Maintenance Wage Determination Process via HUD 4750 Form

Federal Labor Standards & Maintenance Wage
(HUD Programs)
June 21, 2012
Agency: HUD Region VII, Office of Labor Relations (OLR)
Presenter: Fannie Woods, Director, OLR
Contact Information: 913.551.5577
[email protected]
Administration and enforcement of:
◦ Federal labor standards on
 Construction and construction-related projects
funded/insured/assisted with HUD funds and/or through
HUD Programs
 Threshold $2K or more
◦ Prevailing maintenance wage rates determined or
adopted by HUD
 PHA Maintenance Functions
 Authority: U. S. Housing Act of 1937, as amended
 Contains provision (12e) that gives HUD this authority
Reorganization Plan No. 14 of 1950
Davis Bacon (DB) Act
◦ Prevailing wage requirement; pay weekly
Contract Work Hours and Safety Standards
Act (CWHSSA): overtime and penalties
Copeland Act: Weekly certified payrolls;
statement of compliance; anti-kickback;
criminal prosecution
29 CFR, Parts 1, 3, and 5
There are other federal labor statutes, such as FLSA, Portal-to-portal, McNamara-O’Hara
Service Contract Act, that may apply. These (as noted above) are the ones most used
and referred to on federally-funded/assisted projects.
Applies to construction and constructionrelated contracts in excess of $2K
◦ Made applicable to HUD programs by statutory
provisions in HUD-related acts (DBRA)
 The National Housing Act
 U. S. Housing Act of 1937, as amended
 The Housing and Community Development Act of 1974, as
 The National Affordable Housing Act of 1990
Authority for
◦ Submission of weekly certified payrolls and statements
of compliance
 Willful falsification - civil or criminal prosecution; may be
cause for debarment
◦ Restriction on Payroll deductions
 Only those permissible without DOL approval
◦ Criminal prosecution
 Requiring persons/companies to give up any part of
compensation entitled under his/her contract
◦ Only where DBA and DBRA prevailing wage provisions apply.
◦ Do no apply where the nature of federal assistance is only in the nature of a loan guarantee.
Compliance Officer – Appoint
Bid Documents include:
◦ Is the ED the right person for this position?
◦ Appropriate labor standard provisions
 HUD 5370 Form > $100K
 HUD 5370 EZ Form < $100K
◦ Applicable federal wage rate decision
Contract Agreements with prime contractors/subcontractors
◦ Appropriate labor standard provisions
 HUD 5370 Form > $100K
 HUD 5370 EZ Form < $100K
Current wage decision – based on “lock in” or “effective date”
◦ This is the date bids are opened “provided” the contract is awarded within
90 days after bid opening
◦ If contract awarded more than 90 days “after” bid opening
 Wage decision must be updated as of the “date of the award”
 Lock in date becomes contract award date
 Modifications published/received prior to the lock in date apply to
◦ Exception:
 Competitive Bid procedures ONLY
 Disregard modifications published/received less than “10” days before a bid
opening “IF” not a reasonable time to notify bidders
 DOCUMENT this action (permanent record in contract file)
Eligibility Documentation
 Check eligibility of prime or potential contractors before contract award
Project Inspections
◦ Document in master project file
◦ Does contract require a specific number?
