Davis-Bacon and State Prevailing Wage Information

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2012 STANDARD SPECIFICATIONS FOR CONSTRUCTION - SECTION 107
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Contents

General

The following information clarifies various areas of DBRA and Michigan prevailing wage compliance oversight, and assist in consistent interpretation of the regulations.

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Definition of Site of Work

The USDOL regulatory definition (See 29 CFR 5.2) for “site of the work is the physical place or places where the . . . work called for in the contract [is occurring]; and any other site where a significant portion of the . . . work is constructed, provided that such site is established specifically for the performance of the contract or project.”


The site of work for most MDOT projects is defined as the entire construction site as specified in the plans and contract. The site of work also includes batch plants, borrow pits, job headquarters, tool yards, etc., provided they are established for and dedicated exclusively, or nearly so, to the . . . project, and are adjacent or virtually adjacent to the site of work.


The following locations are specifically excluded from the site of work definition:

  • Permanent home offices, branch plant establishments, fabrication plants, tool yards, etc., of a contractor or subcontractor whose location and continuance in operation are determined wholly without regard to a particular federal or federally–assisted project. In other words, if it is a permanent site that is not dedicated to the job, it is not within the site of work definition.
  • Fabrication plants, batch plants, borrow pits, job headquarters, tool yards, etc., of a commercial or material supplier that are established by a supplier of materials for the project before opening of bids, and not on the site of the work, even where such operations for a period of time may be dedicated exclusively, or nearly so, to the performance of a contract.

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Truck Drivers

Coverage of truck drivers under DBRA and state prevailing wage vary in several areas. The following guidance is to be used to determine whether truck drivers are covered under DBRA and state prevailing wage regulations.

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DBRA Trucking

Truck drivers are covered by DBRA while:

  • They are working on the “site of work.”
  • Hauling to or from a facility that is deemed part of the “site of work.” (For example, driving between the job site and a dedicated batch plant or tool yard located adjacent to, or virtually adjacent to, the job site).


Truck drivers are not covered by DBRA in the following instances:

  • If the driver is not working exclusively on the site of work. To be covered by DBRA, the time spent working on site must be more than de minimis (20 percent or more of the work week).


Examples when a truck driver is not covered by DBRA include, but are not limited to, the following:

  • While off the “site of work.” The transportation of materials supplies, tools, equipment, etc., from one site of work to another is not covered unless such sites are dedicated and adjacent.
  • While loading and/or unloading materials and supplies on the “site of work.” As a practical matter, since the majority of time spent by material delivery truck drivers is off site beyond the scope of DBRA coverage and the time spent on site is relatively brief, MDOT chooses to use a rule of reason and will assume that some activities will never exceed de minimis. These items include, but are not limited to:
    • Trucks delivering materials to a stockpile.
    • Trucks delivering materials along the jobsite for later installation. Example: concrete pipe, traffic control devices, etc.
  • Drivers traveling between a DBRA project and a commercial supply facility, while they are off the “site of work.”
  • The travel time between two DBRA projects. The one exception to this rule is when there are adjacent projects under the same or different contracts that were established to accomplish the same objective (60 miles of resurfacing may be broken into several contracts), then all of these projects are considered contiguous and travel between sites is covered by DBRA.

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State Prevailing Wage Trucking

Truck drivers are covered under state prevailing wage wages when:

Note: “Site of Work” and “de minimis” criteria are not applicable.


The truck driver is hired by the contractor for the sole purpose of providing transportation of materials from the source to the project, as well as time spent hauling materials from the project to an offsite location. The covered time starts when the truck driver enters the vehicle until the driver completes the transportation services. This time includes time spent driving to the project from the base of operations through the time the truck driver returns to the base of operations after completing the hauling services. The method of hire, whether subcontract, purchase order, invoice, or as an employee is immaterial. A typical example of this would be the delivery of hot mix asphalt to a road paving job, where the paving contractor has brokered non owner operator trucking to deliver the material to the project site.


If the driver is providing material hauling services for multiple projects, including non-covered and state prevailing wage jobs, the covered time begins at the point where the hauling services end for the unrelated project(s). The covered time ends at the point where the hauling services begin for the non-covered project(s), or when the truck driver parks the vehicle if the covered work is the last operation of the day. An example of a multiple project hauling operation where there are covered jobs and non-covered jobs follows.


