[Title 29 CFR ]
[Code of Federal Regulations (annual edition) - July 1, 2000 Edition]
[From the U.S. Government Printing Office]



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                    29


          Part 0 to 99

                         Revised as of July 1, 2000

Labor





          Containing a Codification of documents of general 
          applicability and future effect
          As of July 1, 2000
          With Ancillaries
          Published by
          Office of the Federal Register
          National Archives and Records
          Administration

As a Special Edition of the Federal Register



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                     U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 2000



               For sale by U.S. Government Printing Office
 Superintendent of Documents, Mail Stop: SSOP, Washington, DC 20402-9328



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                            Table of Contents



                                                                    Page
  Explanation.................................................       v

  Title 29:
          Subtitle A--Office of the Secretary of Labor               3
  Finding Aids:
      Table of CFR Titles and Chapters........................     587
      Alphabetical List of Agencies Appearing in the CFR......     605
      List of CFR Sections Affected...........................     615



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                     ----------------------------

                     Cite this Code:  CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus,  29 CFR 0.735-1 
                       refers to title 29, part 
                       0, section 735-1.

                     ----------------------------

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                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
regulation. Each title is divided into chapters which usually bear the 
name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each 
volume.

LEGAL STATUS

    The contents of the Federal Register are required to be judicially 
noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie 
evidence of the text of the original documents (44 U.S.C. 1510).

HOW TO USE THE CODE OF FEDERAL REGULATIONS

    The Code of Federal Regulations is kept up to date by the individual 
issues of the Federal Register. These two publications must be used 
together to determine the latest version of any given rule.
    To determine whether a Code volume has been amended since its 
revision date (in this case, July 1, 2000, consult the ``List of CFR 
Sections Affected (LSA),'' which is issued monthly, and the ``Cumulative 
List of Parts Affected,'' which appears in the Reader Aids section of 
the daily Federal Register. These two lists will identify the Federal 
Register page number of the latest amendment of any given rule.

EFFECTIVE AND EXPIRATION DATES

    Each volume of the Code contains amendments published in the Federal 
Register since the last revision of that volume of the Code. Source 
citations for the regulations are referred to by volume number and page 
number of the Federal Register and date of publication. Publication 
dates and effective dates are usually not the same and care must be 
exercised by the user in determining the actual effective date. In 
instances where the effective date is beyond the cut-off date for the 
Code a note has been inserted to reflect the future effective date. In 
those instances where a regulation published in the Federal Register 
states a date certain for expiration, an appropriate note will be 
inserted following the text.

OMB CONTROL NUMBERS

    The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires 
Federal agencies to display an OMB control number with their information 
collection request.

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Many agencies have begun publishing numerous OMB control numbers as 
amendments to existing regulations in the CFR. These OMB numbers are 
placed as close as possible to the applicable recordkeeping or reporting 
requirements.

OBSOLETE PROVISIONS

    Provisions that become obsolete before the revision date stated on 
the cover of each volume are not carried. Code users may find the text 
of provisions in effect on a given date in the past by using the 
appropriate numerical list of sections affected. For the period before 
January 1, 1986, consult either the List of CFR Sections Affected, 1949-
1963, 1964-1972, or 1973-1985, published in seven separate volumes. For 
the period beginning January 1, 1986, a ``List of CFR Sections 
Affected'' is published at the end of each CFR volume.

CFR INDEXES AND TABULAR GUIDES

    A subject index to the Code of Federal Regulations is contained in a 
separate volume, revised annually as of January 1, entitled CFR Index 
and Finding Aids. This volume contains the Parallel Table of Statutory 
Authorities and Agency Rules (Table I). A list of CFR titles, chapters, 
and parts and an alphabetical list of agencies publishing in the CFR are 
also included in this volume.
    An index to the text of ``Title 3--The President'' is carried within 
that volume.
    The Federal Register Index is issued monthly in cumulative form. 
This index is based on a consolidation of the ``Contents'' entries in 
the daily Federal Register.
    A List of CFR Sections Affected (LSA) is published monthly, keyed to 
the revision dates of the 50 CFR titles.

REPUBLICATION OF MATERIAL

    There are no restrictions on the republication of material appearing 
in the Code of Federal Regulations.

INQUIRIES

    For a legal interpretation or explanation of any regulation in this 
volume, contact the issuing agency. The issuing agency's name appears at 
the top of odd-numbered pages.
    For inquiries concerning CFR reference assistance, call 202-523-5227 
or write to the Director, Office of the Federal Register, National 
Archives and Records Administration, Washington, DC 20408 or e-mail 
[email protected].

SALES

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ELECTRONIC SERVICES

    The full text of the Code of Federal Regulations, the LSA (List of 
CFR Sections Affected), The United States Government Manual, the Federal 
Register, Public Laws, Public Papers, Weekly Compilation of Presidential 
Documents and the Privacy Act Compilation are available in electronic 
format at www.access.gpo.gov/nara (``GPO Access''). For more 
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Government Printing Office. Phone 202-512-1530, or 888-293-6498 (toll-
free). E-mail, [email protected].

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    The Office of the Federal Register also offers a free service on the 
National Archives and Records Administration's (NARA) World Wide Web 
site for public law numbers, Federal Register finding aids, and related 
information. Connect to NARA's web site at www.nara.gov/fedreg. The NARA 
site also contains links to GPO Access.

                              Raymond A. Mosley,
                                    Director,
                          Office of the Federal Register.

July 1, 2000.



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                               THIS TITLE

    Title 29--Labor is composed of nine volumes. The parts in these 
volumes are arranged in the following order: parts 0-99, parts 100-499, 
parts 500-899, parts 900-1899, parts 1900-1910, part 1910.1000-End, 
parts 1911-1925, part 1926, and part 1927 to end. The contents of these 
volumes represent all current regulations codified under this title as 
of July 1, 2000.

    Subject indexes appear following the occupational safety and health 
standards (part 1910), and following the safety and health regulations 
for: Longshoring (part 1918), Gear Certification (part 1919), and 
Construction (part 1926).

    Redesignation tables appear in the Finding Aids section of the 
eighth volume.

    For this volume, Jonn V. Lilyea was Chief Editor. The Code of 
Federal Regulations publication program is under the direction of 
Frances D. McDonald, assisted by Alomha S. Morris.

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

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                             TITLE 29--LABOR




                   (This book contains parts 0 to 99)

  --------------------------------------------------------------------
                                                                    Part

SUBTITLE A--Office of the Secretary of Labor................           0


Cross References: Railroad Retirement Board: See Employees' Benefits, 20 
  CFR chapter II.

  Social Security Administration, Department of Health and Human 
Services: See Employees' Benefits, 20 CFR chapter III.

  Editorial Note: Other regulations issued by the Department of Labor 
appear in 20 CFR chapters I, IV, V, VI, VII, and IX; 30 CFR chapter I; 
41 CFR chapters 50, 60, and 61. For Standards for a Merit System of 
Personnel Administration: See 5 CFR part 900, subpart F.

[[Page 3]]

              Subtitle A--Office of the Secretary of Labor

  --------------------------------------------------------------------

Part                                                                Page
0               Ethics and conduct of Department of Labor 
                    employees...............................           7
1               Procedures for predetermination of wage 
                    rates...................................           9
2               General regulations.........................          18
3               Contractors and subcontractors on public 
                    building or public work financed in 
                    whole or in part by loans or grants from 
                    the United States.......................          23
4               Labor standards for Federal Service 
                    Contracts...............................          28
5               Labor standards provisions applicable to 
                    contracts covering federally financed 
                    and assisted construction (also labor 
                    standards provisions applicable to 
                    nonconstruction contracts subject to the 
                    Contract Work Hours and Safety Standards 
                    Act)....................................         104
6               Rules of practice for administrative 
                    proceedings enforcing labor standards in 
                    Federal and federally assisted 
                    construction contracts and Federal 
                    service contracts.......................         131
7               Practice before the Administrative Review 
                    Board with regard to Federal and 
                    federally assisted construction 
                    contracts...............................         142
8               Practice before the Administrative Review 
                    Board with regard to Federal service 
                    contracts...............................         146
9               Nondisplacement of qualified workers under 
                    certain contracts.......................         150
11              Department of Labor National Environmental 
                    Policy Act (NEPA) compliance procedures.         164
12              Uniform relocation assistance and real 
                    property acquisition for Federal and 
                    federally assisted programs.............         171
14              Security regulations........................         171
15              Administrative claims under the Federal Tort 
                    Claims Act and related statutes.........         175

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16              Equal Access to Justice Act.................         185
17              Intergovernmental review of Department of 
                    Labor programs and activities...........         191
18              Rules of practice and procedure for 
                    administrative hearings before the 
                    Office of Administrative Law Judges.....         195
19              Right to Financial Privacy Act..............         243
20              Federal claims collection...................         244
22              Program Fraud Civil Remedies Act of 1986....         267
24              Procedures for the handling of 
                    discrimination complaints under Federal 
                    employee protection statutes............         283
25              Rules for the nomination of arbitrators 
                    under section 11 of Executive Order 
                    10988...................................         290
29              Labor standards for the registration of 
                    apprenticeship programs.................         294
30              Equal employment opportunity in 
                    apprenticeship and training.............         305
31              Nondiscrimination in federally assisted 
                    programs of the Department of Labor--
                    effectuation of Title VI of the Civil 
                    Rights Act of 1964......................         318
32              Nondiscrimination on the basis of handicap 
                    in programs and activities receiving or 
                    benefiting from Federal financial 
                    assistance..............................         327
33              Enforcement of nondiscrimination on the 
                    basis of handicap in programs or 
                    activities conducted by the Department 
                    of Labor................................         343
34              Implementation of the Nondiscrimination and 
                    Equal Opportunity Requirements of the 
                    Job Training Partnership Act of 1982, as 
                    amended (JTPA)..........................         351
37              Implementation of the Nondiscrimination and 
                    Equal Opportunity Provisions of the 
                    Workforce Protection Act of 1998 (WIA)..         377
42              Coordinated enforcement.....................         417
44              Process for electing state employment 
                    statistics agency representatives for 
                    consultations with Department of Labor..         423
70              Production or disclosure of information or 
                    materials...............................         424
71              Protection of individual privacy and access 
                    to records under the Privacy Act of 1974         443
75              Department of Labor review and certification 
                    procedures for rural industrialization 
                    loan and grant programs under the 
                    Consolidated Farm and Rural Development 
                    Act of 1972.............................         463

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90              Certification of eligibility to apply for 
                    worker adjustment assistance............         466
93              New restrictions on lobbying................         475
95              Grants and agreements with institutions of 
                    higher education, hospitals, and other 
                    non-profit organizations, and with 
                    commercial organizations, foreign 
                    governments, organizations under the 
                    jurisdiction of foreign governments, and 
                    international organizations.............         487
96              Audit requirements for grants, contracts and 
                    other agreements........................         513
97              Uniform administrative requirements for 
                    grants and cooperative agreements to 
                    state and local governments.............         517
98              Governmentwide debarment and suspension 
                    (nonprocurement) and governmentwide 
                    requirements for drug-free workplace 
                    (grants)................................         544
99              Audits of states, local governments, and 
                    nonprofit organizations.................         562

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PART 0--ETHICS AND CONDUCT OF DEPARTMENT OF LABOR EMPLOYEES--Table of Contents




    Subpart A--Standards of Conduct for Current Department of Labor 
                                Employees

Sec.
0.735-1  Cross-references to employee ethical conduct standards, 
          financial disclosure regulations and other ethics regulations.

             Subpart B--Post Employment Conflict of Interest

0.737-1  Applicability.
0.737-2  Appointment of alternate officials.
0.737-3  Initiation of administrative disciplinary hearing.
0.737-4  Request for a hearing.
0.737-5  Appointment of Examiner.
0.737-6  Time, date and place of hearing.
0.737-7  Hearing rights.
0.737-8  Hearing decision and exceptions.
0.737-9  Decision on exceptions.
0.737-10  Administrative sanctions.
0.737-11  Judicial review.

    Authority: 5 U.S.C. 301; 18 U.S.C. 207 (1988); E.O. 12674, 54 FR 
15159, 3 CFR, 1989 Comp., p. 215, as modified by E.O. 12731, 55 FR 
42547, 3 CFR, 1990 Comp., p. 306; 5 CFR part 2634, part 2635, part 2640.

    Source: 33 FR 10432, July 20, 1968, unless otherwise noted.



    Subpart A--Standards of Conduct for Current Department of Labor 
                                Employees



Sec. 0.735-1  Cross-references to employee ethical conduct standards, financial disclosure regulations and other ethics regulations.

    Employees of the Department of Labor (Department) are subject to the 
executive branch-wide standards of ethical conduct at 5 CFR part 2635, 
the Department's regulations at 5 CFR part 5201 which supplement the 
executive branch-wide standards, the executive branch financial 
disclosure regulations at 5 CFR part 2634, the conflicts of interest 
regulations at 5 CFR part 2640, and the post employment regulations at 5 
CFR part 2641.

[64 FR 73853, Dec. 30, 1999]



             Subpart B--Post Employment Conflict of Interest

    Source: 48 FR 11944, Mar. 22, 1983, unless otherwise noted. 
Redesignated at 61 FR 57287, Nov. 6, 1996.



Sec. 0.737-1  Applicability.

    This subpart is applicable to any former employee of the Department 
of Labor leaving Government service on or after July 1, 1979 and prior 
to January 1, 1991.

[64 FR 73853, Dec. 30, 1999]



Sec. 0.737-2  Appointment of alternate officials.

    Notwithstanding any other provision of this subpart, the Secretary 
of Labor is authorized to perform any of the functions otherwise 
assigned in this subpart to the Under Secretary in any proceeding. The 
Secretary is also authorized to appoint as an alternate official any 
other officer or employee of the Department of Labor to perform 
functions otherwise assigned in this subpart to the Under Secretary or 
the Solicitor of Labor in any proceeding; except that:
    (a) The functions otherwise assigned in this subpart to the Under 
Secretary and the Solicitor shall not both be performed by the same 
alternate official in the same proceeding, and
    (b) The same individual shall not be appointed as both an Examiner 
under Sec. 0.737-5 and an alternate official under this section in the 
same proceeding.



Sec. 0.737-3  Initiation of administrative disciplinary hearing.

    (a) Any person may, in writing, report an apparent violation of 18 
U.S.C. 207(a), (b) or (c) or the regulations of the Office of Personnel 
Management at 5 CFR part 737 by a former employee described in 
Sec. 0.737-1 to the Solicitor of Labor.
    (b) On receipt of information regarding a possible violation of 18 
U.S.C. 207, and after determining that such information appears to be 
substantiated, the Solicitor shall expeditiously provide such 
information, along with any comments or agency regulations, to the 
Office of the Inspector General, the Director of the Office of 
Government

[[Page 8]]

Ethics and to the Criminal Division, Department of Justice.
    (c) Whenever the Solicitor has determined after appropriate review 
that there is reasonable cause to believe that a former employee 
described in Sec. 0.737-1 has violated 18 U.S.C. 207(a), (b) or (c) or 
the regulations of the Office of Personnel Management at 5 CFR part 737, 
the Solicitor may initiate an administrative disciplinary proceeding by 
providing the former employee with a notice of alleged violation.
    (d) The notice of alleged violation shall include:
    (1) A statement of allegations (and the basis thereof) sufficiently 
detailed to enable the former employee to prepare an adequate defense;
    (2) Notification of the right to a hearing; and
    (3) An explanation of the method by which a hearing may be 
requested.



Sec. 0.737-4  Request for a hearing.

    (a) Any former employee who is the subject of a notice of alleged 
violation issued by the Solicitor under Sec. 0.737-3 may within 15 days 
from the date of such notice request a hearing by writing to: The Office 
of the Under Secretary, U.S. Department of Labor, 200 Constitution 
Avenue, Washington, DC 20210.
    (b) If the former employee fails to request a hearing in accordance 
with paragraph (a), the Under Secretary may then render a final 
administrative decision in the matter and, if appropriate, impose the 
sanctions specified in Sec. 0.737-10.



Sec. 0.737-5  Appointment of Examiner.

    Whenever a notice of alleged violation has been issued and a hearing 
requested, the Under Secretary shall provide for the selection of a 
Department of Labor Administrative Law Judge, appointed in accordance 
with 5 U.S.C. 3105, to act as the Examiner with respect to the matter.



Sec. 0.737-6  Time, date and place of hearing.

    (a) Any hearing shall be conducted at a reasonable time, date and 
place as determined by the Examiner.
    (b) In setting a hearing date the Examiner shall give due regard to 
the former employee's need for:
    (1) Adequate time to prepare a defense properly, and
    (2) An expeditious resolution of allegations that may be damaging to 
his or her reputation.



Sec. 0.737-7  Hearing rights.

    (a) The following rights shall be afforded at a hearing conducted 
before the Examiner:
    (1) To represent oneself or to be represented by counsel,
    (2) To introduce and examine witnesses and to submit physical 
evidence,
    (3) To confront and cross-examine adverse witnesses,
    (4) To present oral argument; and
    (5) To obtain a transcript or recording of proceedings, on request.
    (b) In a hearing under this subpart, the Federal Rules of Civil 
Procedure and Evidence do not apply. However, the Examiner may make 
orders and determinations regarding discovery, admissability of 
evidence, conduct of examination and cross-examination, and similar 
matters as the Examiner deems necessary or appropriate to ensure 
orderliness of the proceedings and fundamental fairness to the parties.
    (c) In any proceeding under this subpart, the Department must 
establish any violation by a preponderance of the evidence.



Sec. 0.737-8  Hearing decision and exceptions.

    The Examiner shall make a determination exclusively on matters of 
record in the proceeding, and shall set forth in the hearing decision 
all findings of fact and conclusions of law relevant to the matters at 
issue. The hearing decision of the Examiner shall be considered final 
agency administrative action unless either party files exceptions in 
writing to the Under Secretary, U.S. Department of Labor, 200 
Constitution Avenue, Washington, DC 20210 within 30 days from the date 
of such hearing decision.



Sec. 0.737-9  Decision on exceptions.

    (a) Upon receipt of exceptions, the Under Secretary may afford both 
parties an opportunity to submit briefs or

[[Page 9]]

other appropriate statements in support of their respective positions.
    (b) The Under Secretary shall issue a decision based solely on the 
record of the proceedings or those portions thereof cited by the parties 
to limit the issues.
    (c) If the Under Secretary modifies or reverses the initial hearing 
decision of the Examiner, he or she shall specify such findings of fact 
and conclusions of law as are different from those of the Examiner.



Sec. 0.737-10  Administrative sanctions.

    The Examiner (or the Under Secretary in any matter in which 
exceptions are filed or which is decided in accordance with Sec. 0.737-
4(b)) may take appropriate action in the case of any individual found in 
violation of 18 U.S.C. 207(a), (b) or (c) or of the regulations at 5 CFR 
part 737 upon final administrative decisions by:
    (a) Prohibiting the individual from making, on behalf of any other 
person (except the United States), any formal or informal appearance 
before, or, with the intent to influence, any oral or written 
communication to the Department of Labor on any matter of business for a 
period not to exceed five years, which may be accomplished by directing 
agency employees to refuse to participate in any such appearance or to 
accept any such communications; or
    (b) Taking other appropriate disciplinary action.



Sec. 0.737-11  Judicial review.

    Any person found to have participated in a violation of 18 U.S.C. 
207(a), (b), or (c) or the regulations at 5 CFR part 737 may seek 
judicial review of the administrative determination in an appropriate 
United States district court.



PART 1--PROCEDURES FOR PREDETERMINATION OF WAGE RATES--Table of Contents




Sec.
1.1  Purpose and scope.
1.2  Definitions.
1.3  Obtaining and compiling wage rate information.
1.4  Outline of agency construction programs.
1.5  Procedure for requesting wage determinations.
1.6  Use and effectiveness of wage determinations.
1.7  Scope of consideration.
1.8  Reconsideration by the Administrator.
1.9  Review by Administrative Review Board.

Appendix A to Part 1
Appendix B to Part 1
Appendix C to Part 1

    Authority: 5 U.S.C. 301; R.S. 161, 64 Stat. 1267; Reorganization 
Plan No. 14 of 1950, 5 U.S.C. appendix; 29 U.S.C. 259; 40 U.S.C. 276a--
276a-7; 40 U.S.C. 276c; and the laws listed in appendix A of this part.

    Source: 48 FR 19533, Apr. 29, 1983, unless otherwise noted.

    Editorial Note: Nomenclature changes to Part 1 appear at 61 FR 
19984, May 3, 1996.



Sec. 1.1  Purpose and scope.

    (a) The procedural rules in this part apply under the Davis-Bacon 
Act (946 Stat. 1494, as amended; 40 U.S.C. 276a--276a-7) and other 
statutes listed in appendix A to this part which provide for the payment 
of minimum wages, including fringe benefits, to laborers and mechanics 
engaged in construction activity under contracts entered into or 
financed by or with the assistance of agencies of the United States or 
the District of Columbia, based on determinations by the Secretary of 
Labor of the wage rates and fringe benefits prevailing for the 
corresponding classes of laborers and mechanics employed on projects 
similar to the contract work in the local areas where such work is to be 
performed. Functions of the Secretary of Labor under these statutes and 
under Reorganization Plan No. 14 of 1950 (64 Stat. 1267, 5 U.S.C. 
appendix), except those assigned to the Administrative Review Board (see 
29 CFR part 7), have been delegated to the Deputy Under Secretary of 
Labor for Employment Standards who in turn has delegated the functions 
to the Administrator of the Wage and Hour Division, and authorized 
representatives.
    (b) The regulations in this part set forth the procedures for making 
and applying such determinations of prevailing wage rates and fringe 
benefits pursuant to the Davis-Bacon Act, each of the other statutes 
listed in appendix A, and any other Federal statute providing for 
determinations of such

[[Page 10]]

wages by the Secretary of Labor in accordance with the provisions of the 
Davis-Bacon Act.
    (c) Procedures set forth in this part are applicable, unless 
otherwise indicated, both to general wage determinations for contracts 
in specified localities, and to project wage determinations for use on 
contract work to be performed on a specific project.

[48 FR 19533, Apr. 29, 1983, as amended at 50 FR 49823, Dec. 4, 1985]



Sec. 1.2  Definitions.1
---------------------------------------------------------------------------

    1 These definitions are not intended to restrict the meaning 
of the terms as used in the applicable statutes.
---------------------------------------------------------------------------

    (a)(1) The prevailing wage shall be the wage paid to the majority 
(more than 50 percent) of the laborers or mechanics in the 
classification on similar projects in the area during the period in 
question. If the same wage is not paid to a majority of those employed 
in the classification, the prevailing wage shall be the average of the 
wages paid, weighted by the total employed in the classification.
    (2) In determining the prevailing wages at the time of issuance of a 
wage determination, the Administrator will be guided by paragraph (a)(1) 
of this section and will consider the types of information listed in 
Sec. 1.3 of this part.
    (b) The term area in determining wage rates under the Davis-Bacon 
Act and the prevailing wage provisions of the other statutes listed in 
appendix A shall mean the city, town, village, county or other civil 
subdivision of the State in which the work is to be performed.
    (c) The term Administrator shall mean the Administrator of the Wage 
and Hour Division, Employment Standards Administration, U.S. Department 
of Labor, or authorized representative.
    (d) The term agency shall mean the Federal agency, State highway 
department under 23 U.S.C. 113, or recipient State or local government 
under title 1 of the State and Local Fiscal Assistance Act of 1972.

[48 FR 19533, Apr. 29, 1983, as amended at 48 FR 503l3, Nov. 1, 1983]



Sec. 1.3  Obtaining and compiling wage rate information.

    For the purpose of making wage determinations, the Administrator 
will conduct a continuing program for the obtaining and compiling of 
wage rate information.
    (a) The Administrator will encourage the voluntary submission of 
wage rate data by contractors, contractors' associations, labor 
organizations, public officials and other interested parties, reflecting 
wage rates paid to laborers and mechanics on various types of 
construction in the area. The Administrator may also obtain data from 
agencies on wage rates paid on construction projects under their 
jurisdiction. The information submitted should reflect not only the wage 
rates paid a particular classification in an area, but also the type or 
types of construction on which such rate or rates are paid, and whether 
or not such rates were paid on Federal or federally assisted projects 
subject to Davis-Bacon prevailing wage requirements.
    (b) The following types of information may be considered in making 
wage rate determinations:
    (1) Statements showing wage rates paid on projects. Such statements 
should include the names and addresses of contractors, including 
subcontractors, the locations, approximate costs, dates of construction 
and types of projects, whether or not the projects are Federal or 
federally assisted projects subject to Davis-Bacon prevailing wage 
requirements, the number of workers employed in each classification on 
each project, and the respective wage rates paid such workers.
    (2) Signed collective bargaining agreements. The Administrator may 
request the parties to an agreement to submit statements certifying to 
its scope and application.
    (3) Wage rates determined for public construction by State and local 
officials pursuant to State and local prevailing wage legislation.
    (4) In making wage rate determinations pursuant to 23 U.S.C. 113, 
the highway department of the State in which a project in the Federal-
Aid highway system is to be performed shall be consulted. Before making 
a determination of wage rates for such a

[[Page 11]]

project the Administrator shall give due regard to the information thus 
obtained.
    (5) Wage rate data submitted to the Department of Labor by 
contracting agencies pursuant to 29 CFR 5.5(a)(1)(ii).
    (6) Any other information pertinent to the determination of 
prevailing wage rates.
    (c) The Administrator may initially obtain or supplement such 
information obtained on a voluntary basis by such means, including the 
holding of hearings, and from any sources determined to be necessary. 
All information of the types described in Sec. 1.3(b) of this part, 
pertinent to the determination of the wages prevailing at the time of 
issuance of the wage determination, will be evaluated in the light of 
Sec. 1.2(a) of this part.
    (d) In compiling wage rate data for building and residential wage 
determinations, the Administrator will not use data from Federal or 
federally assisted projects subject to Davis-Bacon prevailing wage 
requirements unless it is determined that there is insufficient wage 
data to determine the prevailing wages in the absence of such data. Data 
from Federal or federally assisted projects will be used in compiling 
wage rate data for heavy and highway wage determinations.

[48 FR 19533, Apr. 29, 1983, as amended at 50 FR 4506, Jan. 31, 1985]



Sec. 1.4  Outline of agency construction programs.

    To the extent practicable, at the beginning of each fiscal year each 
agency using wage determinations under any of the various statutes 
listed in appendix A will furnish the Administrator with a general 
outline of its proposed construction programs for the coming year 
indicating the estimated number of projects for which wage 
determinations will be required, the anticipated types of construction, 
and the locations of construction. During the fiscal year, each agency 
will notify the Administrator of any significant changes in its proposed 
construction programs, as outlined at the beginning of the fiscal year. 
This report has been cleared in accordance with FPMR 101-11.11 and 
assigned interagency report control number 1671-DOL-AN.



Sec. 1.5  Procedure for requesting wage determinations.

    (a)(1) Except as provided in paragraph (b) of this section, the 
Federal agency shall initially request a wage determination under the 
Davis-Bacon Act or any of its related prevailing wage statutes by 
submitting Standard Form 308 to the Department of Labor at this address:

    U.S. Department of Labor, Employment Standards Administration, Wage 
and Hour Division, Branch of Construction Contract Wage Determination, 
Washington, DC 20210.


The agency shall check only those classifications on the applicable form 
which will be needed in the performance of the work. Inserting a note 
such as ``entire schedule'' or ``all applicable classifications'' is not 
sufficient. Additional classifications needed which are not on the form 
may be typed in the blank spaces or on a separate list and attached to 
the form.
    (2) In completing SF-308, the agency shall furnish:
    (i) A sufficiently detailed description of the work to indicate the 
type of construction involved. Additional description or separate 
attachment, if necessary for identification of type of project, shall be 
furnished.
    (ii) The county (or other civil subdivision) and State in which the 
proposed project is located.
    (3) Such request for a wage determination shall be accompanied by 
any pertinent wage payment information which may be available. When the 
requesting agency is a State highway department under the Federal-Aid 
Highway Acts as codified in 23 U.S.C. 113, such agency shall also 
include its recommendations as to the wages which are prevailing for 
each classification of laborers and mechanics on similar construction in 
the area.
    (b) Whenever the wage patterns in a particular area for a particular 
type of construction are well settled and whenever it may be reasonably 
anticipated that there will be a large volume of procurement in that 
area for such a type of construction, the Administrator, upon the 
request of a Federal

[[Page 12]]

agency or in his/her discretion, may furnish notice of a general wage 
determination in the Federal Register when, after consideration of the 
facts and circumstances involved, the Administrator finds that the 
applicable statutory standards and those of this part will be met. If 
there is a general wage determination applicable to the project, the 
agency may use it without notifying the Department of Labor, Provided, 
That questions concerning its use shall be referred to the Department of 
Labor in accordance with Sec. 1.6(b). General wage determinations are 
published in the Government Printing Office (GPO) document entitled 
``General Wage Determinations Issued Under The Davis-Bacon And Related 
Acts''. (See appendix C for publication details and information on how 
to obtain general wage determinations.)
    (c) The time required for processing requests for wage 
determinations varies according to the facts and circumstances in each 
case. An agency should anticipate that such processing in the Department 
of Labor will take at least 30 days.

[48 FR 19533, Apr. 29, 1983, as amended at 48 FR 503l3, Nov. 1, 1983; 50 
FR 49823, Dec. 4, 1985]



Sec. 1.6  Use and effectiveness of wage determinations.

    (a)(1) Project wage determinations initially issued shall be 
effective for 180 calendar days from the date of such determinations. If 
such a wage determination is not used in the period of its effectiveness 
it is void. Accordingly, if it appears that a wage determination may 
expire between bid opening and contract award (or between initial 
endorsement under the National Housing Act or the execution of an 
agreement to enter into a housing assistance payments contract under 
section 8 of the U.S. Housing Act of 1937, and the start of 
construction) the agency shall request a new wage determination 
sufficiently in advance of the bid opening to assure receipt prior 
thereto. However, when due to unavoidable circumstances a determination 
expires before award but after bid opening (or before the start of 
construction, but after initial endorsement under the National Housing 
Act, or before the start of construction but after the execution of an 
agreement to enter into a housing assistance payments contract under 
section 8 of the U.S. Housing Act of 1937), the head of the agency or 
his or her designee may request the Administrator to extend the 
expiration date of the wage determination in the bid specifications 
instead of issuing a new wage determination. Such request shall be 
supported by a written finding, which shall include a brief statement of 
the factual support, that the extension of the expiration date of the 
determination is necessary and proper in the public interest to prevent 
injustice or undue hardship or to avoid serious impairment in the 
conduct of Government business. The Administrator will either grant or 
deny the request for an extension after consideration of all of the 
circumstances, including an examination to determine if the previously 
issued rates remain prevailing. If the request for extension is denied, 
the Administrator will proceed to issue a new wage determination for the 
project.
    (2) General wage determinations issued pursuant to Sec. 1.5(b), 
notice of which is published in the Federal Register, shall contain no 
expiration date.
    (b) Contracting agencies are responsible for insuring that only the 
appropriate wage determination(s) are incorporated in bid solicitations 
and contract specifications and for designating specifically the work to 
which such wage determinations will apply. Any question regarding 
application of wage rate schedules shall be referred to the 
Administrator, who shall give foremost consideration to area practice in 
resolving the question.
    (c)(1) Project and general wage determinations may be modified from 
time to time to keep them current. A modification may specify only the 
items being changed, or may be in the form of a supersedeas wage 
determination, which replaces the entire wage determination. Such 
actions are distinguished from a determination by the Administrator 
under paragraphs (d), (e) and (f) of this section that an erroneous wage 
determination has been issued or that the wrong wage determination or 
wage rate schedule has been utilized by the agency.

[[Page 13]]

    (2)(i) All actions modifying a project wage determination received 
by the agency before contract award (or the start of construction where 
there is no contract award) shall be effective except as follows:
    (A) In the case of contracts entered into pursuant to competitive 
bidding procedures, modifications received by the agency less than 10 
days before the opening of bids shall be effective unless the agency 
finds that there is not a reasonable time still available before bid 
opening, to notify bidders of the modification and a report of the 
finding is inserted in the contract file. A copy of such report shall be 
made available to the Administrator upon request. No such report shall 
be required if the modification is received after bid opening.
    (B) In the case of projects assisted under the National Housing Act, 
modifications shall be effective if received prior to the beginning of 
construction or the date the mortgage is initially endorsed, whichever 
occurs first.
    (C) In the case of projects to receive housing assistance payments 
under section 8 of the U.S. Housing Act of 1937, modifications shall be 
effective if received prior to the beginning of construction or the date 
the agreement to enter into a housing assistance payments contract is 
executed, whichever occurs first.
    (ii) Modifications to project wage determinations and supersedeas 
wage determinations shall not be effective after contract award (or 
after the beginning of construction where there is no contract award).
    (iii) Actual written notice of a modification shall constitute 
receipt.
    (3) All actions modifying a general wage determination shall be 
effective with respect to any project to which the determination 
applies, if notice of such actions is published before contract award 
(or the start of construction where there is no contract award), except 
as follows:
    (i) In the case of contracts entered into pursuant to competitive 
bidding procedures, a modification, notice of which is published less 
than 10 days before the opening of bids, shall be effective unless the 
agency finds that there is not a reasonable time still available before 
bid opening to notify bidders of the modification and a report of the 
finding is inserted in the contract file. A copy of such report shall be 
made available to the Administrator upon request. No such report shall 
be required if notice of the modification is published after bid 
opening.
    (ii) In the case of projects assisted under the National Housing 
Act, a modification shall be effective if notice of such modification is 
published prior to the beginning of construction or the date the 
mortgage is initially endorsed, whichever occurs first.
    (iii) In the case of projects to receive housing assistance payments 
under section 8 of the U.S. Housing Act of 1937, a modification shall be 
effective if notice of such modification is published prior to the 
beginning of construction or the date the agreement to enter into a 
housing assistance payments contract is signed, whichever occurs first.
    (iv) If under paragraph (c)(3)(i) of this section the contract has 
not been awarded within 90 days after bid opening, or if under paragraph 
(c)(3)(ii) or (iii) of this section construction has not begun within 90 
days after initial endorsement or the signing of the agreement to enter 
into a housing assistance payments contract, any modification, notice of 
which is published in the Federal Register prior to award of the 
contract or the beginning of construction, as appropriate, shall be 
effective with respect to that contract unless the head of the agency or 
his or her designee requests and obtains an extension of the 90-day 
period from the Administrator. Such request shall be supported by a 
written finding, which shall include a brief statement of the factual 
support, that the extension is necessary and proper in the public 
interest to prevent injustice or undue hardship or to avoid serious 
impairment in the conduct of Government business. The Administrator will 
either grant or deny the request for an extension after consideration of 
all the circumstances.
    (v) A modification to a general wage determination is ``published'' 
within the meaning of this section on the date of publication of notice 
of such modification in the Federal Register, or

[[Page 14]]

on the date the agency receives actual written notice of the 
modification from the Department of Labor, whichever occurs first.
    (vi) A supersedeas wage determination or a modification to an 
applicable general wage determination, notice of which is published 
after contract award (or after the beginning of construction where there 
is no contract award) shall not be effective.
    (d) Upon his/her own initiative or at the request of an agency, the 
Administrator may correct any wage determination, without regard to 
paragraph (c) of this section, whenever the Administrator finds such a 
wage determination contains clerical errors. Such corrections shall be 
included in any bid specifications containing the wage determination, or 
in any on-going contract containing the wage determination in question, 
retroactively to the start of construction.
    (e) Written notification by the Department of Labor prior to the 
award of a contract (or the start of construction under the National 
Housing Act, under section 8 of the U.S. Housing Act of 1937, or where 
there is no contract award) that: (1) There is included in the bidding 
documents or solicitation the wrong wage determination or the wrong 
schedule or that (2) a wage determination is withdrawn by the Department 
of Labor as a result of a decision by the Administrative Review Board, 
shall be effective immediately without regard to paragraph (c) of this 
section.
    (f) The Administrator may issue a wage determination after contract 
award or after the beginning of construction if the agency has failed to 
incorporate a wage determination in a contract required to contain 
prevailing wage rates determined in accordance with the Davis-Bacon Act, 
or has used a wage determination which by its terms or the provisions of 
this part clearly does not apply to the contract. Further, the 
Administrator may issue a wage determination which shall be applicable 
to a contract after contract award or after the beginning of 
construction when it is found that the wrong wage determination has been 
incorporated in the contract because of an inaccurate description of the 
project or its location in the agency's request for the wage 
determination. Under any of the above circumstances, the agency shall 
either terminate and resolicit the contract with the valid wage 
determination, or incorporate the valid wage determination retroactive 
to the beginning of construction through supplemental agreement or 
through change order, Provided That the contractor is compensated for 
any increases in wages resulting from such change. The method of 
incorporation of the valid wage determination, and adjustment in 
contract price, where appropriate, should be in accordance with 
applicable procurement law.
    (g) If Federal funding or assistance under a statute requiring 
payment of wages determined in accordance with the Davis-Bacon Act is 
not approved prior to contract award (or the beginning of construction 
where there is no contract award), the agency shall request a wage 
determination prior to approval of such funds. Such a wage determination 
shall be issued based upon the wages and fringe benefits found to be 
prevailing on the date of award or the beginning of construction (under 
the National Housing Act, under section 8 of the U.S. Housing Act of 
1937 or where there is no contract award), as appropriate, and shall be 
incorporated in the contract specifications retroactively to that date, 
Provided, That upon the request of the head of the agency in individual 
cases the Administrator may issue such a wage determination to be 
effective on the date of approval of Federal funds or assistance 
whenever the Administrator finds that it is necessary and proper in the 
public interest to prevent injustice or undue hardship, Provided further 
That the Administrator finds no evidence of intent to apply for Federal 
funding or assistance prior to contract award or the start of 
construction, as appropriate.

[48 FR 19533, Apr. 29, 1983, as amended at 50 FR 49823, Dec. 4, 1985]



Sec. 1.7  Scope of consideration.