Worker Interviews – HUD-11
◦ No set number
◦ Try to obtain a number from each trade on the job – target
primary and subcontractors with significant monetary
◦ Compare interview data to applicable certified payroll data
 If discrepancies between information, action to
Davis Bacon Poster
◦ Obtain English and Spanish versions
◦ Post “large” signs so all can see
◦ Include Authority’s compliance officer’s contact information in the
contact block of these posters
◦ Post in a “highly” visible area, protected from the weather
elements, that is easily accessible and traveled by most workers
working at the job site
Project Wage Decision
◦ Approved additional classifications
Other DOL required posters
◦ Go to www.dol website –posters are available – may download
and/or request the larger posters from DOL
After contract award, review wage decision
with prime or subcontractor
 Submit HUD-4230A Form for any required
trades not listed on wage decision
◦ Establish a Master Project File, which includes
Signed Contract Agreement
Project Wage Decision
Construction Start Notice
Lst of subcontractors-trade-points of contact - $$$
 Check eligibility at
Develop separate Subcontractors’ files, which
 Certified payrolls with signed statement of
compliance reflecting original
 WH 347, U. S. Department of Labor Payroll Form
 Statement of Compliance (back side of the WH
 Optional forms – must mirror data and wording
on the WH 347 and statement of compliance
 No deviation in language, as reflected on the
DOL statement of compliance
Go to below link for instructions/download
Weekly Certified Payrolls – Workers paid
◦ From all contractors performing work on the job – different
rules for:
 OLR Letter 96-01, – program offices – labor
relations - resources
 Self-employer owners/sole Proprietors with no crews
 Self-employer owners/sole Proprietors with crews
◦ Reflect all workers on the project and required data
◦ Workers Classification – Flags
No skilled trades—all laborers on a carpentry contract
Classification/Trade not on project wage decision
Helper Classification - Not authorized!
 Show journeyman trade; and apprentice level
 Verify validity of this classification, via a copy of:
 Individual Registration for each worker classified as an apprentice
 Program Standards - specific pages/information
 If silent on fringe benefits – what is the rule?
◦ Hours worked on project (daily and weekly; standard; overtime)
◦ Rates of pay (standard and overtime) – Flags
 Same for all workers; no workers working 40 hours a week
 Prevailing wage is: hourly basic wage + fringes = total prevailing
◦ Gross Pay – Flags
 Rounded numbers
Deductions – focus on “other”
◦ Only if deductions benefit the worker and “not” the
◦ Only if written consent and in advance of work to be
◦ Not a condition for and/or continuation of employment
◦ May be required by a collective bargaining agreement (CBA)
◦ May be court ordered, i.e. child support, garnishment,
Net Pay
Gross pay minus deductions
Matches amount actually paid to the worker
Statements of compliance
◦ Attached to each weekly payroll
◦ Completed fully/accurately
◦ Reflects only original signature
 Owner, Principal, Officer
 If not, written authorization from one of these persons
authorizing, by name, the person to sign this document
Notification of non compliance to contractors
◦ No standard format
◦ Captures problems noted:
 During payroll reviews
 Comparison of HUD-11 Interview to Payroll Data
◦ States action to resolve the deficiency
◦ Provides time line (usually 30 days) for resolution
◦ Serves as the basis to withhold funds if deficiencies
are not resolved
 AVOID closing contracts where there are violations of
federal labor standards
When discovered? Usually◦ During payroll reviews
Misclassification of workers
Apprentice – Out-of-ratio issues
Incorrect rates of pay
Erroneous overtime calculations
Math errors
Deductions that are not allowed
◦ Complaints from workers
 Document, review, investigate, decision, report results
Resubmitted payrolls are labeled “revised”
and carry dates of the initial payrolls
◦ Do not write on payrolls
◦ Do not return any payrolls
◦ Submission of a certified payroll labeled “revisedrestitution”
 New statement of compliance
 May request supporting documentation to verify that
payment was made and worker received it.
Develop intake process
Investigate allegations
Determine validity of allegations
Resolve complaint –
Document actions taken/resolution
Monitor grantees to assess grantee
performance of labor standards
responsibilities (may apply to city/county agencies)
◦ Ensure corrective action for non compliance
Collect and submit to HUD
◦ All enforcement reports required in 29 CFR 29, Part
5, Section 5.7
Submit directly to DOL – additional
classification requirements
◦ No contractor is paid without complying with federal
labor standards provisions
◦ Administrative Compliance Provisions Documentation
 EPLS check
 Weekly pay to workers
 Submission of weekly certified payrolls with
statements of compliance (original signatures;
revised payrolls
 Spot-check – review of payrolls
 Deficiency letters
 Restitution (underpayments or from review of the
HUD 11 not matching submitted payrolls.)
