US Department of Labor Recovers $1.5m for Laborers, Mechanics Working On Multi-Billion-Dollar Federal Program at California Navy Base

Posted by National Alliance for Fair Contracting on

Agency: Wage and Hour Division
Date: March 20, 2024
Release Number: 24-468-SAN

35 contractors violated federal labor laws, shortchanging 413 workers

SACRAMENTO – Widespread violations of federal labor and contracting regulations by nearly three dozen employers with federally funded contracts at Naval Air Weapons Station China Lake resulted in the U.S. Department of Labor recovering more than $1.5 million in back wages and damages for more than 400 workers at the Ridgecrest facility.

Part of an initiative by the department’s Wage and Hour Division, the investigations sought to ensure contractors working on the $3.9 billion earthquake recovery program at NAWS China Lake met federal regulations for the employment of workers on projects supported with federal funds. The initiative seeks to bring construction employers into compliance and hold them responsible for paying workers prevailing wages and health and welfare benefits as required.

In investigations of 35 contractors spanning a two-year period, division investigators recovered more than $1.5 million in back wages and $32,291 in liquidated damages for a total of 413 workers for violations of the Davis-Bacon and Related Acts, the Contract Work Hours and Safety Standards Act, the Service Contract Act and the Fair Labor Standards Act. The division also assessed employers with $14,020 in civil money penalties as a result.

“Federal projects like these often strengthen the region’s economy, but when employers fail to pay workers all the required wages and fringe benefits they’ve earned, the full benefits are not felt,” explained Wage and Hour Division Regional Administrator Ruben Rosalez in San Francisco. “Employers unclear of their legal obligations and workers unsure of their rights can contact us to learn what it takes to comply with federal laws.”

Among the largest violators were subcontractors working on projects awarded to Environmental Chemical Corp., a Burlingame design and construction company doing business as ECC. The company was awarded two contracts as part of the Earthquake Recovery Program, including the largest construction project, the South Airfield Complex at NAWS China Lake. The subcontractors found in violation include:

  • Adecco USA Inc., a Jacksonville, Florida, recruitment and staffing service, failed to pay required prevailing wage rates, health and welfare benefits, and overtime while providing temporary staffing for food service, clerical, maintenance and housekeeping work. The division recovered $626,341 in back wages for 115 workers – some of whom were owed nearly $40,000 – for the violations.
  • Blue Knight Security & Patrol Inc., a Rancho Cordova security guard and patrol service providing security at a temporary housing site for construction workers, failed to pay overtime wages, prevailing wage rates and health and welfare benefits as required by law. The division recovered $313,045 in back wages for 54 workers.
  • Hensel Phelps, a Greeley, Colorado, commercial and institutional building contractor providing construction services, failed to pay prevailing wage rates, health and welfare benefits, and overtime compensation. The division recovered $184,172 in back wages for 37 workers.
  • ATCO Structures and Logistics, a Spring, Texas, prefabricated wood building manufacturer building living units for construction employees, failed to pay prevailing wage rates and overtime wages. The division determined ATCO owed $104,935 in back wages to seven workers.

In addition to these contractors, 31 additional contractors violated federal labor laws. View a list of all employers cited in these investigations.

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Final Rule Effective for the Davis-Bacon Act

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Updating the Davis-Bacon and Related Acts Regulations
Oct. 23, 2023

Effective today, October 23, 2023, the U.S. Department of Labor implemented the final rule, “Updating the Davis-Bacon and Related Acts Regulations.” This implementation follows the official publishing of the final rule in the Federal Register on August 23, 2023.

The change in regulation provides greater clarity and enhances the Davis-Bacon and Related Acts (DBRA) regulations’ effectiveness in the modern economy. Updates to the regulations strengthen and streamline the process for setting and enforcing prevailing wage rates on federally funded construction projects. This ensures that when the federal government invests in infrastructure, it also invests in workers.

These regulatory changes improve the department’s ability to administer and enforce DBRA labor standards effectively and efficiently. These changes include:

  • Creating several efficiencies in the prevailing wage update system and ensuring prevailing wage rates keep up with actual wages, which over time would mean higher wages for workers.
  • Returning to the definition of “prevailing wage” used from 1935 to 1983 to ensure prevailing wages reflect actual wages paid to workers in the local community.
  • Periodically updating prevailing wage rates to address out-of-date wage determinations.
  • Providing broader authority to adopt state or local wage determinations when certain criteria are met.
  • Issuing supplemental rates for key job classifications when no survey data exists.
  • Updating the regulatory language to better reflect modern construction practices.
  • Strengthening worker protections and enforcement, including debarment and new anti-retaliation provisions.

Visit our website for more information on the Davis-Bacon Final Rule and the Davis-Bacon Act.

