Copeland “Anti-Kickback” Act (CA)

CA Purpose, Requirements, and Coverage

  • The CA and implementing regulations in 29 C.F.R. Part 3 apply to DBA and DBRA contracts and provide for the following safeguards:
    1. Prohibit "kickbacks" of wages and back wages.
    2. Require each contractor and subcontractor on covered projects to submit weekly a "Statement of Compliance" (i.e. certifying that the contractor/ subcontractor has paid the required wages). See 29 C.F.R. §§ 3.3 and 3.4, and in the DB contract clauses, 29 C.F.R. § 5.5(a)(3); FAR 48 C.F.R. § 52.222-8.)
    3. Regulate payroll deductions from wages.
    4. Specify methods of payment of wages.

CA Regulation of payroll deductions

  • Rules at 29 C.F.R. § 3.5 permit the following deductions from wages without DOL approval:
    1. Any deduction made in compliance with the requirements of Federal, State or local law, such as social security or federal or state income tax withholding.
    2. Deductions for bona fide prepayment of wages.
    3. Certain deductions for court ordered payments.
    4. Deductions for contributions to fringe benefit plans, provided that the deduction is not prohibited by law; that it is either voluntarily consented to by the employee in writing in advance of the time the work is to be done (not as a condition of employment) or provided for in a collective bargaining agreement; that no profit or other benefit is obtained by the contractor (or its affiliates); and that the deduction serves the convenience and interest of the employee.
    5. Deductions for purchase of U.S. savings bonds when voluntarily authorized by the employee.
    6. Deductions to repay loans or to purchase shares in a credit union, when requested by the employee.
    7. Deductions voluntarily authorized for contributions to organizations such as the Red Cross, United Way, or similar charitable organizations.
    8. Deductions to pay regular union initiation fees and membership dues, excluding fines or special assessments, provided that a collective bargaining agreement provides for such deductions.
    9. Deductions for the "reasonable cost" of board, lodging, or other facilities meeting the requirements of section 3(m) of the FLSA and 29 C.F.R. Part 531.
    10. Deductions for the cost of safety equipment of nominal value purchased (voluntarily or as provided for in a bona fide collective bargaining agreement) by the employee (as his or her own personal property) if such equipment is not required by law to be furnished by the employer, if such deduction is not prohibited by the FLSA or other law, and if the cost on which the deduction is based does not exceed the actual cost to the employer (where the employee purchases the equipment from the employer).
  • Pursuant to 29 C.F.R. § 3.6, any contractor may apply to the DOL for permission to make any deductions not listed in 29 C.F.R. § 3.5. DOL may approve payroll deductions whenever all of the following conditions are met:
    1. The contractor (and its affiliates) do not make a profit or benefit directly or indirectly from the deduction;
    2. The deduction is not otherwise prohibited by law;
    3. Either the deduction is provided under the terms of a bona fide collective bargaining agreement, or the employee voluntarily consented to the deduction in writing in advance of the time the DBA/DBRA work is to be performed (and the employee's employment did not/does not depend on such consent); and
    4. The deduction serves the convenience and interest of the employee.

CA "Statement of Compliance"

  • Contractors and subcontractors on DBA/DBRA-covered construction projects must submit a weekly "Statement of Compliance" certifying compliance with the DBA/DBRA/CA requirements during the preceding workweek. This "statement of compliance" is usually referred to as the certified payroll. 29 C.F.R. Part 3, 29 C.F.R. § 5.5(a)(3) and FAR 48 C.F.R. § 52.222-8.
  • Falsification of a certified payroll is a criminal violation that can result in a fine, up to 5 years in prison, or both. 18 U.S.C. § 874 & 1001. It can also be grounds for a private lawsuit under the False Claims Act. 31 U.S.C. § 3730.

CA "Anti-Kickback" provision 18 U.S.C. § 874.

  • The CA provides penalties to preclude a contractor or subcontractor from in any way inducing an employee to give up any part of the compensation to which he or she is entitled.
  • The "anti-kickback" provision of the CA provides that inducing any person employed on a federally funded or assisted construction project to give up any part of the compensation to which he/she is entitled is a criminal violation punishable by a fine, up to 5 years in prison, or both.
  • As early as possible, the WHD should be notified of potential criminal violations such as the kickback of wages and the falsification of certified payroll records.