    (a) In making a wage determination, the area will normally be the 
county unless sufficient current wage data (data on wages paid on 
current projects or, where necessary, projects under construction no 
more than one year

[[Page 15]]

prior to the beginning of the survey or the request for a wage 
determination, as appropriate) is unavailable to make a wage 
determination.
    (b) If there has not been sufficient similar construction within the 
area in the past year to make a wage determination, wages paid on 
similar construction in surrounding counties may be considered, Provided 
That projects in metropolitan counties may not be used as a source of 
data for a wage determination in a rural county, and projects in rural 
counties may not be used as a source of data for a wage determination 
for a metropolitan county.
    (c) If there has not been sufficient similar construction in 
surrounding counties or in the State in the past year, wages paid on 
projects completed more than one year prior to the beginning of the 
survey or the request for a wage determination, as appropriate, may be 
considered.
    (d) The use of helpers, apprentices and trainees is permitted in 
accordance with part 5 of this subtitle. Wage rates for semi-skilled 
classifications of helpers will be issued when the classifications are 
prevailing in the area. In determining whether use of a particular 
helper classification prevails in the area, the Administrator will 
follow the criteria set forth in paragraphs (d)(1) and (d)(2) of this 
section.
    (1) If the prevailing wage for a particular journeyman 
classification is a wage that is paid to the majority of the journeymen 
in the classification as defined in Sec. 1.2(a)(1) of this part, then 
the practice followed by those contractors whose rates are adopted as 
prevailing for the journeyman shall also be deemed the prevailing 
practice in determining whether to issue a helper classification. Any 
ambiguity with regard to such practice, will be resolved by following 
the rule in paragraph (d)(2) of this section with respect to those 
contractors.
    (2) If the prevailing wage for a particular journeyman 
classification is the average of the wages paid to the journeymen, 
weighted by the total number of journeymen in the classification as 
defined in Sec. 1.2(a)(1) of this part, then the total number of workers 
in the classification employed by contractors utilizing helpers 
(journeymen plus apprentices, trainees, and helpers as defined in 
Sec. 5.2(n)(4) of this chapter) on reported projects will be compared to 
the total number of workers in the classification employed by 
contractors not utilizing helpers (journeymen plus apprentices and 
trainees as defined in Sec. 5.2(n)(4) of this chapter), and the practice 
which covers the majority of such workers shall be deemed the prevailing 
practice in determining whether to issue a helper classification.

[48 FR 19533, Apr. 29, 1983, as amended at 50 FR 4507, Jan. 31, 1985; 55 
FR 50149, Dec. 4, 1990]

    Effective Date Note: At 58 FR 58955, Nov. 5, 1993, Sec. 1.7 was 
amended by suspending paragraph (d) indefinitely.



Sec. 1.8  Reconsideration by the Administrator.

    Any interested person may seek reconsideration of a wage 
determination issued under this part or of a decision of the 
Administrator regarding application of a wage determination. Such a 
request for reconsideration shall be in writing accompanied by a full 
statement of the interested person's views and any supporting wage data 
or other pertinent information. The Administrator will respond within 30 
days of receipt thereof, or will notify the requestor within the 30-day 
period that additional time is necessary.



Sec. 1.9  Review by Administrative Review Board.

    Any interested person may appeal to the Administrative Review Board 
for a review of a wage determination or its application made under this 
part, after reconsideration by the Administrator has been sought 
pursuant to Sec. 1.8 and denied. Any such appeal may, in the discretion 
of the Administrative Review Board, be received, accepted, and decided 
in accordance with the provisions of 29 CFR part 7 and such other 
procedures as the Board may establish.

                          Appendix A to Part 1

 Statutes Related to the Davis-Bacon Act Requiring Payment of Wages at 
              Rates Predetermined by the Secretary of Labor

    1. The Davis-Bacon Act (secs. 1-7, 46 Stat. 1494, as amended; Pub. 
L. 74-403, 40 U.S.C. 276a-276a-7).

[[Page 16]]

    2. National Housing Act (sec. 212 added to c. 847, 48 Stat. 1246, by 
sec. 14, 53 Stat. 807; 12 U.S.C. 1715c and repeatedly amended).
    3. Housing Act of 1950 (college Housing) (amended by Housing Act of 
1959 to add labor provisions, 73 Stat. 681; 12 U.S.C. 1749a(f)).
    4. Housing Act of 1959 (sec. 401(f) of the Housing Act of 1950 as 
amended by Pub. L. 86-372, 73 Stat. 681; 12 U.S.C. 1701q(c)(3)).
    5. Commercial Fisheries Research and Development Act of 1964 (sec. 
7, 78 Stat. 199; 16 U.S.C. 779e(b)).
    6. Library Services and Construction Act (sec. 7(a), 78 Stat. 13; 20 
U.S.C. 355c(a)(4), as amended).
    7. National Technical Institute for the Deaf Act (sec. 5(b)(5), 79 
Stat. 126; 20 U.S.C. 684(b)(5)).
    8. National Foundation on the Arts and Humanities Act of 1965 (sec. 
5(k), 79 Stat. 846 as amended; 20 U.S.C. 954(j)).
    9. Elementary and Secondary Education Act of 1965 as amended by 
Elementary and Secondary and other Education Amendments of 1969 (sec. 
423 as added by Pub. L. 91-230, title IV, sec. 401(a)(10), 84 Stat. 169, 
and renumbered sec. 433, by Pub. L. 92-318; title III, sec. 301(a)(1), 
86 Stat. 326; 20 U.S.C. 1232(b)). Under the amendment coverage is 
extended to all programs administered by the Commissioner of Education.
    10. The Federal-Aid Highway Acts (72 Stat. 895, as amended by 82 
Stat. 821; 23 U.S.C. 113, as amended by the Surface Transportation 
Assistance Act of 1982, Pub. L. 97-424).
    11. Indians Self-Determination and Education Assistance Act (sec. 7, 
88 Stat. 2205; 25 U.S.C. 450e).
    12. Indian Health Care Improvement Act (sec. 303(b), 90 Stat. 1407; 
25 U.S.C. 1633(b)).
    13. Rehabilitation Act of 1973 (sec. 306(b)(5), 87 Stat. 384, 29 
U.S.C. 776(b)(5)).
    14. Comprehensive Employment and Training Act of 1973 (sec. 606, 87 
Stat. 880, renumbered sec. 706 by 83 Stat. 1845; 29 U.S.C. 986; also 
sec. 604, 88 Stat. 1846; 29 U.S.C. 964(b)(3)).
    15. State and Local Fiscal Assistance Act of 1972 (sec. 123(a)(6), 
86 Stat. 933; 31 U.S.C. 1246(a)(6)).
    16. Federal Water Pollution Control Act (sec. 513 of sec. 2, 86 
Stat. 894; 33 U.S.C. 1372).
    17. Veterans Nursing Home Care Act of 1964 (78 Stat. 502, as 
amended; 38 U.S.C. 5035(a)(8)).
    18. Postal Reorganization Act (sec. 410(b)(4)(C); 84 Stat. 726 as 
amended; 39 U.S.C. 410(b)(4)(C)).
    19. National Visitors Center Facilities Act of 1968 (sec. 110, 32 
Stat. 45; 40 U.S.C. 808).
    20. Appalachian Regional Development Act of 1965 (sec. 402, 79 Stat. 
21; 40 U.S.C. App. 402).
    21. Health Services Research, Health Statistics, and Medical 
Libraries Act of 1974 (sec. 107, see sec. 306(h)(2) thereof, 83 Stat. 
370, as amended by 90 Stat. 378; 42 U.S.C. 242m(h)(2)).
    22. Hospital Survey and Construction Act, as amended by the Hospital 
and Medical Facilities Amendments of 1964 (sec. 605(a)(5), 78 Stat. 453; 
42 U.S.C. 291e(a)(5)).
    23. Health Professions Education Assistance Act (sec. 303(b), 90 
Stat. 2254; 42 U.S.C. 293a(g)(1)(C); also sec. 308a, 90 Stat. 2256; 42 
U.S.C. 293a(c)(7)).
    24. Nurse Training Act of 1964 (sec. 941(a)(1)(C), 89 Stat. 364; 42 
U.S.C. 296a(b)(5)).
    25. Heart Disease, Cancer, and Stroke Amendments of 1965 (sec. 904, 
as added by sec. 2, 79 Stat. 928; 42 U.S.C. 299d(b)(4)).
    26. Safe Drinking Water Act (sec. 2(a), see sec. 1450e thereof, 88 
Stat. 1691; 42 U.S.C. 300j-9(e)).
    27. National Health Planning and Resources Act (sec. 4, see sec. 
1604(b)(1)(H), 88 Stat. 2261, 42 U.S.C. 300o-3(b)(1)(H)).
    28. U.S. Housing Act of 1937, as amended and recodified (88 Stat. 
667; 42 U.S.C. 1437j).
    29. Demonstration Cities and Metropolitan Development Act of 1966 
(secs. 110, 311, 503, 1003, 80 Stat. 1259, 1270, 1277, 1284; 42 U.S.C. 
3310; 12 U.S.C. 1715c; 42 U.S.C. 1437j).
    30. Slum clearance program: Housing Act of 1949 (sec. 109, 63 Stat. 
419, as amended; 42 U.S.C. 1459).
    31. Farm housing: Housing Act of 1964 (adds sec. 516(f) to Housing 
Act of 1949 by sec. 503, 78 Stat. 797; 42 U.S.C. 1486(f)).
    32. Housing Act of 1961 (sec. 707, added by sec. 907, 79 Stat. 496, 
as amended; 42 U.S.C. 1500c-3).
    33. Defense Housing and Community Facilities and Services Act of 
1951 (sec. 310, 65 Stat. 307; 42 U.S.C. 1592i).
    34. Special Health Revenue Sharing Act of 1975 (sec. 303, see sec. 
222(a)(5) thereof, 89 Stat. 324; 42 U.S.C. 2689j(a)(5)).
    35. Economic Opportunity Act of 1964 (sec. 607, 78 Stat. 532; 42 
U.S.C. 2947).
    36. Headstart, Economic Opportunity, and Community Partnership Act 
of 1974 (sec. 11, see sec. 811 thereof, 88 Stat. 2327; 42 U.S.C. 2992a).
    37. Housing and Urban Development Act of 1965 (sec. 707, 79 Stat. 
492 as amended; 42 U.S.C. 3107).
    38. Older Americans Act of 1965 (sec. 502, Pub. L. 89-73, as amended 
by sec. 501, Pub. L. 93-29; 87 Stat. 50; 42 U.S.C. 3041a(a)(4)).
    39. Public Works and Economic Development Act of 1965 (sec. 712, 79 
Stat. 575 as amended; 42 U.S.C. 3222).
    40. Juvenile Delinquency Prevention Act (sec. 1, 86 Stat. 536; 42 
U.S.C. 3884).
    41. New Communities Act of 1968 (sec. 410.82 Stat. 516; 42 U.S.C. 
3909).
    42. Urban Growth and New Community Development Act of 1970 (sec. 
727(f), 84 Stat. 1803; 42 U.S.C. 4529).
    43. Domestic Volunteer Service Act of 1973 (sec. 406, 87 Stat. 410; 
42 U.S.C. 5046).
    44. Housing and Community Development Act of 1974 (secs. 110, 
802(g), 83 Stat. 649, 724; 42 U.S.C. 5310, 1440(g)).

[[Page 17]]

    45. Developmentally Disabled Assistance and Bill of Rights Act (sec. 
126(4), 89 Stat. 488; 42 U.S.C. 6042(4); title I, sec. 111, 89 Stat. 
491; 42 U.S.C. 6063(b)(19)).
    46. National Energy Conservation Policy Act (sec. 312, 92 Stat. 
3254; 42 U.S.C. 6371j).
    47. Public Works Employment Act of 1976 (sec. 109, 90 Stat. 1001; 42 
U.S.C. 6708; also sec. 208, 90 Stat. 1008; 42 U.S.C. 6728).
    48. Energy Conservation and Production Act (sec. 45(h), 90 Stat. 
1168; 42 U.S.C. 6881(h)).
    49. Solid Waste Disposal Act (sec. 2, 90 Stat. 2828; 42 U.S.C. 
6979).
    50. Rail Passenger Service Act of 1970 (sec. 405d, 84 Stat. 1337; 45 
U.S.C. 565(d)).
    51. Urban Mass Transportation Act of 1964 (sec. 10, 78 Stat. 307; 
renumbered sec. 13 by 88 Stat. 715; 49 U.S.C. 1609).
    52. Highway speed ground transportation study (sec. 6(b), 79 Stat. 
893; 49 U.S.C. 1636(b)).
    53. Airport and Airway Development Act of 1970 (sec. 22(b), 84 Stat. 
231; 49 U.S.C. 1722(b)).
    54. Federal Civil Defense Act of 1950 (50 U.S.C. App. 2281(i)).
    55. National Capital Transportation Act of 1965 (sec. 3(b)(4), 79 
Stat; 40 U.S.C. 682(b)(4)).
    Note: Repealed Dec. 9, 1969 and labor standards incorporated in sec. 
1-1431 of the District of Columbia Code.
    56. Model Secondary School for the Deaf Act (sec. 4, 80 Stat. 1027, 
Pub. L. 89-694, but not in the United States Code).
    57. Delaware River Basin Compact (sec. 15.1, 75 Stat. 714, Pub. L. 
87-328) (considered a statute for purposes of this part but not in the 
United States Code).
    58. Energy Security Act (sec. 175(c), Pub. L. 96-294, 94 Stat. 611; 
42 U.S.C. 8701 note).

[48 FR 19533, Apr. 29, 1983; 48 FR 20408, May 6, 1983]

                          Appendix B to Part 1

                              Boston Region

    For the States of Connecticut, Maine, Massachusetts, New Hampshire, 
Rhode Island, and Vermont:
    Assistant Regional Administrator for Wage-Hour, Employment Standards 
Administration, U.S. Department of Labor, JFK Federal Building, 
Government Center, room 1612C, Boston, Massachusetts 02203 (telephone: 
617-223-5565).

                             New York Region

    For the States of New Jersey and New York and for the Canal Zone, 
Puerto Rico, and the Virgin Islands:
    Assistant Regional Administrator for Wage-Hour, Employment Standards 
Administration, U.S. Department of Labor, 1515 Broadway, room 3300, New 
York, New York 10036 (telephone: 212-399-5443).

                           Philadelphia Region

    For the States of Delaware, Maryland, Pennsylvania, Virginia, and 
West Virginia, and the District of Columbia:
    Assistant Regional Administrator for Wage-Hour, Employment Standards 
Administration, U.S. Department of Labor, Gateway Building, room 15220, 
3535 Market Street, Philadelphia, Pennsylvania 19104 (telephone: 215-
596-1193).

                             Atlanta Region

    For the States of Alabama, Florida, Georgia, Kentucky, Mississippi, 
North Carolina, South Carolina, and Tennessee:
    Assistant Regional Administrator for Wage-Hour, Employment Standards 
Administration, U.S. Department of Labor, 1371 Peachtree Street, NE., 
room 305, Atlanta, Georgia 30309 (telephone: 404-881-4801).

                             Chicago Region

    For the States of Illinois, Indiana, Michigan, Minnesota, Ohio, and 
Wisconsin:
    Assistant Regional Administrator for Wage-Hour, Employment Standards 
Administration, U.S. Department of Labor, 230 South Dearborn Street, 8th 
Floor, Chicago, Illinois 60604 (telephone: 312-353-7249).

                              Dallas Region

    For the States of Arkansas, Louisiana, New Mexico, Oklahoma, and 
Texas:
    Assistant Regional Administrator for Wage-Hour, Employment Standards 
Administration, U.S. Department of Labor, 555 Griffin Square Building, 
Young and Griffin Streets, Dallas, Texas 75202 (telephone: 214-767-
6891).

                           Kansas City Region

    For the States of Iowa, Kansas, Missouri, and Nebraska:
    Assistant Regional Administrator for Wage-Hour, Employment Standards 
Administration, U.S. Department of Labor, Federal Office Building, room 
2000, 911 Walnut Street, Kansas City, Missouri 64106 (telephone: 816-
374-5386).

                              Denver Region

    For the States of Colorado, Montana, North Dakota, South Dakota, 
Utah, and Wyoming:
    Assistant Regional Administrator for Wage-Hour, Employment Standards 
Administration, U.S. Department of Labor, Federal Office Building, room 
1440, 1961 Stout Street, Denver, Colorado 80294 (telephone: 304-837-
4613).

                          San Francisco Region

    For the States of Arizona, California, Hawaii, and Nevada:

[[Page 18]]

    Assistant Regional Administrator for Wage-Hour, Employment Standards 
Administration, U.S. Department of Labor, 450 Golden Gate Avenue, room 
10353, San Francisco, California 94102 (telephone: 415-556-3592).

                             Seattle Region

    For the States of Alaska, Idaho, Oregon, and Washington:
    Assistant Regional Administrator for Wage-Hour, Employment Standards 
Administration, U.S. Department of Labor, Federal Office Building, room 
4141, 909 First Avenue, Seattle, Washington 98174 (telephone: 206-442-
1916).

                          Appendix C to Part 1

    General Wage Determinations Issued Under The Davis-Bacon And Related 
Acts is published weekly by the Government Printing Office (GPO). This 
publication is available for examination at all 80 Regional Government 
Depository Libraries and many other of the 1,400 Government Depository 
Libraries across the country. Subscriptions may be obtained by 
contacting: Superintendent of Documents, U.S. Government Printing 
Office, Washington, DC 20402, (202) 783-3238.
    The publication is divided into three volumes--East, Central, and 
West--which may be ordered separately. The States covered by each volume 
are as follows: (Regional breakdowns of States are provided in appendix 
B.)

                             Volume I--East

Alabama
Connecticut
Delaware
Florida
Georgia
Kentucky
Maine
Maryland
Massachusetts
Mississippi
New Hampshire
New Jersey
New York
North Carolina
Pennsylvania
Rhode Island
South Carolina
Tennessee
Vermont
Virginia
West Virginia
District of Col.
Canal Zone
Puerto Rico
Virgin Islands

                           Volume II--Central

Arkansas
Illinois
Indiana
Iowa
Kansas
Louisiana
Michigan
Minnesota
Missouri
Nebraska
New Mexico
Ohio
Oklahoma
Texas
Wisconsin

                            Volume III--West

Alaska
Arizona
California
Colorado
Hawaii
Idaho
Montana
Nevada
North Dakota
Oregon
South Dakota
Utah
Washington
Wyoming

    On or about January 1 of each year, an annual edition will be issued 
that includes all current general wage determinations for the States 
covered by each volume. Throughout the remainder of the year, regular 
weekly updates will be distributed providing any modifications or 
supersedeas wage determinations issued. Each volume's annual and weekly 
editions will be provided in loose-leaf format.

[50 FR 49823, Dec. 4, 1985]



PART 2--GENERAL REGULATIONS--Table of Contents




                           Subpart A--General

Sec.
2.1  Employees attached to regional offices.
2.2  Employees attached to Washington office.
2.3  Consent of the Secretary.
2.6  Claims collection.
2.7  Rulemaking.
2.8  Final agency decisions.

       Subpart B--Audiovisual Coverage of Administrative Hearings

2.10  Scope and purpose.
2.11  General principles.
2.12  Audiovisual coverage permitted.
2.13  Audiovisual coverage prohibited.
2.14  Proceedings in which the Department balances conflicting values.
2.15  Protection of witnesses.
2.16  Conduct of hearings.

               Subpart C--Employees Served With Subpoenas

2.20  Purpose, scope and definitions.
2.21  Procedure in the event of a demand for production or disclosure.
2.22  Production or disclosure prohibited unless approved by the 
          appropriate Deputy Solicitor of Labor.
2.23  Procedure where a decision concerning a demand is not made prior 
          to the time a response to the demand is required.
2.24  Procedure in the event of an adverse ruling.
2.25  Subpoenas served upon employees of the Office of the Inspector 
          General.

    Authority: 5 U.S.C. 301; Reorganization Plan No. 6 of 1950, 15 FR 
3174, 64 Stat. 1263; 5 U.S.C. 552-556; Section 2.3 also issued under 31 
U.S.C. 952.

[[Page 19]]



                           Subpart A--General

    Source: 32 FR 11035, July 28, 1967, unless otherwise noted.



Sec. 2.1  Employees attached to regional offices.

    No person who has been an employee of the Department and attached to 
a Regional office of any bureau, board, division, or other agency 
thereof, shall be permitted to practice, appear, or act as attorney, 
agent, or representative before the Department or any branch or agent 
thereof in connection with any case or administrative proceeding which 
was pending before such Regional office during the time of his 
employment with the Department, unless he shall first obtain the written 
consent thereto of the Secretary of Labor or his duly authorized 
representative.



Sec. 2.2  Employees attached to Washington office.

    No person who has been an employee of the Department and attached to 
the Washington office of any bureau, board, division, or other agency 
thereof, shall be permitted to practice, appear, or act as attorney, 
agent, or representative before the Department or any branch or agent 
thereof, in connection with any case or administrative proceeding 
pending before such bureau, board, division, or other agency during the 
time of his employment with the Department, unless he shall first obtain 
the written consent thereto of the Secretary of Labor or his duly 
authorized representative.



Sec. 2.3  Consent of the Secretary.

    The consent of the Secretary or his duly authorized representative 
may be obtained as follows:
    The applicant shall file an application in the form of an affidavit. 
Such application, directed to the Secretary should:
    (a) State the former connection of the applicant with the 
Department;
    (b) Identify the matter in which the applicant desires to appear, 
and
    (c) Contain a statement to the effect that the applicant gave no 
personal consideration to such matter while he was an employee of the 
Department.

The application will be denied if the statements contained therein are 
disproved by an examination of the files, records, and circumstances 
pertaining to the matter, or if, in the opinion of the Secretary or his 
duly authorized representative, the public interest so requires. If the 
Secretary or his duly authorized representative is satisfied that the 
applicant gave no personal consideration to the matter in question while 
employed by the Department, and if he is satisfied that it is lawful and 
consistent with the public interest to do so, he may grant his consent, 
in writing, to the request of the applicant, subject to such conditions, 
if any, as he deems necessary and desirable. Any function of the 
Secretary under this section may be performed by the Under Secretary of 
Labor.



Sec. 2.6  Claims collection.

    (a) Authority of Department; incorporation by reference. The 
regulations in this section are issued under section 3 of the Federal 
Claims Collection Act of 1966, 31 U.S.C. 952. They incorporate herein 
and supplement as necessary for Department operation all provisions of 
the Joint Regulations of the Attorney General and the Comptroller 
General set forth in 4 CFR, chap. II, which prescribe standards for 
administrative collection of civil claims by the Government for money or 
property, for the compromise, termination, or suspension of collection 
action, with respect to claims not exceeding $20,000, exclusive of 
interest, and for the referral of civil claims by the Government to the 
General Accounting Office, and to the Department of Justice for 
litigation.
    (b) Designation. The Assistant Secretary for Administration, and 
such heads of the Administrations and Offices of the Department of Labor 
as he may designate for such purpose, is authorized to perform all of 
the duties and exercise all of the authority of the Secretary under the 
Federal Claims Collection Act of 1966, the aforementioned Joint 
Regulations of the Attorney General and the Comptroller General, and the 
regulations in this section.

(Sec. 3, 80 Stat. 309; 31 U.S.C. 952)

[34 FR 9122, June 10, 1969]

[[Page 20]]



Sec. 2.7  Rulemaking.

    It is the policy of the Secretary of Labor, that in applying the 
rulemaking provisions of the Administrative Procedure Act (5 U.S.C. 
553), the exemption therein for matters relating to public property, 
loans, grants, benefits or contracts shall not be relied upon as a 
reason for not complying with the notice and public participation 
requirements thereof except for all information-gathering procedures 
adopted by the Bureau of Labor Statistics.

[46 FR 35, Jan. 2, 1981]



Sec. 2.8  Final agency decisions.

    Final agency decision issued under the statutory authority of the 
U.S. Department of Labor may be issued by the Secretary of Labor, or by 
his or her designee under a written delegation of authority. The 
Administrative Review Board, an organizational entity within the Office 
of the Secretary, has been delegated authority to issue final agency 
decisions under the statutes, executive orders, and regulations as 
provided in Secretary's Order 2-96, published on May 3, 1996.

[61 FR 19984, May 3, 1996]



       Subpart B--Audiovisual Coverage of Administrative Hearings

    Source: 38 FR 5631, Mar. 2, 1973, unless otherwise noted.



Sec. 2.10  Scope and purpose.

    This subpart defines the scope of audiovisual coverage of 
departmental administrative hearings. It describes the types of 
proceedings where such coverage is encouraged, defines areas where such 
coverage is prohibited (as in certain enforcement proceedings or where 
witnesses object) and areas where a decision concerning coverage is made 
after weighing the values involved in permitting coverage against the 
reasons for not permitting it.



Sec. 2.11  General principles.

    The following general principles will be observed in granting or 
denying requests for permission to cover hearings audiovisually:
    (a) Notice and comment and on-the-record rule making proceedings may 
involve administrative hearings. If such administrative hearings are 
held, we encourage their audiovisual coverage.
    (b) Audiovisual coverage shall be excluded in adjudicatory 
proceedings involving the rights or status of individuals (including 
those of small corporations likely to be indistinguishable in the public 
mind from one or a few individuals) in which an individual's past 
culpable conduct or other aspect of personal life is a primary subject 
of adjudication, and where the person in question objects to coverage.
    (c) Certain proceedings involve balancing of conflicting values in 
order to determine whether audiovisual coverage should be allowed. Where 
audiovisual coverage is restricted, the reasons for the restriction 
shall be stated in the record.



Sec. 2.12  Audiovisual coverage permitted.

    The following are the types of hearings where the Department 
encourages audiovisual coverage:
    (a) All hearings involving notice and comment and on-the-record rule 
making proceedings. The Administrative Procedure Act provides for notice 
of proposed rule making with provision for participation by interested 
parties through submission of written data, views, or arguments, with or 
without opportunity for oral presentation (5 U.S.C. 553). (In many cases 
the Department follows the above procedure in matters exempted from 
these requirements of 5 U.S.C. 553.) On-the-record rule making 
proceedings under 5 U.S.C. 556 and 557 are also hearings where 
audiovisual coverage of hearings is encouraged. Examples of hearings 
encompassed by this paragraph are:
    (1) Hearings to establish or amend safety or health standards under 
the Occupational Safety and Health Act of 1970, 29 U.S.C. 651.
    (2) Hearings to determine the adequacy of State laws under the 
Occupational Safety and Health Act of 1970.
    (b) Hearings to collect or review wage data upon which to base 
minimum wage rates determined under various laws, such as the Davis-
Bacon Act (40 U.S.C. 276a) and related statutes and

[[Page 21]]

the Service Contract Act of 1965 (41 U.S.C. 353, as amended by Pub. L. 
92-473 approved October 9, 1972).
    (c) Hearings under section 4(c) of the Service Contract Act of 1965 
(41 U.S.C. 353, subsection (c) added by Pub. L. 92-473 approved October 
9, 1972) to determine if negotiated rates are substantially at variance 
with those which prevail in the locality for services of a character 
similar.
    (d) Hearings before the Administrative Review Board (parts 1, 3, 5, 
and 7 of this chapter).
    (e) Hearings held at the request of a Federal agency to resolve 
disputes under the Davis-Bacon and related Acts, involving prevailing 
wage rates or proper classification which involve significant sums of 
money, large groups of employees or novel or unusual situations.
    (f) Hearings of special industry committees held pursuant to the 
Fair Labor Standards Act, as amended (29 U.S.C. 201 et seq.) for the 
purpose of recommending minimum wage rates to be paid in Puerto Rico, 
the Virgin Islands, and American Samoa.
    (g) Hearings pursuant to section 13(a) of the Welfare and Pension 
Plans Disclosure Act (29 U.S.C. 308d) to determine whether a bond in 
excess of $500,000 may be prescribed.
    (h) Hearings where the Department is requesting information needed 
for its administrative use in determining what our position should be 
(e.g., our hearings on the 4-day, 40-hour workweek).

[38 FR 5631, Mar. 2, 1973, as amended at 61 FR 19984, May 3, 1996]



Sec. 2.13  Audiovisual coverage prohibited.

    The Department shall not permit audiovisual coverage of the 
following types of hearings if any party objects:
    (a) Hearings to determine whether applications for individual 
variances should be issued under the Occupational Safety and Health Act 
of 1970.
    (b) Hearings (both formal and informal) involving alleged violations 
of various laws such as the Davis-Bacon Act (40 U.S.C. 276a, et seq.) 
and related Acts, the Contract Work Hours and Safety Standards Act (40 
U.S.C. 327 et seq.), the Service Contract Act (41 U.S.C. 351 et seq.), 
the Walsh Healey Act (41 U.S.C. 35 et seq.), under section 41 of the 
Longshoremen's and Harbor Workers' Compensation Act (33 U.S.C. 941 et 
seq.), the Fair Labor Standards Act of 1938, as amended (29 U.S.C. 201 
et seq.), and any informal hearings or conferences under the 
Occupational Safety and Health Act of 1970 (29 U.S.C. 651 et seq.) which 
are not within the jurisdiction of the Occupational Safety and Health 
Commission.
    (c) Adversary hearings under the Longshoremen's and Harbor Workers' 
Compensation Act (33 U.S.C. 901 et seq.) and related Acts, which 
determine an employee's right to compensation.
    (d) Hearings which determine an employee's right to compensation 
under the Federal Employees' Compensation Act (5 U.S.C. 8101 et seq.).



Sec. 2.14  Proceedings in which the Department balances conflicting values.

    In proceedings not covered by Secs. 2.12 and 2.13, the Department 
should determine whether the public's right to know outbalances the 
individual's right to privacy. When audiovisual coverage is restricted 
or excluded, the record shall state fully the reasons for such 
restriction or exclusion. For example, there would be included in this 
category hearings before the Board of Contract Appeals involving appeals 
from contracting officer decisions involving claims for extra costs for 
extra work, extra costs for delay in completion caused by the Government 
or for changes in the work, conformity hearings arising under State 
unemployment insurance laws, etc.



Sec. 2.15  Protection of witnesses.

    A witness has the right, prior to or during his testimony, to 
exclude audiovisual coverage of his testimony in any hearing being 
covered audiovisually.



Sec. 2.16  Conduct of hearings.

    The presiding officer at each hearing which is audiovisually covered 
is authorized to take any steps he deems necessary to preserve the 
dignity of the hearing or prevent its disruption by persons setting up 
or using equipment needed for its audiovisual coverage.

[[Page 22]]



               Subpart C--Employees Served With Subpoenas

    Authority: 5 U.S.C. 301 and Reorganization Plan No. 6 of 1950, 15 FR 
3174, 64 Stat. 1263.

    Source: 46 FR 49543, Oct. 6, 1981, unless otherwise noted.



Sec. 2.20  Purpose, scope and definitions.

    (a) This subpart sets forth the procedures to be followed whenever a 
subpoena, order, or other demand (hereinafter referred to as a demand) 
of a court or other authority, in connection with a proceeding to which 
the U.S. Department of Labor is not a party, is issued for the 
production or disclosure of (1) any material contained in the files of 
the Department, (2) any information relating to material contained in 
the files of the Department, or (3) any information or material acquired 
by any person while such person was an employee of the Department as a 
part of the performance of his official duties or because of his 
official status.
    (b) For purposes of this subpart, the term employee of the 
Department includes all officers and employees of the United States 
Department of Labor appointed by, or subject to the supervision, 
jurisdiction, or control of the Secretary of Labor.
    (c)(1) For purposes of this subpart, the term appropriate Deputy 
Solicitor of Labor means the Deputy Solicitor of Labor for National 
Operations when the person served with a demand is either employed by 
the National Office of the Labor Department, or who is a former Labor 
Department employee and is served with a demand in Washington, DC. In 
all other cases, the term appropriate Deputy Solicitor of Labor means 
the Deputy Solicitor of Labor for Regional Operations.
    (2) For purposes of this subpart, the term appropriate Office of the 
Solicitor means that Office of the Associate Solicitor of Labor (in 
Washington, DC) serving as counsel to the program to which the demand 
relates, where the person served with a demand is employed by the 
National Office of the Labor Department, or who is a former Labor 
Department employee and is served with a demand in Washington, DC. In 
all other cases, the term appropriate Office of the Solicitor means that 
Regional Solicitor's Office or Associate Regional Solicitor's Office 
serving the locality in which the employee or former employee is served 
with a demand.
    (d) This subpart is intended to provide instructions regarding the 
internal operations of the Department of Labor, and is not intended, and 
does not, and may not, be relied upon to create any right or benefit, 
substantive or procedural, enforceable at law by a party against the 
Department of Labor.



Sec. 2.21  Procedure in the event of a demand for production or disclosure.

    Whenever an employee or former employee of the Department receives a 
demand for the production of material or the disclosure of information 
described in Sec. 2.20(a), he shall immediately notify the appropriate 
Office of the Solicitor. The appropriate Office of the Solicitor shall 
be furnished by the party causing the subpoena to be issued with a 
written summary of the information sought and its relevance to the 
proceeding in connection with which it was served. The Associate 
Solicitor, Regional Solicitor, or Associate Regional Solicitor, 
whichever is appropriate, may waive the requirement that a written 
summary be furnished where he or she deems it to be unnecessary. The 
election to waive the requirement of a written summary in no way 
constitutes a waiver of any other requirement set forth in this subpart.



Sec. 2.22  Production or disclosure prohibited unless approved by the appropriate Deputy Solicitor of Labor.

    In terms of instructing an employee or former employee of the manner 
in which to respond to a demand, the Associate Solicitor, Regional 
Solicitor, or Associate Regional Solicitor, whichever is applicable, 
shall follow the instructions of the appropriate Deputy Solicitor of 
Labor. No employee or former employee of the Department of Labor shall, 
in response to a demand of a court or other authority, produce any 
material contained in the files of the Department or disclose any 
information relating to material contained in the files of the 
Department, or disclose

[[Page 23]]

any information or produce any material acquired as part of the 
performance of his official duties or because of his official status 
without approval of the appropriate Deputy Solicitor of Labor.



Sec. 2.23  Procedure where a decision concerning a demand is not made prior to the time a response to the demand is required.

    If the response to the demand is required before the instructions 
from the appropriate Deputy Solicitor of Labor are received, a 
Department attorney or other government attorney designated for the 
purpose shall appear with the employee or former employee of the 
Department upon whom the demand has been made, and shall furnish the 
court or other authority with a copy of the regulations contained in 
this subpart and inform the court or other authority that the demand has 
been, or is being, as the case may be, referred for the prompt 
consideration of the appropriate Deputy Solicitor of Labor and shall 
respectfully request the court or other authority to stay the demand 
pending receipt of the requested instructions.



Sec. 2.24  Procedure in the event of an adverse ruling.

    If the court or other authority declines to stay the effect of the 
demand in response to a request made in accordance with Sec. 2.23 
pending receipt of instructions, or if the court or other authority 
rules that the demand must be complied with irrespective of instructions 
not to produce the material or disclose the information sought, the 
employee or former employee upon whom the demand has been made shall 
respectfully decline to comply with the demand, ``United States ex rel 
Touhy v. Ragen,'' 340 US. 462.



Sec. 2.25  Subpoenas served upon employees of the Office of the Inspector General.

    Notwithstanding the requirements set forth in Secs. 2.20 through 
2.24, this subpart is applicable to demands served on employees or 
former employees of the Office of the Inspector General (OIG), except 
that wherever in Secs. 2.21 through 2.24 there appear the phrases 
appropriate Office of the Solicitor, Associate Solicitor, Regional 
Solicitor, or Associate Regional Solicitor, and appropriate Deputy 
Solicitor of Labor, there shall be substituted in lieu thereof the 
Inspector General or Deputy Inspector General. In addition, the first 
sentence of Sec. 2.22 shall not be applicable to subpoenas served upon 
employees or former employees of the Office of the Inspector General.



PART 3--CONTRACTORS AND SUBCONTRACTORS ON PUBLIC BUILDING OR PUBLIC WORK FINANCED IN WHOLE OR IN PART BY LOANS OR GRANTS FROM THE UNITED STATES--Table of Contents




Sec.
3.1  Purpose and scope.
3.2  Definitions.
3.3  Weekly statement with respect to payment of wages.
3.4  Submission of weekly statements and the preservation and inspection 
          of weekly payroll records.
3.5  Payroll deductions permissible without application to or approval 
          of the Secretary of Labor.
3.6  Payroll deductions permissible with the approval of the Secretary 
          of Labor.
3.7  Applications for the approval of the Secretary of Labor.
3.8  Action by the Secretary of Labor upon applications.
3.9  Prohibited payroll deductions.
3.10  Methods of payment of wages.
3.11  Regulations part of contract.

    Authority: R.S. 161, sec. 2, 48 Stat. 848; Reorg. Plan No. 14, of 
1950, 64 Stat. 1267; 5 U.S.C. 301; 40 U.S.C. 276c.

    Source: 29 FR 97, Jan. 4, 1964, unless otherwise noted.



Sec. 3.1  Purpose and scope.

    This part prescribes ``anti-kickback'' regulations under section 2 
of the Act of June 13, 1934, as amended (40 U.S.C. 276c), popularly 
known as the Copeland Act. This part applies to any contract which is 
subject to Federal wage standards and which is for the construction, 
prosecution, completion, or repair of public buildings, public works or 
buildings or works financed in whole or in part by loans or grants from 
the United States. The part is intended to aid in the enforcement of the 
minimum wage provisions of the Davis-Bacon Act and

[[Page 24]]

the various statutes dealing with federally assisted construction that 
contain similar minimum wage provisions, including those provisions 
which are not subject to Reorganization Plan No. 14 (e.g., the College 
Housing Act of 1950, the Federal Water Pollution Control Act, and the 
Housing Act of 1959), and in the enforcement of the overtime provisions 
of the Contract Work Hours Standards Act whenever they are applicable to 
construction work. The part details the obligation of contractors and 
subcontractors relative to the weekly submission of statements regarding 
the wages paid on work covered thereby; sets forth the circumstances and 
procedures governing the making of payroll deductions from the wages of 
those employed on such work; and delineates the methods of payment 
permissible on such work.



Sec. 3.2  Definitions.

