HUD Region VII OFFICE OF LABOR STANDARDS AND ENFORCEMENT
Federal Labor Standards Compliance Training
Presenter: Fannie Woods, Director, Office of Labor Standards and Enforcement
U. S. Department of Housing and Urban Development (HUD), Region VII, KC, KS
Event: Lincoln, NE NAHRO
Date: September 16, 2015
Contact: 913.551.5577
Email: Fannie.J.Woods@hud.gov
1
OVERVIEW
 Monitoring - Management System Effectiveness
 Certified Payrolls – Common Deficiencies
 Compliance Recommendations
 Mandatory Reporting Requirements
 1099/Independent Contractors –DOL and HUD updates
2
Monitoring - Management System
Effectiveness
 What may constitute a monitoring finding of “an ineffective and/or no
management system to administer and enforce Federal Labor
Standards?”
 Common Management System Issues
3
Common Management System Issues
• FLS knowledge, education, and training
• Maintenance v construction and/or constructionrelated work
• Not a priority for PHAs
• Consultant-driven w/o PHA oversight
• *Executive Director (ED) function v staff function
• No written FLS procedures
• Incorrect and possibly “misuse” of force account
labor
• Incorrect solicitations or “quick fixes”
4
Common Management System Issues
• Missing Documentation
– No Contracts
– Contracts w/o required Federal Labor Standards
language; w/o required applicable version of the HUD
Form 5370; w/o required maintenance or Davis-Bacon
wage decision
– No verification of contractor’s and worker’s eligibility
– No subcontractors list and applicable verification
– No certified payrolls
– No inspection reports or Records of Employee
Interview, HUD-Form 11
5
HUD-11 Interview Form (Also
Spanish)
UNCLASSIFIED // FOUO
available in
HUD-11 Interview Form (Also
Spanish)
UNCLASSIFIED // FOUO
available in
HUD-11 Interview Form (Also
available in
Spanish)
Compare to payroll. Complete
this part, #17a and 17b.
UNCLASSIFIED // FOUO
Common Management System Issues
• Invoiced payments vs weekly payments
– Maintenance v construction/construction-related work
• No weekly payrolls received
• No payroll reviews/analysis/discrepancies identified
and resolved
• Classifications
– Misclassifications
– Missing Trades (not on wage decision)
– 1099 workers/independent contractors
– Apprentices
• Out-of-ratios
• No documentation
9
Certified Payrolls Deficiencies
Deficiencies
Completing, Submitting Certified Payrolls
10
Common Deficiencies
• Prevailing Wage Rate and Overtime Calculation
– Total Prevailing Wage (PW) – Wages not meeting
PW
– Fringe Benefits – No documentation
– Overtime Calculations - Miscalculations
• Other Deductions – No documentation
• Statements of Compliance – Not completed properly
• Ghost Employees – Interviews but not on payrolls
11
Common Deficiencies
• Too few or irregular hours
– Week work hours – less than 30 and 40
most payrolls
• High concentration of laborers
– Skilled jobs but unskilled workers
• Wages paid in cash
– No documents to verify payments
• Compliance Excess
– Too much documentation submitted
12
Common Deficiencies– Apprentices
• Require the following:
• Individual Registration for the apprentice
• Select pages from the DOL Approved Apprenticeship
Program Standards
– Title Page (shows name of program)
– Page reflecting ratio of apprentice to journeyman
– Page reflecting the pay scale for apprentices
» Includes apprenticeship level and percentage of
journeyman’s pay for each level
– Page reflecting fringes
» IF SILENT on fringe benefits, pay, in cash, fringe
benefit on wage decision.