Report to HUD
◦ Workers complaint, if you are unable to resolve
◦ Any potential criminal or complex enforcement
matters, regarding contractors (non compliance)
Report Contractors (non compliance) to HUD
◦ Ref: 29 CFR part 5, Section 5.7
 Collective underpayments of $1,000 or more from one
Statutory Requirement – Maintain files
◦ PHAs, excluding Section 8 Only, report
◦ Report reflects:
 All contracts, subject to federal labor standards,
awarded during the reporting period
 If no contracts awarded during the period,
“report 0”
 Complaints
 Restitution paid
 Overtime and Liquidated damages ($10 per
Two Reporting Periods
◦ Period One: Oct 1 thru Mar 31
◦ Period Two: Apr 1 thru Sep 30
Due dates to OLR
◦ Usually region will determine date to submit to
 In Region VII – Apr 5 and Oct 5
What is the Annual Maintenance Wage Determination
◦ANS: Establishment of prevailing wage rates for maintenance
employees at low-income housing projects operated by Public
Housing Authorities
What mandates this requirement?
◦ANS: USHA of 1937, as amended
Which Authorities are required to
◦ANS: Any Authority that operates low-income
housing projects and employ and/or contract for any
maintenance functions.
are the effective dates of the
“annual” MWD approval?
◦ANS: Fiscal Year of the Authority
form is used for the approval?
◦ANS: HUD 52158
is an “additional classification” required for
maintenance employees and/or maintenance
◦ANS: For any work classification “not” listed on the approved
What if the Authority contracts out all of its
maintenance functions, is the Authority still required to
participate in this process?
What if the Authority fails to participate?
What happens if HUD OLR does not approve the annual
maintenance wage rates prior to start of the Authority fiscal year?
◦ANS: OLR will take the hit
is the recordkeeping requirement for work/employees
covered via this process?
◦Maintenance for no less than 3 years following the completion of
the work
is included with the records?
◦Employer name, address, and ssn
◦Correct work classifications
◦Hourly rate(s) of monetary wages paid
◦Rates(s) of any bona fide fringes benefits provided
◦Number of the daily and weekly hours worked
◦Gross wages earned
◦All deductions taken
◦Actual net wages paid
What happens if the Authority fails to pay the maintenance worker at
least the amount of the total wages approved on the HUD 52158 Form?
Why does HUD OLR require a copy of the Authority’s personnel
Why does HUD OLR require a copy of the job descriptions for the
work classifications listed on the HUD 4750 form?
Why is HUD OLR requiring a narrative and information on the
methodology used to determine the recommended wages on the HUD
4750 form?
Where does an Authority get comparable wage data?
◦Collective Bargaining Agreements (wage rates apply—regardless)
◦Request from local area private agencies that employ workers in
similar positions
◦City Human Resources – if the Authority is connected with the City
and comply with the City’s personnel/human resources policy
What is the timeframe for submitting this information to HUD
◦ANS: Authority submits at least 90 days before fiscal year start date
and HUD OLR approval 60 days before fiscal year start date
What happens if HUD OLR changes the worker’s classification?
Is the annual MWD for routine maintenance work?
What if the Authority has a non routine maintenance job, where does the
Authority get the base wage for its solicitation package?
How is “non routine” maintenance defined?
What if the Authority is unsure if it is a “non routine” project or a project
subject to federal labor standards requirements?
◦Call OLR to discuss
◦Rule of thumb: if construction is related in any way used DB wage
decisions – can not go wrong
What is the meaning of the term “force account”?
Can an Authority use this category for workers?
Are force account workers subject to federal labor standards
What hourly wage rate/fringes are used to calculate pay for these
Can an Authority used a public housing resident as a “volunteer” in a
maintenance function?
◦Ref: 24 CFR Part 70, and paragraphs 2-8 Volunteers, and 11-31,
Making Davis Bacon Work, January 2012
HUD Handbook 1344-1, Rev 2
Links via
 Program Offices
 Labor Relations
 Resources
Department of Labor DBRA Homepage
Department of Labor Regulations
Department of Labor Forms
Labor Relations Letters
On-the-Mark! Series
Available on-line in Labor Relations Library at:
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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