    As used in the regulations in this part:
    (a) The terms building or work generally include construction 
activity as distinguished from manufacturing, furnishing of materials, 
or servicing and maintenance work. The terms include, without 
limitation, buildings, structures, and improvements of all types, such 
as bridges, dams, plants, highways, parkways, streets, subways, tunnels, 
sewers, mains, powerlines, pumping stations, railways, airports, 
terminals, docks, piers, wharves, ways, lighthouses, buoys, jetties, 
breakwaters, levees, and canals; dredging, shoring, scaffolding, 
drilling, blasting, excavating, clearing, and landscaping. Unless 
conducted in connection with and at the site of such a building or work 
as is described in the foregoing sentence, the manufacture or furnishing 
of materials, articles, supplies, or equipment (whether or not a Federal 
or State agency acquires title to such materials, articles, supplies, or 
equipment during the course of the manufacture or furnishing, or owns 
the materials from which they are manufactured or furnished) is not a 
building or work within the meaning of the regulations in this part.
    (b) The terms construction, prosecution, completion, or repair mean 
all types of work done on a particular building or work at the site 
thereof, including, without limitation, altering, remodeling, painting 
and decorating, the transporting of materials and supplies to or from 
the building or work by the employees of the construction contractor or 
construction subcontractor, and the manufacturing or furnishing of 
materials, articles, supplies, or equipment on the site of the building 
or work, by persons employed at the site by the contractor or 
subcontractor.
    (c) The terms public building or public work include building or 
work for whose construction, prosecution, completion, or repair, as 
defined above, a Federal agency is a contracting party, regardless of 
whether title thereof is in a Federal agency.
    (d) The term building or work financed in whole or in part by loans 
or grants from the United States includes building or work for whose 
construction, prosecution, completion, or repair, as defined above, 
payment or part payment is made directly or indirectly from funds 
provided by loans or grants by a Federal agency. The term includes 
building or work for which the Federal assistance granted is in the form 
of loan guarantees or insurance.
    (e) Every person paid by a contractor or subcontractor in any manner 
for his labor in the construction, prosecution, completion, or repair of 
a public building or public work or building or work financed in whole 
or in part by loans or grants from the United States is employed and 
receiving wages, regardless of any contractual relationship alleged to 
exist between him and the real employer.
    (f) The term any affiliated person includes a spouse, child, parent, 
or other close relative of the contractor or subcontractor; a partner or 
officer of the contractor or subcontractor; a corporation closely 
connected with the contractor or subcontractor as parent, subsidiary, or 
otherwise, and an officer or agent of such corporation.
    (g) The term Federal agency means the United States, the District of 
Columbia, and all executive departments, independent establishments, 
administrative agencies, and instrumentalities of the United States and 
of the District of Columbia, including corporations,

[[Page 25]]

all or substantially all of the stock of which is beneficially owned by 
the United States, by the District of Columbia, or any of the foregoing 
departments, establishments, agencies, and instrumentalities.

[29 FR 97, Jan. 4, 1964, as amended at 38 FR 32575, Nov. 27, 1973]



Sec. 3.3  Weekly statement with respect to payment of wages.

    (a) As used in this section, the term employee shall not apply to 
persons in classifications higher than that of laborer or mechanic and 
those who are the immediate supervisors of such employees.
    (b) Each contractor or subcontractor engaged in the construction, 
prosecution, completion, or repair of any public building or public 
work, or building or work financed in whole or in part by loans or 
grants from the United States, shall furnish each week a statement with 
respect to the wages paid each of its employees engaged on work covered 
by this part 3 and part 5 of this chapter during the preceding weekly 
payroll period. This statement shall be executed by the contractor or 
subcontractor or by an authorized officer or employee of the contractor 
or subcontractor who supervises the payment of wages, and shall be on 
form WH 348, ``Statement of Compliance'', or on an identical form on the 
back of WH 347, ``Payroll (For Contractors Optional Use)'' or on any 
form with identical wording. Sample copies of WH 347 and WH 348 may be 
obtained from the Government contracting or sponsoring agency, and 
copies of these forms may be purchased at the Government Printing 
Office.
    (c) The requirements of this section shall not apply to any contract 
of $2,000 or less.
    (d) Upon a written finding by the head of a Federal agency, the 
Secretary of Labor may provide reasonable limitations, variations, 
tolerances, and exemptions from the requirements of this section subject 
to such conditions as the Secretary of Labor may specify.

[29 FR 97, Jan. 4, 1964, as amended at 33 FR 10186, July 17, 1968; 47 FR 
23679, May 28, 1982]



Sec. 3.4  Submission of weekly statements and the preservation and inspection of weekly payroll records.

    (a) Each weekly statement required under Sec. 3.3 shall be delivered 
by the contractor or subcontractor, within seven days after the regular 
payment date of the payroll period, to a representative of a Federal or 
State agency in charge at the site of the building or work, or, if there 
is no representative of a Federal or State agency at the site of the 
building or work, the statement shall be mailed by the contractor or 
subcontractor, within such time, to a Federal or State agency 
contracting for or financing the building or work. After such 
examination and check as may be made, such statement, or a copy thereof, 
shall be kept available, or shall be transmitted together with a report 
of any violation, in accordance with applicable procedures prescribed by 
the United States Department of Labor.
    (b) Each contractor or subcontractor shall preserve his weekly 
payroll records for a period of three years from date of completion of 
the contract. The payroll records shall set out accurately and 
completely the name and address of each laborer and mechanic, his 
correct classification, rate of pay, daily and weekly number of hours 
worked, deductions made, and actual wages paid. Such payroll records 
shall be made available at all times for inspection by the contracting 
officer or his authorized representative, and by authorized 
representatives of the Department of Labor.

(Reporting and recordkeeping requirements in paragraph (b) have been 
approved by the Office of Management and Budget under control number 
1215-0017)

[29 FR 97, Jan. 4, 1964, as amended at 47 FR 145, Jan. 5, 1982]



Sec. 3.5  Payroll deductions permissible without application to or approval of the Secretary of Labor.

    Deductions made under the circumstances or in the situations 
described in the paragraphs of this section may be made without 
application to and approval of the Secretary of Labor:
    (a) Any deduction made in compliance with the requirements of 
Federal,

[[Page 26]]

State, or local law, such as Federal or State withholding income taxes 
and Federal social security taxes.
    (b) Any deduction of sums previously paid to the employee as a bona 
fide prepayment of wages when such prepayment is made without discount 
or interest. A bona fide prepayment of wages is considered to have been 
made only when cash or its equivalent has been advanced to the person 
employed in such manner as to give him complete freedom of disposition 
of the advanced funds.
    (c) Any deduction of amounts required by court process to be paid to 
another, unless the deduction is in favor of the contractor, 
subcontractor, or any affiliated person, or when collusion or 
collaboration exists.
    (d) Any deduction constituting a contribution on behalf of the 
person employed to funds established by the employer or representatives 
of employees, or both, for the purpose of providing either from 
principal or income, or both, medical or hospital care, pensions or 
annuities on retirement, death benefits, compensation for injuries, 
illness, accidents, sickness, or disability, or for insurance to provide 
any of the foregoing, or unemployment benefits, vacation pay, savings 
accounts, or similar payments for the benefit of employees, their 
families and dependents: Provided, however, That the following standards 
are met:
    (1) The deduction is not otherwise prohibited by law;
    (2) It is either:
    (i) Voluntarily consented to by the employee in writing and in 
advance of the period in which the work is to be done and such consent 
is not a condition either for the obtaining of or for the continuation 
of employment, or
    (ii) provided for in a bona fide collective bargaining agreement 
between the contractor or subcontractor and representatives of its 
employees;
    (3) No profit or other benefit is otherwise obtained, directly or 
indirectly, by the contractor or subcontractor or any affiliated person 
in the form of commission, dividend, or otherwise; and
    (4) The deductions shall serve the convenience and interest of the 
employee.
    (e) Any deduction contributing toward the purchase of United States 
Defense Stamps and Bonds when voluntarily authorized by the employee.
    (f) Any deduction requested by the employee to enable him to repay 
loans to or to purchase shares in credit unions organized and operated 
in accordance with Federal and State credit union statutes.
    (g) Any deduction voluntarily authorized by the employee for the 
making of contributions to governmental or quasi-governmental agencies, 
such as the American Red Cross.
    (h) Any deduction voluntarily authorized by the employee for the 
making of contributions to Community Chests, United Givers Funds, and 
similar charitable organizations.
    (i) Any deductions to pay regular union initiation fees and 
membership dues, not including fines or special assessments: Provided, 
however, That a collective bargaining agreement between the contractor 
or subcontractor and representatives of its employees provides for such 
deductions and the deductions are not otherwise prohibited by law.
    (j) Any deduction not more than for the ``reasonable cost'' of 
board, lodging, or other facilities meeting the requirements of section 
3(m) of the Fair Labor Standards Act of 1938, as amended, and part 531 
of this title. When such a deduction is made the additional records 
required under Sec. 516.25(a) of this title shall be kept.
    (k) Any deduction for the cost of safety equipment of nominal value 
purchased by the employee as his own property for his personal 
protection in his work, such as safety shoes, safety glasses, safety 
gloves, and hard hats, if such equipment is not required by law to be 
furnished by the employer, if such deduction is not violative of the 
Fair Labor Standards Act or prohibited by other law, if the cost on 
which the deduction is based does not exceed the actual cost to the 
employer where the equipment is purchased from him and does not include 
any direct or indirect monetary return to the employer where the 
equipment is purchased from a third person, and if the deduction is 
either

[[Page 27]]

    (1) Voluntarily consented to by the employee in writing and in 
advance of the period in which the work is to be done and such consent 
is not a condition either for the obtaining of employment or its 
continuance; or
    (2) Provided for in a bona fide collective bargaining agreement 
between the contractor or subcontractor and representatives of its 
employees.

[29 FR 97, Jan. 4, 1964, as amended at 36 FR 9770, May 28, 1971]



Sec. 3.6  Payroll deductions permissible with the approval of the Secretary of Labor.

    Any contractor or subcontractor may apply to the Secretary of Labor 
for permission to make any deduction not permitted under Sec. 3.5. The 
Secretary may grant permission whenever he finds that:
    (a) The contractor, subcontractor, or any affiliated person does not 
make a profit or benefit directly or indirectly from the deduction 
either in the form of a commission, dividend, or otherwise;
    (b) The deduction is not otherwise prohibited by law;
    (c) The deduction is either (1) voluntarily consented to by the 
employee in writing and in advance of the period in which the work is to 
be done and such consent is not a condition either for the obtaining of 
employment or its continuance, or (2) provided for in a bona fide 
collective bargaining agreement between the contractor or subcontractor 
and representatives of its employees; and
    (d) The deduction serves the convenience and interest of the 
employee.



Sec. 3.7  Applications for the approval of the Secretary of Labor.

    Any application for the making of payroll deductions under Sec. 3.6 
shall comply with the requirements prescribed in the following 
paragraphs of this section:
    (a) The application shall be in writing and shall be addressed to 
the Secretary of Labor.
    (b) The application need not identify the contract or contracts 
under which the work in question is to be performed. Permission will be 
given for deductions on all current and future contracts of the 
applicant for a period of 1 year. A renewal of permission to make such 
payroll deduction will be granted upon the submission of an application 
which makes reference to the original application, recites the date of 
the Secretary of Labor's approval of such deductions, states 
affirmatively that there is continued compliance with the standards set 
forth in the provisions of Sec. 3.6, and specifies any conditions which 
have changed in regard to the payroll deductions.
    (c) The application shall state affirmatively that there is 
compliance with the standards set forth in the provisions of Sec. 3.6. 
The affirmation shall be accompanied by a full statement of the facts 
indicating such compliance.
    (d) The application shall include a description of the proposed 
deduction, the purpose to be served thereby, and the classes of laborers 
or mechanics from whose wages the proposed deduction would be made.
    (e) The application shall state the name and business of any third 
person to whom any funds obtained from the proposed deductions are to be 
transmitted and the affiliation of such person, if any, with the 
applicant.

[29 FR 97, Jan. 4, 1964, as amended at 36 FR 9771, May 28, 1971]



Sec. 3.8  Action by the Secretary of Labor upon applications.

    The Secretary of Labor shall decide whether or not the requested 
deduction is permissible under provisions of Sec. 3.6; and shall notify 
the applicant in writing of his decision.



Sec. 3.9  Prohibited payroll deductions.

    Deductions not elsewhere provided for by this part and which are not 
found to be permissible under Sec. 3.6 are prohibited.



Sec. 3.10  Methods of payment of wages.

    The payment of wages shall be by cash, negotiable instruments 
payable on demand, or the additional forms of compensation for which 
deductions are permissible under this part. No other methods of payment 
shall be recognized on work subject to the Copeland Act.

[[Page 28]]



Sec. 3.11  Regulations part of contract.

    All contracts made with respect to the construction, prosecution, 
completion, or repair of any public building or public work or building 
or work financed in whole or in part by loans or grants from the United 
States covered by the regulations in this part shall expressly bind the 
contractor or subcontractor to comply with such of the regulations in 
this part as may be applicable. In this regard, see Sec. 5.5(a) of this 
subtitle.



PART 4--LABOR STANDARDS FOR FEDERAL SERVICE CONTRACTS--Table of Contents




  Subpart A--Service Contract Labor Standards Provisions and Procedures

Sec.
4.1  Purpose and scope.
4.1a  Definitions and use of terms.
4.1b  Payment of minimum compensation based on collectively bargained 
          wage rates and fringe benefits applicable to employment under 
          predecessor contract.
4.2  Payment of minimum wage specified in section 6(a)(1) of the Fair 
          Labor Standards Act of 1938 under all service contracts.
4.3  Wage determinations.
4.4  Notice of intention to make a service contract.
4.5  Contract specification of determined minimum wages and fringe 
          benefits.
4.6  Labor standards clauses for Federal service contracts exceeding 
          $2,500.
4.7  [Reserved]
4.8  Notice of awards.
4.9  [Reserved]
4.10  Substantial variance proceedings under section 4(c) of the Act.
4.11  Arm's-length proceedings.
4.12  Substantial interest proceedings.

                Subpart B--Wage Determination Procedures

4.50  Types of wage and fringe benefit determinations.
4.51  Prevailing in the locality determinations.
4.52  Fringe benefit determinations.
4.53  Collective bargaining agreement (successorship) determinations.
4.54  Locality basis of wage and fringe benefit determinations.
4.55  Issuance and revision of wage determinations.
4.56  Review and reconsideration of wage determinations.

   Subpart C--Application of the McNamara-O'Hara Service Contract Act

                              Introductory

4.101  Official rulings and interpretations in this subpart.
4.102  Administration of the Act.
4.103  The Act.
4.104  What the Act provides, generally.
4.105  The Act as amended.
4.106  [Reserved]

                 Agencies Whose Contracts May Be Covered

4.107  Federal contracts.
4.108  District of Columbia contracts.
4.109  [Reserved]

                       Covered Contracts Generally

4.110  What contracts are covered.
4.111  Contracts ``to furnish services.''
4.112  Contracts to furnish services ``in the United States.''
4.113  Contracts to furnish services ``through the use of service 
          employees.''
4.114  Subcontracts.

                           Specific Exclusions

4.115  Exemptions and exceptions, generally.
4.116  Contracts for construction activity.
4.117  Work subject to requirements of Walsh-Healey Act.
4.118  Contracts for carriage subject to published tariff rates.
4.119  Contracts for services of communications companies.
4.120  Contracts for public utility services.
4.121  Contracts for individual services.
4.122  Contracts for operation of postal contract stations.
4.123  Administrative limitations, variations, tolerances, and 
          exemptions.
4.124--4.129  [Reserved]

         Particular Application of Contract Coverage Principles

4.130  Types of covered service contracts illustrated.
4.131  Furnishing services involving more than use of labor.
4.132  Services and other items to be furnished under a single contract.
4.133  Beneficiary of contract services.
4.134  Contracts outside the Act's coverage.
4.135--4.139  [Reserved]

                     Determining Amount of Contract

4.140  Significance of contract amount.
4.141  General criteria for measuring amount.
4.142  Contracts in an indefinite amount.

                      Changes in Contract Coverage

4.143  Effects of changes or extensions of contracts, generally.

[[Page 29]]

4.144  Contract modifications affecting amount.
4.145  Extended term contracts.

                           Period of Coverage

4.146  Contract obligations after award, generally.
4.147--4.149  [Reserved]

                      Employees Covered by the Act

4.150  Employee coverage, generally.
4.151  Employees covered by provisions of section 2(a).
4.152  Employees subject to prevailing compensation provisions of 
          sections 2(a) (1) and (2) and 4(c).
4.153  Inapplicability of prevailing compensation provisions to some 
          employees.
4.154  Employees covered by sections 2(a) (3) and (4).
4.155  Employee coverage does not depend on form of employment contract.
4.156  Employees in bona fide executive, administrative, or professional 
          capacity.
4.157--4.158  [Reserved]

                    Subpart D--Compensation Standards

4.159  General minimum wage.
4.160  Effect of section 6(e) of the Fair Labor Standards Act.
4.161  Minimum monetary wages under contracts exceeding $2,500.
4.162  Fringe benefits under contracts exceeding $2,500.
4.163  Section 4(c) of the Act.
4.164  [Reserved]

                 Compliance With Compensation Standards

4.165  Wage payments and fringe benefits--in general.
4.166  Wage payments--unit of payment.
4.167  Wage payments--medium of payment.
4.168  Wage payments--deductions from wages paid.
4.169  Wage payments--work subject to different rates.
4.170  Furnishing fringe benefits or equivalents.
4.171  ``Bona fide'' fringe benefits.
4.172  Meeting requirements for particular fringe benefits--in general.
4.173  Meeting requirements for vacation fringe benefits.
4.174  Meeting requirements for holiday fringe benefits.
4.175  Meeting requirements for health, welfare, and/or pension 
          benefits.
4.176  Payment of fringe benefits to temporary and part-time employees.
4.177  Discharging fringe benefit obligations by equivalent means.
4.178  Computation of hours worked.
4.179  Identification of contract work.

                    Overtime Pay of Covered Employees

4.180  Overtime pay--in general.
4.181  Overtime pay provisions of other Acts.
4.182  Overtime pay of service employees entitled to fringe benefits.

                           Notice to Employees

4.183  Employees must be notified of compensation required.
4.184  Posting of notice.

                                 Records

4.185  Recordkeeping requirements.
4.186  [Reserved]

                         Subpart E--Enforcement

4.187  Recovery of underpayments.
4.188  Ineligibility for further contracts when violations occur.
4.189  Administrative proceedings relating to enforcement of labor 
          standards.
4.190  Contract cancellation.
4.191  Complaints and compliance assistance.

    Authority: 41 U.S.C. 351, et seq., 79 Stat. 1034, as amended in 86 
Stat. 789, 90 Stat. 2358; 41 U.S.C. 38 and 39; 5 U.S.C. 301; and 108 
Stat. 4101(c).

    Source: 48 FR 49762, Oct. 27, 1983, unless otherwise noted.

    Editorial Note: Nomenclature changes to Part 4 appear at 61 FR 
19984, May 3, 1996.



  Subpart A--Service Contract Labor Standards Provisions and Procedures



Sec. 4.1  Purpose and scope.

    This part contains the Department of Labor's rules relating to the 
administration of the McNamara-O'Hara Service Contract Act of 1965, as 
amended, referred to hereinafter as the Act. Rules of practice for 
administrative proceedings under the Act and for the review of wage 
determinations are contained in parts 6 and 8 of this chapter. See part 
1925 of this title for the safety and health standards applicable under 
the Service Contract Act.



Sec. 4.1a  Definitions and use of terms.

    As used in this part, unless otherwise indicated by the context--
    (a) Act, Service Contract Act, McNamara-O'Hara Act, or Service 
Contract Act of 1965 shall mean the Service Contract Act of 1965 as 
amended by Public

[[Page 30]]

Law 92-473, 86 Stat. 789, effective October 9, 1972, Public Law 93-57, 
87 Stat. 140, effective July 6, 1973, and Public Law 94-489, 90 Stat. 
2358, effective October 13, 1976 and any subsequent amendments thereto.
    (b) Secretary includes the Secretary of Labor, the Deputy Under 
Secretary for Employment Standards, and their authorized 
representatives.
    (c) Wage and Hour Division means the organizational unit in the 
Employment Standards Administration of the Department of Labor to which 
is assigned the performance of functions of the Secretary under the 
Service Contract Act of 1965, as amended.
    (d) Administrator means the Administrator of the Wage and Hour 
Division, or authorized representative.
    (e) Contract includes any contract subject wholly or in part to the 
provisions of the Service Contract Act of 1965 as amended, and any 
subcontract of any tier thereunder. (See Secs. 4.10-4.134.)
    (f) Contractor includes a subcontractor whose subcontract is subject 
to provisions of the Act. Also, the term employer means, and is used 
interchangeably with, the terms contractor and subcontractor in various 
sections in this part. The U.S. Government, its agencies, and 
instrumentalities are not contractors, subcontractors, employers or 
joint employers for purposes of compliance with the provisions of the 
Act.
    (g) Affiliate or affiliated person includes a spouse, child, parent, 
or other close relative of the contractor or subcontractor; a partner or 
officer of the contractor or subcontractor; a corporation closely 
connected with a contractor or subcontractor as a parent, subsidiary, or 
otherwise; and an officer or agent of such corporation. An affiliation 
is also deemed to exist where, directly or indirectly, one business 
concern or individual controls or has the power to control the other or 
where a third party controls or has the power to control both.
    (h) Wage determination includes any determination of minimum wage 
rates or fringe benefits made pursuant to the provisions of sections 
2(a) and/or 4(c) of the Act for application to the employment in a 
locality of any class or classes of service employees in the performance 
of any contract in excess of $2,500 which is subject to the provisions 
of the Service Contract Act of 1965.



Sec. 4.1b  Payment of minimum compensation based on collectively bargained wage rates and fringe benefits applicable to employment under predecessor contract.

    (a) Section 4(c) of the Service Contract Act of 1965 as amended 
provides special minimum wage and fringe benefit requirements applicable 
to every contractor and subcontractor under a contract which succeeds a 
contract subject to the Act and under which substantially the same 
services as under the predecessor contract are furnished in the same 
locality. Section 4(c) provides that no such contractor or subcontractor 
shall pay any service employee employed on the contract work less than 
the wages and fringe benefits provided for in a collective bargaining 
agreement as a result of arms-length negotiations, to which such service 
employees would have been entitled if they were employed under the 
predecessor contract, including accrued wages and fringe benefits and 
any prospective increases in wages and fringe benefits provided for in 
such collective bargaining agreement. If, however, the Secretary finds 
after a hearing in accordance with the regulations set forth in 
Sec. 4.10 of this subpart and parts 6 and 8 of this title that in any of 
the foregoing circumstances such wages and fringe benefits are 
substantially at variance with those which prevail for service of a 
character similar in the locality, those wages and/or fringe benefits in 
such collective bargaining agreement which are found to be substantially 
at variance shall not apply, and a new wage determination shall be 
issued. If the contract has been awarded and work begun prior to a 
finding that the wages and/or fringe benefits in a collective bargaining 
agreement are substantially at variance with those prevailing in the 
locality, the payment obligation of such contractor or subcontractor 
with respect to the wages and fringe benefits contained in the new wage 
determination shall be applicable as of the date of the Administrative 
Law Judge's decision or, where the decision is reviewed by the 
Administrative Review

[[Page 31]]

Board, the date of the decision of the Administrative Review Board. (See 
also Sec. 4.163(c).)
    (b) Pursuant to section 4(b) of the Act, the application of section 
4(c) is made subject to the following variation in the circumstances and 
under the conditions described: The wage rates and fringe benefits 
provided for in any collective bargaining agreement applicable to the 
performance of work under the predecessor contract which is consummated 
during the period of performance of such contract shall not be effective 
for purposes of the successor contract under the provisions of section 
4(c) of the Act or under any wage determination implementing such 
section issued pursuant to section 2(a) of the Act, if--
    (1) In the case of a successor contract for which bids have been 
invited by formal advertising, notice of the terms of such new or 
changed collective bargaining agreement is received by the contracting 
agency less than 10 days before the date set for opening of bids, 
provided that the contracting agency finds that there is not reasonable 
time still available to notify bidders; or
    (2) Notice of the terms of a new or changed collective bargaining 
agreement is received by the agency after award of a successor contract 
to be entered into pursuant to negotiations or as a result of the 
execution of a renewal option or an extension of the initial contract 
term, provided that the contract start of performance is within 30 days 
of such award or renewal option or extension. If the contract does not 
specify a start of performance date which is within 30 days from the 
award, and/or performance of such procurement does not commence within 
this 30-day period, any notice of the terms of a new or changed 
collective bargaining agreement received by the agency not less than 10 
days before commencement of the contract will be effective for purposes 
of the successor contract under section 4(c); and
    (3) The limitations in paragraph (b)(1) or (2) of this section shall 
apply only if the contracting officer has given both the incumbent 
(predecessor) contractor and his employees' collective bargaining 
representative written notification at least 30 days in advance of all 
applicable estimated procurement dates, including issue of bid 
solicitation, bid opening, date of award, commencement of negotiations, 
receipt of proposals, or the commencement date of a contract resulting 
from a negotiation, option, or extension, as the case may be.



Sec. 4.2  Payment of minimum wage specified in section 6(a)(1) of the Fair Labor Standards Act of 1938 under all service contracts.

    Section 2(b)(1) of the Service Contract Act of 1965 provides in 
effect that, regardless of contract amount, no contractor or 
subcontractor performing work under any Federal contract the principal 
purpose of which is to furnish services through the use of service 
employees shall pay any employees engaged in such work less than the 
minimum wage specified in section 6(a)(1) of the Fair Labor Standards 
Act of 1938, as amended.

[61 FR 68663, Dec. 30, 1996]



Sec. 4.3  Wage determinations.

    (a) The minimum monetary wages and fringe benefits for service 
employees which the Act requires to be specified in contracts and bid 
solicitations subject to section 2(a) thereof will be set forth in wage 
determinations issued by the Administrator. Wage determinations shall be 
issued as soon as administratively feasible for all contracts subject to 
section 2(a) of the Act, and will be issued for all contracts entered 
into under which more than 5 service employees are to be employed.
    (b) Such wage determinations will set forth for the various classes 
of service employees to be employed in furnishing services under such 
contracts in the appropriate localities, minimum monetary wage rates to 
be paid and minimum fringe benefits to be furnished them during the 
periods when they are engaged in the performance of such contracts, 
including, where appropriate under the Act, provisions for adjustments 
in such minimum rates and benefits to be placed in effect under such 
contracts at specified future times. The wage rates and fringe benefits 
set forth in such wage determinations shall be determined in accordance 
with the provisions of sections

[[Page 32]]

2(a)(1), (2), and (5), 4(c) and 4(d) of the Act from those prevailing in 
the locality for such employees, with due consideration of the rates 
that would be paid for direct Federal employment of any classes of such 
employees whose wages, if federally employed, would be determined as 
provided in 5 U.S.C. 5341 or 5 U.S.C. 5332, or from pertinent collective 
bargaining agreements with respect to the implementation of section 
4(c). The wage rates and fringe benefits so determined for any class of 
service employees to be engaged in furnishing covered contract services 
in a locality shall be made applicable by contract to all service 
employees of such class employed to perform such services in the 
locality under any contract subject to section 2(a) of the Act which is 
entered into thereafter and before such determination has been rendered 
obsolete by a withdrawal, modification, or supersedure.
    (c) Generally, wage determinations issued for solicitations or 
negotiations for any contract where the place of performance is unknown 
will contain minimum monetary wages and fringe benefits for the various 
geographic localities where the work may be performed which were 
identified in the initial solicitation (see Sec. 4.4(a)(2)(i)).
    (d) Wage determinations will be available for public inspection 
during business hours at the Wage and Hour Division, Employment 
Standards Administration, U.S. Department of Labor, Washington, DC, and 
copies will be made available on request at Regional Offices of the Wage 
and Hour Division.



Sec. 4.4  Notice of intention to make a service contract.

    (a)(1) For any contract exceeding $2,500 which may be subject to the 
Act, the contracting agency shall file with the Wage and Hour Division, 
Employment Standards Administration, Department of Labor, its notice of 
intention to make a service contract. With respect to recurring or known 
requirements, such notices shall be filed not less than 60 days (nor 
more than 120 days, except with the approval of the Wage and Hour 
Division) prior to: (i) Any invitation for bids, (ii) request for 
proposals, (iii) commencement of negotiations, (iv) exercise of option 
or contract extension, (v) annual anniversary date of a multi-year 
contract subject to annual fiscal appropriations of the Congress, or 
(vi) each biennial anniversary date of a multi-year contract not subject 
to such annual appropriations, if so authorized by the Wage and Hour 
Division. (See Sec. 4.4(d).) Notices with regard to solicitations where 
such planning is not feasible shall be submitted as soon as possible, 
but not later than 30 days prior to the above contracting actions. Such 
notice shall be submitted on Standard Form 98, Notice of Intention to 
Make a Service Contract, and Standard Form 98-A or a statement 
containing the information in paragraph (b) of this section and shall be 
completed in accordance with the instruction provided and shall be 
supplemented by the information required under paragraphs (c) and (d) of 
this section. Supplies of Standard Forms 98 and 98-A are available in 
all GSA supply depots under stock numbers 7540-926-8972 and 7540-118-
1008, respectively. If there exists any question or doubt as to the 
possible application of the Act to a particular procurement, the 
contracting agency shall submit such question in a timely manner to the 
Administrator for determination.
    (2)(i) Where the place of performance of a contract for services 
subject to the Act is unknown at the time of solicitation, the 
solicitation need not initially contain a wage determination. The 
contracting agency shall, upon identification of firms participating in 
the procurement in response to an initial solicitation, file with the 
Wage and Hour Division, Employment Standards Administration, Department 
of Labor, its notice of intention to make a service contract. In 
addition to the requirements contained in paragraph (a)(1) of this 
section, such submission shall identify each location where the work may 
be performed as indicated by participating firms. Subsequent amendments 
to the solicitation setting forth the wage determinations and any 
necessary change in the date and time for submission of final bids shall 
be made upon receipt of wage determinations. An applicable wage 
determination must be obtained for each firm participating in the 
bidding for the location

[[Page 33]]

in which it would perform the contract. The appropriate wage 
determination shall be incorporated in the resultant contract documents 
and shall be applicable to all work performed thereunder (regardless of 
whether the successful contractor subsequently changes the place(s) of 
contract performance).
    (ii) There may be unusual situations, as determined by the 
Department of Labor upon consultation with a contracting agency, where 
the procedure in paragraph (a)(2)(i) of this section is not practicable 
in a particular situation, in which event the Department may authorize a 
modified procedure which may result in the subsequent issuance of wage 
determinations for one or more composite localities.
    (b) The contracting agency shall file with its Notice of Intention 
to Make a Service Contract (SF-98) either a Standard Form 98-A or a 
statement in writing, containing the following information concerning 
the service employees expected by the agency to be employed by the 
contractor and any subcontractors in performing the contract:
    (1) The number of such employees of all classes, or a statement 
indicating whether such number will or will not exceed 5, the number for 
which the inclusion of a wage determination in the contract is mandatory 
under the provisions of section 10 of the Act as set forth in 
Sec. 4.3(a); and
    (2) A listing of those classes of service employees expected to be 
employed under the contract which, if employed by the agency, would be 
subject to the wage provisions of 5 U.S.C. 5341 or 5 U.S.C. 5332, 
together with a specification of the rates of wages and fringe benefits 
that would be paid by the Government to employees of each such class if 
such statute were applicable to them. (Under section 2(a)(5) of the Act 
and Sec. 4.6 the inclusion of such a statement in the service contract 
is also required.)
    (c) If the services to be furnished under the proposed contract will 
be substantially the same as services being furnished in the same 
locality by an incumbent contractor whose contract the proposed contract 
will succeed, and if such incumbent contractor is furnishing such 
services through the use of service employees whose wage rates and 
fringe benefits are the subject of one or more collective bargaining 
agreements, the contracting agency shall file with its Notice of 
Intention to Make a Service Contract (SF-98) a copy of each such 
collective bargaining agreement together with any related documents 
specifying the wage rates and fringe benefits currently or prospectively 
payable under such agreement. If the place of contract performance is 
unknown, the contracting agency will submit the collective bargaining 
agreement of the incumbent contractor for incorporation into a wage 
determination applicable to a potential bidder located in the same 
geographic area as the predecessor contractor (section 4.4(a)(2)). If 
such services are being furnished at more than one locality and the 
collectively bargained wage rates and fringe benefits are different at 
different localities or do not apply to one or more localities, the 
agency shall identify the localities to which such agreements have 
application. If the collective bargaining agreement does not apply to 
all service employees under the contract, the agency shall identify the 
employees and/or work subject to the collective bargaining agreement. In 
the event that the agency has reason to believe that any such collective 
bargaining agreement was not entered into as a result of arm's-length 
negotiations, a full statement of the facts so indicating shall be 
transmitted with the copy of such agreement. See Sec. 4.11. If the 
agency has information indicating that any such collectively bargained 
wage rates and fringe benefits are substantially at variance with those 
prevailing for services of a similar character in the locality, the 
agency shall so advise the Wage and Hour Division and, if it believes a 
hearing thereon pursuant to section 4(c) of the Act is warranted, shall 
file its request for such hearing pursuant to Sec. 4.10 at the time of 
filing the Notice of Intention to Make a Service Contract (Form SF-98).
    (d) If the proposed contract is for a multi-year period subject to 
other than annual appropriations, the contracting agency shall file with 
its Standard Form 98 a statement in writing concerning the type of 
funding and the

[[Page 34]]

contemplated term of the proposed contract. Unless otherwise advised by 
the Wage and Hour Division that a Standard Form 98 must be filed on the 
annual anniversary date, a new Standard Form 98 shall be submitted on 
each biennial anniversary date of the proposed multi-year contract in 
the event its term is for a period in excess of two years.
    (e) Any Standard Form 98 submitted by a contracting agency without 
the information required under paragraphs (b), (c), or (d) of this 
section will be returned to the agency for further action.
    (f) If exceptional circumstances prevent the filing of the notice of 
intention and supplemental information required by this section on a 
date at least 60 days (or 30 days in the case of unplanned procurements) 
prior to any invitation for bids, request for proposals, or commencement 
of negotiations, the notice shall be submitted to the Wage and Hour 
Division as soon as practicable with a detailed explanation of the 
special circumstances which prevented timely submission. In the event 
the proposed contract involves performance by more than 5 service 
employees and an emergency situation requires an immediate award, the 
contracting agency shall contact the Wage and Hour Division by telephone 
for guidance prior to any such award. In no event may a contract subject 
to the act on which more than 5 service employees are contemplated to be 
employed be awarded without an appropriate wage determination. (Section 
10 of the Act.)
    (g) If any invitation for bids, request for proposals, bid opening, 
or commencement of negotiations for a proposed contract for which a wage 
determination was provided in response to a Standard Form 98 has been 
delayed, for whatever reason, more than 60 days from the date of such 
procurement action as indicated on the submitted Standard Form 98, the 
contracting agency shall contact the Wage and Hour Division for the 
purpose of determining whether the wage determination issued pursuant to 
the initial submission is still current. Any revision of a wage 
determination received by the contracting agency as a result of such 
communication or upon discovery by the Department of Labor of a delay, 
shall supersede and replace the earlier response as the wage 
determination applicable to such procurement, subject to the time frames 
set forth in Sec. 4.5(a)(2).



Sec. 4.5  Contract specification of determined minimum wages and fringe benefits.

    (a) Any contract in excess of $2,500 shall contain, as an 
attachment, the applicable, currently effective wage determination 
specifying the minimum wages and fringe benefits for service employees 
to be employed thereunder, including any document referred to in 
paragraphs (a)(1) or (2) of this section;
    (1) Any communication from the Wage and Hour Division, Employment 
Standards Administration, Department of Labor, responsive to the notice 
required by Sec. 4.4; or
    (2) Any revision of a wage determination issued prior to the award 
of the contract or contracts which specifies minimum wage rates or 
fringe benefits for classes of service employees whose wages or fringe 
benefits were not previously covered by wage determinations, or which 
changes previously determined minimum wage rates and fringe benefits for 
service employees employed on covered contracts in the locality. 
However, revisions received by the Federal agency later than 10 days 
before the opening of bids, in the case of contracts entered into 
pursuant to competitive bidding procedures, shall not be effective if 
the Federal agency finds that there is not a reasonable time still 
available to notify bidders of the revision. In the case of procurements 
entered into pursuant to negotiations (or in the case of the execution 
of an option or an extension of the initial contract term), revisions 
received by the agency after award (or execution of an option or 
extension of term, as the case may be) of the contract shall not be 
effective provided that the contract start of performance is within 30 
days of such award (or execution of an option or extension of term). If 
the contract does not specify a start of performance date which is 
within 30 days from the award, and/or if performance of such procurement

[[Page 35]]

does not commence within this 30-day period, the Department of Labor 
shall be notified and any notice of a revision received by the agency 
not less than 10 days before commencement of the contract shall be 
effective. In situations arising under section 4(c) of the Act, the 
provisions in Sec. 4.1b(b) apply.
    (b)(1) The following exemption from the compensation requirements of 
section 2(a) of the Act applies, subject to the limitations set forth in 
paragraphs (b)(2), (3), and (4) of this section: To avoid serious 
impairment of the conduct of Government business it has been found 
necessary and proper to provide exemption from the determined wage and 
fringe benefits section of the Act (section 2(a)(1), (2)) but not the 
minimum wage specified under section 6(a)(1) of the Fair Labor Standards 
Act of 1938, as amended (section 2(b) of this Act), of contracts under 
which five or less service employees are to be employed, and for which 
no such wage or fringe benefit determination has been issued;
    (2) The exemption provided in paragraph (b)(1) of this section, 
which was adopted pursuant to section 4(b) of the Act prior to its 
amendment by Public Law 92-473, does not extend to undetermined wages or 
fringe benefits in contracts for which one or more, but not all, classes 
of service employees are the subject of an applicable wage 
determination. The procedure for determination of wage rates and fringe 
benefits for any classes of service employees engaged in performing such 
contracts whose wages and fringe benefits are not specified in the 
applicable wage determination is set forth in Sec. 4.6(b).
    (3) The exemption provided in paragraph (b)(1) of this section does 
not exempt any contract from the application of the provisions of 
section 4(c) of the Act as amended, concerning successor contracts.
    (4) The exemption provided in paragraph (b)(1) of this section does 
not apply to any contract for which section 10 of the Act as amended 
requires an applicable wage determination.
    (c)(1) If the notice of intention required by Sec. 4.4 is not filed 
with the required supporting documents within the time provided in such 
section, the contracting agency shall, through the exercise of any and 
all of its power and authority that may be needed (including, where 
necessary, its authority to negotiate, its authority to pay any 
necessary additional costs, and its authority under any provision of the 
contract authorizing changes), include in the contract any wage 
determinations communicated to it by the Wage and Hour Division, 
Employment Standards Administration, U.S. Department of Labor, within 30 
days of the receipt of such wage determination(s). With respect to any 
contract for which section 10 of the Act requires an applicable wage 
determination, the Administrator may require retroactive application of 
such wage determination.
    (2) Where the Department of Labor discovers and determines, whether 
before or subsequent to a contract award, that a contracting agency made 
an erroneous determination that the Service Contract Act did not apply 
to a particular procurement and/or failed to include an appropriate wage 
determination in a covered contract, the contracting agency, within 30 
days of notification by the Department of Labor, shall include in the 
contract the stipulations contained in Sec. 4.6 and any applicable wage 
determination issued by the Administrator or his authorized 
representative through the exercise of any and all authority that may be 
needed (including, where necessary, its authority to negotiate or amend, 
its authority to pay any necessary additional costs, and its authority 
under any contract provision authorizing changes, cancellation, and 
termination). With respect to any contract subject to section 10 of the 
Act, the Administrator may require retroactive application of such wage 
determination. (See 53 Comp. Gen. 412, (1973); Curtiss-Wright Corp. v. 
McLucas, 381 F. Supp. 657 (D NJ 1974); Marine Engineers Beneficial 
Assn., District 2 v. Military Sealift Command, 86 CCH Labor Cases 
para.33,782 (D DC 1979); Brinks, Inc. v. Board of Governors of the 
Federal Reserve System, 466 F. Supp. 112 (D DC 1979), 466 F. Supp. 116 
(D DC 1979).) (See also 32 CFR 1-403.)
    (d) In cases where the contracting agency has filed its SF-98 within 
the time limits discussed in Sec. 4.4(a) and has not received a response 
from the Department of Labor, the contracting

[[Page 36]]

agency shall, with respect to any contract for which section 10 of the 
Act and Sec. 4.3 of this part mandate the inclusion of an applicable 
wage determination, contact the Wage and Hour Division by telephone for 
guidance.