CA Purpose, Requirements, and Coverage

  • The CA and implementing regulations in 29 C.F.R. Part 3 apply to DBA and DBRA contracts and provide for the following safeguards:
  • Prohibit "kickbacks" of wages and back wages.
  • Require each contractor and subcontractor on covered projects to submit weekly a "Statement of Compliance" (i.e. certifying that the contractor/ subcontractor has paid the required wages). See 29 C.F.R. §§ 3.3 and 3.4, and in the DB contract clauses, 29 C.F.R. § 5.5(a)(3); FAR 48 C.F.R. § 52.222-8.)
  • Regulate payroll deductions from wages.
  • Specify methods of payment of wages.

CA Regulation of payroll deductions

  • Rules at 29 C.F.R. § 3.5 permit the following deductions from wages without DOL approval:
  • (1) Any deduction made in compliance with the requirements of Federal, State or local law, such as social security or federal or state income tax withholding.

    (2) Deductions for bona fide prepayment of wages.

    (3) Certain deductions for court ordered payments.

    (4) Deductions for contributions to fringe benefit plans, provided that the deduction is not prohibited by law; that it is either voluntarily consented to by the employee in writing in advance of the time the work is to be done (not as a condition of employment) or provided for in a collective bargaining agreement; that no profit or other benefit is obtained by the contractor (or its affiliates); and that the deduction serves the convenience and interest of the employee.

    (5) Deductions for purchase of U.S. savings bonds when voluntarily authorized by the employee.

    (6) Deductions to repay loans or to purchase shares in a credit union, when requested by the employee.

    (7) Deductions voluntarily authorized for contributions to organizations such as the Red Cross, United Way, or similar charitable organizations.

    (8) Deductions to pay regular union initiation fees and membership dues, excluding fines or special assessments, provided that a collective bargaining agreement provides for such deductions.

    (9) Deductions for the "reasonable cost" of board, lodging, or other facilities meeting the requirements of section 3(m) of the FLSA and 29 C.F.R. Part 531.

    (10) Deductions for the cost of safety equipment of nominal value purchased (voluntarily or as provided for in a bona fide collective bargaining agreement) by the employee (as his or her own personal property) if such equipment is not required by law to be furnished by the employer, if such deduction is not prohibited by the FLSA or other law, and if the cost on which the deduction is based does not exceed the actual cost to the employer (where the employee purchases the equipment from the employer).

  • Pursuant to 29 C.F.R. § 3.6, any contractor may apply to the DOL for permission to make any deductions not listed in 29 C.F.R. § 3.5. DOL may approve payroll deductions whenever all of the following conditions are met:
  • (1) The contractor (and its affiliates) do not make a profit or benefit directly or indirectly from the deduction;

    (2) The deduction is not otherwise prohibited by law;

    (3) Either the deduction is provided under the terms of a bona fide collective bargaining agreement, or the employee voluntarily consented to the deduction in writing in advance of the time the DBA/DBRA work is to be performed (and the employee's employment did not/does not depend on such consent); and

    (4) The deduction serves the convenience and interest of the employee.

CA "Statement of Compliance"

  • Contractors and subcontractors on DBA/DBRA-covered construction projects must submit a weekly "Statement of Compliance" certifying compliance with the DBA/DBRA/CA requirements during the preceding workweek. This "statement of compliance" is usually referred to as the certified payroll. 29 C.F.R. Part 3, 29 C.F.R. § 5.5(a)(3) and FAR 48 C.F.R. § 52.222-8.
  • Falsification of a certified payroll is a criminal violation that can result in a fine, up to 5 years in prison, or both. 18 U.S.C. § 874 & 1001. It can also be grounds for a private lawsuit under the False Claims Act. 31 U.S.C. § 3730.

CA "Anti-Kickback" provision 18 U.S.C. § 874.

  • The CA provides penalties to preclude a contractor or subcontractor from in any way inducing an employee to give up any part of the compensation to which he or she is entitled.
  • The "anti-kickback" provision of the CA provides that inducing any person employed on a federally funded or assisted construction project to give up any part of the compensation to which he/she is entitled is a criminal violation punishable by a fine, up to 5 years in prison, or both.
  • As early as possible, the WHD should be notified of potential criminal violations such as the kickback of wages and the falsification of certified payroll records.


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.

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