HUD Region VII OFFICE OF LABOR STANDARDS AND ENFORCEMENT

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Federal Labor Standards Compliance Training

Presenter: Fannie Woods, Director, Office of Labor Standards and EnforcementU. S. Department of Housing and Urban Development (HUD), Region VII, KC, KSEvent: Lincoln, NE NAHRODate: September 16, 2015Contact: 913.551.5577 Email: Fannie.J.Woods@hud.gov

OVERVIEW

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Monitoring - Management System Effectiveness

Certified Payrolls – Common Deficiencies

Compliance Recommendations

Mandatory Reporting Requirements

1099/Independent Contractors –DOL and HUD updates

Monitoring - Management System Effectiveness

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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

• FLS knowledge, education, and training

• Maintenance v construction and/or construction-related 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”

Common Management System Issues

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• 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

Common Management System Issues

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UNCLASSIFIED // FOUO

HUD-11 Interview Form (Also available in Spanish)

UNCLASSIFIED // FOUO

HUD-11 Interview Form (Also available in Spanish)

UNCLASSIFIED // FOUO

Compare to payroll. Complete this part, #17a and 17b.

HUD-11 Interview Form (Also available in Spanish)

• 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

Common Management System Issues

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Certified Payrolls Deficiencies

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DeficienciesCompleting, Submitting Certified Payrolls

• 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

Common Deficiencies

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• 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

Common Deficiencies

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• 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

Common Deficiencies– Apprentices

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UNCLASSIFIED // FOUO14

• 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

Common Deficiencies -Fringe Benefits

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• 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.

Common Deficiencies – Other Deductions

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$89.46 $472.94Jim Smith XXX-XX-1234

4 Laborer Group 1, Area B

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Laborer Apprentice

Laborer Group 1, Area B

Laborer Apprentice

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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 benefitsCash fringe benefit added to worker’s basic rate of pay

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• Requires Original Signature• Requires signature from company

President, Owner, or Officer

– OR from one of these – written, dated authorization

• Authorizing another person to sign

Statement of Compliance

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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

• 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

Reporting Requirements

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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 state25

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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• 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

Compliance - Recommendations

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• 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

Compliance - Recommendations

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• 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

Compliance Recommendations

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DOL Administrator’s Interpretation1099 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_offices/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, KSMichele.J.Green@hud.gov; 913.551.5557

William Moore, Contractor Industrial Relations Specialist Jurisdiction: Kansas (excluding Wyandotte and Johnson County, KS) and IowaWilliam.Moore@hud.gov; 913.551.6606

400 State StreetGateway Tower II, 5th Floor

Kansas City, KS 66101

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SUMMARY

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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.

DISCLAIMER

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DRAFT

HUD Region VIII OLSE