Sec. 4.6  Labor standards clauses for Federal service contracts exceeding $2,500.

    The clauses set forth in the following paragraphs shall be included 
in full by the contracting agency in every contract entered into by the 
United States or the District of Columbia, in excess of $2,500, or in an 
indefinite amount, the principal purpose of which is to furnish services 
through the use of service employees:
    (a) Service Contract Act of 1965, as amended: This contract is 
subject to the Service Contract Act of 1965, as amended (41 U.S.C. 351 
et seq.) and is subject to the following provisions and to all other 
applicable provisions of the Act and regulations of the Secretary of 
Labor issued thereunder (29 CFR part 4).
    (b)(1) Each service employee employed in the performance of this 
contract by the contractor or any subcontractor shall be paid not less 
than the minimum monetary wages and shall be furnished fringe benefits 
in accordance with the wages and fringe benefits determined by the 
Secretary of Labor or authorized representative, as specified in any 
wage determination attached to this contract.
    (2)(i) If there is such a wage determination attached to this 
contract, the contracting officer shall require that any class of 
service employee which is not listed therein and which is to be employed 
under the contract (i.e., the work to be performed is not performed by 
any classification listed in the wage determination), be classified by 
the contractor so as to provide a reasonable relationship (i.e., 
appropriate level of skill comparison) between such unlisted 
classifications and the classifications listed in the wage 
determination. Such conformed class of employees shall be paid the 
monetary wages and furnished the fringe benefits as are determined 
pursuant to the procedures in this section.
    (ii) Such conforming procedure shall be initiated by the contractor 
prior to the performance of contract work by such unlisted class of 
employee. A written report of the proposed conforming action, including 
information regarding the agreement or disagreement of the authorized 
representative of the employees involved or, where there is no 
authorized representative, the employees themselves, shall be submitted 
by the contractor to the contracting officer no later than 30 days after 
such unlisted class of employees performs any contract work. The 
contracting officer shall review the proposed action and promptly submit 
a report of the action, together with the agency's recommendation and 
all pertinent information including the position of the contractor and 
the employees, to the Wage and Hour Division, Employment Standards 
Administration, U.S. Department of Labor, for review. The Wage and Hour 
Division will approve, modify, or disapprove the action or render a 
final determination in the event of disagreement within 30 days of 
receipt or will notify the contracting officer within 30 days of receipt 
that additional time is necessary.
    (iii) The final determination of the conformance action by the Wage 
and Hour Division shall be transmitted to the contracting officer who 
shall promptly notify the contractor of the action taken. Each affected 
employee shall be furnished by the contractor with a written copy of 
such determination or it shall be posted as a part of the wage 
determination.
    (iv)(A) The process of establishing wage and fringe benefit rates 
that bear a reasonable relationship to those listed in a wage 
determination cannot be reduced to any single formula. The approach used 
may vary from wage determination to wage determination depending on the 
circumstances. Standard wage and salary administration practices which 
rank various job classifications by pay grade pursuant to point schemes 
or other job factors may, for example, be relied upon. Guidance may also 
be obtained from the way different jobs are rated under Federal pay 
systems (Federal Wage Board Pay System and the General Schedule) or from 
other wage determinations

[[Page 37]]

issued in the same locality. Basic to the establishment of any 
conformable wage rate(s) is the concept that a pay relationship should 
be maintained between job classifications based on the skill required 
and the duties performed.
    (B) In the case of a contract modification, an exercise of an option 
or extension of an existing contract, or in any other case where a 
contractor succeeds a contract under which the classification in 
question was previously conformed pursuant to this section, a new 
conformed wage rate and fringe benefits may be assigned to such 
conformed classification by indexing (i.e., adjusting) the previous 
conformed rate and fringe benefits by an amount equal to the average 
(mean) percentage increase (or decrease, where appropriate) between the 
wages and fringe benefits specified for all classifications to be used 
on the contract which are listed in the current wage determination, and 
those specified for the corresponding classifications in the previously 
applicable wage determination. Where conforming actions are accomplished 
in accordance with this paragraph prior to the performance of contract 
work by the unlisted class of employees, the contractor shall advise the 
contracting officer of the action taken but the other procedures in 
paragraph (b)(2)(ii) of this section need not be followed.
    (C) No employee engaged in performing work on this contract shall in 
any event be paid less than the currently applicable minimum wage 
specified under section 6(a)(1) of the Fair Labor Standards Act of 1938, 
as amended.
    (v) The wage rate and fringe benefits finally determined pursuant to 
paragraphs (b)(2)(i) and (ii) of this section shall be paid to all 
employees performing in the classification from the first day on which 
contract work is performed by them in the classification. Failure to pay 
such unlisted employees the compensation agreed upon by the interested 
parties and/or finally determined by the Wage and Hour Division 
retroactive to the date such class of employees commenced contract work 
shall be a violation of the Act and this contract.
    (vi) Upon discovery of failure to comply with paragraphs (b)(2)(i) 
through (v) of this section, the Wage and Hour Division shall make a 
final determination of conformed classification, wage rate, and/or 
fringe benefits which shall be retroactive to the date such class of 
employees commenced contract work.
    (3) If, as authorized pursuant to section 4(d) of the Service 
Contract Act of 1965 as amended, the term of this contract is more than 
1 year, the minimum monetary wages and fringe benefits required to be 
paid or furnished thereunder to service employees shall be subject to 
adjustment after 1 year and not less often than once every 2 years, 
pursuant to wage determinations to be issued by the Wage and Hour 
Division, Employment Standards Administration of the Department of Labor 
as provided in such Act.
    (c) The contractor or subcontractor may discharge the obligation to 
furnish fringe benefits specified in the attachment or determined 
conformably thereto by furnishing any equivalent combinations of bona 
fide fringe benefits, or by making equivalent or differential payments 
in cash in accordance with the applicable rules set forth in subpart D 
of 29 CFR part 4, and not otherwise.
    (d)(1) In the absence of a minimum wage attachment for this 
contract, neither the contractor nor any subcontractor under this 
contract shall pay any person performing work under the contract 
(regardless of whether they are service employees) less than the minimum 
wage specified by section 6(a)(1) of the Fair Labor Standards Act of 
1938. Nothing in this provision shall relieve the contractor or any 
subcontractor of any other obligation under law or contract for the 
payment of a higher wage to any employee.
    (2) If this contract succeeds a contract, subject to the Service 
Contract Act of 1965 as amended, under which substantially the same 
services were furnished in the same locality and service employees were 
paid wages and fringe benefits provided for in a collective bargaining 
agreement, in the absence of the minimum wage attachment for this 
contract setting forth such collectively bargained wage rates

[[Page 38]]

and fringe benefits, neither the contractor nor any subcontractor under 
this contract shall pay any service employee performing any of the 
contract work (regardless of whether or not such employee was employed 
under the predecessor contract), less than the wages and fringe benefits 
provided for in such collective bargaining agreements, to which such 
employee would have been entitled if employed under the predecessor 
contract, including accrued wages and fringe benefits and any 
prospective increases in wages and fringe benefits provided for under 
such agreement. No contractor or subcontractor under this contract may 
be relieved of the foregoing obligation unless the limitations of 
Sec. 4.1b(b) of 29 CFR part 4 apply or unless the Secretary of Labor or 
his authorized representative finds, after a hearing as provided in 
Sec. 4.10 of 29 CFR part 4 that the wages and/or fringe benefits 
provided for in such agreement are substantially at variance with those 
which prevail for services of a character similar in the locality, or 
determines, as provided in Sec. 4.11 of 29 CFR part 4, that the 
collective bargaining agreement applicable to service employees employed 
under the predecessor contract was not entered into as a result of 
arm's-length negotiations. Where it is found in accordance with the 
review procedures provided in 29 CFR 4.10 and/or 4.11 and parts 6 and 8 
that some or all of the wages and/or fringe benefits contained in a 
predecessor contractor's collective bargaining agreement are 
substantially at variance with those which prevail for services of a 
character similar in the locality, and/or that the collective bargaining 
agreement applicable to service employees employed under the predecessor 
contract was not entered into as a result of arm's-length negotiations, 
the Department will issue a new or revised wage determination setting 
forth the applicable wage rates and fringe benefits. Such determination 
shall be made part of the contract or subcontract, in accordance with 
the decision of the Administrator, the Administrative Law Judge, or the 
Administrative Review Board, as the case may be, irrespective of whether 
such issuance occurs prior to or after the award of a contract or 
subcontract. 53 Comp. Gen. 401 (1973). In the case of a wage 
determnation issued solely as a result of a finding of substantial 
variance, such determination shall be effective as of the date of the 
final administrative decision.
    (e) The contractor and any subcontractor under this contract shall 
notify each service employee commencing work on this contract of the 
minimum monetary wage and any fringe benefits required to be paid 
pursuant to this contract, or shall post the wage determination attached 
to this contract. The poster provided by the Department of Labor 
(Publication WH 1313) shall be posted in a prominent and accessible 
place at the worksite. Failure to comply with this requirement is a 
violation of section 2(a)(4) of the Act and of this contract.
    (f) The contractor or subcontractor shall not permit any part of the 
services called for by this contract to be performed in buildings or 
surroundings or under working conditions provided by or under the 
control or supervision of the contractor or subcontractor which are 
unsanitary or hazardous or dangerous to the health or safety of service 
employees engaged to furnish these services, and the contractor or 
subcontractor shall comply with the safety and health standards applied 
under 29 CFR part 1925.
    (g)(1) The contractor and each subcontractor performing work subject 
to the Act shall make and maintain for 3 years from the completion of 
the work records containing the information specified in paragraphs 
(g)(1) (i) through (vi) of this section for each employee subject to the 
Act and shall make them available for inspection and transcription by 
authorized representatives of the Wage and Hour Division, Employment 
Standards Administration of the U.S. Department of Labor:
    (i) Name and address and social security number of each employee.
    (ii) The correct work classification or classifications, rate or 
rates of monetary wages paid and fringe benefits provided, rate or rates 
of fringe benefit payments in lieu thereof, and total daily and weekly 
compensation of each employee.

[[Page 39]]

    (iii) The number of daily and weekly hours so worked by each 
employee.
    (iv) Any deductions, rebates, or refunds from the total daily or 
weekly compensation of each employee.
    (v) A list of monetary wages and fringe benefits for those classes 
of service employees not included in the wage determination attached to 
this contract but for which such wage rates or fringe benefits have been 
determined by the interested parties or by the Administrator or 
authorized representative pursuant to the labor standards clause in 
paragraph (b) of this section. A copy of the report required by the 
clause in paragraph (b)(2)(ii) of this section shall be deemed to be 
such a list.
    (vi) Any list of the predecessor contractor's employees which had 
been furnished to the contractor pursuant to Sec. 4.6(l)(2).
    (2) The contractor shall also make available a copy of this contract 
for inspection or transcription by authorized representatives of the 
Wage and Hour Division.
    (3) Failure to make and maintain or to make available such records 
for inspection and transcription shall be a violation of the regulations 
and this contract, and in the case of failure to produce such records, 
the contracting officer, upon direction of the Department of Labor and 
notification of the contractor, shall take action to cause suspension of 
any further payment or advance of funds until such violation ceases.
    (4) The contractor shall permit authorized representatives of the 
Wage and Hour Division to conduct interviews with employees at the 
worksite during normal working hours.
    (h) The contractor shall unconditionally pay to each employee 
subject to the Act all wages due free and clear and without subsequent 
deduction (except as otherwise provided by law or Regulations, 29 CFR 
part 4), rebate, or kickback on any account. Such payments shall be made 
no later than one pay period following the end of the regular pay period 
in which such wages were earned or accrued. A pay period under this Act 
may not be of any duration longer than semi-monthly.
    (i) The contracting officer shall withhold or cause to be withheld 
from the Government prime contractor under this or any other Government 
contract with the prime contractor such sums as an appropriate official 
of the Department of Labor requests or such sums as the contracting 
officer decides may be necessary to pay underpaid employees employed by 
the contractor or subcontractor. In the event of failure to pay any 
employees subject to the Act all or part of the wages or fringe benefits 
due under the Act, the agency may, after authorization or by direction 
of the Department of Labor and written notification to the contractor, 
take action to cause suspension of any further payment or advance of 
funds until such violations have ceased. Additionally, any failure to 
comply with the requirements of these clauses relating to the Service 
Contract Act of 1965, may be grounds for termination of the right to 
proceed with the contract work. In such event, the Government may enter 
into other contracts or arrangements for completion of the work, 
charging the contractor in default with any additional cost.
    (j) The contractor agrees to insert these clauses in this section 
relating to the Service Contract Act of 1965 in all subcontracts subject 
to the Act. The term contractor as used in these clauses in any 
subcontract, shall be deemed to refer to the subcontractor, except in 
the term Government prime contractor.
    (k)(1) As used in these clauses, the term service employee means any 
person engaged in the performance of this contract other than any person 
employed in a bona fide executive, administrative, or professional 
capacity, as those terms are defined in part 541 of title 29, Code of 
Federal Regulations, as of July 30, 1976, and any subsequent revision of 
those regulations. The term service employee includes all such persons 
regardless of any contractual relationship that may be alleged to exist 
between a contractor or subcontractor and such persons.
    (2) The following statement is included in contracts pursuant to 
section 2(a)(5) of the Act and is for informational purposes only:
    The following classes of service employees expected to be employed 
under

[[Page 40]]

the contract with the Government would be subject, if employed by the 
contracting agency, to the provisions of 5 U.S.C. 5341 or 5 U.S.C. 5332 
and would, if so employed, be paid not less than the following rates of 
wages and fringe benefits:

------------------------------------------------------------------------
                                                               Monetary
                       Employee class                        wage-fringe
                                                               benefits
------------------------------------------------------------------------
                                                             ...........
                                                             ...........
                                                             ...........
------------------------------------------------------------------------

    (l)(1) If wages to be paid or fringe benefits to be furnished any 
service employees employed by the Government prime contractor or any 
subcontractor under the contract are provided for in a collective 
bargaining agreement which is or will be effective during any period in 
which the contract is being performed, the Government prime contractor 
shall report such fact to the contracting officer, together with full 
information as to the application and accrual of such wages and fringe 
benefits, including any prospective increases, to service employees 
engaged in work on the contract, and a copy of the collective bargaining 
agreement. Such report shall be made upon commencing performance of the 
contract, in the case of collective bargaining agreements effective at 
such time, and in the case of such agreements or provisions or 
amendments thereof effective at a later time during the period of 
contract performance, such agreements shall be reported promptly after 
negotiation thereof.
    (2) Not less than 10 days prior to completion of any contract being 
performed at a Federal facility where service employees may be retained 
in the performance of the succeeding contract and subject to a wage 
determination which contains vacation or other benefit provisions based 
upon length of service with a contractor (predecessor) or successor 
(Sec. 4.173 of Regulations, 29 CFR part 4), the incumbent prime 
contractor shall furnish to the contracting officer a certified list of 
the names of all service employees on the contractor's or 
subcontractor's payroll during the last month of contract performance. 
Such list shall also contain anniversary dates of employment on the 
contract either with the current or predecessor contractors of each such 
service employee. The contracting officer shall turn over such list to 
the successor contractor at the commencement of the succeeding contract.
    (m) Rulings and interpretations of the Service Contract Act of 1965, 
as amended, are contained in Regulations, 29 CFR part 4.
    (n)(1) By entering into this contract, the contractor (and officials 
thereof) certifies that neither it (nor he or she) nor any person or 
firm who has a substantial interest in the contractor's firm is a person 
or firm ineligible to be awarded Government contracts by virtue of the 
sanctions imposed pursuant to section 5 of the Act.
    (2) No part of this contract shall be subcontracted to any person or 
firm ineligible for award of a Government contract pursuant to section 5 
of the Act.
    (3) The penalty for making false statements is prescribed in the 
U.S. Criminal Code, 18 U.S.C. 1001.
    (o) Notwithstanding any of the clauses in paragraphs (b) through (m) 
of this section relating to the Service Contract Act of 1965, the 
following employees may be employed in accordance with the following 
variations, tolerances, and exemptions, which the Secretary of Labor, 
pursuant to section 4(b) of the Act prior to its amendment by Public Law 
92-473, found to be necessary and proper in the public interest or to 
avoid serious impairment of the conduct of Government business:
    (1) Apprentices, student-learners, and workers whose earning 
capacity is impaired by age, physical, or mental deficiency or injury 
may be employed at wages lower than the minimum wages otherwise required 
by section 2(a)(1) or 2(b)(1) of the Service Contract Act without 
diminishing any fringe benefits or cash payments in lieu thereof 
required under section 2(a)(2) of that Act, in accordance with the 
conditions and procedures prescribed for the employment of apprentices, 
student-learners, handicapped persons, and handicapped clients of 
sheltered workshops under section 14 of the Fair Labor Standards Act of 
1938, in the regulations issued by the Administrator (29 CFR parts 520, 
521, 524, and 525).

[[Page 41]]

    (2) The Administrator will issue certificates under the Service 
Contract Act for the employment of apprentices, student-learners, 
handicapped persons, or handicapped clients of sheltered workshops not 
subject to the Fair Labor Standards Act of 1938, or subject to different 
minimum rates of pay under the two acts, authorizing appropriate rates 
of minimum wages (but without changing requirements concerning fringe 
benefits or supplementary cash payments in lieu thereof), applying 
procedures prescribed by the applicable regulations issued under the 
Fair Labor Standards Act of 1938 (29 CFR parts 520, 521, 524, and 525).
    (3) The Administrator will also withdraw, annul, or cancel such 
certificates in accordance with the regulations in parts 525 and 528 of 
title 29 of the Code of Federal Regulations.
    (p) Apprentices will be permitted to work at less than the 
predetermined rate for the work they perform when they are employed and 
individually registered in a bona fide apprenticeship program registered 
with a State Apprenticeship Agency which is recognized by the U.S. 
Department of Labor, or if no such recognized agency exists in a State, 
under a program registered with the Bureau of Apprenticeship and 
Training, Employment and Training Administration, U.S. Department of 
Labor. Any employee who is not registered as an apprentice in an 
approved program shall be paid the wage rate and fringe benefits 
contained in the applicable wage determination for the journeyman 
classification of work actually performed. The wage rates paid 
apprentices shall not be less than the wage rate for their level of 
progress set forth in the registered program, expressed as the 
appropriate percentage of the journeyman's rate contained in the 
applicable wage determination. The allowable ratio of apprentices to 
journeymen employed on the contract work in any craft classification 
shall not be greater than the ratio permitted to the contractor as to 
his entire work force under the registered program.
    (q) Where an employee engaged in an occupation in which he or she 
customarily and regularly receives more than $30 a month in tips, the 
amount of tips received by the employee may be credited by the employer 
against the minimum wage required by Section 2(a)(1) or 2(b)(1) of the 
Act to the extent permitted by section 3(m) of the Fair Labor Standards 
Act and Regulations, 29 CFR Part 531. To utilize this proviso:
    (1) The employer must inform tipped employees about this tip credit 
allowance before the credit is utilized;
    (2) The employees must be allowed to retain all tips (individually 
or through a pooling arrangement and regardless of whether the employer 
elects to take a credit for tips received);
    (3) The employer must be able to show by records that the employee 
receives at least the applicable Service Contract Act minimum wage 
through the combination of direct wages and tip credit;
    (4) The use of such tip credit must have been permitted under any 
predecessor collective bargaining agreement applicable by virtue of 
section 4(c) of the Act.
    (r) Disputes concerning labor standards. Disputes arising out of the 
labor standards provisions of this contract shall not be subject to the 
general disputes clause of this contract. Such disputes shall be 
resolved in accordance with the procedures of the Department of Labor 
set forth in 29 CFR parts 4, 6, and 8. Disputes within the meaning of 
this clause include disputes between the contractor (or any of its 
subcontractors) and the contracting agency, the U.S. Department of 
Labor, or the employees or their representatives.

(The information collection, recordkeeping, and reporting requirements 
contained in this section have been approved by the Office of Management 
and Budget under the following numbers:

------------------------------------------------------------------------
                                                             OMB control
                         Paragraph                              number
------------------------------------------------------------------------
(b)(2) (i)--(iv)...........................................    1215-0150
(e)........................................................    1215-0150
(g)(1) (i)--(iv)...........................................    1215-0017
(g)(1) (v), (vi)...........................................    1215-0150
(l) (1), (2)...............................................    1215-0150
(q)(3).....................................................    1215-0017
------------------------------------------------------------------------


[48 FR 49762, Oct. 27, 1983; 48 FR 50529, Nov. 2, 1983, as amended at 61 
FR 68663, Dec. 30, 1996]

[[Page 42]]



Sec. 4.7  [Reserved]



Sec. 4.8  Notice of awards.

    Whenever an agency of the United States or the District of Columbia 
awards a contract subject to the Act which may be in excess of $10,000 
and such agency does not submit Standard Form 279, FPDS Individual 
Contract Action Report, or its equivalent, to the Federal Procurement 
Data System, it shall furnish the Wage and Hour Division, ESA, an 
original and one copy of Standard Form 99, Notice of Award of Contract, 
unless it makes other arrangements with the Wage and Hour Division for 
notifying it of such contract awards. The form shall be completed as 
follows:
    (a) Items 1 through 7 and 12 and 13: Self-explanatory;
    (b) Item 8: Enter the notation ``Service Contract Act;''
    (c) Item 9: Leave blank;
    (d) Item 10: (1) Enter the notation ``Major Category,'' and indicate 
beside this entry the general service area into which the contract falls 
(e.g., food services, grounds maintenance, computer services, 
installation or facility support services, custodial-janitorial service, 
garbage collection, insect and rodent control, laundry and drycleaning 
services, etc.);
    (e) Item 11: Enter the dollar amount of the contract, or the 
estimated dollar value with the notation ``estimated'' (if the exact 
amount is not known). If neither the exact nor the estimated dollar 
value is known, enter ``indefinite,'' or ``not to exceed $----.'' 
Supplies of Standard Form 99 are available in all GSA supply depots 
under stock number 7540-634-4049.



Sec. 4.9  [Reserved]



Sec. 4.10  Substantial variance proceedings under section 4(c) of the Act.

    (a) Statutory provision. Under section 4(c) of the Act, and under 
corresponding wage determinations made as provided in section 2(a)(1) 
and (2) of the Act, contractors and subcontractors performing contracts 
subject to the Act generally are obliged to pay to service employees 
employed on the contract work wages and fringe benefits not less than 
those to which they would have been entitled under a collective 
bargaining agreement if they were employed on like work under a 
predecessor contract in the same locality. (See Secs. 4.1b, 4.3, 
4.6(d)(2).) Section 4(c) of the Act provides, however, that ``such 
obligations shall not apply if the Secretary finds after a hearing in 
accordance with regulations adopted by the Secretary that such wages and 
fringe benefits are substantially at variance with those which prevail 
for services of a character similar in the locality''.
    (b) Prerequisites for hearing. (1)(i) A request for a hearing under 
this section may be made by the contracting agency or other person 
affected or interested, including contractors or prospective contractors 
and associations of contractors, representatives of employees, and other 
interested Governmental agencies. Such a request shall be submitted in 
writing to the Administrator, Wage and Hour Division, Employment 
Standards Administration, U.S. Department of Labor, Washington, DC 
20210, and shall include the following:
    (A) The number of any wage determination at issue, the name of the 
contracting agency whose contract is involved, and a brief description 
of the services to be performed under the contract;
    (B) A statement regarding the status of the procurement and any 
estimated procurement dates, such as bid opening, contract award, 
commencement date of the contract or its follow-up option period;
    (C) A statement of the applicant's case, setting forth in detail the 
reasons why the applicant believes that a substantial variance exists 
with respect to some or all of the wages and/or fringe benefits, 
attaching available data concerning wages and/or fringe benefits 
prevailing in the locality;
    (D) Names and addresses (to the extent known) of interested parties.
    (ii) If the information in paragraph (b)(1)(i) of this section is 
not submitted with the request, the Administrator

[[Page 43]]

may deny the request or request supplementary information, at his/her 
discretion. No particular form is prescribed for submission of a request 
under this section.
    (2) The Administrator will respond to the party requesting a hearing 
within 30 days after receipt, granting or denying the request or 
advising that additional time is necessary for a decision. No hearing 
will be provided pursuant to this section and section 4(c) of the Act 
unless the Administrator determines from information available or 
submitted with a request for such a hearing that there may be a 
substantial variance between some or all of the wage rates and/or fringe 
benefits provided for in a collective bargaining agreement to which the 
service employees would otherwise be entitled by virtue of the 
provisions of section 4(c) of the Act, and those which prevail for 
services of a character similar in the locality.
    (3) Pursuant to section 4(b) of the Act, requests for a hearing 
shall not be considered unless received as specified below, except in 
those situations where the Administrator determines that extraordinary 
circumstances exist:
    (i) For advertised contracts, prior to ten days before the award of 
the contract;
    (ii) For negotiated contracts and for contracts with provisions 
extending the initial term by option, prior to the commencement date of 
the contract or the follow-up option period, as the case may be.
    (c) Referral to the Chief Administrative Law Judge. When the 
Administrator determines from the information available or submitted 
with a request for a hearing that there may be a substantial variance, 
the Administrator on his/her own motion or on application of any 
interested person will by order refer the issue to the Chief 
Administrative Law Judge, for designation of an Administrative Law Judge 
who shall conduct such a fact finding hearing as may be necessary to 
render a decision solely on the issue of whether the wages and/or fringe 
benefits contained in the collective bargaining agreement which was the 
basis for the wage determination at issue are substantially at variance 
with those which prevail for services of a character similar in the 
locality. However, in situations where there is also a question as to 
whether the collective bargaining agreement was reached as a result of 
``arm's-length negotiations'' (see Sec. 4.11), the referral shall 
include both issues for resolution in one proceeding. No authority is 
delegated under this section to hear and/or decide any other issues 
pertaining to the Service Contract Act. As provided in section 4(a) of 
the Act, the provisions of section 4 and 5 of the Walsh-Healey Public 
Contracts Act (41 U.S.C. 38, 39) shall be applicable to such proceeding, 
which shall be conducted in accordance with the procedures set forth at 
29 CFR part 6.
    (d) The Administrator shall be an interested party and shall have 
the opportunity to participate in the proceeding to the degree he/she 
considers appropriate.



Sec. 4.11  Arm's length proceedings.

    (a) Statutory provision. Under section 4(c) of the Act, the wages 
and fringe benefits provided in the predecessor contractor's collective 
bargaining agreement must be reached ``as a result of arm's-length 
negotiations.'' This provision precludes arrangements by parties to a 
collective bargaining agreement who, either separately or together, act 
with an intent to take advantage of the wage determination scheme 
provided for in sections 2(a) and 4(c) of the Act. See Trinity Services, 
Inc. v. Marshall, 593 F.2d 1250 (D.C. Cir. 1978). A finding as to 
whether a collective bargaining agreement or particular wages and fringe 
benefits therein are reached as a result of arm's-length negotiations 
may be made through investigation, hearing or otherwise pursuant to the 
Secretary's authority under section 4(a) of the Act.
    (b) Prerequisites for hearing. (1) A request for a determination 
under this section may be made by a contracting agency or other person 
affected or interested, including contractors or prospective contractors 
and associations of contractors, representatives of employees, and 
interested Governmental agencies. Such a request shall be submitted in 
writing to the Administrator, Wage and Hour Division, Employment 
Standards Administration,

[[Page 44]]

U.S. Department of Labor, Washington, DC 20210. Although no particular 
form is prescribed for submission of a request under this section, such 
request shall include the following information:
    (i) A statement of the applicant's case setting forth in detail the 
reasons why the applicant believes that the wages and fringe benefits 
contained in the collective bargaining agreement were not reached as a 
result of arm's-length negotiations;
    (ii) A statement regarding the status of the procurement and any 
estimated procurement dates, such as bid opening, contract award, 
commencement date of the contract or its follow-up option period;
    (iii) Names and addresses (to the extent known) of interested 
parties.
    (2) Pursuant to section 4(b) of the Act, requests for a hearing 
shall not be considered unless received as specified below except in 
those situations where the Administrator determines that extraordinary 
circumstances exist:
    (i) For advertised contracts, prior to ten days before the award of 
the contract;
    (ii) For negotiated contracts and for contracts with provisions 
extending the term by option, prior to the commencement date of the 
contract or the follow-up option period, as the case may be.
    (c)(1) The Administrator, on his/her own motion or after receipt of 
a request for a determination, may make a finding on the issue of arm's-
length negotiations.
    (2) If the Administrator determines that there may not have been 
arm's-length negotiations, but finds that there is insufficient evidence 
to render a final decision thereon, the Administrator may refer the 
issue to the Chief Administrative Law Judge in accordance with paragraph 
(d) of this section.
    (3)(i) If the Administrator finds that the collective bargaining 
agreement or wages and fringe benefits at issue were reached as a result 
of arm's-length negotiations or that arm's-length negotiations did not 
take place, the interested parties, including the parties to the 
collective bargaining agreement, will be notified of the Administrator's 
findings, which shall include the reasons therefor, and such parties 
shall be afforded an opportunity to request that a hearing be held to 
render a decision on the issue of arm's-length negotiations.
    (ii) Such parties shall have 20 days from the date of the 
Administrator's ruling to request a hearing. A detailed statement of the 
reasons why the Administrator's ruling is in error, including facts 
alleged to be in dispute, if any, shall be submitted with the request 
for a hearing.
    (iii) If no hearing is requested within the time mentioned in 
paragraph (c)(3)(ii) of this section, the Administrator's ruling shall 
be final, and, in the case of a finding that arm's-length negotiations 
did not take place, a new wage determination will be issued for the 
contract. If a hearing is requested, the decision of the Administrator 
shall be inoperative.
    (d) Referral to the Chief Administrative Law Judge. The 
Administrator on his/her own motion, under paragraph (c)(2) of this 
section or upon a request for a hearing under paragraph (c)(3)(ii) of 
this section where the Administrator determines that material facts are 
in dispute, shall by order refer the issue to the Chief Administrative 
Law Judge for designation of an Administrative Law Judge, who shall 
conduct such hearings as may be necessary to render a decision solely on 
the issue of arm's-length negotiations. However, in situations where 
there is also a question as to whether some or all of the collectively 
bargained wage rates and/or fringe benefits are substantially at 
variance (see Sec. 4.10), the referral shall include both issues for 
resolution in one proceeding. As provided in section 4(a) of the Act, 
the provisions of sections 4 and 5 of the Walsh-Healey Public Contracts 
Act (41 U.S.C. 38, 39) shall be applicable to such proceeding, which 
shall be conducted in accordance with the procedures set forth at 29 CFR 
part 6.
    (e) Referral to the Administrative Review Board. When a party 
requests a hearing under paragraph (c)(3)(ii) of this section and the 
Administrator determines that no material facts are in dispute, the 
Administrator shall refer the issue and the record compiled thereon to 
the Administrative Review

[[Page 45]]

Board to render a decision solely on the issue of arm's-length 
negotiations. Such proceeding shall be conducted in accordance with the 
procedures set forth at 29 CFR part 8.



Sec. 4.12  Substantial interest proceedings.

    (a) Statutory provision. Under section 5(a) of the Act, no contract 
of the United States (or the District of Columbia) shall be awarded to 
the persons or firms appearing on the list distributed by the 
Comptroller General giving the names of persons or firms who have been 
found to have violated the Act until 3 years have elapsed from the date 
of publication of the list. Section 5(a) further states that ``no 
contract of the United States shall be awarded * * * to any firm, 
corporation, partnership, or association in which such persons or firms 
have a substantial interest * * * .'' A finding as to whether persons or 
firms whose names appear on the debarred bidders list have a substantial 
interest in any other firm, corporation, partnership, or association may 
be made through investigation, hearing, or otherwise pursuant to the 
Secretary's authority under section 4(a) of the Act.
    (b) Ineligibility. See Sec. 4.188 of this part for the Secretary's 
rulings and interpretations with respect to substantial interest.
    (c)(1) A request for a determination under this section may be made 
by any interested party, including contractors or prospective 
contractors, and associations of contractors, representatives of 
employees, and interested Government agencies. Such a request shall be 
submitted in writing to the Administrator, Wage and Hour Division, 
Employment Standards Administration, U.S. Department of Labor, 
Washington, DC 20210.
    (2) The request shall include a statement setting forth in detail 
why the petitioner believes that a person or firm whose name appears on 
the debarred bidders list has a substantial interest in any firm, 
corporation, partnership, or association which is seeking or has been 
awarded a contract of the United States or the District of Columbia. No 
particular form is prescribed for the submission of a request under this 
section.
    (d)(1) The Administrator, on his/her own motion or after receipt of 
a request for a determination, may make a finding on the issue of 
substantial interest.
    (2) If the Administrator determines that there may be a substantial 
interest, but finds that there is insufficient evidence to render a 
final ruling thereon, the Administrator may refer the issue to the Chief 
Administrative Law Judge in accordance with paragraph (e) of this 
section.
    (3) If the Administrator finds that no substantial interest exists, 
or that there is not sufficient information to warrant the initiation of 
an investigation, the requesting party, if any, will be so notified and 
no further action taken.
    (4)(i) If the Administrator finds that a substantial interest 
exists, the person or firm affected will be notified of the 
Administrator's finding, which shall include the reasons therefor, and 
such person or firm shall be afforded an opportunity to request that a 
hearing be held to render a decision on the issue of substantial 
interest.
    (ii) Such person or firm shall have 20 days from the date of the 
Administrator's ruling to request a hearing. A detailed statement of the 
reasons why the Administrator's ruling is in error, including facts 
alleged to be in dispute, if any, shall be submitted with the request 
for a hearing.
    (iii) If no hearing is requested within the time mentioned in 
paragraph (d)(4)(ii) of this section, the Administrator's finding shall 
be final and the Administrator shall so notify the Comptroller General. 
If a hearing is requested, the decision of the Administrator shall be 
inoperative unless and until the Administrative Law Judge or the 
Administrative Review Board issues an order that there is a substantial 
interest.
    (e) Referral to the Chief Administrative Law Judge. The 
Administrator on his/her own motion, or upon a request for a hearing 
where the Administrator determines that relevant facts are in dispute, 
shall by order refer the issue to the Chief Administrative Law Judge, 
for designation of an Administrative Law Judge who shall conduct such 
hearings as may be necessary to render

[[Page 46]]

a decision solely on the issue of substantial interest. As provided in 
section 4(a) of the Act, the provisions of sections 4 and 5 of the 
Walsh-Healey Public Contracts Act (41 U.S.C. 38, 39) shall be applicable 
to such proceedings, which shall be conducted in accordance with the 
procedures set forth at 29 CFR part 6.
    (f) Referral to the Administrative Review Board. When the person or 
firm requests a hearing and the Administrator determines that relevant 
facts are not in dispute, the Administrator will refer the issue and the 
record compiled thereon to the Administrative Review Board to render a 
decision solely on the issue of substantial interest. Such proceeding 
shall be conducted in accordance with the procedures set forth at 29 CFR 
part 8.



                Subpart B--Wage Determination Procedures



Sec. 4.50  Types of wage and fringe benefit determinations.

    The Administrator specifies the minimum monetary wages and fringe 
benefits to be paid as required under the Act in two types of 
determinations:
    (a) Prevailing in the locality. Determinations that set forth 
minimum monetary wages and fringe benefits determined to be prevailing 
for various classes of service employees in the locality (sections 
2(a)(1) and 2(a)(2) of the Act) after giving ``due consideration'' to 
the rates applicable to such service employees if directly hired by the 
Federal Government (section 2(a)(5) of the Act); and
    (b) Collective Bargaining Agreement--(Successorship). Determinations 
that set forth the wage rates and fringe benefits, including accrued and 
prospective increases, contained in a collective bargaining agreement 
applicable to the service employees who performed on a predecessor 
contract in the same locality (sections 4(c) and 2(a)(1) and (2) of the 
Act).



Sec. 4.51  Prevailing in the locality determinations.