– Signatory Page (reflects signatories to agreement)
• Absent this information, pay full journeyman's rates
13
14
UNCLASSIFIED // FOUO
Common Deficiencies -Fringe Benefits
• Supporting Documentation
– ONLY when the rate of pay is less than the total
hourly prevailing wage
• Required supporting documentation
– Provide an “Itemized Fringe List” for each employee
that lists:
• Each fringe benefit
• The hourly value of each fringe benefit
• Total hourly value of the fringe benefits
• Each employee reflected on the certified payroll
– The name, address, contact name, and contact
person for the 3rd Party Administrator for each
Fringe Benefit
– The frequency of deposits
15
Common Deficiencies – Other Deductions
• Supporting Documentation
– Child support, garnishment, other court ordered
payment: SUBMIT COURT ORDER
– Union dues and related items:
SUBMIT
COLLECTIVE BARGAINING AGREEMENT (CBA)
– Telephones, vehicles, tools, uniforms, lodging, rent,
loans, advance pay, any other than the above: SUBMIT
WRITTEN, DATED, SIGNED AUTHORIZATION FROM
WORKER “before job started.”
• Itemized each deduction, the amount, frequency,
and repayment period
• NOTE: Not all of these authorized items may be
permissible deductions and may be disallowed.
16
X
Great Subcontracting
8
123 Main Street, Somewhere, CA 91245
May 18, 2013
Police Dpt. Expansion
10435
M T W Th F Sa S
u
12 13 14 15 16 17 18
Jim Smith XXX-XX-1234
4
Laborer Group
1, Area B
8
Medi.
401K
$9.69
$3.92
$29.64
$392.80
0
8
SDI
$49.10
$36.50
$9.71
$89.46
$472.94
$562.40
17
Laborer Group 1,
Area B
Laborer
Apprentice
Laborer
Apprentice
4
8
8
8
8
18
19
20
Common Deficiencies -Fringe Benefits
• Statement of Compliance (SOC)
 Block 4a not checked -- fringe benefits paid
 Block 4b not checked – fringe benefits not paid
 If combination of both – nothing indicated
 In remarks, state the hourly value of the paid fringe benefits
and hourly value of cash fringe benefits
 Cash fringe benefit added to worker’s basic rate of pay
21
Statement of Compliance
• Requires Original Signature
• Requires signature from company
President, Owner, or Officer
– OR
from one of these – written, dated
authorization
• Authorizing another person to sign
22
December 1, 2012
Sally Jones
Payroll Officer
Great Subcontracting
Police Facility Expansion
09
October 2012
19
November 2012
Great Subcontracting
X
Sally Jones, Payroll Officer
Sally
Jones
23
Reporting Requirements
• Mandatory Reporting
– Semi-Annual Labor Standards Report
– Single contractor w/ restitution of $1K or
more (report, via letter, quarterly, to HUD
OLSE rep)
– Annual Maintenance Wage Determination
24
Semi-Annual Labor Standards Report
• Applies only to Federally-funded construction . . .
• Submit NLT Apr 5 and Oct 5 (only for work funded during one of
the following periods)
– Period 1 – Oct 1 thru Mar 30
– Period 2 – Apr 1 thru Sep 30
• Use HUD Form 4710, Semi-Annual Labor Standards
Enforcement Report – Local Contracting Agencies (HUD
Programs)
• Send to HUD OLSE Rep for your state
25
Other Reports
• Single Contractor – Restitution
– Submit report quarterly to HUD OLSE Representative
– Applies to any one contractor w/ restitution of $1K or more
• Maintenance Wage Determinations
– Applies only to PHAs (excludes Section 8 Only PHAs)
– Submit, via HUD Form 4750, Maintenance Wage Rate
Recommendation, to HUD OLSE Representative
– Submit 45 days prior to start of PHA Fiscal Year
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Compliance - Recommendations
•
Develop and implement written procedures for the administration and
enforcement of Federal Labor Standards -- applies to the HUD LCAs
•
Develop written contracts with the project wage decision and other Federal Labor
Compliance language in all contracts with all subcontractors (regardless of tier
level) – general contractors and LCAs enforce
•
Verify all contractors working on the construction work are eligible to work on
Federally-funded projects – via www.sam.gov – and document the results
•
Verify all workers working on the project are eligible to work in the United States
– use www.uscis.gov
•
Pay workers weekly - no exceptions
–
•
Ensure sole proprietors or self-employed workers, with no crews, performing
maintenance and/or physical work on the job site are paid at least the weekly prevailing
wage rate for trade performed
Submit weekly certified payrolls and statements of compliance
–
Ensure this is based on a one-week payroll and not a divided two-week payroll
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Compliance - Recommendations
