whose rate prevailed (union or non-union, as listed in the wage determination) on similar construction in the area during the year prior to bid opening/award of this contract? (See Fry Brothers Corp., WAB Case No. 76-6, dated June 14, 1977, and American Building Automation, ARB Case No. 00- 067, dated March 30, 2001 (and cases cited therein)). A brief synopsis of these cases is provided below. (See Reference Case Nos. 1 and 4).
- For example:
- For a building construction project, if the contract wage determination contains a union rate for the classification that may perform the duties in question, is there evidence that union workers in that classification performed those duties on building construction in the area during the year prior to award of this contract?
- On a highway construction project, if the contract wage determination contains a non-union rate for a classification that may perform the duties in question, is there evidence that non-union workers employed by non-union contractors in that classification performed the duties in question on highway construction project(s) in the area during the year prior to award of the contract?
- Step 5: If there is such evidence, the request for the additional classification must be denied, as a classification already in the contract wage determination performs the work for which the additional classification was requested.
- Example A - The wage determination classifications/rates are union:
- If a union rate is listed for a classification in the wage determination that may perform the duties in question, and if union worker(s) can be shown to have performed the duties in question in that classification on the same type of construction in the same area during the year prior to award of the contract in question, then in light of the first criterion for approval of an additional classification, the request for the additional classification must be denied.
- NOTE: A claim that the applicable union agreement applies to such work is normally not an adequate basis for denying the additional classification request when the work performed falls outside of what would generally be considered core craft work. Specific information identifying project(s) on which the union workers in that classification performed such work, and identifying the contractor who employed them on such project(s), typically is needed to establish that the work in question was performed by a classification in the contract wage determination.
- Such data generally is needed to support denial of a proposed classification on the basis that work is performed in the area by the classification already listed in the applicable contract wage determination. When there is evidence that union contractors in the area have established a local area practice of employing the union workers in a prevailing classification already listed in the contract wage determination when they perform the work for which an additional classification is requested, their project-based evidence is the basis for denial of the requested classification. While it is important to have evidence that the union classification listed in the wage determination has been used to perform the duties in question; generally it is not necessary to demonstrate anew that the wage determination classification and rate already listed in the contract wage determination is prevailing in the area for the work at issue in a request for approval of a different classification and rate for the work in question. See American Building Automation, ARB Case No. 00-067 (March 30, 2001). (A synopsis of the ARB decision in that case is provided below.)
- If there is evidence that the duties for which an additional classification is proposed have been performed using the union classification in the wage determination, then the work in question must be classified in accordance with the union classification in the contract wage determination, and at least the rate specified there, including fringe benefits, shall be paid to all workers performing work in the classification under the contract from the first day on which work has been performed.
- If there is no evidence that the duties in question were performed by the classification in the contract wage determination, move to step 6, below.
- Example B - The wage determination classifications/rates are non-union:
- If a non-union rate is listed in the contract wage determination for a classification that may perform the duties in question and non-union workers in the classification can be shown to have performed those duties on the same type of construction in the same area prior to award of the contract, then the request for the additional classification must be denied.
- Step 6: If the duties of the proposed classification are not performed by a classification on the wage determination, it must then be determined whether or not the proposed conformed rate requested bears a reasonable relationship to the wage rates already listed in the applicable contract wage determination schedule for the given county and type of construction. Please see AAM No. 213 for detailed guidance.
- Proposed rates should be compared to those already listed for classifications within appropriate subgroups. Thus, proposed rates for skilled classifications should be compared to those listed for skilled classifications on the wage determination; proposed power equipment operators should be compared to power equipment operators; proposed laborers to laborers; and proposed truck drivers to truck drivers.
- A determination of whether union or non-union sector rates prevail in the appropriate subgroup (skilled classifications, power equipment operators, laborers, or truck drivers) should be made.
- After reviewing the entirety of the rates within the appropriate category and sector, a rate that bears a reasonable relationship to those rates in the wage determination must be determined.
- A determination of whether any other considerations also apply should be made. For example, if the classification being conformed is a skilled classification and some of the wage rates for skilled classifications in the wage determination are lower than the rates for laborer classifications, then the contracting agency should generally consider only those existing skilled classification rates that are higher than the laborer rates to determine the proposed rate.
- Please see relevant decisions in appeals board cases, below:
- Skilled craft rates should bear a reasonable relationship to other skilled craft rates and conformance requests for skilled classifications should not be approved at wage rates below those already listed for other skilled crafts (excluding laborers, truck drivers, and power equipment operators) - (See M Z. Contractors Co., Inc., WAB Case No. 92-06, dated August 25, 1992, and Tower Construction, WAB Case No 94-17, dated February 28, 1995; reference case no. 2, below.)
- Rates for additional laborer, truck driver, and power equipment operator classes should normally be compared with other laborers, truck drivers, and power equipment operators, respectively. (See Tower Construction, WAB Case No 94-17, dated February 28, 1995; reference case no. 2, below.)
- "If the contract wage determination includes rates for skilled craft(s) where almost all skilled crafts are higher than the laborers' rate but a few skilled classifications are below the laborers' rate, it would be unreasonable to set a wage rate for the skilled conformed classification by simply setting the rate at the same level as the laborers' rate. (See M Z. Contractors Co., Inc., WAB Case No. 92-06, dated August 25, 1992).
- Where most of the wage rates and fringe benefits in a wage determination for "skilled" crafts are substantially higher than the wages and fringe benefits applicable to one or two other "skilled" classifications in the wage determination, mechanical adoption of the wage rate and fringe benefits applicable to the lowest paid "skilled" classification, or the wage rate and fringe benefit for the "laborer" classification, whichever is higher, does not satisfy the requirement that "the proposed wage rate, including any fringe benefits, bears a reasonable relationship to the wage rates contained in the wage determination." See M Z. Contractors Co., Inc., WAB Case No. 92-06, dated August 25, 1992).
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.
This email is intended for general information purposes only and should not be construed as legal advice
or legal opinions on any specific facts or circumstances.