    (a) Information considered. The minimum monetary wages and fringe 
benefits set forth in determinations of the Secretary are based on all 
available pertinent information as to wage rates and fringe benefits 
being paid at the time the determination is made. Such information is 
most frequently derived from area surveys made by the Bureau of Labor 
Statistics, U.S. Department of Labor, or other Labor Department 
personnel. Information may also be obtained from Government contracting 
officers and from other available sources, including employees and their 
representatives and employers and their associations. The determinations 
may be based on the wage rates and fringe benefits contained in 
collective bargaining agreements where they have been determined to 
prevail in a locality for specified occupational class(es) of employees.
    (b) Determination of prevailing rates. Where a single rate is paid 
to a majority (50 percent or more) of the workers in a class of service 
employees engaged in similar work in a particular locality, that rate is 
determined to prevail. The wage rates and fringe benefits in a 
collective bargaining agreement covering 2,001 janitors in a locality, 
for example, prevail if it is determined that no more than 4,000 workers 
are engaged in such janitorial work in that locality. In the case of 
information developed from surveys, statistical measurements of central 
tendency such as a median (a point in a distribution of wage rates where 
50 percent of the surveyed workers receive that or a higher rate and an 
equal number receive a lesser rate) or the mean (average) are considered 
reliable indicators of the prevailing rate. Which of these statistical 
measurements will be applied in a given case will be determined after a 
careful analysis of the overall survey, separate classification data, 
patterns existing between survey periods, and the way the separate 
classification data interrelate. Use of the median is the general rule. 
However, the mean (average) rate may be used in situations where, after 
analysis, it is determined that the median is not a reliable indicator. 
Examples where the mean may be used include situations where:
    (1) The number of workers studied for the job classification 
constitutes a relatively small sample and the computed median results in 
an actual rate that is

[[Page 47]]

paid to few of the studied workers in the class;
    (2) Statistical deviation such as a skewed (bimodal or multimodal) 
frequency distribution biases the median rate due to large 
concentrations of workers toward either end of the distribution curve 
and the computed median results in an actual rate that is paid to few of 
the studied workers in the class; or
    (3) The computed median rate distorts historic wage relationships 
between job levels within a classification family (i.e., Electronic 
Technician Classes A, B, and C levels within the Electronic technician 
classification family), between classifications of different skill 
levels (i.e., a maintenance electrician as compared with a maintenance 
carpenter), or, for example, yields a wage movement inconsistent with 
the pattern shown by the survey overall or with related and/or similarly 
skilled job classifications.
    (c) Slotting wage rates. In some instances, a wage survey for a 
particular locality may result in insufficient data for one or more job 
classifications that are required in the performance of a contract. 
Establishment of a prevailing wage rate for certain such classifications 
may be accomplished through a ``slotting'' procedure, such as that used 
under the Federal pay system. Under this procedure, wage rates are 
derived for a classification based on a comparison of equivalent or 
similar job duty and skill characteristics between the classifications 
studied and those for which no survey data is available. As an example, 
a wage rate found prevailing for the janitorial classification may be 
adopted for the classification of mess attendant if the skill and duties 
attributed to each classification are known to be rated similarly under 
pay classification schemes. (Both classifications are assigned the same 
wage grade under the Coordinated Federal Wage System and are paid at the 
Wage Board grade 2 when hired directly by a Federal agency.)
    (d) Due consideration. In making wage and fringe benefit 
determinations, section 2(a)(5) of the Act requires that due 
consideration be given to the rates that would be paid by the Federal 
agency to the various classes of service employees if section 5341 or 
section 5332 of title 5 U.S.C., were applicable to them. Section 5341 
refers to the Wage Board or Coordinated Federal Wage System for ``blue 
collar'' workers and section 5332 refers to the General Schedule pay 
system for ``white collar'' workers. The term due consideration implies 
the exercise of discretion on the basis of the facts and circumstances 
surrounding each determination, recognizing the legislative objective of 
narrowing the gap between the wage rates and fringe benefits prevailing 
for service employees and those established for Federal employees. Each 
wage determination is based on a survey or other information on the wage 
rates and fringe benefits being paid in a particular locality and also 
takes into account those wage rates and fringe benefits which would be 
paid under Federal pay systems.



Sec. 4.52  Fringe benefit determinations.

    (a) Wage determinations issued pursuant to the Service Contract Act 
ordinarily contain provisions for vacation and holiday benefits 
prevailing in the locality. In addition, wage determinations contain a 
prescribed minimum rate for all other benefits, such as insurance, 
pension, etc., which are not required as a matter of law (i.e., 
excluding Social Security, unemployment insurance, and workers' 
compensation payments and similar statutory benefits), based upon the 
sum of the benefits contained in the U.S. Bureau of Labor Statistics, 
Employment Cost Index (ECI), for all employees in private industry, 
nationwide (and excluding ECI components for supplemental pay, such as 
shift differential, which are considered wages rather than fringe 
benefits under SCA). Pursuant to Section 4(b) of the Act and Sec. 4.123, 
the Secretary has determined that it is necessary and proper in the 
public interest, and in accord with remedial purposes of the Act to 
protect prevailing labor standards, to issue a variation from the Act's 
requirement that fringe benefits be determined for various classes of 
service employees in the locality.
    (b) The minimum rate for all benefits (other than holidays and 
vacation)

[[Page 48]]

which are not legally required, as prescribed in paragraph (a) of this 
section, shall be phased in over a four-year period beginning June 1, 
1997. The first year the rate will be $.90 per hour plus one-fourth of 
the difference between $.90 per hour and the rate prescribed in 
paragraph (a) of this section; the second year the rate will be 
increased by one-third of the difference between the rate set the first 
year and the rate prescribed; the third year the rate will be increased 
by one-half of the difference between the rate set in the second year 
and the rate prescribed; and the fourth year and thereafter the rate 
will be the rate prescribed in paragraph (a) of this section.
    (c) Where it is determined pursuant to Sec. 4.51(b) that a single 
fringe benefit rate is paid with respect to a majority of the workers in 
a class of service employees engaged in similar work in a locality, that 
rate will be determined to prevail notwithstanding the rate which would 
otherwise be prescribed pursuant to this section. Ordinarily, it will be 
found that a majority of workers receive fringe benefits at a single 
level where those workers are subject to a collective bargaining 
agreement whose provisions have been found to prevail in the locality.
    (d) A significant number of contracts contain a prevailing fringe 
benefit rate of $2.56 per hour. Generally, these contracts are large 
base support contracts, contracts requiring competition from large 
corporations, contracts requiring highly technical services, and 
contracts solicited pursuant to A-76 procedures (displacement of Federal 
employees), as well as successor contracts thereto. The $2.56 benefit 
rate shall continue to be issued for all contracts containing the $2.56 
benefit rate, as well as resolicitations and other successor contracts 
for substantially the same services, until the fringe benefit rate 
determined in accordance with paragraphs (a) and (b) of this section 
equals or exceeds $2.56 per hour.
    (e) Variance procedure. (1) The Department will consider variations 
requested by contracting agencies pursuant to Section 4(b) of the Act 
and Sec. 4.123, from the methodology described in paragraph (a) of this 
section for determining prevailing fringe benefit rates. This variation 
procedure will not be utilized to routinely permit separate fringe 
benefit packages for classes of employees and industries, but rather 
will be limited to the narrow circumstances set forth herein where 
special needs of contracting agencies require this procedure. Such 
variations will be considered where the agency demonstrates that because 
of the special circumstances of the particular industry, the variation 
is necessary and proper in the public interest or to avoid the serious 
impairment of government business. Such a demonstration might be made, 
for example, where an agency is unable to obtain contractors willing to 
bid on a contract because the service will be performed at the 
contractor's facility by employees performing work for the Government 
and other customers, and as a result, paying the required SCA fringe 
benefits would cause undue disruption to the contractor's own work force 
and pay practices.
    (2) It will also be necessary for the agency to demonstrate that a 
variance is in accordance with the remedial purpose of the Act to 
protect prevailing labor standards, by providing comprehensive data from 
a valid survey demonstrating the prevailing fringe benefits for the 
specific industry. If the agency does not continue to provide current 
data in subsequent years, the variance will be withdrawn and the rate 
prescribed in paragraph (a) of this section will be issued for the 
contract.

[61 FR 68664, Dec. 30, 1996]



Sec. 4.53  Collective bargaining agreement (successorship) determinations.

    Determinations based on the collective bargaining agreement of a 
predecessor contractor set forth by job classification each provision 
relating to wages (such as the established straight time hourly or 
salary rate, cost-of-living allowance, and any shift, hazardous, and 
other similar pay differentials) and to fringe benefits (such as holiday 
pay, vacation pay, sick leave pay, life, accidental death, disability, 
medical, and dental insurance plans, retirement or pension plans, 
severance pay, supplemental unemployment benefits, saving and thrift 
plans, stock-option plans, funeral leave, jury/witness

[[Page 49]]

leave, or military leave) contained in the predecessor's collective 
bargaining agreement, as well as conditions governing the payment of 
such wages and fringe benefits. Accrued wages and fringe benefits and 
prospective increases therein are also included. Each wage determination 
is limited in application to a specific contract succeeding a contract 
which had been performed in the same locality by a contractor with a 
collective bargaining agreement, and contains a notice to prospective 
bidders regarding their obligations under section 4(c) of the Act.

[48 FR 49762, Oct. 27, 1983. Redesignated at 61 FR 68664, Dec. 30, 1996]



Sec. 4.54  Locality basis of wage and fringe benefit determinations.

    (a) Under section 2(a) of the Act, the Secretary or his authorized 
representative is given the authority to determine the minimum monetary 
wages and fringe benefits prevailing for various classes of service 
employees ``in the locality''. Although the term locality has reference 
to a geographic area, it has an elastic and variable meaning and 
contemplates consideration of the existing wage structures which are 
pertinent to the employment of particular classes of service employees 
on the varied kinds of service contracts. Because wage structures are 
extremely varied, there can be no precise single formula which would 
define the geographic limits of a ``locality'' that would be relevant or 
appropriate for the determination of prevailing wage rates and 
prevailing fringe benefits in all situations under the Act. The locality 
within which a wage or fringe benefit determination is applicable is, 
therefore, defined in each such determination upon the basis of all the 
facts and circumstances pertaining to that determination. Locality is 
ordinarily limited geographically to a particular county or cluster of 
counties comprising a metropolitan area. For example, a survey by the 
Bureau of Labor Statistics of the Baltimore, Maryland Standard 
Metropolitan Statistical Area includes the counties of Baltimore, 
Harford, Howard, Anne Arundel, and the City of Baltimore. A wage 
determination based on such information would define locality as the 
same geographic area included within the scope of the survey. Locality 
may also be defined as, for example, a city, a State, or, under rare 
circumstances, a region, depending on the actual place or places of 
contract performance, the geographical scope of the data on which the 
determination was based, the nature of the services being contracted 
for, and the procurement method used. In addition, in Southern Packaging 
& Storage Co. v. United States, 618 F.2d 1088 (4th Cir. 1980), the court 
held that a nationwide wage determination normally is not permissible 
under the Act, but postulated that ``there may be the rare and 
unforeseen service contract which might be performed at locations 
throughout the country and which would generate truly nationwide 
competition''.
    (b) Where the services are to be performed for a Federal agency at 
the site of the successful bidder, in contrast to services to be 
performed at a specific Federal facility or installation, or in the 
locality of such installation, the location where the work will be 
performed often cannot be ascertained at the time of bid advertisement 
or solicitation. In such instances, wage determinations will generally 
be issued for the various localities identified by the agency as set 
forth in Sec. 4.4(a)(2)(i).
    (c) Where the wage rates and fringe benefits contained in a 
collective bargaining agreement applicable to the predecessor contract 
are set forth in a determination, locality in such a determination is 
typically described as the geographic area in which the predecessor 
contract was performed. The determination applies to any successor 
contractor which performs the contract in the same locality. However, 
see Sec. 4.163(i).

[48 FR 49762, Oct. 27, 1983. Redesignated at 61 FR 68664, Dec. 30, 1996]



Sec. 4.55  Issuance and revision of wage determinations.

    (a) Section 4.4 of subpart A requires that the awarding agency file 
a notice of intention to make a service contract which is subject to the 
Act with the Wage and Hour Division, Employment Standards 
Administration, prior to any invitation for bids or the commencement of 
negotiations for any contract

[[Page 50]]

exceeding $2,500. Upon receipt of the notice, the Wage and Hour Division 
may issue a new determination of minimum monetary wages and fringe 
benefits for the classes of service employees who will perform work on 
the contract or may revise a determination which is currently in effect.
    (b) Determinations will be reviewed periodically and where 
prevailing wage rates or fringe benefits have changed, such changes will 
be reflected in revised determinations. For example, in a locality where 
it is determined that the wage rate which prevails for a particular 
class of service employees is the rate specified in a collective 
bargaining agreement(s) applicable in that locality, and such 
agreement(s) specifies increases in such rates to be effective on 
specific dates, the determinations would be revised to reflect such 
changes as they become effective. Revised determinations shall be 
applicable to contracts in accordance with the provisions of 
Sec. 4.5(a)(2) of subpart A.
    (c) Determinations issued by the Wage and Hour Division with respect 
to particular contracts are required to be incorporated in the 
invitations for bids or requests for proposals or quotations issued by 
the contracting agencies, and are to be incorporated in the contract 
specifications in accordance with Sec. 4.5 of subpart A. In this manner, 
prospective contractors and subcontractors are advised of the minimum 
monetary wages and fringe benefits required under the most recently 
applicable determination to be paid the service employees who perform 
the contract work. These requirements are, of course, the same for all 
bidders so none will be placed at a competitive disadvantage.

[48 FR 49762, Oct. 27, 1983. Redesignated at 61 FR 68664, Dec. 30, 1996]



Sec. 4.56  Review and reconsideration of wage determinations.

    (a) Review by the Administrator. (1) Any interested party affected 
by a wage determination issued under section 2(a) of the Act may request 
review and reconsideration by the Administrator. A request for review 
and reconsideration may be made by the contracting agency or other 
interested party, including contractors or prospective contractors and 
associations of contractors, representatives of employees, and other 
interested Governmental agencies. Any such request must be accompanied 
by supporting evidence. In no event shall the Administrator review a 
wage determination or its applicability after the opening of bids in the 
case of a competitively advertised procurement, or, later than 10 days 
before commencement of a contract in the case of a negotiated 
procurement, exercise of a contract option or extension. This limitation 
is necessary in order to ensure competitive equality and an orderly 
procurement process.
    (2) The Administrator shall, upon receipt of a request for 
reconsideration, review the data sources relied upon as a basis for the 
wage determination, the evidence furnished by the party requesting 
review or reconsideration, and, if necessary to resolve the matter, any 
additional information found to be relevant to determining prevailing 
wage rates and fringe benefits in a particular locality. The 
Administrator, pursuant to a review of available information, may issue 
a new wage determination, may cause the wage determination to be 
revised, or may affirm the wage determination issued, and will notify 
the requesting party in writing of the action taken. The Administrator 
will render a decision within 30 days of receipt of the request or will 
notify the requesting party in writing within 30 days of receipt that 
additional time is necessary.
    (b) Review by the Administrative Review Board. Any decision of the 
Administrator under paragraph (a) of this section may be appealed to the 
Administrative Review Board within 20 days of issuance of the 
Administrator's decision. Any such appeal shall be in accordance with 
the provisions of part 8 of this title.

[48 FR 49762, Oct. 27, 1983. Redesignated at 61 FR 68664, Dec. 30, 1996]

[[Page 51]]



   Subpart C--Application of the McNamara-O'Hara Service Contract Act

                              Introductory



Sec. 4.101  Official rulings and interpretations in this subpart.

    (a) The purpose of this subpart is to provide, pursuant to the 
authority cited in Sec. 4.102, official rulings and interpretations with 
respect to the application of the McNamara-O'Hara Service Contract Act 
for the guidance of the agencies of the United States and the District 
of Columbia which may enter into and administer contracts subject to its 
provisions, the persons desiring to enter into such contracts with these 
agencies, and the contractors, subcontractors, and employees who perform 
work under such contracts.
    (b) These rulings and interpretations are intended to indicate the 
construction of the law and regulations which the Department of Labor 
believes to be correct and which will be followed in the administration 
of the Act unless and until directed otherwise by Act of Congress or by 
authoritative ruling of the courts, or if it is concluded upon 
reexamination of an interpretation that it is incorrect. See for 
example, Skidmore v. Swift & Co., 323 U.S. 134 (1944); Roland Co. v. 
Walling, 326 U.S. 657 (1946); Endicott Johnson Corp. v. Perkins, 317 
U.S. 501, 507-509 (1943); Perkins v. Lukens Steel Co., 310 U.S. 113, 128 
(1940); United States v. Western Pacific Railroad Co., 352 U.S. 59 
(1956). The Department of Labor (and not the contracting agencies) has 
the primary and final authority and responsibility for administering and 
interpreting the Act, including making determinations of coverage. See 
Woodside Village v. Secretary of Labor, 611 F. 2d 312 (9th Cir. 1980); 
Nello L. Teer Co. v. United States, 348 F.2d 533, 539-540 (Ct. Cl. 
1965), cert. denied, 383 U.S. 934; North Georgia Building & Construction 
Trades Council v. U.S. Department of Transportation, 399 F. Supp. 58, 63 
(N.D. Ga. 1975) (Davis-Bacon Act); Curtiss-Wright Corp. v. McLucas, 364 
F. Supp. 750, 769-72 (D.N.J. 1973); and 43 Atty. Gen. Ops. ---- (March 
9, 1979); 53 Comp. Gen. 647, 649-51 (1974); 57 Comp. Gen. 501, 506 
(1978).
    (c) Court decisions arising under the Act (as well as under related 
remedial labor standards laws such as the Walsh-Healey Public Contracts 
Act, the Davis-Bacon Act, the Contract Work Hours and Safety Standards 
Act, and the Fair Labor Standards Act) which support policies and 
interpretations contained in this part are cited where it is believed 
that they may be helpful. On matters which have not been authoritatively 
determined by the courts, it is necessary for the Secretary of Labor and 
the Administrator to reach conclusions as to the meaning and the 
application of provisions of the law in order to carry out their 
responsibilities of administration and enforcement (Skidmore v. Swift & 
Co., 323 U.S. 134 (1944)). In order that these positions may be made 
known to persons who may be affected by them, official interpretations 
and rulings are issued by the Administrator with the advice of the 
Solicitor of Labor, as authorized by the Secretary (Secretary's Order 
No. 16-75, Nov. 21, 1975, 40 FR 55913; Employment Standards Order No. 2-
76, Feb. 23, 1976, 41 FR 9016). These interpretations are a proper 
exercise of the Secretary's authority. Idaho Sheet Metal Works v. Wirtz, 
383 U.S. 190, 208 (1966), reh. den. 383 U.S. 963 (1966). References to 
pertinent legislative history, decisions of the Comptroller General and 
of the Attorney General, and Administrative Law Judges' decisions are 
also made in this part where it appears they will contribute to a better 
understanding of the stated interpretations and policies.
    (d) The interpretations of the law contained in this part are 
official interpretations which may be relied upon. The Supreme Court has 
recognized that such interpretations of the Act ``provide a practical 
guide to employers and employees as to how the office representing the 
public interest in its enforcement will seek to apply it'' and 
``constitute a body of experience and informed judgment to which courts 
and litigants may properly resort for guidance'' (Skidmore v. Swift & 
Co., 323 U.S. 134 (1944)). Interpretations of the agency charged with 
administering an Act are generally afforded deference by the courts. 
(Griggs v. Duke Power Co., 401 U.S. 424, 433-34 (1971);

[[Page 52]]

Udall v. Tallman, 380 U.S. 1 (1965).) Some of the interpretations in 
this part relating to the application of the Act are interpretations of 
provisions which appeared in the original Act before its amendments in 
1972 and 1976. Accordingly, the Department of Labor considers these 
interpretations to be correct, since there were no amendments of the 
statutory provisions which they interpret. (United States v. Davison 
Fuel & Dock Co., 371 F.2d 705, 711-12 (C.A. 4, 1967).)
    (e) The interpretations contained herein shall be in effect until 
they are modified, rescinded, or withdrawn. This part supersedes and 
replaces certain interpretations previously published in the Federal 
Register and Code of Federal Regulations as part 4 of this chapter. 
Prior opinions, rulings, and interpretations and prior enforcement 
policies which are not inconsistent with the interpretations in this 
part or with the Act as amended are continued in effect; all other 
opinions, rulings, interpretations, and enforcement policies on the 
subjects discussed in the interpretations in this part, to the extent 
they are inconsistent with the rules herein stated, are superseded, 
rescinded, and withdrawn.
    (f) Principles governing the application of the Act as set forth in 
this subpart are clarified or amplified in particular instances by 
illustrations and examples based on specific fact situations. Since such 
illustrations and examples cannot and are not intended to be exhaustive, 
or to provide guidance on every problem which may arise under the Act, 
no inference should be drawn from the fact that a subject or 
illustration is omitted.
    (g) It should not be assumed that the lack of discussion of a 
particular subject in this subpart indicates the adoption of any 
particular position by the Department of Labor with respect to such 
matter or to constitute an interpretation, practice, or enforcement 
policy. If doubt arises or a question exists, inquiries with respect to 
matters other than safety and health standards should be directed to the 
Administrator of the Wage and Hour Division, Employment Standards 
Administration, U.S. Department of Labor, Washington, DC 20210, or to 
any regional office of the Wage and Hour Division. Safety and health 
inquiries should be addressed to the Assistant Secretary for 
Occupational Safety and Health, U.S. Department of Labor, Washington, DC 
20210, or to any OSHA regional office. A full description of the facts 
and any relevant documents should be submitted if an official ruling is 
desired.



Sec. 4.102  Administration of the Act.

    As provided by section 4 of the Act and under provisions of sections 
4 and 5 of the Walsh-Healey Public Contracts Act (49 Stat. 2036, 41 
U.S.C. 38, 39), which are made expressly applicable for the purpose, the 
Secretary of Labor is authorized and directed to administer and enforce 
the provisions of the McNamara-O'Hara Service Contract Act, to make 
rules and regulations, issue orders, make decisions, and take other 
appropriate action under the Act. The Secretary is also authorized to 
make reasonable limitations and to make rules and regulations allowing 
reasonable variations, tolerances, and exemptions to and from provisions 
of the Act (except section 10), but only in special circumstances where 
it is determined that such action is necessary and proper in the public 
interest or to avoid serious impairment of the conduct of Government 
business and is in accord with the remedial purposes of the Act to 
protect prevailing labor standards. The authority and enforcement powers 
of the Secretary under the Act are coextensive with the authority and 
powers under the Walsh-Healey Act. Curtiss Wright Corp. v. McLucas 364 
F. Supp. 750, 769 (D NJ 1973).



Sec. 4.103  The Act.

    The McNamara-O'Hara Service Contract Act of 1965 (Pub. L. 89-286, 79 
Stat. 1034, 41 U.S.C. 351 et seq.), hereinafter referred to as the Act, 
was approved by the President on October 22, 1965 (1 Weekly Compilation 
of Presidential Documents 428). It establishes standards for minimum 
compensation and safety and health protection of employees performing 
work for contractors and subcontractors on service contracts entered 
into with the Federal Government and the District of Columbia. It 
applies to contracts entered into

[[Page 53]]

pursuant to negotiations concluded or invitations for bids issued on or 
after January 20, 1966. It has been amended by Public Law 92-473, 86 
Stat. 798; by Public Law 93-57, 87 Stat. 140; and by Public Law 94-489, 
90 Stat. 2358.



Sec. 4.104  What the Act provides, generally.

    The provisions of the Act apply to contracts, whether negotiated or 
advertised, the principal purpose of which is to furnish services in the 
United States through the use of service employees. Under its 
provisions, every contract subject to the Act (and any bid specification 
therefor) entered into by the United States or the District of Columbia 
in excess of $2,500 must contain stipulations as set forth in Sec. 4.6 
of this part requiring: (a) That specified minimum monetary wages and 
fringe benefits determined by the Secretary of Labor (based on wage 
rates and fringe benefits prevailing in the locality or, in specified 
circumstances, the wage rates and fringe benefits contained in a 
collective bargaining agreement applicable to employees who performed on 
a predecessor contract) be paid to service employees employed by the 
contractor or any subcontractor in performing the services contracted 
for; (b) that working conditions of such employees which are under the 
control of the contractor or subcontractor meet safety and health 
standards; and (c) that notice be given to such employees of the 
compensation due them under the minimum wage and fringe benefits 
provisions of the contract. Contractors performing work subject to the 
Act thus enter into competition to obtain Government business on terms 
of which they are fairly forewarned by inclusion in the contract. 
(Endicott Johnson Corp. v. Perkins, 317 U.S. 501, 507 (1943).) The Act's 
purpose is to impose obligations upon those favored with Government 
business by precluding the use of the purchasing power of the Federal 
Government in the unfair depression of wages and standards of 
employment. (See H.R. Rep. No. 948, 89th Cong., 1st Sess. 2-3 (1965); S. 
Rep. No. 798, 89th Cong., 1st Sess. 3-4 (1965).) The Act does not permit 
the monetary wage rates specified in such a contract to be less than the 
minimum wage specified under section 6(a)(1) of the Fair Labor Standards 
Act, as amended (29 U.S.C. 206(a)(1)). In addition, it is a violation of 
the Act for any contractor or subcontractor under a Federal contract 
subject to the Act, regardless of the amount of the contract, to pay any 
of his employees engaged in performing work on the contract less than 
such Fair Labor Standards Act minimum wage. Contracts of $2,500 or less 
are not, however, required to contain the stipulations described above. 
These provisions of the Service Contract Act are implemented by the 
regulations contained in this part 4 and are discussed in more detail in 
subsequent sections of subparts C, D, and E.



Sec. 4.105  The Act as amended.

    (a) The provisions of the Act (see Secs. 4.102-4.103) were amended, 
effective October 9, 1972, by Public Law 92-473, signed into law by the 
President on that date. By virtue of amendments made to paragraphs (1) 
and (2) of section 2(a) and the addition to section 4 of a new 
subsection (c), the compensation standards of the Act (see Secs. 4.159-
4.179) were revised to impose on successor contractors certain 
requirements (see Sec. 4.1b) with respect to payment of wage rates and 
fringe benefits based on those agreed upon for substantially the same 
services in the same locality in collective bargaining agreements 
entered into by their predecessor contractors (unless such agreed 
compensation is substantially at variance with that locally prevailing 
or the agreement was not negotiated at arm's length). The Secretary of 
Labor is to give effect to the provisions of such collective bargaining 
agreements in his wage determinations under section 2 of the Act. A new 
paragraph (5) added to section 2(a) of the Act requires a statement in 
the government service contract of the rates that would be paid by the 
contracting agency in the event of its direct employment of those 
classes of service employees to be employed on the contract work who, if 
directly employed by the agency, would receive wages determined as 
provided in 5 U.S.C. 5341. The Secretary of Labor is directed to give 
due consideration to such rates in determining prevailing monetary wages 
and fringe benefits

[[Page 54]]

under the Act's provisions. Other provisions of the 1972 amendments 
include the addition of a new section 10 to the Act to insure that wage 
determinations are issued by the Secretary for substantially all service 
contracts subject to section 2(a) of the Act at the earliest 
administratively feasible time; an amendment to section 4(b) of the Act 
to provide, in addition to the conditions previously specified for 
issuance of administrative limitations, variations, tolerances, and 
exemptions (see Sec. 4.123), that administrative action in this regard 
shall be taken only in special circumstances where the Secretary 
determines that it is in accord with the remedial purpose of the Act to 
protect prevailing labor standards; and a new subsection (d) added to 
section 4 of the Act providing for the award of service contracts for 
terms not more than 5 years with provision for periodic adjustment of 
minimum wage rates and fringe benefits payable thereunder by the 
issuance of wage determinations by the Secretary of Labor during the 
term of the contract. A further amendment to section 5(a) of the Act 
requires the names of contractors found to have violated the Act to be 
submitted for the debarment list (see Sec. 4.188) not later than 90 days 
after the hearing examiner's finding of violation unless the Secretary 
recommends relief, and provides that such recommendations shall be made 
only because of unusual circumstances.
    (b) The provisions of the Act were amended by Public Law 93-57, 87 
Stat. 140, effective July 6, 1973, to extend the Act's coverage to 
Canton Island.
    (c) The provisions of the Act were amended by Public Law 94-489, 90 
Stat. 2358, approved October 13, 1976, to extend the Act's coverage to 
white collar workers. Accordingly, the minimum wage protection of the 
Act now extends to all workers, both blue collar and white collar, other 
than persons employed in a bona fide executive, administrative, or 
professional capacity as those terms are used in the Fair Labor 
Standards Act and in part 541 of title 29. Public Law 94-489 
accomplished this change by adding to section 2(a)(5) of the Act a 
reference to 5 U.S.C. 5332, which deals with white collar workers, and 
by amending the definition of service contract employee in section 8(b) 
of the Act.
    (d) Included in this part 4 and in parts 6 and 8 of this subtitle 
are provisions to give effect to the amendments mentioned in this 
section.



Sec. 4.106  [Reserved]

                 Agencies Whose Contracts May Be Covered



Sec. 4.107  Federal contracts.

    (a) Section 2(a) of the Act covers contracts (and any bid 
specification therefor) ``entered into by the United States'' and 
section 2(b) applies to contracts entered into ``with the Federal 
Government.'' Within the meaning of these provisions, contracts entered 
into by the United States and contracts with the Federal Government 
include generally all contracts to which any agency or instrumentality 
of the U.S. Government becomes a party pursuant to authority derived 
from the Constitution and laws of the United States. The Act does not 
authorize any distinction in this respect between such agencies and 
instrumentalities on the basis of their inclusion in or independence 
from the executive, legislative, or judicial branches of the Government, 
the fact that they may be corporate in form, or the fact that payment 
for the contract services is not made from appropriated funds. Thus, 
contracts of wholly owned Government corporations, such as the Postal 
Service, and those of nonappropriated fund instrumentalities under the 
jurisdiction of the Armed Forces, or of other Federal agencies, such as 
Federal Reserve Banks, are included among those subject to the general 
coverage of the Act. (Brinks, Inc. v. Board of Governors of the Federal 
Reserve System, 466 F. Supp. 116 (D DC 1979); 43 Atty. Gen. Ops. ------ 
(September 26, 1978).) Contracts with the Federal Government and 
contracts entered into ``by the United States'' within the meaning of 
the Act do not, however, include contracts for services entered into on 
their own behalf by agencies or instrumentalities of other Governments 
within the United States, such as those of the several States and their 
political subdivisions, or of Puerto Rico, the Virgin Islands, Guam, or 
American Samoa.

[[Page 55]]

    (b) Where a Federal agency exercises its contracting authority to 
procure services desired by the Government, the method of procurement 
utilized by the contracting agency is not controlling in determining 
coverage of the contract as one entered into by the United States. Such 
contracts may be entered into by the United States either through a 
direct award by a Federal agency or through the exercise by another 
agency (whether governmental or private) of authority granted to it to 
procure services for or on behalf of a Federal agency. Thus, sometimes 
authority to enter into service contracts of the character described in 
the Act for and on behalf of the Government and on a cost-reimbursable 
basis may be delegated, for the convenience of the contracting agency, 
to a prime contractor which has the responsibility for all work to be 
done in connection with the operation and management of a Federal plant, 
installation, facility, or program, together with the legal authority to 
act as agency for and on behalf of the Government and to obligate 
Government funds in the procurement of all services and supplies 
necessary to carry out the entire program of operation. The contracts 
entered into by such a prime contractor with secondary contractors for 
and on behalf of the Federal agency pursuant to such delegated 
authority, which have such services as their principal purpose, are 
deemed to be contracts entered into by the United States and contracts 
with the Federal Government within the meaning of the Act. However, 
service contracts entered into by State or local public bodies with 
purveyors of services are not deemed to be entered into by the United 
States merely because such services are paid for with funds of the 
public body which have been received from the Federal Government as a 
grant under a Federal program. For example, a contract entered into by a 
municipal housing authority for tree trimming, tree removal, and 
landscaping for an urban renewal project financed by Federal funds is 
not a contract entered into by the United States and is not covered by 
the Service Contract Act. Similarly, contracts let under the Medicaid 
program which are financed by federally-assisted grants to the States, 
and contracts which provide for insurance benefits to a third party 
under the Medicare program are not subject to the Act.



Sec. 4.108  District of Columbia contracts.

    Section 2(a) of the Act covers contracts (and any bid specification 
therefor) in excess of $2,500 which are ``entered into by the * * * 
District of Columbia.'' The contracts of all agencies and 
instrumentalities which procure contract services for or on behalf of 
the District or under the authority of the District Government are 
contracts entered into by the District of Columbia within the meaning of 
this provision. Such contracts are also considered contracts entered 
into with the Federal Government or the United States within the meaning 
of section 2(b), section 5, and the other provisions of the Act. The 
legislative history indicates no intent to distinguish District of 
Columbia contracts from the other contracts made subject to the Act, and 
traditionally, under other statutes, District Government contracts have 
been made subject to the same labor standards provisions as contracts of 
agencies and instrumentalities of the United States.

[48 FR 49762, Oct. 27, 1983; 48 FR 50529, Nov. 2, 1983]



Sec. 4.109  [Reserved]

                       Covered Contracts Generally



Sec. 4.110  What contracts are covered.

    The Act covers service contracts of the Federal agencies described 
in Secs. 4.107-4.108. Except as otherwise specifically provided (see 
Secs. 4.115 et seq.), all such contracts, the principal purpose of which 
is to furnish services in the United States through the use of service 
employees, are subject to its terms. This is true of contracts entered 
into by such agencies with States or their political subdivisions, as 
well as such contracts entered into with private employers. Contracts 
between a Federal or District of Columbia agency and another such agency 
are not within the purview of the Act; however, ``subcontracts'' awarded 
under ``prime contracts'' between the Small Business Administration and 
another Federal

[[Page 56]]

agency pursuant to various preferential set-aside programs, such as the 
8(a) program, are covered by the Act. It makes no difference in the 
coverage of a contract whether the contract services are procured 
through negotiation or through advertising for bids. Also, the mere fact 
that an agreement is not reduced to writing does not mean that the 
contract is not within the coverage of the Act. The amount of the 
contract is not determinative of the Act's coverage, although the 
requirements are different for contracts in excess of $2,500 and for 
contracts of a lesser amount. The Act is applicable to the contract if 
the principal purpose of the contract is to furnish services, if such 
services are to be furnished in the United States, and if service 
employees will be used in providing such services. These elements of 
coverage will be discussed separately in the following sections.



Sec. 4.111  Contracts ``to furnish services.''

    (a) ``Principal purpose'' as criterion. Under its terms, the Act 
applies to a ``contract * * * the principal purpose of which is to 
furnish services * * *.'' If the principal purpose is to provide 
something other than services of the character contemplated by the Act 
and any such services which may be performed are only incidental to the 
performance of a contract for another purpose, the Act does not apply. 
However, as will be seen by examining the illustrative examples of 
covered contracts in Secs. 4.130 et seq., no hard and fast rule can be 
laid down as to the precise meaning of the term principal purpose. This 
remedial Act is intended to be applied to a wide variety of contracts, 
and the Act does not define or limit the types of services which may be 
contracted for under a contract the principal purpose of which is to 
furnish services. Further, the nomenclature, type, or particular form of 
contract used by procurement agencies is not determinative of coverage. 
Whether the principal purpose of a particular contract is the furnishing 
of services through the use of service employees is largely a question 
to be determined on the basis of all the facts in each particular case. 
Even where tangible items of substantial value are important elements of 
the subject matter of the contract, the facts may show that they are of 
secondary import to the furnishing of services in the particular case. 
This principle is illustrated by the examples set forth in Sec. 4.131.
    (b) Determining whether a contract is for ``services'', generally. 
Except indirectly through the definition of service employee the Act 
does not define, or limit, the types of services which may be contracted 
for under a contract ``the principal purpose of which is to furnish 
services''. As stated in the congressional committee reports on the 
legislation, the types of service contracts covered by its provisions 
are varied. Among the examples cited are contracts for laundry and dry 
cleaning, for transportation of the mail, for custodial, janitorial, or 
guard service, for packing and crating, for food service, and for 
miscellaneous housekeeping services. Covered contracts for services 
would also include those for other types of services which may be 
performed through the use of the various classes of service employees 
included in the definition in section 8(b) of the Act (see Sec. 4.113). 
Examples of some such contracts are set forth in Secs. 4.130 et seq. In 
determining questions of contract coverage, due regard must be given to 
the apparent legislative intent to include generally as contracts for 
services those contracts which have as their principal purpose the 
procurement of something other than the construction activity described 
in the Davis-Bacon Act or the materials, supplies, articles, and 
equipment described in the Walsh-Healey Act. The Committee reports in 
both the House and Senate, and statements made on the floor of the 
House, took note of the labor standards protections afforded by these 
two Acts to employees engaged in the performance of construction and 
supply contracts and observed: ``The service contract is now the only 
remaining category of Federal contracts to which no labor standards 
protections apply'' (H. Rept. 948, 89th Cong., 1st Sess., p. 1; see also 
S. Rept. 798, 89th Cong., 1st Sess., p. 1; daily Congressional Record, 
Sept. 20, 1965, p. 23497). A similar understanding of contracts 
principally for services as embracing contracts other than those for 
construction or supplies is reflected

[[Page 57]]

in the statement of President Johnson upon signing the Act (1 Weekly 
Compilation of Presidential Documents, p. 428).



Sec. 4.112  Contracts to furnish services ``in the United States.''

    (a) The Act and the provisions of this part apply to contract 
services furnished ``in the United States,'' including any State of the 
United States, the District of Columbia, Puerto Rico, the Virgin 
Islands, Outer Continental Shelf lands as defined in the Outer 
Continental Shelf Lands Act, American Samoa, Guam, the Commonwealth of 
the Northern Mariana Islands, Wake Island, and Johnston Island. The 
definition expressly excludes any other territory under the jurisdiction 
of the United States and any United States base or possession within a 
foreign country. Services to be performed exclusively on a vessel 
operating in international waters outside the geographic areas named in 
this paragraph would not be services furnished ``in the United States'' 
within the meaning of the Act.
    (b) A service contract to be performed in its entirety outside the 
geographical limits of the United States as thus defined is not covered 
and is not subject to the labor standards of the Act. However, if a 
service contract is to be performed in part within and in part outside 
these geographic limits, the stipulations required by Sec. 4.6 or 
Sec. 4.7, as appropriate, must be included in the invitation for bids or 
negotiation documents and in the contract, and the labor standards must 
be observed with respect to that part of the contract services that is 
performed within these geographic limits. In such a case the 
requirements of the Act and of the contract clauses will not be 
applicable to the services furnished outside the United States.

[61 FR 68664, Dec. 30, 1996]



Sec. 4.113  Contracts to furnish services ``through the use of service employees.''

