Davis-Bacon Act Compliance: Questions and Answers for the DOE State Energy Program (SEP) and Energy Efficiency and Conservation Block Grant (EECBG) Program
You can find answers to the following questions dealing with compliance with the Davis-Bacon Act requirements of the 2009 Recovery Act.
Where to Obtain Additional Information:
For additional information, please visit the U.S. Department of Energy (DOE) Office of Energy Efficiency and Renewable Energy Weatherization and Intergovernmental Program Web site.
You may also visit the U.S. Department of Labor (DOL) Wage and Hour Division or call the DOL Wage-Hour Toll-Free Information and Helpline between 8 a.m. and 5 p.m. (in your time zone): 1-866-4US-WAGE (1-866-487-9243).
Why does the DBA apply to the DOE State Energy Program (SEP) and Energy Efficiency and Conservation Block Grant (EECBG) Program?
The American Recovery and Reinvestment Act of 2009 (ARRA) provided approximately $3.1 billion in funding for DOE's SEP and $3.2 billion in funding for DOE’s EECBG program. Section 1606 of ARRA specifies that laborers and mechanics employed by contractors and subcontractors on construction projects funded directly by or assisted in whole or in part under ARRA, which includes the DOE-funded SEP, must be paid at least the wages rates prevailing in the locality in accordance with the DBA. State and local units of government are not considered contractors under the DBA when the construction is performed by their own employees. Community Action Agencies (CAAs) and other local non-profit groups are covered by DBA when their employees are used to perform the weatherization work. In addition, contractors and subcontractors of State and local units of government and CAAs are also DBA-covered.
Are prevailing wages going to be required for all projects using ARRA money, whether or not they are public sector projects?
Yes.
Are local government providers employees subject to DBA?
Local units of government are not considered by the Department of Labor to be contractors or subcontractors, and their workers are not covered by DBA. Any contracts awarded by the local government, however, must include the DBA labor clauses and applicable wage determination(s) for work performed using ARRA-funded SEP and EECBG grant funding.
Is the $2,000 Davis-Bacon Act threshold based on the entire amount of the contract, including equipment costs, or only on the labor costs?
The $2,000 DBA threshold applies to the total cost of a contract; it is not based on contract labor costs alone.
Can States use HUD Davis-Bacon forms?
No. Please use the standard DOL forms. Forms are available on the www.wdol.gov webpage. For example the Certified Payroll form can be found at: http://www.dol.gov/esa/whd/forms/wh347.pdf
Does the DBA apply to the Appliance Rebate Program?
No, the DBA does not apply to the Appliance Rebate Program. The DBA only applies to laborers and mechanics performing construction at the work site. The Appliance Rebate Program does not involve the use of Laborers and mechanics performing construction at the work site. Additionally, the DBA does not apply to workers of the material suppliers who deliver and set up energy efficient appliances such as refrigerators, because material suppliers only spend an incidental amount of time performing work at the site.
If an agency uses other non-ARRA funding on a job that includes the use of SEP funding, does the contractor have to pay DB wages for all the work?
If the ARRA-funded work is done in conjunction with the non-ARRA funded work, so that all the work is ongoing at the same time, the whole project is subject to the DBA. The ARRA provides that "all laborers and mechanics on projects funded directly by or assisted in whole or in part" with ARRA funding are subject to the DBA.
If, however, the work is separated into two separate and distinct projects and not performed together (i.e., the work using non-ARRA funds is completed prior to or after the ARRA-funded work, the work crews are not working together, and separate contracts are used for the two types of work), the non-ARRA funded work would not be subject to the DBA. This separation of work answer assumes the non-ARRA funded work is not subject to DBA. It is incumbent upon Recipients and Subrecipients to check with other Federal agencies when using their funding as part of any comprehensive project to determine the applicability of DBA to the use of the funding.
Which workers are covered by DBA and which are not?
The DBA applies to laborers and mechanics employed at the work site. Auditors, inspectors, and other personnel not performing physical or manual work at the site of the work are not covered by DBA.