The truck driver starts their day hauling gravel from a pit to a non-covered project. After delivering their last load of gravel to the non-covered project, they switch to hauling hot mix asphalt to a covered project. The covered time starts at the point the driver leaves the non-covered job and drives to the hot mix asphalt plant, including drive time. The covered time ends when the driver parks the vehicle after the last load has been delivered, including drive time to the base of operations, or the driver arrives at another non covered project to haul material.


In general, when a driver is performing work for the sole intended purpose of the covered project, all time spent is covered under state prevailing wage laws.


Truck drivers are not covered under state prevailing wage when:

The truck driver is delivering materials/product for the company of which they are employed, and that company is selling materials/product to the contractor. An example of this would be the delivery of concrete pipe to a project. The person delivering the pipe is also an employee of the pipe manufacturer and not the contractor.

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Owner-Operator Trucking, DBRA and State Prevailing Wage

Bona fide owner-operators of trucks who own and drive their own truck and operate the truck on the “site of work” are not covered under DBRA or state prevailing wage requirements. However, the contractor who hires the owner-operator must include the names of such owner-operators on their certified payrolls, but do not need to show the hours worked or rates paid, only the notation “owner-operator.” (Note: This applies only to the individual owner of a truck. The same policy does not apply to owner-operators of other equipment such as bulldozers, backhoes, cranes, welding machines, etc.)

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Product and Material Suppliers Personnel

Product and materials suppliers such as barricade companies are not generally subject to DBRA coverage unless they are spending more than a de minimis amount of time on the site of work (20 percent or more of the work week). This 20 percent rule applies to individual projects and is not cumulative.


However, the USDOL maintains that when a material supplier, manufacturer, or carrier undertakes to perform part of a construction contract as a subcontractor, its laborers and mechanics employed at the site of work are subject to the prevailing wage requirements in the same manner as those employed by any other contractor or subcontractor. Prevailing wages must be paid to the employees for all time spent working on the site of work, and certified payrolls must be submitted to the engineer. In other words, if the traffic control company puts the devices into place as specified by the contract documents, the work is covered. This includes placement and covering of lead in signing for the construction project and any other one time activity of this nature.


Examples of when DBRA coverage is required:

  • Placing/moving temporary signs and barricades on the DBRA covered site of work in accordance with the requirements of the contract (including initial placement).
  • Providing flag control on a DBRA covered site of work.


Examples when DBRA coverage is not required:

  • Drop off and pick up of traffic control products on the site of work when this time is de minimis.
  • Maintaining/servicing temporary signs and barricades, replacing lights, etc., when this time is de minimis.
  • Drop off and pick up of traffic control products at contractor’s yard outside the site of work.
  • Travel between DBRA-covered projects.

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Post Tensioning of Concrete Beams at the Site of Work

The USDOL regulatory definition (See 29 CFR 5.2) of “construction” includes “[m]anufacturing or furnishing of materials, articles, supplies or equipment on the site of the . . . work . . . .” as well as the installation of items fabricated off site. For example, employees of a materials supplier who are required to perform more than an incidental amount of construction work in any work week at the site of the work would be covered by DBRA and due the applicable wage rate for the classification of work performed.


For enforcement purposes, the USDOL adopts a policy that if such an employee spends more than 20 percent of his/her time in a work week engaged in the work of a laborer or mechanic on the site of work, he/she is subject to DBRA coverage for all time spent on the site during the work week. DBRA coverage does not apply to factory representatives who simply observe and monitor the post tensioning activities.

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PREVAILING WAGE OVERSIGHT QUALITY ASSURANCE

In order to assure compliance with MDOT prevailing wage oversight procedures, Quality Assurance (QA) reviews will be conducted at all levels of prevailing wage oversight for MDOT let contracts.


The following process is to be followed at all of the levels of oversight.