    (a) Use of ``service employees'' in a contract performance. (1) As 
indicated in Sec. 4.110, the Act covers service contracts only where 
``service employees'' will be used in performing the services which it 
is the purpose of the contract to procure. A contract principally for 
services ordinarily will meet this condition if any of the services will 
be furnished through the use of any service employee or employees. Where 
it is contemplated that the services (of the kind performed by service 
employees) will be performed individually by the contractor, and the 
contracting officer knows when advertising for bids or concluding 
negotiations that service employees will in no event be used by the 
contractor in providing the contract services, the Act will not be 
deemed applicable to the contract and the contract clauses required by 
Sec. 4.6 or Sec. 4.7 may be omitted. The fact that the required services 
will be performed by municipal employees or employees of a State would 
not remove the contract from the purview of the Act, as this Act does 
not contain any exemption for contracts performed by such employees. 
Also, as discussed in paragraph (a)(3) of this section, where the 
services the Government wants under the contract are of a type that will 
require the use of service employees as defined in section 8(b) of the 
Act, the contract is not taken out of the purview of the Act by the fact 
that the manner in which the services of such employees are performed 
will be subject to the continuing overall supervision of bona fide 
executive, administrative, or professional personnel to whom the Act 
does not apply.
    (2) The coverage of the Act does not extend to contracts for 
services to be performed exclusively by persons who are not service 
employees, i.e., persons who are bona fide executive, administrative or 
professional personnel as defined in part 541 of this title (see 
paragraph (b) of this section). A contract for medical services 
furnished by professional personnel is an example of such a contract.
    (3) In addition, the Department does not require application of the 
Act to any contract for services which is performed essentially by bona 
fide executive, administrative, or professional employees, with the use 
of service employees being only a minor factor in the performance of the 
contract. However, the Act would apply to a contract for services which 
may involve the use

[[Page 58]]

of service employees to a significant or substantial extent even though 
there is some use of bona fide executive, administrative, or 
professional employees in the performance of the contract. For example, 
contracts for drafting or data processing services are often performed 
by drafters, computer operators, or other service employees and are 
subject to the Act even though the work of such employees may be 
performed under the direction and supervision of bona fide professional 
employees.
    (4) In close cases involving a decision as to whether a contract 
will involve a significant use of service employees, the Department of 
Labor should be consulted, since such situations require consideration 
of other factors such as the nature of the contract work, the type of 
work performed by service employees, how necessary the work is to 
contract performance, the amount of contract work performed by service 
employees vis-a-vis professional employees, and the total number of 
service employees employed on the contract.
    (b) ``Service employees'' defined. In determining whether or not any 
of the contract services will be performed by service employees, the 
definition of service employee in section 8(b) of the Act is 
controlling. It provides:

    The term service employee means any person engaged in the 
performance of a contract entered into by the United States and not 
exempted under section 7, whether negotiated or advertised, the 
principal purpose of which is to furnish services in the United States 
(other than any person employed in a bona fide executive, 
administrative, or professional capacity, as those terms are defined in 
part 541 of title 29, Code of Federal Regulations, as of July 30, 1976, 
and any subsequent revision of those regulations); and shall include all 
such persons regardless of any contractual relationship that may be 
alleged to exist between a contractor or subcontractor and such persons.
It will be noted that the definition expressly excludes those employees 
who are employed in a bona fide executive, administrative, or 
professional capacity as defined in part 541 of this title and as 
discussed further in Sec. 4.156. Some of the specific types of service 
employees who may be employed on service contracts are noted in other 
sections which discuss the application of the Act to employees.

[48 FR 49762, Oct. 27, 1983; 48 FR 50529, Nov. 2, 1983]



Sec. 4.114  Subcontracts.

    (a) ``Contractor'' as including ``subcontractor.'' Except where 
otherwise noted or where the term Government prime contractor is used, 
the term contractor as used in this part 4 shall be deemed to include a 
subcontractor. The term contractor as used in the contract clauses 
required by subpart A in any subcontract under a covered contract shall 
be deemed to refer to the subcontractor, or, if in a subcontract entered 
into by such a subcontractor, shall be deemed to refer to the lower 
level subcontractor. (See Sec. 4.1a(f).)
    (b) Liability of prime contractor. When a contractor undertakes a 
contract subject to the Act, the contractor agrees to assume the 
obligation that the Act's labor standards will be observed in furnishing 
the required services. This obligation may not be relieved by shifting 
all or part of the work to another, and the prime contractor is jointly 
and severally liable with any subcontractor for any underpayments on the 
part of a subcontractor which would constitute a violation of the prime 
contract. The prime contractor is required to include the prescribed 
contract clauses (Secs. 4.6--4.7) and applicable wage determination in 
all subcontracts. The appropriate enforcement sanctions provided under 
the Act may be invoked against both the prime contractor and the 
subcontractor in the event of failure to comply with any of the Act's 
requirements where appropriate under the circumstances of the case.

                           Specific Exclusions



Sec. 4.115  Exemptions and exceptions, generally.

    (a) The Act, in section 7, specifically excludes from its coverage 
certain contracts and work which might otherwise come within its terms 
as procurements the principal purpose of which is to furnish services 
through the use of service employees.
    (b) The statutory exemptions in section 7 of the Act are as follows:
    (1) Any contract of the United States or District of Columbia for 
construction, alteration, and/or repair, including painting and 
decorating of public buildings or public works;

[[Page 59]]

    (2) Any work required to be done in accordance with the provisions 
of the Walsh-Healey Public Contracts Act (49 Stat. 2036);
    (3) Any contract for the carriage of freight or personnel by vessel, 
airplane, bus, truck, express, railway line, or oil or gas pipeline 
where published tariff rates are in effect;
    (4) Any contract for the furnishing of services by radio, telephone, 
telegraph, or cable companies, subject to the Communications Act of 
1934;
    (5) Any contract for public utility services, including electric 
light and power, water, steam, and gas;
    (6) Any employment contract providing for direct services to a 
Federal agency by an individual or individuals;
    (7) Any contract with the Post Office Department, (now the U.S. 
Postal Service) the principal purpose of which is the operation of 
postal contract stations.



Sec. 4.116  Contracts for construction activity.

    (a) General scope of exemption. The Act, in paragraph (1) of section 
7, exempts from its provisions ``any contract of the United States or 
District of Columbia for construction, alteration and/or repair, 
including painting and decorating of public buildings or public works.'' 
This language corresponds to the language used in the Davis-Bacon Act to 
describe its coverage (40 U.S.C. 276a). The legislative history of the 
McNamara-O'Hara Service Contract Act indicates that the purpose of the 
provision is to avoid overlapping coverage of the two acts by excluding 
from the application of the McNamara-O'Hara Act those contracts to which 
the Davis-Bacon Act is applicable and in the performance of which the 
labor standards of that Act are intended to govern the compensation 
payable to the employees of contractors and subcontractors on the work. 
(See H. Rept. 798, pp. 2, 5, and H. Rept. 948, pp. 1, 5, also Hearing, 
Special Subcommittee on Labor, House Committee on Education and Labor, 
p. 9 (89th Cong., 1st sess.).) The intent of section 7(1) is simply to 
exclude from the provisions of the Act those construction contracts 
which involve the employment of persons whose wage rates and fringe 
benefits are determinable under the Davis-Bacon Act.
    (b) Contracts not within exemption. Section 7(1) does not exempt 
contracts which, for purposes of the Davis-Bacon Act, are not considered 
to be of the character described by the corresponding language in that 
Act, and to which the provisions of the Davis-Bacon Act are therefore 
not applied. Such contracts are accordingly subject to the McNamara-
O'Hara Act where their principal purpose is to furnish services in the 
United States through the use of service employees. For example, a 
contract for clearing timber or brush from land or for the demolition or 
dismantling of buildings or other structures located thereon may be a 
contract for construction activity subject to the Davis-Bacon Act where 
it appears that the clearing of the site is to be followed by the 
construction of a public building or public work at the same location. 
If, however, no further construction activity at the site is 
contemplated the Davis-Bacon Act is considered inapplicable to such 
clearing, demolition, or dismantling work. In such event, the exemption 
in section 7(1) of the McNamara-O'Hara Act has no application and the 
contract may be subject to the Act in accordance with its general 
coverage provisions. It should be noted that the fact that a contract 
may be labeled as one for the sale and removal of property, such as 
salvage material, does not negate coverage under the Act even though 
title to the removable property passes to the contractor. While the 
value of the property being sold in relation to the services performed 
under the contract is a factor to be considered in determining coverage, 
where the facts show that the principal purpose of removal, dismantling, 
and demolition contracts is to furnish services through the use of 
service employees, these contracts are subject to the Act. (See also 
Sec. 4.131.)
    (c) Partially exempt contracts. (1) Instances may arise in which, 
for the convenience of the Government, instead of awarding separate 
contracts for construction work subject to the Davis-Bacon Act and for 
services of a different type to be performed by service employees, the 
contracting officer may include separate specifications for

[[Page 60]]

each type of work in a single contract calling for the performance of 
both types of work. For example, a contracting agency may invite bids 
for the installation of a plumbing system or for the installation of a 
security alarm system in a public building and for the maintenance of 
the system for one year. In such a case, if the contract is principally 
for services, the exemption provided by section 7(1) will be deemed 
applicable only to that portion of the contract which calls for 
construction activity subject to the Davis-Bacon Act. The contract 
documents are required to contain the clauses prescribed by Sec. 4.6 for 
application to the contract obligation to furnish services through the 
use of service employees, and the provisions of the McNamara-O'Hara Act 
will apply to that portion of the contract.
    (2) Service or maintenance contracts involving construction work. 
The provisions of both the Davis-Bacon Act and the Service Contract Act 
would generally apply to contracts involving construction and service 
work where such contracts are principally for services. The Davis-Bacon 
Act, and thus the exemption provided by section 7(1) of the Act, would 
be applicable to construction contract work in such hybrid contracts 
where:
    (i) The contract contains specific requirements for substantial 
amounts of construction, reconstruction, alteration, or repair work 
(hereinafter referred to as construction) or it is ascertainable that a 
substantial amount of construction work will be necessary for the 
performance of the contract (the word ``substantial'' relates to the 
type and quantity of construction work to be performed and not merely to 
the total value of construction work (whether in absolute dollars or 
cost percentages) as compared to the total value of the contract); and
    (ii) The construction work is physically or functionally separate 
from, and as a practical matter is capable of being performed on a 
segregated basis from, the other work called for by the contract.

[48 FR 49762, Oct. 27, 1983; 48 FR 50529, Nov. 2, 1983]



Sec. 4.117  Work subject to requirements of Walsh-Healey Act.

    (a) The Act, in paragraph (2) of section 7, exempts from its 
provisions ``any work required to be done in accordance with the 
provision of the Walsh-Healey Public Contracts Act'' (49 Stat. 2036, 41 
U.S.C. 35 et seq.). It will be noted that like the similar provision in 
the Contract Work Hours and Safety Standards Act (40 U.S.C. 329(b)), 
this is an exemption for ``work'', i.e., specifications or requirements, 
rather than for ``contracts'' subject to the Walsh-Healey Act. The 
purpose of the exemption was to eliminate possible overlapping of the 
differing labor standards of the two Acts, which otherwise might be 
applied to employees performing work on a contract covered by the 
Service Contract Act if such contract and their work under it should 
also be deemed to be covered by the Walsh-Healey Act. The Walsh-Healey 
Act applies to contracts in excess of $10,000 for the manufacture or 
furnishing of materials, supplies, articles or equipment. Thus, there is 
no overlap if the principal purpose of the contract is the manufacture 
or furnishing of such materials etc., rather than the furnishing of 
services of the character referred to in the Service Contract Act, for 
such a contract is not within the general coverage of the Service 
Contract Act. In such cases the exemption in section 7(2) is not 
pertinent. See, for example, the discussion in Secs. 4.131 and 4.132.
    (b) Further, contracts principally for remanufacturing of equipment 
which is so extensive as to be equivalent to manufacturing are subject 
to the Walsh-Healey Act. Remanufacturing shall be deemed to be 
manufacturing when the criteria in paragraph (b)(1) or (2) of this 
section are met.
    (1) Major overhaul of an item, piece of equipment, or materiel which 
is degraded or inoperable, and under which all of the following 
conditions exist:
    (i) The item or equipment is required to be completely or 
substantially torn down into individual components parts; and
    (ii) Substantially all of the parts are reworked, rehabilitated, 
altered and/or replaced; and

[[Page 61]]

    (iii) The parts are reassembled so as to furnish a totally rebuilt 
item or piece of equipment; and
    (iv) Manufacturing processes similar to those which were used in the 
manufacturing of the item or piece of equipment are utilized; and
    (v) The disassembled componets, if usable (except for situations 
where the number of items or pieces of equipment involved are too few to 
make it practicable) are commingled with existing inventory and, as 
such, lose their identification with respect to a particular piece of 
equipment; and
    (vi) The items or equipment overhauled are restored to original life 
expectancy, or nearly so; and
    (vii) Such work is performed in a facility owned or operated by the 
contractor.
    (2) Major modification of an item, piece of equipment, or materiel 
which is wholly or partially obsolete, and under which all of the 
following conditions exist:
    (i) The item or equipment is required to be completely or 
substantially torn down; and
    (ii) Outmoded parts are replaced; and
    (iii) The item or equipment is rebuilt or reassembled; and
    (iv) The contract work results in the furnishing of a substantially 
modified item in a usable and serviceable condition; and
    (v) The work is performed in a facility owned or operated by the 
contractor.
    (3) Remanufacturing does not include the repair of damaged or broken 
equipment which does not require a complete teardown, overhaul, and 
rebuild as described in paragraphs (b)(1) and (2) of this section, or 
the periodic and routine maintenance, preservation, care, adjustment, 
upkeep, or servicing of equipment to keep it in usable, serviceable, 
working order. Such contracts typically are billed on an hourly rate 
(labor plus materials and parts) basis. Any contract principally for the 
work described in this paragraph (b)(3) is subject to the Service 
Contract Act. Examples of such work include:
    (i) Repair of an automobile, truck, or other vehicle, construction 
equipment, tractor, crane, aerospace, air conditioning and refrigeration 
equipment, electric motors, and ground powered industrial or vehicular 
equipment;
    (ii) Repair of typewriters and other office equipment (see 
Sec. 4.123(e));
    (iii) Repair of appliances, radios television, calculators, and 
other electronic equipment;
    (iv) Inspecting, testing, calibration, painting, packaging, 
lubrication, tune-up, or replacement of internal parts of equipment 
listed in paragraphs (b)(3)(i), (ii), and (iii) of this section; and
    (v) Reupholstering, reconditioning, repair, and refinishing of 
furniture.
    (4) Application of the Service Contract Act or the Walsh-Healey Act 
to any similar type of contract not decided above will be decided on a 
case-by-case basis by the Administrator.



Sec. 4.118  Contracts for carriage subject to published tariff rates.

    The Act, in paragraph (3) of section 7, exempts from its provisions 
``any contract for the carriage of freight or personnel by vessel, 
airplane, bus, truck, express, railway line or oil or gas pipeline where 
published tariff rates are in effect''. In order for this exemption to 
be applicable, the contract must be for such carriage by a common 
carrier described by the terms used. It does not, for example, apply to 
contracts for taxicab or ambulance service, because taxicab and 
ambulance companies are not among the common carriers specified by the 
statute. Also, a contract for transportation service does not come 
within this exemption unless the service contracted for is actually 
governed by published tariff rates in effect pursuant to State or 
Federal law for such carriage. The contracts excluded from the reach of 
the Act by this exemption are typically those where there is on file 
with the Interstate Commerce Commission or an appropriate State or local 
regulatory body a tariff rate applicable to the transportation involved, 
and the transportation contract between the Government and the carrier 
is evidenced by a Government bill of lading citing the published tariff 
rate. An administrative exemption has been provided for certain 
contracts where such carriage is subject to rates covered by section 
10721 of the Interstate Commerce Act and is in accordance

[[Page 62]]

with applicable regulations governing such rates. See Sec. 4.123(d). 
However, only contracts principally for the carriage of ``freight or 
personnel'' are exempt. Thus, the exemption cannot apply where the 
principal purpose of the contract is packing, crating, handling, 
loading, and/or storage of goods prior to or following line-haul 
transportation. The fact that substantial local drayage to and from the 
contractor's establishment (such as a warehouse) may be required in such 
contracts does not alter the fact that their principal purpose is other 
than the carriage of freight. Also, this exemption does not exclude any 
contracts for the transportation of mail from the application of the 
Act, because the term freight does not include the mail. (For an 
administrative exemption of certain contracts with common carriers for 
carriage of mail, see Sec. 4.123(d).)



Sec. 4.119  Contracts for services of communications companies.

    The Act, in paragraph (4) of section 7, exempts from its provisions 
``any contract for the furnishing of services by radio, telephone, 
telegraph, or cable companies, subject to the Communications Act of 
1934.'' This exemption is applicable to contracts with such companies 
for communication services regulated under the Communications Act. It 
does not exempt from the Act any contracts with such companies to 
furnish any other kinds of services through the use of service 
employees.



Sec. 4.120  Contracts for public utility services.

    The Act, in paragraph (5) of section 7, exempts from its provisions 
``any contract for public utility services, including electric light and 
power, water, steam, and gas.'' This exemption is applicable to 
contracts for such services with companies whose rates therefor are 
regulated under State, local, or Federal law governing operations of 
public utility enterprises. Contracts entered into with public utility 
companies to furnish services through the use of service employees, 
other than those subject to such rate regulation, are not exempt from 
the Act. Among the contracts included in the exemption would be those 
between Federal electric power marketing agencies and investor-owned 
electric utilities, Rural Electrification Administration cooperatives, 
municipalities and State agencies engaged in the transmission and sale 
of electric power and energy.


(See H. Rept. No. 948, 89th Cong., 1st sess., p. 4)



Sec. 4.121  Contracts for individual services.

    The Act, in paragraph (6) of section 7, exempts from its provisions 
``any employment contract providing for direct services to a Federal 
agency by an individual or individuals.'' This exemption, which applies 
only to an ``employment contract'' for ``direct services,'' makes it 
clear that the Act's application to Federal contracts for services is 
intended to be limited to service contracts entered into with 
independent contractors. If a contract to furnish services (to be 
performed by a service employee as defined in the Act) provides that 
they will be furnished directly to the Federal agency by the individual 
under conditions or circumstances which will make him an employee of the 
agency in providing the contract service, the exemption applies and the 
contract will not be subject to the Act's provisions. The exemption does 
not exclude from the Act any contract for services of the kind performed 
by service employees which is entered into with an independent 
contractor whose individual services will be used in performing the 
contract, but as noted earlier in Sec. 4.113, such a contract would be 
outside the general coverage of the Act if only the contractor's 
individual services would be furnished and no service employee would in 
any event be used in its performance.



Sec. 4.122  Contracts for operation of postal contract stations.

    The Act, in paragraph (7) of section 7, exempts from its provisions 
``any contract with the Post Office Department, [now the U.S. Postal 
Service], the principal purpose of which is the operation of postal 
contract stations.'' The exemption is limited to postal service 
contracts having the operation of such stations as their principal 
purpose. A

[[Page 63]]

provision of the legislation which would also have exempted contracts 
with the U.S. Postal Service having as their principal purpose the 
transportation, handling, or delivery of the mails was eliminated from 
the bill during its consideration by the House Committee on Education 
and Labor (H. Rept. 948, 89th Cong., 1st sess., p. 1).



Sec. 4.123  Administrative limitations, variances, tolerances, and exemptions.

    (a) Authority of the Secretary. Section 4(b) of the Act as amended 
in 1972 authorizes the Secretary to ``provide such reasonable 
limitations'' and to ``make such rules and regulations allowing 
reasonable variations, tolerances, and exemptions to and from any or all 
provisions of this Act (other than Sec. 10), but only in special 
circumstances where he determines that such limitation, variation, 
tolerance, or exemption is necessary and proper in the public interest 
or to avoid the serious impairment of Government business, and is in 
accord with the remedial purpose of this Act to protect prevailing labor 
standards.'' This authority is similar to that vested in the Secretary 
under section 6 of the Walsh-Healey Public Contracts Act (41 U.S.C. 40) 
and under section 105 of the Contract Work Hours and Safety Standards 
Act (40 U.S.C. 331).
    (b) Administrative action under section 4(b) of the Act. The 
authority conferred on the Secretary by section 4(b) of the Act will be 
exercised with due regard to the remedial purpose of the statute to 
protect prevailing labor standards and to avoid the undercutting of such 
standards which could result from the award of Government work to 
contractors who will not observe such standards, and whose saving in 
labor cost therefrom enables them to offer a lower price to the 
Government than can be offered by the fair employers who maintain the 
prevailing standards. Administrative action consistent with this 
statutory purpose may be taken under section 4(b) with or without a 
request therefor, when found necessary and proper in accordance with the 
statutory standards. No formal procedures have been prescribed for 
requesting such action. However, a request for exemption from the Act's 
provisions will be granted only upon a strong and affirmative showing 
that it is necessary and proper in the public interest or to avoid 
serious impairment of Government business, and is in accord with the 
remedial purpose of the Act to protect prevailing labor standards. If 
the request for administrative action under section 4(b) is not made by 
the headquarters office of the contracting agency to which the contract 
services are to be provided, theviews of such office on the matter 
should be obtained and submitted with the request or the contracting 
officer may forward such a request through channels to the agency 
headquarters for submission with the latter's views to the Administrator 
of the Wage and Hour Division, Department of Labor, whenever any wage 
payment issues are involved. Any request relating to an occupational 
safety or health issue shall be submitted to the Assistant Secretary for 
Occupational Safety and Health, Department of Labor.
    (c) Documentation of official action under section 4(b). All papers 
and documents made a part of the official record of administrative 
action pursuant to section 4(b) of the Act are available for public 
inspection in accordance with the regulations in 29 CFR part 70. 
Limitations, variations, tolerances and exemptions of general 
applicability and legal effect promulgated pursuant to such authority 
are published in the Federal Register and made a part of the rules 
incorporated in this part 4. For convenience in use of the rules, they 
are generally set forth in the sections of this part covering the 
subject matter to which they relate. (See, for example, Secs. 4.5(b), 
4.6(o), 4.112 and 4.113.) Any rules that are promulgated under section 
4(b) of the Act relating to subject matter not dealt with elsewhere in 
this part 4 will be set forth immediately following this paragraph.
    (d) In addition to the statutory exemptions in section 7 of the Act 
(see Sec. 4.115(b)), the following types of contracts have been exempted 
from all the provisions of the Service Contract Act of 1965, pursuant to 
section 4(b) of the Act, prior to its amendment by Public Law 92-473, 
which exemptions the Secretary of Labor found to be necessary

[[Page 64]]

and proper in the public interest or to avoid serious impairment of the 
conduct of Government business:
    (1) Contracts entered into by the United States with common carriers 
for the carriage of mail by rail, air (except air star routes), bus, and 
ocean vessel, where such carriage is performed on regularly scheduled 
runs of the trains, airplanes, buses, and vessels over regularly 
established routes and accounts for an insubstantial portion of the 
revenue therefrom;
    (2) Any contract entered into by the U.S. Postal Service with an 
individual owner-operator for mail service where it is not contemplated 
at the time the contract is made that such owner-operator will hire any 
service employee to perform the services under the contract except for 
short periods of vacation time or for unexpected contingencies or 
emergency situations such as illness, or accident; and
    (3) Contracts for the carriage of freight or personnel where such 
carriage is subject to rates covered by section 10721 of the Interstate 
Commerce Act.
    (e) The following types of contracts have been exempted from all the 
provisions of the Service Contract Act of 1965, pursuant to section 4(b) 
of the Act, which exemptions the Secretary of Labor found to be 
necessary and proper in the public interest or to avoid serious 
impairment of the conduct of Government business and are in accord with 
the remedial purpose of the Act to protect prevailing labor standards:
    (1)(i) Contracts principally for the maintenance, calibration and/or 
repair of:
    (A) Automated data processing equipment and office information/word 
processing systems;
    (B) Scientific equipment and medical apparatus or equipment where 
the application of microelectronic circuitry or other technology of at 
least similar sophistication is an essential element (for example, 
Federal Supply Classification (FSC) Group 65, Class 6515, ``Medical 
Diagnostic Equipment''; Class 6525, ``X-Ray Equipment''; FSC Group 66, 
Class 6630, ``Chemical Analysis Instruments''; Class 6665, 
``Geographical and Astronomical Instruments'', are largely composed of 
the types of equipment exempted hereunder);
    (C) Office/business machines not otherwise exempt pursuant to 
paragraph (e)(1)(i)(A) of this section, where such services are 
performed by the manufacturer or supplier of the equipment.
    (ii) The exemptions set forth in this paragraph (e)(1) shall apply 
only under the following circumstances:
    (A) The items of equipment are commercial items which are used 
regularly for other than Government purposes, and are sold or traded by 
the contractor in substantial quantities to the general public in the 
course of normal business operations;
    (B) The contract services are furnished at prices which are, or are 
based on, established catalog or market prices for the maintenance, 
calibration, and/or repair of such commerical items. An established 
catalog price is a price included in a catalog, price list, schedule, or 
other form that is regularly maintained by the manufacturer or the 
contractor, is either published or otherwise available for inspection by 
customers, and states prices at which sales are currently, or were last, 
made to a significant number of buyers constituting the general public. 
An established market price is a current price, established in the usual 
course of trade between buyers and sellers free to bargain, which can be 
substantiated from sources independent of the manufacturer or 
contractor; and
    (C) The contractor utilizes the same compensation (wage and fringe 
benefits) plan for all service employees performing work under the 
contract as the contractor uses for equivalent employees servicing the 
same equipment of commercial customers;
    (D) The contractor certifies in the contract to the provisions in 
this subparagraph (e)(ii).
    (iii) Determinations of the applicability of this exemption shall be 
made in the first instance by the contracting officer prior to contract 
award. In making a judgment that the exemption applies, the contracting 
officer shall consider all factors and make an affirmative determination 
that all of the above conditions have been met.
    (iv) If the Department of Labor determines after contract award that 
any of

[[Page 65]]

the above requirements for exemption has not been met, the exemption 
will be deemed inapplicable, and the contract shall become subject to 
the Service Contract Act, effective as of the date of the Department of 
Labor determination. In such case, the corrective procedures in 
Sec. 4.5(c)(2) of this part shall be followed.



Secs. 4.124--4.129  [Reserved]

         Particular Application of Contract Coverage Principles



Sec. 4.130  Types of covered service contracts illustrated.

    (a) The types of contracts, the principal purpose of which is to 
furnish services through the use of service employees, are too numerous 
and varied to permit an exhaustive listing. The following list is 
illustrative, however, of the types of services called for by such 
contracts that have been found to come within the coverage of the Act. 
Other examples of covered contracts are discussed in other sections of 
this subpart.
    (1) Aerial spraying.
    (2) Aerial reconnaissance for fire detection.
    (3) Ambulance service.
    (4) Barber and beauty shop services.
    (5) Cafeteria and food service.
    (6) Carpet laying (other than part of construction) and cleaning.
    (7) Cataloging services.
    (8) Chemical testing and analysis.
    (9) Clothing alteration and repair.
    (10) Computer services.
    (11) Concessionaire services.
    (12) Custodial, janitorial, and housekeeping services.
    (13) Data collection, processing, and/or analysis services.
    (14) Drafting and illustrating.
    (15) Electronic equipment maintenance and operation and engineering 
support services.
    (16) Exploratory drilling (other than part of construction).
    (17) Film processing.
    (18) Fire fighting and protection.
    (19) Fueling services.
    (20) Furniture repair and rehabilitation.
    (21) Geological field surveys and testing.
    (22) Grounds maintenance.
    (23) Guard and watchman security service.
    (24) Inventory services.
    (25) Keypunching and keyverifying contracts.
    (26) Laboratory analysis services.
    (27) Landscaping (other than part of construction).
    (28) Laundry and dry cleaning.
    (29) Linen supply services.
    (30) Lodging and/or meals.
    (31) Mail hauling.
    (32) Mailing and addressing services.
    (33) Maintenance and repair of all types of equipment, e.g., 
aircraft, engines, electrical motors, vehicles, and electronic, 
telecommunications, office and related business, and construction 
equipment (See Sec. 4.123(e).).
    (34) Mess attendant services.
    (35) Mortuary services.
    (36) Motor pool operation.
    (37) Nursing home services.
    (38) Operation, maintenance, or logistic support of a Federal 
facility.
    (39) Packing and crating.
    (40) Parking services.
    (41) Pest control.
    (42) Property management.
    (43) Snow removal.
    (44) Stenographic reporting.
    (45) Support services at military installations.
    (46) Surveying and mapping services (not directly related to 
construction).
    (47) Taxicab services.
    (48) Telephone and field interview services.
    (49) Tire and tube repairs.
    (50) Transporting property or personnel (except as explained in 
Sec. 4.118).
    (51) Trash and garbage removal.
    (52) Tree planting and thinning, clearing timber or brush, etc. (See 
also Secs. 4.116(b) and 4.131(f).).
    (53) Vending machine services.
    (54) Visual and graphic arts.
    (55) Warehousing or storage.



Sec. 4.131  Furnishing services involving more than use of labor.

    (a) If the principal purpose of a contract is to furnish services in 
the performance of which service employees will be used, the Act will 
apply to the contract, in the absence of an exemption, even though the 
use or furnishing of nonlabor items may be an important element in the 
furnishing of the services called for by its terms. The Act is

[[Page 66]]

concerned with protecting the labor standards of workers engaged in 
performing such contracts, and is applicable if the statutory coverage 
test is met, regardless of the form in which the contract is drafted. 
The proportion of the labor cost to the total cost of the contract and 
the necessity of furnishing or receiving tangible nonlabor items in 
performing the contract obligations will be considered but are not 
necessarily determinative. A procurement that requires tangible items to 
be supplied to the Government or the contractor as a part of the service 
furnished is covered by the Act so long as the facts show that the 
contract is chiefly for services, and that the furnishing of tangible 
items is of secondary importance.
    (b) Some examples of covered contracts illustrating these principles 
may be helpful. One such example is a contract for the maintenance and 
repair of typewriters. Such a contract may require the contractor to 
furnish typewriter parts, as the need arises, in performing the contract 
services. Since this does not change the principal purpose of the 
contract, which is to furnish the maintenance and repair services 
through the use of service employees, the contract remains subject to 
the Act.
    (c) Another example of the application of the above principle is a 
contract for the recurrent supply to a Government agency of freshly 
laundered items on a rental basis. It is plain from the legislative 
history that such a contract is typical of those intended to be covered 
by the Act. S. Rept. 798, 89th Cong., 1st Sess., p. 2; H. Rept. 948, 
89th Cong., 1st Sess., p. 2. Although tangible items owned by the 
contractor are provided on a rental basis for the use of the Government, 
the service furnished by the contractor in making them available for 
such use when and where they are needed, through the use of service 
employees who launder and deliver them, is the principal purpose of the 
contract.
    (d) Similarly, a contract in the form of rental of equipment with 
operators for the plowing and reseeding of a park area is a service 
contract. The Act applies to it because its principal purpose is the 
service of plowing and reseeding, which will be performed by service 
employees, although as a necessary incident the contractor is required 
to furnish equipment. For like reasons the contracts for aerial spraying 
and aerial reconnaissance listed in Sec. 4.130 are covered, even though 
the use of airplanes, an expensive item of equipment, is essential in 
performing such services. In general, contracts under which the 
contractor agrees to provide the Government with vehicles or equipment 
on a rental basis with drivers or operators for the purpose of 
furnishing services are covered by the Act. Such contracts are not 
considered contracts for furnishing equipment within the meaning of the 
Walsh-Healey Public Contracts Act. On the other hand, contracts under 
which the contractor provides equipment with operators for the purpose 
of construction of a public building or public work, such as road 
resurfacing or dike repair, even where the work is performed under the 
supervision of Government employees, would be within the exemption in 
section 7(1) of the Act as contracts for construction subject to the 
Davis-Bacon Act. (See Sec. 4.116.)
    (e) Contracts for data collection, surveys, computer services, and 
the like are within the general coverage of the Act even though the 
contractor may be required to furnish such tangible items as written 
reports or computer printouts, since items of this nature are considered 
to be of secondary importance to the services which it is the principal 
purpose of the contract to procure.
    (f) Contracts under which the contractor receives tangible items 
from the Government in return for furnishing services (which items are 
in lieu of or in addition to monetary consideration granted by either 
party) are covered by the Act where the facts show that the furnishing 
of such services is the principal purpose of the contracts. For example, 
property removal or disposal contracts which involve demolition of 
buildings or other structures are subject to the Act when their 
principal purpose is dismantling and removal (and no further 
construction activity at the site is contemplated). However, removal or 
dismantling contracts whose principal purpose is sales

[[Page 67]]

are not covered. So-called ``timber sales'' contracts generally are not 
subject to the Act because normally the services provided under such 
contracts are incidental to the principal purpose of the contracts. (See 
also Secs. 4.111(a) and 4.116(b).)



Sec. 4.132  Services and other items to be furnished under a single contract.

    If the principal purpose of a contract is to furnish services 
through the use of service employees within the meaning of the Act, the 
contract to furnish such services is not removed from the Act's coverage 
merely because, as a matter of convenience in procurement, the service 
specifications are combined in a single contract document with 
specifications for the procurement of different or unrelated items. In 
such case, the Act would apply to service specifications but would not 
apply to any specifications subject to the Walsh-Healey Act or to the 
Davis-Bacon Act. With respect to contracts which contain separate 
specifications for the furnishing of services and construction activity, 
see Sec. 4.116(c).



Sec. 4.133  Beneficiary of contract services.

    (a) The Act does not say to whom the services under a covered 
contract must be furnished. So far as its language is concerned, it is 
enough if the contract is ``entered into'' by and with the Government 
and if its principal purpose is ``to furnish services in the United 
States through the use of service employees''. It is clear that Congress 
intended to cover at least contracts for services of direct benefit to 
the Government, its property, or its civilian or military personnel for 
whose needs it is necessary or desirable for the Government to make 
provision for such services. For example, the legislative history makes 
specific reference to such contracts as those for furnishing food 
service and laundry and dry cleaning service for personnel at military 
installations. Furthermore, there is no limitation in the Act regarding 
the beneficiary of the services, nor is there any indication that only 
contracts for services of direct benefit to the Government, as 
distinguished from the general public, are subject to the Act. 
Therefore, where the principal purpose of the Government contract is to 
provide services through the use of service employees, the contract is 
covered by the Act, regardless of the direct beneficiary of the services 
or the source of the funds from which the contractor is paid for the 
service, and irrespective of whether the contractor performs the work in 
its own establishment, on a Government installation, or elsewhere. The 
fact that the contract requires or permits the contractor to provide the 
services directly to individual personnel as a concessionaire, rather 
than through the contracting agency, does not negate coverage by the 
Act.
    (b) The Department of Labor, pursuant to section 4(b) of the Act, 
exempts from the provisions of the Act certain kinds of concession 
contracts providing services to the general public, as provided herein. 
Specifically, concession contracts (such as those entered into by the 
National Park Service) principally for the furnishing of food, lodging, 
automobile fuel, souvenirs, newspaper stands, and recreational equipment 
to the general public, as distinguished from the United States 
Government or its personnel, are exempt. This exemption is necessary and 
proper in the public interest and is in accord with the remedial purpose 
of the Act. Where concession contracts, however, include substantial 
requirements for services other than those stated, those services are 
not exempt. The exemption provided does not affect a concession 
contractor's obligation to comply with the labor standards provisions of 
any other statutes such as the Contract Work Hours and Safety Standards 
Act (40 U.S.C. 327 et seq.), the Davis-Bacon Act (40 U.S.C. 276a et 
seq.; see part 5 of this title) and the Fair Labor Standards Act (29 
U.S.C. 201 et seq.).



Sec. 4.134  Contracts outside the Act's coverage.

    (a) Contracts entered into by agencies other than those of the 
Federal Government or the District of Columbia as described in 
Secs. 4.107-4.108 are not within the purview of the Act. Thus, the Act 
does not cover service contracts entered into with any agencies of 
Puerto Rico, the Virgin Islands,

[[Page 68]]

American Samoa, or Guam acting in behalf of their respective local 
governments. Similarly, it does not cover service contracts entered into 
by agencies of States or local public bodies, not acting as agents for 
or on behalf of the United States or the District of Columbia, even 
though Federal financial assistance may be provided for such contracts 
under Federal law or the terms and conditions specified in Federal law 
may govern the award and operation of the contract.
    (b) Further, as already noted in Secs. 4.111 through 4.113, the Act 
does not apply to Government contracts which do not have as their 
principal purpose the furnishing of services, or which call for no 
services to be furnished within the United States or through the use of 
service employees as those terms are defined in the Act. Clearly outside 
the Act's coverage for these reasons are such contracts as those for the 
purchase of tangible products which the Government needs (e.g. vehicles, 
office equipment, and supplies), for the logistic support of an air base 
in a foreign country, or for the services of a lawyer to examine the 
title to land. Similarly, where the Government contracts for a lease of 
building space for Government occupancy and the building owner furnishes 
general janitorial and other building services on an incidental basis 
through the use of service employees, the leasing of the space rather 
than the furnishing of the building services is the principal purpose of 
the contract, and the Act does not apply. Another type of contract which 
is outside the coverage of the Act because it is not for the principal 
purpose of furnishing services may be illustrated by a contract for the 
rental of parking space under which the Government agency is simply 
given a lease or license to use the contractor's real property. Such a 
contract is to be distinguished from contracts for the storage of 
vehicles which are delivered into the possession or custody of the 
contractor, who will provide the required services including the parking 
or retrieval of the vehicles.
    (c) There are a number of types of contracts which, while outside 
the Act's coverage in the usual case, may be subject to its provisions 
under the conditions and circumstances of a particular procurement, 
because these may be such as to require a different view of the 
principal purpose of the contract. Thus, the ordinary contract for the 
recapping of tires would have as its principal purpose the manufacture 
and furnishing of rebuilt tires for the Government rather than the 
furnishing of services through the use of service employees, and thus 
would be outside the Act's coverage. Similarly, contracts calling for 
printing, reproduction, and duplicating ordinarily would appear to have 
as their principal purpose the furnishing in quantity of printed, 
reproduced or duplicated written materials rather than the furnishing of 
reproduction services through the use of service employees. However, in 
a particular case, the terms, conditions, and circumstances of the 
procurement may be such that the facts would show its purpose to be 
chiefly the furnishing of services (e.g. repair services, typesetting, 
photocopying, editing, etc.), and where such services require the use of 
service employees the contract would be subject to the Act unless 
excluded therefrom for some other reason.