Are working foreman covered by the DBA?
Yes, working foremen are covered for the time they spend working as a laborer or mechanic. Time spent filling our forms or ordering supplies is not DBA-covered work.
Does DBA apply to workers of material suppliers who might deliver refrigerators or weatherization materials to a job site?
No. Material suppliers are not DBA-covered if they spend only an incidental amount of time performing work at the site.
Is it acceptable for a CAA or contractor to pay the DBA wage for all activities rather than worrying about those paid hours not actually on a job site? If so, then is there any need to separate those activities for reporting requirements?
CAAs and contractors may pay more than is required under the DBA, but they must never pay less. If the employee is paid the DBA wages for all activities, there would be no need to separate those activities for reporting requirements.
Are employers able to take fringe benefit credit against the DBA prevailing wage requirements?
Wages under the DBA include both the cash wages and "bona fide" fringe benefits that are provided to laborers and mechanics. A covered employer may discharge its prevailing wage obligation for the payment of both straight time wages and fringe benefits by (1) paying both in cash, (2) making payments or incurring costs for "bona fide" fringe benefits, or, (3) by a combination thereof. Examples of fringe benefits include health insurance, pension contributions, and paid time off. The use of a company truck or employer required payments into Social Security or worker's compensation insurance are not examples of fringe benefits. Employers can take credit for their bona fide fringe benefit costs towards meeting the applicable prevailing wage rate.
What is a certified payroll and where can I find a copy with instructions for completing it?
All laborers and mechanics employed on the work site must be paid, unconditionally, at least once a week. Covered employers must submit a certified payroll on a weekly basis. The employer must sign the certified payroll, affirming that the information is complete and accurate. Falsification of the certified payroll record can result in debarment from future contracts for up to three years and /or criminal penalties.
A copy of a certified payroll form (WH-347) can be found on the Labor Department's Wage and Hour Division ARRA website at http://www.dol.gov/esa/whd/recovery/.
Does the owner of a contracting or weatherization company have to be listed on the certified payroll record if they also perform the duties of a laborer or mechanic at the work site? Are owners of the business covered by the DBA?
Bona fide owners who are exempt pursuant to Department of Labor regulations, found at 29 CFR Part 541, are not laborers and mechanics and are not subject to the DBA. DOE recommends that owners of a business who also perform construction work list themselves on the certified payroll and under the column for "Work Classification" insert the word "owner." Additionally, the owner of a contracting or subcontracting company, or authorized officer or employee who supervises the payment of wages must sign the Statement of Compliance for the certified payroll.
Is it appropriate for Recipients, in certain instances, to conduct some on-site reviews at the local agency and contractor levels to ensure contract compliance?
Yes, it is appropriate for the State to conduct on-site reviews at the local agency and contractor levels. As set forth in the Davis-Bacon Act Requirements clause and the Recipient Functions clause that will be added to existing weatherization grants that already have been awarded to State/Recipients, Recipients are responsible for ensuring compliance with DBA requirements by Community Action Agencies, local agencies, contractors and their lower-tier subcontractors. On-site reviews are useful in ensuring compliance.
Will the new Weatherization Wage Determinations that DOL will be issuing apply to weatherization activities for all structures, including multi-family units, such as apartment buildings and/or public housing units?
Weatherization activities on structures that are five stories or more in height are subject to the existing "building construction" general wage determinations rather than the "residential weatherization worker" wage determinations that DOL issued.
Greater than 4 story multifamily homes: Use existing "Building Construction" Rates (see www.wdol.gov)
Four stories and less multifamily homes: Use new residential weatherization determinations.
If we are doing work in a multifamily building and using multiple sources of funding, which part of our work is covered by DBA?
If the ARRA-funded work is done in conjunction with the non-ARRA funded work, so that all the work is ongoing at the same time, the whole project is subject to the DBA. The ARRA provides that "all laborers and mechanics on projects funded directly by or assisted in whole or in part" with ARRA funding are subject to the DBA.