  • In order to identify any problems with prevailing wage compliance, the QA reviews will be conducted each construction season while the contract is active.
  • A sufficient number of contractors assigned to the contract will be reviewed to assure compliance with prevailing wage requirements.
  • Certified payrolls and other project documentation will be reviewed to determine compliance. The certified payroll review checklist form 1952 will be used for the review.
  • If deficiencies are discovered during the review, follow-up and document the resolution. When deficiencies are found, the proper procedures are to be reviewed with the engineer.


During the review, the following prevailing wage compliance procedure requirements are to be checked:

  • All posters and jobsite information must be posted, as required.
  • Wage rate interviews are conducted according to the prevailing wage procedures.
  • The certified payrolls are completed properly and agree with project documentation.
  • The workers for all classifications were paid the correct wage.
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Local Agency Level

  • The region coordinator for prevailing wage compliance will work with the engineer of each TSC to assure that a QA review is done for a minimum of one contract for each local agency under the jurisdiction of the TSC. Additional reviews may be needed if the level of compliance is questionable.
  • Once the review is complete, the engineer will forward a copy of the review documents to the region coordinator.
  • The region coordinator will review the documents to assure compliance with MDOT procedures and forward a copy to the C&T Division prevailing wage compliance specialist.

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TSC Level

  • The region coordinator for prevailing wage compliance will conduct random QA reviews for each engineer in each TSC in the region.
  • The region coordinator will select a minimum of 10 percent of TSC projects for review. If the TSC has less than ten projects in a construction season, then at least one project is to be reviewed. Additional reviews may be needed if the level of compliance is questionable.
  • Once the review is compete, the coordinator will forward a copy of the review documents to the C&T Division prevailing wage specialist.

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Statewide Level

The C&T Division wage compliance specialist assures compliance of the prevailing wage oversight program statewide. The following process will be used:

  • Review reports from region coordinator for prevailing wage to assure oversight compliance at the TSC and local agency level.
  • Select a minimum of one contract from each region for QA review of prevailing wage compliance.


In addition to the above, review a minimum of one consultant-administered contract if applicable.

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SUMMARY OF CHANGES TO THE PROCEDURES FOR PREVAILING WAGE OVERSIGHT

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Federal Prevailing Wage

  • A bullet was added to the list of bona fide fringe benefits for Supplemental Unemployment Benefit Programs.
  • A bullet was added to the list of fringe benefits not allowed under DBRA for Per Diems.
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Multiple Wage Decisions

  • Clarification was added for work delineation between ‘Building’ and ‘Airport, Bridge and Highway’ decisions for electrical work in rest area contracts.

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Certified Payrolls

  • Clarification for when certified payrolls are required including work under subcontracts, purchase orders, invoices, or other contractual arrangements.

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Submittal Requirements

  • Included statement for short duration projects for certified payroll submittal time frame of two weeks instead of three.
  • Inserted ‘in good faith’ when discussing the three week grace period for submission of the first certified payroll.

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Notice of Delinquent Certified Payroll

  • Added options for sending of notices to include other methods which establish the date received by the prime contractor.
  • Revised distribution for first and second notices to the prime contractor.
  • Content of the first notice was revised to include the intent to assess non compliance damages if payrolls remain delinquent after thirty calendar days from the receipt of the first notice until complete and accurate certified payroll are received by the engineer.
  • Removed the action of withholding all payment for all items after 30 calendar days of the second notice.
  • Second notice warns of rescinding payment for all items of work and warns of the submittal of interim Contractor Performance Evaluations for the offending contractor(s).
  • Note 1 for the action table revised the method of sending the notices by allowing other methods which establish the date the contractor receives the notice and the distribution copies of the first and second notices.
  • Added Note 3 referencing Table 1 Schedule of Non-Compliance Damages.
  • Revised the paragraph that addresses steps to be taken for short duration projects using Notice to Bidders 03NB12 which changes the three week grace period for certified payroll submittal to two weeks and shortens the contractor response times for action for the first and second notices from 30 calendar days to 15 calendar days.
  • Added Table 1 Schedule of Non-Compliance Damages.
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Certified Payroll Status Record