Secs. 4.135--4.139  [Reserved]

                     Determining Amount of Contract



Sec. 4.140  Significance of contract amount.

    As set forth in Sec. 4.104 and in the requirements of Secs. 4.6--
4.7, the obligations of a contractor with respect to labor standards 
differ in the case of a covered and nonexempt contract, depending on 
whether the contract is or is not in excess of $2,500. Rules for 
resolving questions that may arise as to whether a contract is or is not 
in excess of this figure are set forth in the following sections.



Sec. 4.141  General criteria for measuring amount.

    (a) In general, the contract amount is measured by the consideration 
agreed to be paid, whether in money or other valuable consideration, in 
return for the obligations assumed under the contract. Thus, even though 
a contractor, such as a wrecker entering into a contract with the 
Government to raze a building on a site which will remain

[[Page 69]]

vacant, may not be entitled to receive any money from the Government for 
such work under his contract or may even agree to pay the Government in 
return for the right to dispose of the salvaged materials, the contract 
will be deemed one in excess of $2,500 if the value of the property 
obtained by the contractor, less anything he might pay the Government, 
is in excess of such amount. In addition, concession contracts are 
considered to be contracts in excess of $2,500 if the contractor's gross 
receipts under the contract may exceed $2,500.
    (b) All bids from the same person on the same invitation for bids 
will constitute a single offer, and the total award to such person will 
determine the amount involved for purposes of the Act. Where the 
procurement is made without formal advertising, in arriving at the 
aggregate amount involved, there must be included all property and 
services which would properly be grouped together in a single 
transaction and which would be included in a single advertisement for 
bids if the procurement were being effected by formal advertising. 
Therefore, if an agency procures continuing services through the 
issuance of monthly purchase orders, the amount of the contract for 
purposes of application of the Act is not measured by the amount of an 
individual purchase order. In such cases, if the continuing services 
were procured through formal advertising, the contract term would 
typically be for one year, and the monthly purchase orders must be 
grouped together to determine whether the yearly amount may exceed 
$2,500. However, a purchase order for services which are not continuing 
but are performed on a one-time or sporadic basis and which are not 
performed under a requirements contract or under the terms of a basic 
ordering agreement or similar agreement need not be equated to a yearly 
amount. (See Sec. 4.142(b).) In addition, where an invitation is for 
services in an amount in excess of $2,500 and bidders are permitted to 
bid on a portion of the services not amounting to more than $2,500, the 
amounts of the contracts awarded separately to individual and unrelated 
bidders will be measured by the portions of the services covered by 
their respective contracts.
    (c) Where a contract is issued in an amount in excess of $2,500 this 
amount will govern for purposes of application of the Act even though 
penalty deductions, deductions for prompt payment, and similar 
deductions may reduce the amount actually expended by the Government to 
$2,500 or less.



Sec. 4.142  Contracts in an indefinite amount.

    (a) Every contract subject to this Act which is indefinite in amount 
is required to contain the clauses prescribed in Sec. 4.6 for contracts 
in excess of $2,500, unless the contracting officer has definite 
knowledge in advance that the contract will not exceed $2,500 in any 
event.
    (b) Where contracts or agreements between a Government agency and 
prospective purveyors of services are negotiated which provide terms and 
conditions under which services will be furnished through the use of 
service employees in response to individual purchase orders or calls, if 
any, which may be issued by the agency during the life of the agreement, 
these agreements would ordinarily constitute contracts within the 
intendment of the Act under principles judicially established in United 
Biscuit Co. v. Wirtz, 17 WH Cases 146 (C.A.D.C.), a case arising under 
the Walsh-Healey Public Contracts Act. Such a contract, which may be in 
the nature of a bilateral option contract or basic ordering agreement 
and not obligate the Government to order any services or the contractor 
to furnish any, nevertheless governs any procurement of services that 
may be made through purchase orders or calls issued under its terms. 
Since the amount of the contract is indefinite, it is subject to the 
rule stated in paragraph (a) of this section. The amount of the contract 
is not determined by the amount of any individual call or purchase 
order.

[[Page 70]]

                      Changes in Contract Coverage



Sec. 4.143  Effects of changes or extensions of contracts, generally.

    (a) Sometimes an existing service contract is modified, amended, or 
extended in such a manner that the changed contract is considered to be 
a new contract for purposes of the application of the Act's provisions. 
The general rule with respect to such contracts is that, whenever 
changes affecting the labor requirements are made in the terms of the 
contract, the provisions of the Act and the regulations thereunder will 
apply to the changed contract in the same manner and to the same extent 
as they would to a wholly new contract. However, contract modifications 
or amendments (other than contract extensions) that are unrelated to the 
labor requirements of a contract will not be deemed to create a new 
contract for purposes of the Act. In addition, only significant changes 
related to labor requirements will be considered as creating new 
contracts. This limitation on the application of the Act has been found 
to be in accordance with the provisions of section 4(b) of the Act.
    (b) Also, whenever the term of an existing contract is extended, 
pursuant to an option clause or otherwise, so that the contractor 
furnishes services over an extended period of time, rather than being 
granted extra time to fulfill his original commitment, the contract 
extension is considered to be a new contract for purposes of the 
application of the Act's provisions. All such ``new'' contracts as 
discussed above require the insertion of a new or revised wage 
determination in the contract as provided in Sec. 4.5.



Sec. 4.144  Contract modifications affecting amount.

    Where a contract which was originally issued in an amount not in 
excess of $2,500 is later modified so that its amount may exceed that 
figure, all the provisions of section 2(a) of the Act, and the 
regulations thereunder are applicable from the date of modification to 
the date of contract completion. In the event of such modification, the 
contracting officer will immediately request a wage determination from 
the Department of Labor and insert the required contract clauses and any 
wage determination issued into the contract. In the event that a 
contract for services subject to the Act in excess of $2,500 is modified 
so that it cannot exceed $2,500, compliance with the provisions of 
section 2(a) of the Act and the contract clauses required thereunder 
ceases to be an obligation of the contractor when such modification 
becomes effective.



Sec. 4.145  Extended term contracts.

    (a) Sometimes service contracts are entered into for an extended 
term exceeding one year; however, their continuation in effect is 
subject to the appropriation by Congress of funds for each new fiscal 
year. In such event, for purposes of this Act, a contract shall be 
deemed entered into upon the contract anniversary date which occurs in 
each new fiscal year during which the terms of the original contract are 
made effective by an appropriation for that purpose. In other cases a 
service contract, entered into for a specified term by a Government 
agency, may contain a provision such as an option clause under which the 
agency may unilaterally extend the contract for a period of the same 
length or other stipulated period. Since the exercise of the option 
results in the rendition of services for a new or different period not 
included in the term for which the contractor is obligated to furnish 
services or for which the Government is obligated to pay under the 
original contract in the absence of such action to extend it, the 
contract for the additional period is a wholly new contract with respect 
to application of the Act's provisions and the regulations thereunder 
(see Sec. 4.143(b)).
    (b) With respect to multi-year service contracts which are not 
subject to annual appropriations (for example, concession contracts 
which are funded through the concessionaire's sales, certain operations 
and maintenance contracts which are funded with so-called ``no year 
money'' or contracts awarded by instrumentalities of the United States, 
such as the Federal Reserve Banks, which do not receive appropriated 
funds), section 4(d) of the Act allows such contracts to be awarded for

[[Page 71]]

a period of up to five years on the condition that the multi-year 
contracts will be amended no less often than once every two years to 
incorporate any new Service Contract Act wage determination which may be 
applicable. Accordingly, unless the contracting agency is notified to 
the contrary (see Sec. 4.4(d)), such contracts are treated as wholly new 
contracts for purposes of the application of the Act's provisions and 
regulations thereunder at the end of the second year and again at the 
end of the fourth year, etc. The two-year period is considered to begin 
on the date that the contractor commences performance on the contract 
(i.e., anniversary date) rather than on the date of contract award.

                           Period of Coverage



Sec. 4.146  Contract obligations after award, generally.

    A contractor's obligation to observe the provisions of the Act 
arises on the date the contractor is informed that award of the contract 
has been made, and not necessarily on the date of formal execution. 
However, the contractor is required to comply with the provisions of the 
Act and regulations thereunder only while the employees are performing 
on the contract, provided the contractor's records make clear the period 
of such performance. (See also Sec. 4.179.) If employees of the 
contractor are required by the contract to complete certain preliminary 
training or testing prior to the commencement of the contract services, 
or if there is a phase-in period which allows the new contractor's 
employees to familiarize themselves with the contract work so as to 
provide a smooth transition between contractors, the time spent by 
employees undertaking such training or phase-in work is considered to be 
hours worked on the contract and must be compensated for even though the 
principal contract services may not commence until a later date.



Secs. 4.147--4.149  [Reserved]

                      Employees Covered by the Act



Sec. 4.150  Employee coverage, generally.

    The Act, in section 2(b), makes it clear that its provisions apply 
generally to all service employees engaged in performing work on a 
covered contract entered into by the contractor with the Federal 
Government, regardless of whether they are the contractor's employees or 
those of any subcontractor under such contract. All service employees 
who, on or after the date of award, are engaged in working on or in 
connection with the contract, either in performing the specific services 
called for by its terms or in performing other duties necessary to the 
performance of the contract, are thus subject to the Act unless a 
specific exemption (see Secs. 4.115 et seq.) is applicable. All such 
employees must be paid wages at a rate not less than the minimum wage 
specified under section 6(a)(1) of the Fair Labor Standards Act (29 
U.S.C. 206(a)(1)), as amended. Payment of a higher minimum monetary wage 
and the furnishing of fringe benefits may be required under the 
contract, pursuant to the provisions of sections 2 (a)(1), (2), and 4(c) 
of the Act.



Sec. 4.151  Employees covered by provisions of section 2(a).

    The provisions of sections 2(a) and 4(c) of the Act prescribe labor 
standards requirements applicable, except as otherwise specifically 
provided, to every contract in excess of $2,500 which is entered into by 
the United States or the District of Columbia for the principal purpose 
of furnishing services in the United States through the use of service 
employees. These provisions apply to all service employees engaged in 
the performance of such a contract or any subcontract thereunder. The 
Act, in section 8(b) defines the term service employee. The general 
scope of the definition is considered in Sec. 4.113(b) of this subpart.



Sec. 4.152  Employees subject to prevailing compensation provisions of sections 2(a)(1) and (2) and 4(c).

    (a) Under sections 2(a)(1) and (2) and 4(c) of the Act, minimum 
monetary wages and fringe benefits to be paid or furnished the various 
classes of service employees performing such contract work are 
determined by the Secretary of Labor or his authorized representative in 
accordance with prevailing

[[Page 72]]

rates and fringe benefits for such employees in the locality or in 
accordance with the rates contained in a predecessor contractor's 
collective bargaining agreement, as appropriate, and are required to be 
specified in such contracts and subcontracts thereunder. All service 
employees of the classes who actually perform the specific services 
called for by the contract (e.g., janitors performing on a contract for 
office cleaning; stenographers performing on a contract for stenographic 
reporting) are covered by the provisions specifying such minimum 
monetary wages and fringe benefits for such classes of service employees 
and must be paid not less than the applicable rate established for the 
classification(s) of work performed. Pursuant to section 4.6(b)(2), 
conforming procedures are required to be observed for all such classes 
of service employees not listed in the wage determination incorporated 
in the contract.
    (b) The duties which an employee actually performs govern the 
classification and the rate of pay to which the employee is entitled 
under the applicable wage determination. Some job classifications listed 
in an applicable wage determination are descriptive by title and have 
commonly understood meanings (e.g., janitors, security guards, pilots, 
etc.). In such situations, detailed position descriptions may not be 
included in the wage determination. However, in cases where additional 
descriptive information is needed to inform users of the scope of duties 
included in the classification, the wage determination will generally 
contain detailed position descriptions based on the data source relied 
upon for the issuance of the wage determination.
    (c)(1) Some wage determinations will list a series of classes within 
a job classification family, e.g., Computer Operators, Class A, B, and 
C, or Electronic Technicians, Class A, B, and C, or Clerk Typist, Class 
A and B. Generally, the lowest level listed for a job classification 
family is considered to be the entry level and establishment of a lower 
level through conformance (Sec. 4.6(b)(2)) is not permissible. Further, 
trainee classifications cannot be conformed. Helpers in skilled 
maintenance trades (e.g., electricians, machinists, automobile 
mechanics, etc.) whose duties constitute, in fact, separate and distinct 
jobs, may also be used if listed on the wage determination, but cannot 
be conformed. Conformance may not be used to artificially split or 
subdivide classifications listed in the wage determination. However, 
conforming procedures may be used if the work which an employee performs 
under the contract is not within the scope of any classification listed 
on the wage determination, regardless of job title.
    (2) Subminimum rates for apprentices, student learners, and 
handicapped workers are permissible under the conditions discussed in 
Sec. 4.6 (o) and (p).



Sec. 4.153  Inapplicability of prevailing compensation provisions to some employees.

    There may be employees used by a contractor or subcontractor in 
performing a service contract in excess of $2,500 which is subject to 
the Act, whose services, although necessary to the performance of the 
contract, are not subject to minimum monetary wage or fringe benefit 
provisions contained in the contract pursuant to section 2(a) because 
such employees are not directly engaged in performing the specified 
contract services. An example might be a laundry contractor's billing 
clerk performing billing work with respect to the items laundered. In 
all such situations, the employees who are necessary to the performance 
of the contract but not directly engaged in the performance of the 
specified contract services, are nevertheless subject to the minimum 
wage provision of section 2(b) (see Sec. 4.150) requiring payment of not 
less than the minimum wage specified under section 6(a)(1) of the Fair 
Labor Standards Act to all employees working on a covered contract, 
unless specifically exempt. However, in situations where minimum 
monetary wages and fringe benefits for a particular class or classes of 
service employees actually performing the services called for by the 
contract have not been specified in the contract because the wage and 
fringe benefit determination applicable to the contract has been made 
only for other classes of service employees who will perform the

[[Page 73]]

contract work, the employer will be required to pay the monetary wages 
and fringe benefits which may be specified for such classes of employees 
pursuant to the conformance procedures provided in Sec. 4.6(b).



Sec. 4.154  Employees covered by sections 2(a)(3) and (4).

    The safety and health standards of section 2(a)(3) and the notice 
requirements of section 2(a)(4) of the Act (see Sec. 4.183) are 
applicable, in the absence of a specific exemption, to every service 
employee engaged by a contractor or subcontractor to furnish services 
under a contract subject to section 2(a) of the Act.



Sec. 4.155  Employee coverage does not depend on form of employment contract.

    The Act, in section 8(b), makes it plain that the coverage of 
service employees depends on whether their work for the contractor or 
subcontractor on a covered contract is that of a service employee as 
defined in section 8(b) and not on any contractual relationship that may 
be alleged to exist between the contractor or subcontractor and such 
persons. In other words, any person, except those discussed in 
Sec. 4.156 below, who performs work called for by a contract or that 
portion of a contract subject to the Act is, per se, a service employee. 
Thus, for example, a person's status as an ``owner-operator'' or an 
``independent contractor'' is immaterial in determining coverage under 
the Act and all such persons performing the work of service employees 
must be compensated in accordance with the Act's requirements.



Sec. 4.156  Employees in bona fide executive, administrative, or professional capacity.

    The term service employee as defined in section 8(b) of the Act does 
not include persons employed in a bona fide executive, administrative, 
or professional capacity as those terms are defined in 29 CFR part 541. 
Employees within the definition of service employee who are employed in 
an executive, administrative, or professional capacity are not excluded 
from coverage, however, even though they are highly paid, if they fail 
to meet the tests set forth in 29 CFR part 541. Thus, such employees as 
laboratory technicians, draftsmen, and air ambulance pilots, though they 
require a high level of skill to perform their duties and may meet the 
salary requirements of the regulations in part 541 of this title, are 
ordinarily covered by the Act's provisions because they do not typically 
meet the other requirements of those regulations.



Secs. 4.157--4.158  [Reserved]



                    Subpart D--Compensation Standards



Sec. 4.159  General minimum wage.

    The Act, in section 2(b)(1), provides generally that no contractor 
or subcontractor under any Federal contract subject to the Act shall pay 
any employee engaged in performing work on such a contract less than the 
minimum wage specified under section 6(a)(1) of the Fair Labor Standards 
Act. Section 2(a)(1) provides that the minimum monetary wage specified 
in any such contract exceeding $2,500 shall in no case be lower than 
this Fair Labor Standards Act minimum wage. Section 2(b)(1) is a 
statutory provision which applies to the contractor or subcontractor 
without regard to whether it is incorporated in the contract; however, 
Secs. 4.6 and 4.7 provide for inclusion of its requirements in covered 
contracts and subcontracts. Because this statutory requirement specifies 
no fixed monetary wage rate and refers only to the minimum wage 
specified under section 6(a)(1) of the Fair Labor Standards Act, and 
because its application does not depend on provisions of the contract, 
any increase in such Fair Labor Standards Act minimum wage during the 
life of the contract is, on its effective date, also effective to 
increase the minimum wage payable under section 2(b)(1) to employees 
engaged in performing work on the contract. The minimum wage rate under 
section 6(a)(1) of the Fair Labor Standards Act is $3.10 per hour 
beginning January 1, 1980, and $3.35 per hour after December 31, 1980.

[[Page 74]]



Sec. 4.160  Effect of section 6(e) of the Fair Labor Standards Act.

    Contractors and subcontractors performing work on contracts subject 
to the Service Contract Act are required to pay all employees, including 
those employees who are not performing work on or in connection with 
such contracts, not less than the general minimum wage standard provided 
in section 6(a)(1) of the Fair Labor Standards Act, as amended (Pub. L. 
95-151).



Sec. 4.161  Minimum monetary wages under contracts exceeding $2,500.

    The standards established pursuant to the Act for minimum monetary 
wages to be paid by contractors and subcontractors under service 
contracts in excess of $2,500 to service employees engaged in 
performance of the contract or subcontract are required to be specified 
in the contract and in all subcontracts (see Sec. 4.6). Pursuant to the 
statutory scheme provided by sections 2(a)(1) and 4(c) of the Act, every 
covered contract (and any bid specification therefor) which is in excess 
of $2,500 shall contain a provision specifying the minimum monetary 
wages to be paid the various classes of service employees engaged in the 
performance of the contract or any subcontract thereunder, as determined 
by the Secretary or his authorized representative in accordance with 
prevailing rates for such employees in the locality, or, where a 
collective bargaining agreement applied to the employees of a 
predecessor contractor in the same locality, in accordance with the 
rates for such employees provided for in such agreement, including 
prospective wage increases as provided in such agreement as a result of 
arm's-length negotiations. In no case may such wages be lower than the 
minimum wage specified under section 6(a)(1) of the Fair Labor Standards 
Act of 1938, as amended. (For a detailed discussion of the application 
of section 4(c) of the Act, see Sec. 4.163.) If some or all of the 
determined wages in a contract fall below the level of the Fair Labor 
Standards Act minimum by reason of a change in that rate by amendment of 
the law, these rates become obsolete and the employer is obligated under 
section 2(b)(1) of the Service Contract Act to pay the minimum wage rate 
established by the amendment as of the date it becomes effective. A 
change in the Fair Labor Standards Act minimum by operation of law would 
also have the same effect on advertised specifications or negotiations 
for covered service contracts, i.e., it would make ineffective and would 
supplant any lower rate or rates included in such specifications or 
negotiations whether or not determined. However, unless affected by such 
a change in the Fair Labor Standards Act minimum wage, by contract 
changes necessitating the insertion of new wage provisions (see 
Secs. 4.5(c) and 4.143-4.145) or by the requirements of section 4(c) of 
the Act (see Sec. 4.163), the minimum monetary wage rate specified in 
the contract for each of the classes of service employees for which wage 
determinations have been made under section 2(a)(1) will continue to 
apply throughout the period of contract performance. No change in the 
obligation of the contractor or subcontractor with respect to minimum 
monetary wages will result from the mere fact that higher or lower wage 
rates may be determined to be prevailing for such employees in the 
locality after the award and before completion of the contract. Such 
wage determinations are effective for contracts not yet awarded, as 
provided in Sec. 4.5(a).



Sec. 4.162  Fringe benefits under contracts exceeding $2,500.

    (a) Pursuant to the statutory scheme provided by sections 2(a)(2) 
and 4(c) of the Act, every covered contract in excess of $2,500 shall 
contain a provision specifying the fringe benefits to be furnished the 
various classes of service employees, engaged in the performance of the 
contract or any subcontract thereunder, as determined by the Secretary 
or his authorized representative to be prevailing for such employees in 
the locality or, where a collective bargaining agreement applied to the 
employees of a predecessor contractor in the same locality, the various 
classes of service employees engaged in the performance of the contract 
or any subcontract must be provided the fringe benefits, including 
prospective or accrued fringe benefit increases,

[[Page 75]]

provided for in such agreement as a result of arm's-length negotiations. 
(For a detailed discussion of section 4(c) of the Act, see Sec. 4.163.) 
As provided by section 2(a)(2) of the Act, fringe benefits include 
medical or hospital care, pensions on retirement or death, compensation 
for injuries or illness resulting from occupational activity, or 
insurance to provide any of the foregoing, unemployment benefits, life 
insurance, disability and sickness insurance, accident insurance, 
vacation and holiday pay, costs of apprenticeship or other similar 
programs and other bona fide fringe benefits not otherwise required by 
Federal, State, or local law to be provided by the contractor or 
subcontractor.
    (b) Under this provision, the fringe benefits, if any, which the 
contractor or subcontractor is required to furnish the service employees 
engaged in the performance of the contract are specified in the contract 
documents (see Sec. 4.6). How the contractor may satisfy this obligation 
is dealt with in Secs. 4.170 through 4.177 of this part. A change in the 
fringe benefits required by the contract provision will not result from 
the mere fact that other or additional fringe benefits are determined to 
be prevailing for such employees in the locality at a time subsequent to 
the award but before completion of the contract. Such fringe benefit 
determinations are effective for contracts not yet awarded (see 
Sec. 4.5(a)), or in the event that changes in an existing contract 
requiring their insertion for prospective application have occurred (see 
Secs. 4.143 through 4.145). However, none of the provisions of this 
paragraph may be construed as altering a successor contractor's 
obligations under section 4(c) of the Act. (See Sec. 4.163.)



Sec. 4.163  Section 4(c) of the Act.

    (a) Section 4(c) of the Act provides that no ``contractor or 
subcontractor under a contract, which succeeds a contract subject to 
this Act and under which substantially the same services are furnished, 
shall pay any service employee under such contract less than the wages 
and fringe benefits, including accrued wages and fringe benefits, and 
any prospective increases in wages and fringe benefits provided for in a 
collective-bargaining agreement as a result of arm's-length 
negotiations, to which such service employees would have been entitled 
if they were employed under the predecessor contract: Provided, That in 
any of the foregoing circumstances such obligations shall not apply if 
the Secretary finds after a hearing in accordance with regulations 
adopted by the Secretary that such wages and fringe benefits are 
substantially at variance with those which prevail for services of a 
character similar in the locality.'' Under this provision, the successor 
contractor's sole obligation is to insure that all service employees are 
paid no less than the wages and fringe benefits to which such employees 
would have been entitled if employed under the predecessor's collective 
bargaining agreement (i.e., irrespective of whether the successor's 
employees were or were not employed by the predecessor contractor). The 
obligation of the successor contractor is limited to the wage and fringe 
benefit requirements of the predecessor's collective bargaining 
agreement and does not extend to other items such as seniority, 
grievance procedures, work rules, overtime, etc.
    (b) Section 4(c) is self-executing. Under section 4(c), a successor 
contractor in the same locality as the predecessor contractor is 
statutorily obligated to pay no less than the wage rates and fringe 
benefits which were contained in the predecessor contractor's collective 
bargaining agreement. This is a direct statutory obligation and 
requirement placed on the successor contractor by section 4(c) and is 
not contingent or dependent upon the issuance or incorporation in the 
contract of a wage determination based on the predecessor contractor's 
collective bargaining agreement. Pursuant to section 4(b) of the Act, a 
variation has been granted which limits the self-executing application 
of section 4(c) in the circumstances and under the conditions described 
in Sec. 4.1b(b) of this part. It must be emphasized, however, that the 
variation in Sec. 4.1b(b) is applicable only if the contracting officer 
has given both the incumbent (predecessor) contractor and the employees' 
collective bargaining representative notification

[[Page 76]]

at least 30 days in advance of any estimated procurement date.
    (c) Variance hearings. The regulations and procedures for hearings 
pursuant to section 4(c) of the Act are contained in Sec. 4.10 of 
subpart A and parts 6 and 8 of this title. If, as the result of such 
hearing, some or all of the wage rate and/or fringe benefit provisions 
of a predecessor contractor's collective bargaining agreement are found 
to be substantially at variance with the wage rates and/or fringe 
benefits prevailing in the locality, the Administrator will cause a new 
wage determination to be issued in accordance with the decision of the 
Administrative Law Judge or the Administrative Review Board, as 
appropriate. Since ``it was the clear intent of Congress that any 
revised wage determinations resulting from a section 4(c) proceeding 
were to have validity with respect to the procurement involved'' (53 
Comp. Gen. 401, 402, 1973), the solicitation, or the contract if already 
awarded, must be amended to incorporate the newly issued wage 
determination. Such new wage determination shall be made applicable to 
the contract as of the date of the Administrative Law Judge's decision 
or, where the decision is reviewed by the Administrative Review Board, 
the date of that decision. The legislative history of the 1972 
Amendments makes clear that the collectively bargained ``wages and 
fringe benefits shall continue to be honored * * * unless and until the 
Secretary finds, after a hearing, that such wages and fringe benefits 
are substantially at variance with those prevailing in the locality for 
like services'' (S. Rept. 92-1131, 92nd Cong., 2d Sess. 5). Thus, 
variance decisions do not have application retroactive to the 
commencement of the contract.
    (d) Sections 2(a) and 4(c) must be read in conjunction. The Senate 
report accompanying the bill which amended the Act in 1972 states that 
``Sections 2(a)(1), 2(a)(2), and 4(c) must be read in harmony to reflect 
the statutory scheme.'' (S. Rept. 92-1131, 92nd Cong., 2nd Sess. 4.) 
Therefore, since section 4(c) refers only to the predecessor 
contractor's collective bargaining agreement, the reference to 
collective bargaining agreements in sections 2(a)(1) and 2(a)(2) can 
only be read to mean a predecessor contractor's collective bargaining 
agreement. The fact that a successor contractor may have its own 
collective bargaining agreement does not negate the clear mandate of the 
statute that the wages and fringe benefits called for by the predecessor 
contractor's collective bargaining agreement shall be the minimum 
payable under a new (successor) contract nor does it negate the 
application of a prevailing wage determination issued pursuant to 
section 2(a) where there was no applicable predecessor collective 
bargaining agreement. 48 Comp. Gen. 22, 23-24 (1968). In addition, 
because section 2(a) only applies to covered contracts in excess of 
$2,500, the requirements of section 4(c) likewise apply only to 
successor contracts which may be in excess of $2,500. However, if the 
successor contract is in excess of $2,500, section 4(c) applies 
regardless of the amount of the predecessor contract. (See Secs. 4.141-
4.142 for determining contract amount.)
    (e) The operative words of section 4(c) refer to ``contract'' not 
``contractor''. Section 4(c) begins with the language, ``[n]o contractor 
or subcontractor under a contract, which succeeds a contract subject to 
this Act'' (emphasis supplied). Thus, the statute is applicable by its 
terms to a successor contract without regard to whether the successor 
contractor was also the predecessor contractor. A contractor may become 
its own successor because it was the successful bidder on a 
recompetition of an existing contract, or because the contracting agency 
exercises an option or otherwise extends the term of the existing 
contract, etc. (See Secs. 4.143-4.145.) Further, since sections 2(a) and 
4(c) must be read in harmony to reflect the statutory scheme, it is 
clear that the provisions of section 4(c) apply whenever the Act or the 
regulations require that a new wage determination be incorporated into 
the contract (53 Comp. Gen. 401, 404-6 (1973)).
    (f) Collective bargaining agreement must be applicable to work 
performed on the predecessor contract. Section 4(c) will be operative 
only if the employees who worked on the predecessor contract were 
actually paid in accordance with the wage and fringe benefit provisions 
of a predecessor contractor's collective

[[Page 77]]

bargaining agreement. Thus, for example, section 4(c) would not apply if 
the predecessor contractor entered into a collective bargaining 
agreement for the first time, which did not become effective until after 
the expiration of the predecessor contract. Likewise, the requirements 
of section 4(c) would not apply if the predecessor contractor's 
collective bargaining agreement applied only to other employees of the 
firm and not to the employees working on the contract.
    (g) Contract reconfigurations. As a result of changing priorities, 
mission requirements, or other considerations, contracting agencies may 
decide to restructure their support contracts. Thus, specific contract 
requirements from one contract may be broken out and placed in a new 
contract or combined with requirements from other contracts into a 
consolidated contract. The protections afforded service employees under 
section 4(c) are not lost or negated because of such contract 
reconfigurations, and the predecessor contractor's collectively 
bargained rates follow identifiable contract work requirements into new 
or consolidated contracts, provided that the new or consolidated 
contract is for services which were furnished in the same locality under 
a predecessor contract. See Sec. 4.163(i). However, where there is more 
than one predecessor contract to the new or consolidated contract, and 
where the predecessor contracts involve the same or similar function(s) 
of work, using substantially the same job classifications, the 
predecessor contract which covers the greater portion of the work in 
such function(s) shall be deemed to be the predecessor contract for 
purposes of section 4(c), and the collectively bargained wages and 
fringe benefits under that contract, if any, shall be applicable to such 
function(s). This limitation on the application of section 4(c) is 
necessary and proper in the public interest and is in accord with the 
remedial purpose of the Act to protect prevailing labor standards.
    (h) Interruption of contract services. Other than the requirement 
that substantially the same services be furnished, the requirement for 
arm's-length negotiations and the provision for variance hearings, the 
Act does not impose any other restrictions on the application of section 
4(c). Thus, the application of section 4(c) is not negated because the 
contracting authority may change and the successor contract is awarded 
by a different contracting agency. Also, there is no requirement that 
the successor contract commence immediately after the completion or 
termination of the predecessor contract, and an interruption of contract 
services does not negate the application of section 4(c). Contract 
services may be interrupted because the Government facility is 
temporarily closed for renovation, or because a predecessor defaulted on 
the contract or because a bid protest has halted a contract award 
requiring the Government to perform the services with its own employees. 
In all such cases, the requirements of section 4(c) would apply to any 
successor contract which may be awarded after the temporary interruption 
or hiatus. The basic principle in all of the preceding examples is that 
successorship provisions of section 4(c) apply to the full term 
successor contract. Therefore, temporary interim contracts, which allow 
a contracting agency sufficient time to solicit bids for a full term 
contract, also do not negate the application of section 4(c) to a full 
term successor contract.
    (i) Place of performance. The successorship requirements of section 
4(c) apply to all contracts for substantially the same services as were 
furnished under a predecessor contract in the same locality. As stated 
in Sec. 4.4(a)(2), a wage determination incorporated in the contract 
shall be applicable thereto regardless of whether the successful 
contractor subsequently changes the place(s) of contract performance. 
Similarly, the application of section 4(c) (and any wage determination 
issued pursuant to section 4(c) and included in the contract) is not 
negated by the fact that a successor prime contractor subsequently 
changes the place(s) of contract performance or subcontracts any part of 
the contract work to a firm which performs the work in a different 
locality.
    (j) Interpretation of wage and fringe benefit provisions of wage 
determinations issued pursuant to sections 2(a) and 4(c). Wage 
determinations which are issued

[[Page 78]]

for successor contracts subject to section 4(c) are intended to 
accurately reflect the rates and fringe benefits set forth in the 
predecessor's collective bargaining agreement. However, failure to 
include in the wage determination any job classification, wage rate, or 
fringe benefit encompassed in the collective bargaining agreement does 
not relieve the successor contractor of the statutory requirement to 
comply at a minimum with the terms of the collective bargaining 
agreement insofar as wages and fringe benefits are concerned. Since the 
successor's obligations are governed by the terms of the collective 
bargaining agreement, any interpretation of the wage and fringe benefit 
provisions of the collective bargaining agreement where its provisions 
are unclear must be based on the intent of the parties to the collective 
bargaining agreement, provided that such interpretation is not violative 
of law. Therefore, some of the principles discussed in Secs. 4.170 
through 4.177 regarding specific interpretations of the fringe benefit 
provisions of prevailing wage determinations may not be applicable to 
wage determinations issued pursuant to section 4(c). As provided in 
section 2(a)(2), a contractor may satisfy its fringe benefit obligations 
under any wage determination ``by furnishing any equivalent combinations 
of fringe benefits or by making equivalent or differential payments in 
cash'' in accordance with the rules and regulations set forth in 
Sec. 4.177 of this subpart.
    (k) No provision of this section shall be construed as permitting a 
successor contractor to pay its employees less than the wages and fringe 
benefits to which such employees would have been entitled under the 
predecessor contractor's collective bargaining agreement. Thus, some of 
the principles discussed in Sec. 4.167 may not be applicable in section 
4(c) successorship situations. For example, unless the predecessor 
contractor's collective bargaining agreement allowed the deduction from 
employees' wages of the reasonable cost or fair value for providing 
board, lodging, or other facilities, the successor may not include such 
costs as part of the applicable minimum wage specified in the wage 
determination. Likewise, unless the predecessor contractor's agreement 
allowed a tip credit (Sec. 4.6(q)), the successor contractor may not 
take a tip credit toward satisfying the minimum wage requirements under 
sections 2(a)(1) and 4(c).



Sec. 4.164  [Reserved]

                 Compliance with Compensation Standards



Sec. 4.165  Wage payments and fringe benefits--in general.

    (a)(1) Monetary wages specified under the Act shall be paid to the 
employees to whom they are due promptly and in no event later than one 
pay period following the end of the pay period in which they are earned. 
No deduction, rebate, or refund is permitted, except as hereinafter 
stated. The same rules apply to cash payments authorized to be paid with 
the statutory monetary wages as equivalents of determined fringe 
benefits (see Sec. 4.177).
    (2) The Act makes no distinction, with respect to its compensation 
provisions, between temporary, part-time, and full-time employees, and 
the wage and fringe benefit determinations apply, in the absence of an 
express limitation, equally to all such service employees engaged in 
work subject to the Act's provisions. (See Sec. 4.176 regarding fringe 
benefit payments to temporary and part-time employees.)
    (b) The Act does not prescribe the length of the pay period. 
However, for purposes of administration of the Act, and to conform with 
practices required under other statutes that may be applicable to the 
employment, wages and hours worked must be calculated on the basis of a 
fixed and regularly recurring workweek of seven consecutive 24-hour 
workday periods, and the records must be kept on this basis. It is 
appropriate to use this workweek for the pay period. A bi-weekly or 
semimonthly, pay period may, however, be used if advance notification is 
given to the affected employees. A pay period longer than semimonthly is 
not recognized as appropriate for service employees and wage payments at 
greater intervals will not be considered as constituting proper payments 
in compliance with the Act.

[[Page 79]]

    (c) The prevailing rate established by a wage determination under 
the Act is a minimum rate. A contractor is not precluded from paying 
wage rates in excess of those determined to be prevailing in the 
particular locality. Nor does the Act affect or require the changing of 
any provisions of union contracts specifying higher monetary wages or 
fringe benefits than those contained in an applicable determination. 
However, if an applicable wage determination contains a wage or fringe 
benefit provision for a class of service employees which is higher than 
that specified in an existing union agreement, the determination's 
provision must be observed for any work performed on a contract subject 
to that determination.



Sec. 4.166  Wage payments--unit of payment.

    The standard by which monetary wage payments are measured under the 
Act is the wage rate per hour. An hourly wage rate is not, however, the 
only unit for payment of wages that may be used for employees subject to 
the Act. Employees may be paid on a daily, weekly, or other time basis, 
or by piece or task rates, so long as the measure of work and 
compensation used, when translated or reduced by computation to an 
hourly basis each workweek, will provide a rate per hour that will 
fulfill the statutory requirement. Whatever system of payment is used, 
however, must ensure that each hour of work in performance of the 
contract is compensated at not less than the required minimum rate. 
Failure to pay for certain hours at the required rate cannot be 
transformed into compliance with the Act by reallocating portions of 
payments made for other hours which are in excess of the specified 
minimum.



Sec. 4.167  Wage payments--medium of payment.

    The wage payment requirements under the Act for monetary wages 
specified under its provisions will be satisfied by the timely payment 
of such wages to the employee either in cash or negotiable instrument 
payable at par. Such payment must be made finally and unconditionally 
and ``free and clear.'' Scrip, tokens, credit cards, ``dope checks'', 
coupons, salvage material, and similar devices which permit the employer 
to retain and prevent the employee from acquiring control of money due 
for the work until some time after the pay day for the period in which 
it was earned, are not proper mediums of payment under the Act. If, as 
is permissible, they are used as a convenient device for measuring 
earnings or allowable deductions during a single pay period, the 
employee cannot be charged with the loss or destruction of any of them 
and the employer may not, because the employee has not actually redeemed 
them, credit itself with any which remain outstanding on the pay day in 
determining whether it has met the requirements of the Act. The employer 
may not include the cost of fringe benefits or equivalents furnished as 
required under section 2(a)(2) of the Act, as a credit toward the 
monetary wages it is required to pay under section 2(a)(1) or 2(b) of 
the Act (see Sec. 4.170). However, the employer may generally include, 
as a part of the applicable minimum wage which it is required to pay 
under the Act, the reasonable cost or fair value, as determined by the 
Administrator, of furnishing an employee with ``board, lodging, or other 
facilities,'' as defined in part 531 of this title, in situations where 
such facilities are customarily furnished to employees, for the 
convenience of the employees, not primarily for the benefit of the 
employer, and the employees' acceptance of them is voluntary and 
uncoerced. (See also Sec. 4.163(k).) The determination of reasonable 
cost or fair value will be in accordance with the Administrator's 
regulations under the Fair Labor Standards Act, contained in such part 
531 of this title. While employment on contracts subject to the Act 
would not ordinarily involve situations in which service employees would 
receive tips from third persons, the treatment of tips for wage purposes 
in the situations where this may occur should be understood. For 
purposes of this Act, tips may generally be included in wages in 
accordance with the regulations under the Fair Labor Standards Act, 
contained in part 531. (See also Sec. 4.6(q) and Sec. 4.163(k).) The 
general rule under that Act is that the amount paid a tipped

[[Page 80]]

employee by his employer is deemed to be increased on account of tips by 
an amount determined by the employer, not in excess of 40 percent of the 
minimum wage applicable under section 6 of that Act, effective January 
1, 1980. Thus, the tip credit taken by an employer subject to the 
Service Contract Act may not exceed $1.34 per hour after December 31, 
1980. (See Sec. 4.163(k) for exceptions in section 4(c) situations.) In 
no event shall the sum credited be in excess of the value of tips 
actually received by the employee.