Davis-Bacon Regulations in the Federal Register

AG Shapiro Calls for Federal Action to Protect Public Construction Workers

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Office of Attorney General Josh Shapiro (PA)
May 17, 2022

HARRISBURG–Attorney General Josh Shapiro and Secretary of Labor & Industry Jennifer Berrier filed comments today in support of the United States Department of Labor’s (“USDOL”) proposed updated regulations to the Davis-Bacon and Related Acts (“DBRA”).

“The Department’s proposal would put in place common-sense rules that experience shows will help enforcement agencies catch serious, intentional violations of the law,” said Attorney General Shapiro. “The men and women who build Pennsylvania’s infrastructure should be paid all of the money they have earned, and honest contractors should not have to compete on an uneven playing field with lawbreakers.”

The DBRA is intended to level the playing field among bidders for public construction contracts and protect workers. The DBRA accomplishes its goal by ensuring that all contractors working on projects that receive federal funding pay the wage rates that prevail in a given geographical region as determined by USDOL. Contractors are generally permitted to satisfy a portion of the required wage by providing qualifying fringe benefits to employees

“It’s been over 40 years since these regulations were significantly updated,” said Secretary Berrier. “These regulations will ensure that workers who perform the important and difficult work of updating Pennsylvania’s infrastructure are paid a true prevailing wage and receive the benefits they deserve.”

(Read More)

U.S. Department of Labor’s Wage and Hour Division publishes NPRM to update the Davis-Bacon and Related Acts

Posted by National Alliance for Fair Contracting on

On March 18, 2022, the Department published a notice of proposed rulemaking (NPRM), Updating the Davis-Bacon and Related Acts Regulations in the Federal Register.

Publication of the NPRM in the Federal Register begins the comment period that will be open for 60 days and closes on May 17, 2022. Anyone who submits a comment (including duplicate comments) should understand and expect that the comment will become a matter of public record and will be posted without change to www.regulations.gov, including any personal information provided.

Submit a Comment

The Wage and Hour Division (WHD) posts comments gathered and submitted by a third-party organization as a group under a single document ID number on www.regulations.gov. All comments must be received by 11:59 p.m. on May 17, 2022, for consideration in this rulemaking; comments received after the comment period closes will not be considered. Comments and data may be submitted online or by mail.

Submit a Comment

Address written submissions to: Division of Regulations, Legislation, and Interpretation, Wage and Hour Division, U.S. Department of Labor, Room S-3502, 200 Constitution Avenue, N.W., Washington, DC 20210.

For more information on the Notice of Proposed Rulemaking, Updating the Davis-Bacon and Related Acts Regulations, visit www.regulations.gov, contact the Wage and Hour Division or call toll-free 1-866-4US-WAGE.

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Virtual seminar on Davis-Bacon compliance for projects receiving funding under the Bipartisan Infrastructure Law

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The U.S. Department of Labor’s Wage and Hour Division will offer compliance seminars for contracting agencies, contractors, unions, workers, and other stakeholders to provide information on Davis-Bacon compliance requirements for projects receiving funding under the Bipartisan Infrastructure Law.

The Bipartisan Infrastructure Law, signed by the President on November 15, 2021, creates an historic investment in our nation’s aging infrastructure. Most of the construction projects funded or assisted through the Bipartisan Infrastructure Law will be subject to Davis-Bacon prevailing wage labor standards, and construction workers on these projects must be paid at least the locally prevailing wage and fringe benefits required for the work they perform. This ensures that responsible contractors can compete for federally-funded or assisted construction contracts, and that the workers who will build our communities, ensure our safety, and improve our infrastructure receive fair wages. This seminar provides an overview of how federal funding agencies, funding recipients, and contractors can meet their Davis-Bacon obligations on projects receiving BIL funding subject to the Davis-Bacon labor standards.

Register Now

The training is the latest in the Wage and Hour Division’s ongoing efforts to increase awareness and improve compliance with federal prevailing wage requirements among employers performing work on federally funded construction or services contracts. The webinar will include an overview of the Davis-Bacon compliance requirements followed by a Q&A session. Participants will be able to submit questions in advance or during the webinar. The interactive webinar will be offered on the alternative dates of February 28 and March 1, 2022, and participants may register for either date.

While seminar attendance is free, registration is required. Participants may register at Eventbrite. Additional information, including the links to video trainings and virtual Q&A session dates, will be provided to registrants.

Register Now

For more information on Davis-Bacon compliance with Bilateral Infrastructure Law, the Davis-Bacon Act, the Service Contract Act, and other federal wage laws, please call the Department’s toll-free helpline at 1-866-4US-WAGE (487-9243) or visit dol.gov/agencies/whd.