If, however, the work is separated into two separate and distinct projects and not performed together (i.e., the work using non-ARRA funds is completed prior to or after the ARRA-funded work, the work crews are not working together, and separate contracts are used for the two types of work), the non-ARRA funded work would not be subject to the DBA. This separation of work answer assumes the non-ARRA funded work is not subject to DBA. It is incumbent upon Recipients and Subrecipients to check with other Federal agencies when using their funding as part of any comprehensive project to determine the applicability of DBA to the use of the funding.
Exactly what activities are covered by DBA? Travel time to the job site? Loading and unloading trucks? Time spent in the warehouse or classroom training?
The DBA requirements apply to laborers and mechanics employed on the site of work. Time spent at the home office, picking up supplies, traveling to the work site, etc., are not DBA hours. However, the non-DBA hours may count towards overtime for covered workers if DBA hours and non-DBA hours exceed 40 hours in a week.
Are there going to be exemptions from DBA pay requirements for workers in training? For example, can local agencies pay a training wage and then have that wage modified to meet the prevailing wage rate once training is completed and the worker starts actual production?
A training or apprentice wage can be paid only if the trainee is registered in a DOL approved apprenticeship or training program or with a State Apprenticeship Agency recognized by DOL. Otherwise, the individual is to be paid the DBA rate for the classification of work that they are performing regardless of their skill level.
Do AmeriCorps volunteers need to have Davis-Bacon wages or be registered as apprentices or should they be exempt as they're government employees?
The DBA provides that it does not supersede or impair any authority otherwise granted by Federal law to provide for the establishment of specific wage rates. The authorizing statutes for the Youth Conservation Corps, 16 U.S.C. 1703(a)(3), and the Public Land Corps, 16 U.S.C. 1726, for example, specifically require the Secretaries of Interior and Agriculture to set the rates of pay or living allowances for the Corps' participants. Other youth programs, such as the American Conservation and Youth Service Corps (AmeriCorps), 42 U.S.C. 126551, and Volunteers in Service to America (VISTA), 42 U.S.C. 4955, specify in the statutory language the living allowances and other benefits that must be provided to each participant. Therefore, since these Federal youth programs have established specific compensation to be paid to participants, such participants would not be covered by Davis-Bacon labor standards.
How should agencies seek Davis-Bacon exemption for locally based volunteer organizations?
To determine whether any other Volunteer Organizations may be exempt, a written request for a determination should be accompanied with appropriate supporting documentation and must be sent to Mr. John L. McKeon, Deputy Administrator, Wage and Hour Division, 200 Constitution Avenue, N.W., Room S-3502, Washington, D.C. 20210.
What is the State's role in overseeing agency DBA compliance? Do they include reporting and recordkeeping requirements?
As set forth in the Davis-Bacon Act Requirements clause and the Recipient Functions clause that will be added to existing SEP grants that already have been awarded to State/Recipients, Recipients are responsible as part of their oversight role for ensuring compliance with DBA requirements by Community Action Agencies, local agencies, contractors and subcontractors. These clauses will specifically identify and clarify the responsibilities of Recipients under the weatherization grants. These responsibilities include reporting and recordkeeping requirements; obtaining, maintaining, monitoring and reviewing the payroll records of the Community Action Agencies, local agencies, contractors, and subcontractors; and assisting DOE in its DBA enforcement responsibilities. DOE is ultimately responsible for ensuring DBA compliance on ARRA funded weatherization projects. Recipient oversight functions are similar to prime and subcontractor DBA compliance responsibilities under a Federal contract. Costs associated with the Recipient's responsibilities for DBA compliance will usually be allowable costs in accordance with the terms of the SEP grant, which has been funded in whole or in part with ARRA funds.
Who is responsible for ensuring contractor compliance as well as timely and accurate reporting from contractors?