•
Submit authorization letters for SOC signatures and “other” deductions
•
Submit the required apprentice information and apprenticeship program standards
•
Classify and pay workers correctly
– Paid hourly rate of pay + fringes must equal “total” hourly prevailing wage rate
– Obtain break out of each fringe benefit and the hourly value of each for each
worker performing work on a HUD-funded/assisted and/or construction work
•
Require the correct documents to verify workers classified as apprentices are
registered in a DOL-approved and/or state-approved apprenticeship program
– Acquire the individual registration forms
– Acquire the applicable Apprenticeship Program Standards
•
Identify potential violations pertaining to 1099 workers/independent contractors –
refer to appropriate State Agency
•
Review, analyze, identify and correct violations of Federal Labor Standards within 30
days
28
Compliance Recommendations
•
Develop more comprehensive Federal Labor Standards presentations during
pre construction briefings—maintain minutes of these meetings
•
Accept, investigate, and document workers’ complaints
•
Refer complex cases to HUD OLSE for review -- HUD, if necessary, will refer
to DOL for review/investigation
•
Submit Annual and Semi – Annual Reporting:
– Submit the HUD 4750, Request for Maintenance Wage Decision
– Complete and submit the required Semi-Annual Labor Standards Enforcement
Report due on April 5th and October 5th of each year
•
Withhold money from current contracts or “cross-withhold” from other
Federal contracts for contractors and subcontractors violating Federal Labor
Standards
•
Do not allow construction work, that triggered compliance with Federal Labor
Standards, to close with outstanding/unresolved labor issues
29
DOL Administrator’s Interpretation
1099 Workers/Independent Contractors
• Administrator’s Interpretation No. 2015-1
– Dated: July 15 2015
– Guidelines for categorizing workers as 1099/Independent
Contractors
– Examples of the application to various construction workers
• Co-partners
• Bonafide business vs non bonafide
• Economic realty factors – economic dependency on the one job
• HUD OLSE Summary Guidance
– Handout
• HUD OLSE Letter 96-01, Labor standards compliance
requirements for self-employed laborers and mechanics (aka
Working Subcontractors) (Rev 1)
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Resources
• http://portal.hud.gov/hudportal/HUD?src=/program_office
s/labor_standards_enforcement
– All resources pertaining to HUD’s Administration and
Enforcement of Federal Labor Standards
– HUD Library (includes OLSE Labor Letters)
– HUD Handbook 1344-1
– HUD Contractors Guide to . . .
– HUD Guide for State, PHAs, and Indian Tribes . . .
– Links to DOL websites for Davis-Bacon
– HUD Forms pertaining to Davis-Bacon
– Names and contact information for HUD OLSE staff throughout
the country
– Names and contact information for HUD HQ OLSE Staff
– Training Opportunities
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Resources – OLSE Staff
Fannie J. Woods, Director
Fannie.J.Woods@hud.gov; 913.551.5577
Michele J. Green, Senior Contractor Industrial Relations Specialist
Jurisdiction: Missouri, Wyandotte and Johnson County, KS
Michele.J.Green@hud.gov; 913.551.5557
William Moore, Contractor Industrial Relations Specialist
Jurisdiction: Kansas (excluding Wyandotte and Johnson County, KS) and Iowa
William.Moore@hud.gov; 913.551.6606
400 State Street
Gateway Tower II, 5th Floor
Kansas City, KS 66101
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SUMMARY
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DISCLAIMER
This presentation is intended as general information only and
does not carry the force of legal opinion.
The Department of Housing and Urban Development (HUD) is
providing this information as a public service. This information
and related materials are presented to give the public access to
information on HUD programs. You should be aware that, while
we try to keep the information timely and accurate, there will often
be delay between official publications of the materials and the
modification of these pages. Therefore, we make no express or
implied guarantees. The Federal Register and the Code of
Federal Regulations remain the official source for regulatory
information published by the Department of Housing and Urban
Development. We will make every effort to keep this information
current and to correct errors brought to our attention.
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HUD Region VIII OLSE
DRAFT