Gov. Pritzker Releases Public Works Plan (IL)

Posted by National Alliance for Fair Contracting on

MAY 18, 2019
Radio.com

CHICAGO (WBBM NEWSRADIO) — It’s finally here — a proposed $41.5 billion public works plan called Rebuild Illinois.

Gov. JB Pritzker’s office presented it to lawmakers Friday. If enacted, it would be the first capital construction plan for the state in a decade.

Mike Sturino, president and CEO of the Illinois Road and Transportation Builders Association, says the construction proposed is a 70-30 split between horizontal (roads and bridges) and vertical (buildings).

…

In an e-mailed statement, the governor’s spokeswoman, Jordan Abudayyeh, said:

“As a result of working group sessions with lawmakers on both sides of the aisle from both chambers of the general assembly, the administration is working on a preliminary draft of a comprehensive capital plan that will put 540,000 Illinoisans back to work and finally fix our crumbling infrastructure. The administration looks forward to continuing to engaging in productive conversations before the proposal is finalized.”

In an e-mailed statement, Senate Minority Leader Bill Brady of Bloomington said:

(Read More)

Prevailing wage law passed after Alabama workers built Northport VA

Posted by National Alliance for Fair Contracting on

By James T. Madore
Updated May 3, 2019 6:00 AM

The Northport VA Medical Center gave rise to the federal law stipulating that the prevailing wage be paid on federal building projects, according to historians and federal records.

The use of an out-of-state contractor and workers to construct the local hospital in the 1920s led Rep. Robert L. Bacon (R-Westbury) to propose what became the Davis-Bacon Act of 1931. The act is still in force, though it has been amended through the years. The hospital was in Bacon’s district.

Speaking at a 1927 congressional hearing, Bacon said several New York State contractors were outbid for the hospital’s construction because they included the state’s prevailing wage in their bids, which the successful bidder, from Alabama, had not done.

The out-of-state contractor “brought some thousand nonunion laborers from Alabama,” Bacon said. “They were herded onto this job, they were housed in shacks, they were paid a very low wage.”

He continued: “It seemed to me that the federal government should not engage in construction work in any state and undermine the labor conditions and the labor wages paid in that state. …The least the federal government can do is comply with the local standards of wages.”

Bacon’s bill languished until it was sponsored in the Senate by John Davis (R-Pennsylvania), a former labor secretary under three presidents, including Herbert Hoover. The bill was signed into law by Hoover in 1931.

More recently, opponents of the prevailing wage, such as columnist George F. Will, have asserted Bacon was upset because some of the workers on the Northport hospital’s construction were black. But neither he nor Davis spoke of race in the period leading up to the legislation’s overwhelming adoption, according to congressional records.

“For Bacon, the issue was not race,” economists Hamid Azari-Rad and Peter Philips said in “The Economics of Prevailing Wage Laws” (Ashgate, 2005). “The issue was that both black and white workers from Alabama were being paid very much less than the wage scale prevailing in New York.”

The original hospital buildings are no longer in use and will be demolished next year, a VA spokesman said.

(See Article)

Contractors, Your Subcontractors’ Wage And Hour Practices Are Your Business

Posted by National Alliance for Fair Contracting on

J.D. Supra
March 20, 2019

A prime or general contractor may be held jointly and severally liable for any violations, including wage and hour violations, by its subcontractors if the contractor is found to be a joint employer with the subcontractor under applicable federal or state law. As most contractors who work on construction projects covered by the federal Davis-Bacon Act (DBA) (direct contracts) and DBA Related Acts (federal funding or loan guarantees) (together, DBRAs) know, a prime or higher tier contractor is jointly and severally liable for violations by its subcontractors without the requirement of a joint employer finding. Many state prevailing wage laws (which require that wages for construction workers on public works projects be paid according to published wage scales) mirror the DBRAs’ liability law. The consequences for violations of the DBRAs, which are enforced by the U.S. Department of Labor (DOL), include back pay, penalties under the Contract Work Hours Safety Standards Act (CWHSSA) for overtime violations, and debarment from holding or working on any government contracts (after a referral and hearing process) for a period of up to three years.

For these reasons, contractors on DBRAs-covered projects should include terms and language in their subcontracts to help ensure their subcontractors are complying with the DBRAs regarding proper classification of workers, accurate timekeeping, timely payment of the correct prevailing wages and benefits based on job classification and hours worked, proper payment of overtime under CWHSSA, and the submission of accurate certified payroll. While rare, in addition to holding the prime or higher tier contractor responsible for payment of back pay and CWHSSA penalties for subcontractor violations if the subcontractor cannot pay or will not pay, the DOL has debarred prime contractors that have failed to properly monitor their subcontractors with respect to the DBRAs’ requirements.