Recipients are responsible for ensuring compliance with DBA requirements by Community Action Agencies, contractors and lower-tier subcontractors. Many of the requirements, including reporting and recordkeeping, flow down to the Community Action Agencies and their contractors and lower-tier subcontractors. Therefore, the Community Action Agencies will also be responsible for ensuring compliance by its contractors and lower- tier subcontractors with DBA requirements, including reporting and recordkeeping requirements. Contractors hired by Community Action Agencies to perform weatherization work also have compliance responsibilities as well as reporting requirements. The specific responsibilities will be set forth in the DBA clauses, which will be included in the SEP grants and the subawards issued to the Community Action Agencies and local agencies as well as the contracts issued to contractors and lower tier subcontractors. However, DOE is ultimately responsible for ensuring compliance and enforcement of DBA on ARRA funded weatherization projects.
Our State agency has a policy of retaining Davis-Bacon records in its offices for a period of one year and then in an off-site secure storage area for 3 years. Is the 3 year retention for Weatherization on site or off site?
All work payroll records must be retained for a period of 3-years. The State agency may store the records at an off-site secure storage area out of its on-site offices once it has reviewed the records for accuracy. The records may be maintained either on-site or off-site for the 3-year retention period. The State agency may determine how long the records will be maintained at a particular location. There is no need to maintain the payroll records for more than a total of 3 years after the project is complete. The records, whether stored on-site or off-site should be maintained so as to be easily retrieved should DOE, DOL, or an authorized agent require the records for an audit.
Certified weekly payroll must be submitted to the "contracting and administering agency." In our State the State Agency will be the "administering agency" and the CAA is generally the "contracting agency." Therefore, will each of the many certified weekly payroll sheets have to be submitted to the State administering agency for each of the CAAs as well as each of their subcontractors? Or do they only get submitted up one level. As in, the HVAC contractor will submit his payroll to the CAA, and the CAA will submit just the CAA employees' payroll to the state. Either way, at that point, are they submitted to DOL? And if so, how often? Or, is it none of the above, and all paperwork is just held at the local level to be inspected by monitors at the appropriate time?
The certified weekly payroll sheets are submitted from the contractor to the State contracting agency. The contracting agency reviews the certified payroll from its contractors and then forwards the contractor's certified payroll to the State Agency. If the CAA is using its own employees to perform the weatherization work, the CAA submits its certified payroll to the State. Thus, if the CAA is using both its own employees and a contractor it would submit both certified payrolls to the State on a weekly basis.
The certified payrolls are not submitted to either DOL or to DOE. The State maintains the certified payroll on behalf of DOE and makes them available for DOE's use. The State must maintain records of its monitoring of DBA compliance and make those records available to DOE as part of the compliance checking undertaken by DOE. The States are also required to maintain all certified weekly payrolls on behalf of DOE for a period of three years after completion of the project.
Is it acceptable under 29 CFR 5.5 for States to require its sub-grantees to obtain independent weekly certification of its and its contractors' payroll to ensure compliance with Davis-Bacon?
Yes, it is acceptable. Sub-grantees are not required to have the payrolls certified independently; however, States may require its sub-grantees to obtain independent weekly certification if the State believes there is a high risk of the sub-grantee's non compliance. It is the State's ultimate responsibility to review the records and ensure compliance with Davis-Bacon. Payroll must be calculated and paid weekly to employees. Laborers and mechanics are paid on an hourly basis and the DOL wage rate will contain both an hourly rate and an amount for bona fide fringe benefits. This is a question as to whether it is an allowable expense under the Grant.
How will DBA compliance costs be charged at both the State and local level?
For States, the costs associated with DBA compliance can generally be charged either as an administrative expense or as a training and technical expense, if training for implementation of DBA is conducted by the State for its subrecipients. For local agencies (subrecipients), these costs can generally also be charged as an administrative expense. However, States should contact their respective DOE Project Management Center Project Officer or Administrator for specific guidance on budgeting and charging costs associated with DBA compliance.
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