  • Deleted requirement for employee address on certified payrolls and requiring only the last four digits of the employee social security number. Payrolls containing full social security numbers are to be returned to the prime with no change in the time frames for delinquent or deficient certified payrolls and associated actions by the engineer.
  • Revised the reporting requirement for classification description to include the complete classification description from the wage rate decision.
  • Eliminated the duplication and provided clarification for employee daily and weekly hour reporting.
  • Added requirement for reporting total weekly hours for all jobs worked.
  • Provided further clarification of reporting method for fringe benefits and explanation of miscellaneous deductions.
  • Clarified requirement for reporting of gross jobs wages, gross weekly wages for all jobs, and net weekly wages for the job and all jobs.
  • Revised the example for curb and gutter work under DBRA to include the revised classification descriptions.
  • Clarified overtime payment requirements for DBRA projects.
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Deficient Certified Payrolls

  • Method of sending notices was revised to include other methods which establish the date the notice was received by the prime contractor.
  • Revised the information to be included in the first notice to the prime contractor to include withholding of the offending contractor’(s) item if the issues are not resolved within 30 calendar days from the receipt of the first notice by the prime contractor until all payrolls are complete, accurate, and current.
  • Added notice that if deficiencies are not corrected within 30 calendar days of receipt of the first notice by the prime, non-compliance damages will be assessed retroactive to the date the first notice was received by the prime contractor.
  • The second notice to the prime contractor is to include a warning that past payments for all work items of the offending contractor(s) will be rescinded if complete, accurate, and current. Additionally, that interim Contractor Performance Evaluations will be submitted reflecting the non-compliant actions of the offending contractor(s).
  • Revised the Notice/Actions Table and Notes to reflect the above changes.
  • Revised the paragraph that addresses steps to be taken for short duration projects using Notice to Bidders 03NB12 which changes the three week grace period for certified payroll submittal to two weeks and shortens the contractor response times for action for the first and second notices from 30 calendar days to 15 calendar days.
  • Added Note 3 referencing Table 1 Schedule of Non-Compliance Damages.

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Restitution

  • Revised the content of the first notice to the prime contractor and involved subcontractor(s) to include the intent to withhold payment for offending contractor’(s) items if the non-compliance issues are not resolved in 60 calendar days.
  • Revised the content of the second notice to the prime contractor and involved subcontractor(s) to include the intent to assess non-compliance damages retroactive to the date the second notice was received by the prime contractor and to assess all the investigation and audits expenses by MDOT and associated entities until the non-compliance issues are fully resolved and proof of restitution is received by the engineer.
  • If issues are not fully resolved within 30 calendar days of the receipt of the second notice by the prime contractor, the engineer is to submit interim Contractor Performance Evaluations for the offending contractor(s) and the prime if the offending contractor(s) are subcontractor(s) reflecting the lack of compliance with prevailing wage regulations and the lack of oversight by the prime contractor.
  • Submission of ‘revised’ certified payrolls was changed to ‘supplemental’ certified payrolls for the non-compliant period and further explains what information is to be included in the supplemental certified payrolls.
  • Revisions were made to the way restitution and non-compliance issues are reported to the region coordinators for prevailing wage compliance. The local agencies are to report there issues to their delivery engineer who will include it with their report to the region coordinators for submission to the Lansing office.

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Prevailing Wage Discussion at the Preconstruction Meeting

  • Bullets were added to include discussion of certified payroll submission time frames and to discuss specific overtime and trucking requirements for projects covered under state prevailing wage laws.
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Jobsite Posting

  • A paragraph was added discussing postings locations on the job as well as for jobs without field offices or for moving operations.

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Apprentices and Trainees

  • Information is provided to clarify what documentation is needed when apprentices and trainees show up on certified payrolls. The documentation includes an Apprenticeship Certification letter and Apprenticeship Agreement. Examples have been added in Appendix A and Appendix B.

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State Prevailing Wage Trucking

  • The sections on covered activities and activities that are not covered have been completely rewritten to reflect the updated policy from the Michigan Department of Labor and Economic Growth.

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Product and Materials Suppliers Personnel

  • The activity of placing and covering lead in signing and other one-time activities for traffic control setup are now considered a covered activity under DBRA. The example given in this section was also changed to reflect this revision.
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EXHIBIT A

Exhibit A: DOL Letter

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EXHIBIT B

Exhibit B: DOL Application

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