District of Columbia; Maryland

For construction contractors who work on projects in the District of Columbia (D.C.) or Maryland, there is even more reason to mind the pay practices of subcontractors. In the last few years, both of these jurisdictions have enacted laws that, like the DBA, hold higher tier contractors jointly and severally liable for their subcontractors’ violations of local wage and hour laws.

In D.C., the local wage and hour laws specify that prevailing wages are covered, and can be recovered, in addition to local minimum and overtime wages.

The potential damages that can be recovered are crushing. In D.C., in addition to back pay, a contractor can be liable for an additional three times the back pay in damages (or quadruple recovery) as well as attorneys’ fees and additional penalties. In Maryland, the liability is slightly less, back pay plus two times the back pay in damages (or triple recovery) as well as attorneys’ fees and penalties.

(Read More)

The case for prevailing wage (NY)

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Foes say it adds costs to projects, but New York should strengthen this mandate


Patrick Purcell
February 19, 2019 12:00 AM

New York cannot afford to continue subsidizing a developers’ paradise with little to no public responsibilities tied to these taxpayer dollars.

This is a reality that Gov. Andrew Cuomo understands well. His inclusion of prevailing wage requirements on publicly subsidized projects in his budget proposal is a testament to that.

On the other side, there are forces with little interest in understanding just why prevailing wage requirements are so critical to the economic health and development of New York. An analyst for the Empire Center for Public Policy was quoted in a recent article stating, “New York’s prevailing wage mandate is an archaic law that needlessly adds 25% to the cost of construction in the city.” He said that outside of New York, the law increases project costs by 13%.

Now, these claims aren’t completely wrong. New York does have legislation that is archaic-legislation that gives private developers a loophole to take public subsidies for their projects with no responsibility to taxpayers in return. Countless projects across the state have received subsidies with zero wage requirements attached them. Just one example is Fresh Direct in the Bronx.

…

Those opposed to prevailing-wage legislation based on mistaken beliefs about increased construction costs also fail to take into account that the cost of living in New York is high. When developers come to New York-and especially when they building on taxpayers’ dime-they should have to pay their workers livable wages.

Counter to the idea that prevailing-wage mandates needlessly add to the cost of construction are the actual facts.

Fact: Prevailing wages would boost the economy upstate and downstate.

Fact: Mandating wage standards and taxpayer benefits would generate an additional $3.5 million to $6.9 million in annual sales tax revenue.

Cuomo sees the bigger picture. He recognizes that prevailing wage requirements are critical to get the best return on investment for taxpayer dollars and create jobs that serve New Yorkers rather than exploit them as many developers would do if it were up to them. Without these mandates and a clearer definition of public works, developers will continue to capitalize on loopholes in definitions of private projects and a lack of accountability to workers and taxpayers alike.

It’s up to Albany to do what is right for New York and pass public-works legislation before April 1. Tick tock.

Patrick Purcell is executive director of the New York State Laborers’ Union, which represents more than 40,000 construction workers

(Read More)

Flawed System Lets Contractors Cheat Workers on Federal Building Jobs

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AUG 21 2017, 4:58 AM ET
by MARYAM JAMEEL

This story was originally published by The Center for Public Integrity, a nonprofit, nonpartisan investigative news organization in Washington, D.C.

Like many buildings of its vintage, the century-old headquarters of the United States General Services Administration was once lined with asbestos.

The hazardous mineral, used for fireproofing, filled nearly a half-million square feet of the building on F Street in downtown Washington. It took more than a hundred licensed workers almost a year to pry out the substance during a renovation that began in 2011. The workers would log nightly nine-hour shifts, spent mostly in air-tight spaces that reached 100 degrees.

The pay for this grueling task was dictated by the Davis-Bacon Act, a 1931 law that promises specific wages and benefits for construction work on government buildings and infrastructure. The compensation set by the U.S. Department of Labor under the act, based on location and job duties, is often higher than what’s offered on private-sector projects.

Three workers on the GSA job who spoke to the Center for Public Integrity said their employer didn’t tell them what they were owed under the law. They and 124 others filed a complaint with the Labor Department’s Wage and Hour Division in 2011.

Investigators found in the workers’ favor, saying they should have earned $25.47 per hour including benefits, as skilled laborers, a specific category of employee under Davis-Bacon. Instead, their supervisors paid them $15.84 an hour and classified their work as general labor. Six years after the complaint was filed, the investigation remains open on appeal. The workers still haven’t gotten their back pay.

“You feel powerless,” said Luis Fonseca, one of the asbestos removal workers.

But in some ways, Fonseca and his former co-workers already have beaten the odds.

(Read More)