[48 FR 49762, Oct. 27, 1983; 48 FR 50529, Nov. 2, 1983]



Sec. 4.168  Wage payments--deductions from wages paid.

    (a) The wage requirements of the Act will not be met where 
unauthorized deductions, rebates, or refunds reduce the wage payment 
made to the employee below the minimum amounts required under the 
provisions of the Act and the regulations thereunder, or where the 
employee fails to receive such amounts free and clear because he ``kicks 
back'' directly or indirectly to the employer or to another person for 
the employer's benefit the whole or part of the wage delivered to him. 
Authorized deductions are limited to those required by law, such as 
taxes payable by employees required to be withheld by the employer and 
amounts due employees which the employer is required by court order to 
pay to another; deductions allowable for the reasonable cost or fair 
value of board, lodging, and facilities furnished as set forth in 
Sec. 4.167; and deductions of amounts which are authorized to be paid to 
third persons for the employee's account and benefit pursuant to his 
voluntary assignment or order or a collective bargaining agreement with 
bona fide representatives of employees which is applicable to the 
employer. Deductions for amounts paid to third persons on the employee's 
account which are not so authorized or are contrary to law or from which 
the contractor, subcontractor or any affiliated person derives any 
payment, rebate, commission, profit, or benefit directly or indirectly, 
may not be made if they cut into the wage required to be paid under the 
Act. The principles applied in determining the permissibility of 
deductions for payments made to third persons are explained in more 
detail in Secs. 531.38-531.40 of this title.
    (b) Cost of maintaining and furnishing uniforms. (1) If the 
employees are required to wear uniforms either by the employer, the 
nature of the job, or the Government contract, then the cost of 
furnishing and maintaining the uniforms is deemed to be a business 
expense of the employer and such cost may not be borne by the employees 
to the extent that to do so would reduce the employees' compensation 
below that required by the Act. Since it may be administratively 
difficult and burdensome for employers to determine the actual cost 
incurred by all employees for maintaining their own uniforms, payment in 
accordance with the following standards is considered sufficient for the 
contractor to satisfy its wage obligations under the Act:
    (i) The contractor furnishes all employees with an adequate number 
of uniforms without cost to the employees or reimburses employees for 
the actual cost of the uniforms.
    (ii) Where uniform cleaning and maintenance is made the 
responsibility of the employee, the contractor reimburses all employees 
for such cleaning and maintenance at the rate of $3.35 a week (or 67 
cents a day). Since employees are generally required to wear a clean 
uniform each day regardless of the number of hours the employee may work 
that day, the preceding weekly amount generally may be reduced to the 
stated daily equivalent but not to an hourly equivalent. A contractor 
may reimburse employees at a different rate if the contractor furnishes 
affirmative proof as to the actual cost to the employees of maintaining 
their uniforms or if a different rate is provided for in a bona fide 
collective bargaining agreement covering the employees working on the 
contract.
    (2) However, there generally is no requirement that employees be 
reimbursed for uniform maintenance costs in those instances where the 
uniforms furnished are made of ``wash and wear'' materials which may be 
routinely washed and dried with other personal garments, and do not 
generally require

[[Page 81]]

daily washing, dry cleaning, commercial laundering, or any other special 
treatment because of heavy soiling in work usage or in order to meet the 
cleanliness or appearance standards set by the terms of the Government 
contract, by the contractor, by law, or by the nature of the work. This 
limitation does not apply where a different provision has been set forth 
on the applicable wage determination. In the case of wage determinations 
issued under section 4(c) of the Act for successor contracts, the amount 
established by the parties to the predecessor collective bargaining 
agreement is deemed to be the cost of laundering wash and wear uniforms.
    (c) Stipends, allowances or other payments made directly to an 
employee by a party other than the employer (such as a stipend for 
training paid by the Veterans Administration) are not part of ``wages'' 
and the employer may not claim credit for such payments toward its 
monetary obligations under the Act.



Sec. 4.169  Wage payments--work subject to different rates.

    If an employee during a workweek works in different capacities in 
the performance of the contract and two or more rates of compensation 
under section 2 of the Act are applicable to the classes of work which 
he or she performs, the employee must be paid the highest of such rates 
for all hours worked in the workweek unless it appears from the 
employer's records or other affirmative proof which of such hours were 
included in the periods spent in each class of work. The rule is the 
same where such an employee is employed for a portion of the workweek in 
work not subject to the Act, for which compensation at a lower rate 
would be proper if the employer by his records or other affirmative 
proof, segregated the worktime thus spent.



Sec. 4.170  Furnishing fringe benefits or equivalents.

    (a) General. Fringe benefits required under the Act shall be 
furnished, separate from and in addition to the specified monetary 
wages, by the contractor or subcontractor to the employees engaged in 
performance of the contract, as specified in the determination of the 
Secretary or his authorized representative and prescribed in the 
contract documents. Section 2(a)(2) of the Act provides that the 
obligation to furnish the specified benefits ``may be discharged by 
furnishing any equivalent combinations of fringe benefits or by making 
equivalent or differential payments in cash under rules and regulations 
established by the Secretary.'' The governing rules and regulations for 
furnishing such equivalents are set forth in Sec. 4.177 of this subpart. 
An employer cannot offset an amount of monetary wages paid in excess of 
the wages required under the determination in order to satisfy his 
fringe benefit obligations under the Act, and must keep appropriate 
records separately showing amounts paid for wages and amounts paid for 
fringe benefits.
    (b) Meeting the requirement, in general. The various fringe benefits 
listed in the Act and in Sec. 4.162(a) are illustrative of those which 
may be found to be prevailing for service employees in a particular 
locality. The benefits which an employer will be required to furnish 
employees performing on a particular contract will be specified in the 
contract documents. A contractor may dispose of certain of the fringe 
benefit obligations which may be required by an applicable fringe 
benefit determination, such as pension, retirement, or health insurance, 
by irrevocably paying the specified contributions for fringe benefits to 
an independent trustee or other third person pursuant to an existing 
``bona fide'' fund, plan, or program on behalf of employees engaged in 
work subject to the Act's provisions. Where such a plan or fund does not 
exist, a contractor must discharge his obligation relating to fringe 
benefits by furnishing either an equivalent combination of ``bona fide'' 
fringe benefits or by making equivalent payments in cash to the 
employee, in accordance with the regulations in Sec. 4.177.



Sec. 4.171  ``Bona fide'' fringe benefits.

    (a) To be considered a ``bona fide'' fringe benefit for purposes of 
the Act, a fringe benefit plan, fund, or program must constitute a 
legally enforceable obligation which meets the following criteria:

[[Page 82]]

    (1) The provisions of a plan, fund, or program adopted by the 
contractor, or by contract as a result of collective bargaining, must be 
specified in writing, and must be communicated in writing to the 
affected employees. Contributions must be made pursuant to the terms of 
such plan, fund, or program. The plan may be either contractor-financed 
or a joint contractor-employee contributory plan. For example, employer 
contributions to Individual Retirement Accounts (IRAs) approved by IRS 
are permissible. However, any contributions made by employees must be 
voluntary, and if such contributions are made through payroll 
deductions, such deductions must be made in accordance with Sec. 4.168. 
No contribution toward fringe benefits made by the employees themselves, 
or fringe benefits provided from monies deducted from the employee's 
wages may be included or used by an employer in satisfying any part of 
any fringe benefit obligation under the Act.
    (2) The primary purpose of the plan must be to provide 
systematically for the payment of benefits to employees on account of 
death, disability, advanced age, retirement, illness, medical expenses, 
hospitalization, supplemental unemployment benefits, and the like.
    (3) The plan must contain a definite formula for determining the 
amount to be contributed by the contractor and a definite formula for 
determining the benefits for each of the employees participating in the 
plan.
    (4) Except as provided in paragraph (b), the contractor's 
contributions must be paid irrevocably to a trustee or third person 
pursuant to an insurance agreement, trust or other funded arrangement. 
The trustee must assume the usual fiduciary responsibilities imposed 
upon trustees by applicable law. The trust or fund must be set up in 
such a way that the contractor will not be able to recapture any of the 
contributions paid in nor in any way divert the funds to its own use or 
benefit.
    (5) Benefit plans or trusts of the types listed in 26 U.S.C. 401(a) 
which are disapproved by the Internal Revenue Service as not satisfying 
the requirements of section 401(a) of the Internal Revenue Code or which 
do not meet the requirements of the Employee Retirement Income Security 
Act of 1974, 29 U.S.C. 1001, et seq. and regulations thereunder, are not 
deemed to be ``bona fide'' plans for purposes of the Service Contract 
Act.
    (6) It should also be noted that such plans must meet certain other 
criteria as set forth in Sec. 778.215 of 29 CFR part 778 in order for 
any contributions to be excluded from computation of the regular rate of 
pay for overtime purposes under the Fair Labor Standards Act 
(Secs. 4.180-4.182).
    (b)(1) Unfunded self-insured fringe benefit plans (other than fringe 
benefits such as vacations and holidays which by their nature are 
normally unfunded) under which contractors allegedly make ``out of 
pocket'' payments to provide benefits as expenses may arise, rather than 
making irrevocable contributions to a trust or other funded arrangement 
as required under Sec. 4.171(a)(4), are not normally considered ``bona 
fide'' plans or equivalent benefits for purposes of the Act.
    (2) A contractor may request approval by the Administrator of an 
unfunded self-insured plan in order to allow credit for payments under 
the plan to meet the fringe benefit requirements of the Act. In 
considering whether such a plan is bona fide, the Administrator will 
consider such factors as whether it could be reasonably anticipated to 
provide the prescribed benefits, whether it represents a legally 
enforceable commitment to provide such benefits, whether it is carried 
out under a financially responsible program, and whether the plan has 
been communicated to the employees in writing. The Administrator in his/
her discretion may direct that assets be set aside and preserved in an 
escrow account or that other protections be afforded to meet the plan's 
future obligation.
    (c) No benefit required by any other Federal law or by any State or 
local law, such as unemployment compensation, workers' compensation, or 
social security, is a fringe benefit for purposes of the Act.
    (d) The furnishing to an employee of board, lodging, or other 
facilities under the circumstances described in Sec. 4.167, the cost or 
value of which is creditable

[[Page 83]]

toward the monetary wages specified under the Act, may not be used to 
offset any fringe benefit obligations, as such items and facilities are 
not fringe benefits or equivalent benefits for purposes of the Act.
    (e) The furnishing of facilities which are primarily for the benefit 
or convenience of the contractor or the cost of which is properly a 
business expense of the contractor is not the furnishing of a ``bona 
fide'' fringe benefit or equivalent benefit or the payment of wages. 
This would be true of such items, for example, as relocation expenses, 
travel and transportation expenses incident to employment, incentive or 
suggestion awards, and recruitment bonuses, as well as tools and other 
materials and services incidental to the employer's performance of the 
contract and the carrying on of his business, and the cost of 
furnishing, laundering, and maintaining uniforms and/or related apparel 
or equipment where employees are required by the contractor, by the 
contractor's Government contract, by law, or by the nature of the work 
to wear such items. See also Sec. 4.168.
    (f) Contributions by contractors for such items as social functions 
or parties for employees, flowers, cards, or gifts on employee 
birthdays, anniversaries, etc. (sunshine funds), employee rest or 
recreation rooms, paid coffee breaks, magazine subscriptions, and 
professional association or club dues, may not be used to offset any 
wages or fringe benefits specified in the contract, as such items are 
not ``bona fide'' wages or fringe benefits or equivalent benefits for 
purposes of the Act.



Sec. 4.172  Meeting requirements for particular fringe benefits--in general.

    Where a fringe benefit determination specifies the amount of the 
employer's contribution to provide the benefit, the amount specified is 
the actual minimum cash amount that must be provided by the employer for 
the employee. No deduction from the specified amount may be made to 
cover any administrative costs which may be incurred by the contractor 
in providing the benefits, as such costs are properly a business expense 
of the employer. If prevailing fringe benefits for insurance or 
retirement are determined in a stated amount, and the employer provides 
such benefits through contribution in a lesser amount, he will be 
required to furnish the employee with the difference between the amount 
stated in the determination and the actual cost of the benefits which he 
provides. Unless otherwise specified in the particular wage 
determination, such as one reflecting collectively bargained fringe 
benefit requirements, issued pursuant to section 4(c) of the Act, every 
employee performing on a covered contract must be furnished the fringe 
benefits required by that determination for all hours spent working on 
that contract up to a maximum of 40 hours per week and 2,080 (i.e., 52 
weeks of 40 hours each) per year, as these are the typical number of 
nonovertime hours of work in a week, and in a year, respectively. Since 
the Act's fringe benefit requirements are applicable on a contract-by-
contract basis, employees performing on more than one contract subject 
to the Act must be furnished the full amount of fringe benefits to which 
they are entitled under each contract and applicable wage determination. 
Where a fringe benefit determination has been made requiring employer 
contributions for a specified fringe benefit in a stated amount per 
hour, a contractor employing employees part of the time on contract work 
and part of the time on other work, may only credit against the hourly 
amount required for the hours spent on the contract work, the 
corresponding proportionate part of a weekly, monthly, or other amount 
contributed by him for such fringe benefits or equivalent benefits for 
such employees. If, for example, the determination requires health and 
welfare benefits in the amount of 30 cents an hour and the employer 
provides hospitalization insurance for such employees at a cost of 
$10.00 a week, the employer may credit 25 cents an hour ($10.00  
40) toward his fringe benefit obligation for such employees. If an 
employee works 25 hours on the contract work and 15 hours on other work, 
the employer cannot allocate the entire $10.00 to the 25 hours spent on 
contract work and take credit for 30 cents per hour in that manner, but 
must spread the cost over the full forty hours.

[[Page 84]]



Sec. 4.173  Meeting requirements for vacation fringe benefits.

    (a) Determining length of service for vacation eligibility. It has 
been found that for many types of service contracts performed at Federal 
facilities a successor contractor will utilize the employees of the 
previous contractor in the performance of the contract. The employees 
typically work at the same location providing the same services to the 
same clientele over a period of years, with periodic, often annual, 
changes of employer. The incumbent contractor, when bidding on a 
contract, must consider his liability for vacation benefits for those 
workers in his employ. If prospective contractors who plan to employ the 
same personnel were not required to furnish these employees with the 
same prevailing vacation benefits, it would place the incumbent 
contractor at a distinct competitive disadvantage as well as denying 
such employees entitlement to prevailing vacation benefits.
    (1) Accordingly, most vacation fringe benefit determinations issued 
under the Act require an employer to furnish to employees working on the 
contract a specified amount of paid vacation upon completion of a 
specified length of service with a contractor or successor. This 
requirement may be stated in the determination, for example, as ``one 
week paid vacation after one year of service with a contractor or 
successor'' or by a determination which calls for ``one week's paid 
vacation after one year of service''. Unless specified otherwise in an 
applicable fringe benefit determination, an employer must take the 
following two factors into consideration in determining when an employee 
has completed the required length of service to be eligible for vacation 
benefits:
    (i) The total length of time spent by an employee in any capacity in 
the continuous service of the present (successor) contractor, including 
both the time spent in performing on regular commercial work and the 
time spent in performing on the Government contract itself, and
    (ii) Where applicable, the total length of time spent in any 
capacity as an employee in the continuous service of any predecessor 
contractor(s) who carried out similar contract functions at the same 
Federal facility.
    (2) The application of these principles may be illustrated by the 
example given above of a fringe benefit determination calling for ``one 
week paid vacation after one year of service with a contractor or 
successor''. In that example, if a contractor has an employee who has 
worked for him for 18 months on regular commercial work and only for 6 
months on a Government service contract, that employee would be eligible 
for the one week vacation since his total service with the employer adds 
up to more than 1 year. Similarly, if a contractor has an employee who 
worked for 16 months under a janitorial service contract at a particular 
Federal base for two different predecessor contractors, and only 8 
months with the present employer, that employee would also be considered 
as meeting the ``after one year of service'' test and would thus be 
eligible for the specified vacation.
    (3) The ``contractor or successor'' requirement set forth in 
paragraph (a)(1) of this section is not affected by the fact that a 
different contracting agency may have contracted for the services 
previously or by the agency's dividing and/or combining the contract 
services. However, prior service as a Federal employee is not counted 
toward an employee's eligibility for vacation benefits under fringe 
benefit determinations issued pursuant to the Act.
    (4) Some fringe benefit determinations may require an employer to 
furnish a specified amount of paid vacation upon completion of a 
specified length of service with the employer, for example, ``one week 
paid vacation after one year of service with an employer''. Under such 
determinations, only the time spent in performing on commercial work and 
on Government contract work in the employment of the present contractor 
need be considered in computing the length of service for purposes of 
determining vacation eligibility.
    (5) Whether or not the predecessor contract(s) was covered by a 
fringe benefit determination is immaterial in determining whether the 
one year of

[[Page 85]]

service test has been met. This qualification refers to work performed 
before, as well as after, an applicable fringe benefit determination is 
incorporated into a contract. Also, the fact that the labor standards in 
predecessor service contract(s) were only those required under the Fair 
Labor Standards Act has no effect on the applicable fringe benefit 
determination contained in a current contract.
    (b) Eligibility requirement--continuous service. Under the 
principles set forth above, if an employee's total length of service 
adds up to at least one year, the employee is eligible for vacation with 
pay. However, such service must have been rendered continuously for a 
period of not less than one year for vacation eligibility. The term 
``continuous service'' does not require the combination of two entirely 
separate periods of employment. Whether or not there is a break in the 
continuity of service so as to make an employee ineligible for a 
vacation benefit is dependent upon all the facts in the particular case. 
No fixed time period has been established for determining whether an 
employee has a break in service. Rather, as illustrated below, the 
reason(s) for an employee's absence from work is the primary factor in 
determining whether a break in service occurred.
    (1) In cases where employees have been granted leave with or without 
pay by their employer, or are otherwise absent with permission for such 
reasons as sickness or injury, or otherwise perform no work on the 
contract because of reasons beyond their control, there would not be a 
break in service. Likewise, the absence from work for a few days, with 
or without notice, does not constitute a break in service, without a 
formal termination of employment. The following specific examples are 
illustrative situations where it has been determined that a break in 
service did not occur:
    (i) An employee absent for five months due to illness but employed 
continuously for three years.
    (ii) A strike after which employees returned to work.
    (iii) An interim period of three months between contracts caused by 
delays in the procurement process during which time personnel hired 
directly by the Government performed the necessary services. However, 
the successor contractor in this case was not held liable for vacation 
benefits for those employees who had anniversary dates of employment 
during the interim period because no employment relationship existed 
during such period.
    (iv) A mess hall closed three months for renovation. Contractor 
employees were considered to be on temporary layoff during the 
renovation period and did not have a break in service.
    (2) Where an employee quits, is fired for cause, or is otherwise 
terminated (except for temporary layoffs), there would be a break in 
service even if the employee were rehired at a later date. However, an 
employee may not be discharged and rehired as a subterfuge to evade the 
vacation requirement.
    (c) Vesting and payment of vacation benefits. (1) In the example 
given in paragraph (a)(1) of this section of a fringe benefit 
determination calling for ``one week paid vacation after 1 year of 
service with a contractor or successor'', an employee who renders the 
``one year of service'' continuously becomes eligible for the ``one week 
paid vacation'' (i.e., 40 hours of paid vacation, unless otherwise 
specified in an applicable wage determination) upon his anniversary date 
of employment and upon each succeeding anniversary date thereafter. 
However, there is no accrual or vesting of vacation eligibility before 
the employee's anniversary date of employment, and no segment of time 
smaller than one year need be considered in computing the employer's 
vacation liability, unless specifically provided for in a particular 
fringe benefit determination. For example, an employee who has worked 13 
months for an employer subject to such stipulations and is separated 
without receiving any vacation benefit is entitled only to one full 
week's (40 hours) paid vacation. He would not be entitled to the 
additional fraction of one-twelfth of one week's paid vacation for the 
month he worked in the second year unless otherwise stated in the 
applicable wage determination. An employee who has not met the ``one 
year of service'' requirement would not be

[[Page 86]]

entitled to any portion of the ``one week paid vacation''.
    (2) Eligibility for vacation benefits specified in a particular wage 
determination is based on completion of the stated period of past 
service. The individual employee's anniversary date (and each annual 
anniversary date of employment thereafter) is the reference point for 
vesting of vacation eligibility, but does not necessarily mean that the 
employee must be given the vacation or paid for it on the date on which 
it is vested. The vacation may be scheduled according to a reasonable 
plan mutually agreed to and communicated to the employees. A 
``reasonable'' plan may be interpreted to be a plan which allows the 
employer to maintain uninterrupted contract services but allows the 
employee some choice, by seniority or similar factor, in the scheduling 
of vacations. However, the required vacation must be given or payment 
made in lieu thereof before the next anniversary date, before completion 
of the current contract, or before the employee terminates employment, 
whichever occurs first.
    (d) Contractor liability for vacation benefits. (1) The liability 
for an employee's vacation is not prorated among contractors unless 
specifically provided for under a particular fringe benefit 
determination. The contractor by whom a person is employed at the time 
the vacation right vests, i.e., on the employee's anniversary date of 
employment, must provide the full benefit required by the determination 
which is applicable on that date. For example, an employee, who had not 
previously performed similar contract work at the same facility, was 
first hired by a predecessor contractor on July 1, 1978. July 1 is the 
employee's anniversary date. The predecessor's contract ended June 30, 
1979, but the employee continued working on the contract for the 
successor. Since the employee did not have an anniversary date of 
employment during the predecessor's contract, the predecessor would not 
have any vacation liability with respect to this employee. However, on 
July 1, 1979 the employee's entitlement to the full vacation benefit 
vested and the successor contractor would be liable for the full amount 
of the employee's vacation benefit.
    (2) The requirements for furnishing data relative to employee hiring 
dates in situations where such employees worked for ``predecessor'' 
contractors are set forth in Sec. 4.6. However, a contractor is not 
relieved from any obligation to provide vacation benefits because of any 
difficulty in obtaining such data.
    (e) Rate applicable to computation of vacation benefits. (1) If an 
applicable wage determination requires that the hourly wage rate be 
increased during the period of the contract, the rate applicable to the 
computation of any required vacation benefits is the hourly rate in 
effect in the workweek in which the actual paid vacation is provided or 
the equivalent is paid, as the case may be, and would not be the average 
of the two hourly rates. This rule would not apply to situations where a 
wage determination specified the method of computation and the rate to 
be used.
    (2) As set forth in Sec. 4.172, unless specified otherwise in an 
applicable fringe benefit determination, service employees must be 
furnished the required amount of fringe benefits for all hours paid for 
up to a maximum of 40 hours per week and 2,080 hours per year. Thus, an 
employee on paid vacation leave would accrue and must be compensated for 
any other applicable fringe benefits specified in the fringe benefit 
determination, and if any of the other benefits are furnished in the 
form of cash equivalents, such equivalents must be included with the 
applicable hourly wage rate in computing vacation benefits or a cash 
equivalent therefor. The rules and regulations for computing cash 
equivalents are set forth in Sec. 4.177.



Sec. 4.174  Meeting requirements for holiday fringe benefits.

    (a) Determining eligibility for holiday benefits--in general. (1) 
Most fringe benefit determinations list a specific number of named 
holidays for which payment is required. Unless specified otherwise in an 
applicable determination, an employee who performs any work during the 
workweek in which a named holiday occurs is entitled to the holiday 
benefit, regardless of whether the

[[Page 87]]

named holiday falls on a Sunday, another day during the workweek on 
which the employee is not normally scheduled to work, or on the 
employee's day off. In addition, holiday benefits cannot be denied 
because the employee has not been employed by the contractor for a 
designated period prior to the named holiday or because the employee did 
not work the day before or the day after the holiday, unless such 
qualifications are specifically included in the determination.
    (2) An employee who performs no work during the workweek in which a 
named holiday occurs is generally not entitled to the holiday benefit. 
However, an employee who performs no work during the workweek because he 
is on paid vacation or sick leave in accordance with the terms of the 
applicable fringe benefit determination is entitled to holiday pay or 
another day off with pay to substitute for the named holiday. In 
addition, an employee who performs no work during the workweek because 
of a layoff does not forfeit his entitlement to holiday benefits if the 
layoff is merely a subterfuge by the contractor to avoid the payment of 
such benefits.
    (3) The obligation to furnish holiday pay for the named holiday may 
be discharged if the contractor furnishes another day off with pay in 
accordance with a plan communicated to the employees involved. However, 
in such instances the holidays named in the fringe benefit determination 
are the reference points for determining whether an employee is eligible 
to receive holiday benefits. In other words, if an employee worked in a 
workweek in which a listed holiday occurred, the employee is entitled to 
pay for that holiday. Some determinations may provide for a specific 
number of holidays without naming them. In such instances the contractor 
is free to select the holidays to be taken in accordance with a plan 
communicated to the employees involved, and the agreed-upon holidays are 
the reference points for determining whether an employee is eligible to 
receive holiday benefits.
    (b) Determining eligibility for holiday benefits--newly hired 
employees. The contractor generally is not required to compensate a 
newly hired employee for the holiday occurring prior to the hiring of 
the employee. However, in the one situation where a named holiday falls 
in the first week of a contract, all employees who work during the first 
week would be entitled to holiday pay for that day. For example, if a 
contract to provide services for the period January 1 through December 
31 contained a fringe benefit determination listing New Year's Day as a 
named holiday, and if New Year's Day were officially celebrated on 
January 2 in the year in question because January 1 fell on a Sunday, 
employees hired to begin work on January 3 would be entitled to holiday 
pay for New Year's Day.
    (c) Payment of holiday benefits. (1) A full-time employee who is 
eligible to receive payment for a named holiday must receive a full 
day's pay up to 8 hours unless a different standard is used in the 
fringe benefit determination, such as one reflecting collectively 
bargained holiday benefit requirements issued pursuant to section 4(c) 
of the Act or a different historic practice in an industry or locality. 
Thus, for example, a contractor must furnish 7 hours of holiday pay to a 
full-time employee whose scheduled workday consists of 7 hours. An 
employee whose scheduled workday is 10 hours would be entitled to a 
holiday payment of 8 hours unless a different standard is used in the 
determination. As discussed in Sec. 4.172, such holiday pay must include 
the full amount of other fringe benefits to which the employee is 
entitled.
    (2) Unless a different standard is used in the wage determination, a 
full-time employee who works on the day designated as a holiday must be 
paid, in addition to the amount he ordinarily would be entitled to for 
that day's work, the cash equivalent of a full-day's pay up to 8 hours 
or be furnished another day off with pay.
    (3) If the fringe benefit determination lists the employee's 
birthday as a paid holiday and that day coincides with another listed 
holiday, the contractor may discharge his obligation to furnish payment 
for the second holiday by either substituting another day off with pay 
with the consent of the employee, furnishing holiday benefits of an 
extra day's pay, or if the employee works on

[[Page 88]]

the holiday in question, furnish holiday benefits of two extra days' 
pay.
    (4) As stated in paragraph (a)(1) of this section, an employee's 
entitlement to holiday pay fully vests by working in the workweek in 
which the named holiday occurs. Accordingly, any employee who is 
terminated before receiving the full amount of holiday benefits due him 
must be paid the holiday benefits as a final cash payment.
    (5) The rules and regulations for furnishing holiday pay to 
temporary and part-time employees are discussed in Sec. 4.176.
    (6) The rules and regulations for furnishing equivalent fringe 
benefits or cash equivalents in lieu of holiday pay are discussed in 
Sec. 4.177.



Sec. 4.175  Meeting requirements for health, welfare, and/or pension benefits.

    (a) Determining the required amount of benefits. (1) Most fringe 
benefit determinations containing health and welfare and/or pension 
requirements specify a fixed payment per hour on behalf of each service 
employee. These payments are usually also stated as weekly or monthly 
amounts. As set forth in Sec. 4.172, unless specified otherwise in the 
applicable determination such payments are due for all hours paid for, 
including paid vacation, sick leave, and holiday hours, up to a maximum 
of 40 hours per week and 2,080 hours per year on each contract. The 
application of this rule can be illustrated by the following examples:
    (i) An employee who works 4 days a week, 10 hours a day is entitled 
to 40 hours of health and welfare and/or pension fringe benefits. If an 
employee works 3 days a week, 12 hours a day, then such employee is 
entitled to 36 hours of these benefits.
    (ii) An employee who works 32 hours in a workweek and also receives 
8 hours of holiday pay is entitled to the maximum of 40 hours of health 
and welfare and/or pension payments in that workweek. If the employee 
works more than 32 hours and also received 8 hours of holiday pay, the 
employee is still only entitled to the maximum of 40 hours of health and 
welfare and/or pension payments.
    (iii) If an employee is off work for two weeks on vacation and 
received 80 hours of vacation pay, the employee must also receive 
payment for the 80 hours of health and welfare and/or pension benefits 
which accrue during the vacation period.
    (iv) An employee entitled to two weeks paid vacation who instead 
works the full 52 weeks in the year, receiving the full 2,080 hours 
worth of health and welfare and/or pension benefits, would be due an 
extra 80 hours of vacation pay in lieu of actually taking the vacation; 
however, such an employee would not be entitled to have an additional 80 
hours of health and welfare and/or pension benefits included in his 
vacation pay.
    (2) A fringe benefit determination calling for a specified benefit 
such as health insurance contemplates a fixed and definite contribution 
to a ``bona fide'' plan (as that term is defined in Sec. 4.171) by an 
employer on behalf of each employee, based on the monetary cost to the 
employer rather than on the level of benefits provided. Therefore, in 
determining compliance with an applicable fringe benefit determination, 
the amount of the employer's contribution on behalf of each individual 
employee governs. Thus, as set forth in Sec. 4.172, if a determination 
should require a contribution to a plan providing a specified fringe 
benefit and that benefit can be obtained for less than the required 
contribution, it would be necessary for the employer to make up the 
difference in cash to the employee, or furnish equivalent benefits, or a 
combination thereof. The following illustrates the application of this 
principle: A fringe benefit determination requires a rate of $36.40 per 
month per employee for a health insurance plan. The employer obtains the 
health insurance coverage specified at a rate of $20.45 per month for a 
single employee, $30.60 for an employee with spouse, and $40.90 for an 
employee with a family. The employer is required to make up the 
difference in cash or equivalent benefits to the first two classes of 
employees in order to satisfy the determination, notwithstanding that 
coverage for an employee would be automatically changed by the employer 
if the employee's status should

[[Page 89]]

change (e.g., single to married) and notwithstanding that the employer's 
average contribution per employee may be equal to or in excess of $36.40 
per month.
    (3) In determining eligibility for benefits under certain wage 
determinations containing hours or length of service requirements (such 
as having to work 40 hours in the preceding month), the contractor must 
take into account time spent by employees on commercial work as well as 
time spent on the Government contract.
    (b) Some fringe benefit determinations specifically provide for 
health and welfare and/or pension benefits in terms of average cost. 
Under this concept, a contractor's contributions per employee to a 
``bona fide'' fringe benefit plan are permitted to vary depending upon 
the individual employee's marital or employment status. However, the 
firm's total contributions for all service employees enrolled in the 
plan must average at least the fringe benefit determination requirement 
per hour per service employee. If the contractor's contributions average 
less than the amount required by the determination, then the firm must 
make up the deficiency by making cash equivalent payments or equivalent 
fringe benefit payments to all service employees in the plan who worked 
on the contract during the payment period. Where such deficiencies are 
made up by means of cash equivalent payments, the payments must be made 
promptly on the following payday. The following illustrates the 
application of this principle: The determination requires an average 
contribution of $0.84 an hour. The contractor makes payments to bona 
fide fringe benefit plans on a monthly basis. During a month the firm 
contributes $15,000 for the service employees employed on the contract 
who are enrolled in the plan, and a total of 20,000 man-hours had been 
worked by all service employees during the month. Accordingly, the 
firm's average cost would have been $15,00020,000 hours or $0.75 
per hour, resulting in a deficiency of $0.09 per hour. Therefore, the 
contractor owes the service employees in the plan who worked on the 
contract during the month an additional $0.09 an hour for each hour 
worked on the contract, payable on the next regular payday for wages. 
Unless otherwise provided in the applicable wage determination, 
contributions made by the employer for non-service employees may not be 
credited toward meeting Service Contract Act fringe benefit obligations.
    (c) Employees not enrolled in or excluded from participating in 
fringe benefit plans. (1) Some health and welfare and pension plans 
contain eligibility exclusions for certain employees. For example, 
temporary and part-time employees may be excluded from participating in 
such plans. Also, employees receiving benefits through participation in 
plans of an employer other than the Government contractor or by a 
spouse's employer may be prevented from receiving benefits from the 
contractor's plan because of prohibitions against ``double coverage''. 
While such exclusions do not invalidate an otherwise bona fide insurance 
plan, employer contributions to such a plan cannot be considered to be 
made on behalf of the excluded employees. Accordingly, under fringe 
benefit determination requirements as described in paragraph (a)(2) of 
this section, the employees excluded from participation in the health 
insurance plan must be furnished equivalent bona fide fringe benefits or 
be paid a cash equivalent payment during the period that they are not 
eligible to participate in the plan.
    (2) It is not required that all employees participating in a fringe 
benefit plan be entitled to receive benefits from that plan at all 
times. For example, under some plans, newly hired employees who are 
eligible to participate in an insurance plan from their first day of 
employment may be prohibited from receiving benefits from the plan 
during a specified ``waiting period''. Contributions made on behalf of 
such employees would serve to discharge the contractor's obligation to 
furnish the fringe benefit. However, if no contributions are made for 
such employees, no credit may be taken toward the contractor's fringe 
benefit obligations.
    (d) Payment of health and welfare and pension benefits. (1) Health 
and welfare and/or pension payments to a ``bona fide'' insurance plan or 
trust program may be made on a periodic payment

[[Page 90]]

basis which is not less often than quarterly. However, where fringe 
benefit determinations contemplate a fixed contribution on behalf of 
each employee, and a contractor exercises his option to make hourly cash 
equivalent or differential payments, such payments must be made promptly 
on the regular payday for wages. (See Sec. 4.165.)
    (2) The rules and regulations for furnishing health and welfare and 
pension benefits to temporary and part-time employees are discussed in 
Sec. 4.176.
    (3) The rules and regulations for furnishing equivalent fringe 
benefits or cash equivalents in lieu of health and welfare and pension 
benefits are discussed in Sec. 4.177.



Sec. 4.176  Payment of fringe benefits to temporary and part-time employees.

    (a) As set forth in Sec. 4.165(a)(2), the Act makes no distinction, 
with respect to its compensation provisions, between temporary, part-
time, and full-time employees. Accordingly, in the absence of express 
limitations, the provisions of an applicable fringe benefit 
determination apply to all temporary and part-time service employees 
engaged in covered work. However, in general, such temporary and part-
time employees are only entitled to an amount of the fringe benefits 
specified in an applicable determination which is proportionate to the 
amount of time spent in covered work. The application of these 
principles may be illustrated by the following examples:
    (1) Assuming the paid vacation for full-time employees is one week 
of 40 hours, a part-time employee working a regularly scheduled workweek 
of 16 hours is entitled to 16 hours of paid vacation time or its 
equivalent each year, if all other qualifications are met.
    (2) In the case of holidays, a part-time employee working a 
regularly scheduled workweek of 16 hours would be entitled to two-fifths 
of the holiday pay due full-time employees. It is immaterial whether or 
not the holiday falls on a normal workday of the part-time employee. 
Except as provided in Sec. 4.174(b), a temporary or casual employee 
hired during a holiday week, but after the holiday, would be due no 
holiday benefits for that week.
    (3) Holiday or vacation pay obligations to temporary and part-time 
employees working an irregular schedule of hours may be discharged by 
paying such employees a proportion of the holiday or vacation benefits 
due full-time employees based on the number of hours each such employee 
worked in the workweek prior to the workweek in which the holiday occurs 
or, with respect to vacations, the number of hours which the employee 
worked in the year preceding the employee's anniversary date of 
employment. For example:
    (i) An employee works 10 hours during the week preceding July 4, a 
designated holiday. The employee is entitled to 10/40 of the holiday pay 
to which a full-time employee is entitled (i.e., 10/40 times 8=2 hours 
holiday pay).
    (ii) A part-time employee works 520 hours during the 12 months 
preceding the employee's anniversary date. Since the typical number of 
nonovertime hours in a year of work is 2,080, if a full-time employee 
would be entitled to one week (40 hours) paid vacation under the 
applicable fringe benefit determination, then the part-time employee 
would be entitled to 520/2,080 times 40=10 hours paid vacation.
    (4) A part-time employee working a regularly scheduled workweek of 
20 hours would be entitled to one-half of the health and welfare and/or 
pension benefits specified in the applicable fringe benefit 
determination. Thus, if the determination requires $36.40 per month for 
health insurance, the contractor could discharge his obligation towards 
the employee in question by providing a health insurance policy costing 
$18.20 per month.
    (b) A contractor's obligation to furnish the specified fringe 
benefits to temporary and part-time employees may be discharged by 
furnishing equivalent benefits, cash equivalents, or a combination 
thereof in accordance with the rules and regulations set forth in 
Sec. 4.177.



Sec. 4.177  Discharging fringe benefit obligations by equivalent means.

    (a) In general. (1) Section 2(a)(2) of the Act, which provides for 
fringe benefits that are separate from and in addition to the monetary 
compensation required under section 2(a)(1), permits an

[[Page 91]]

employer to discharge his obligation to furnish the fringe benefits 
specified in an applicable fringe benefit determination by furnishing 
any equivalent combinations of ``bona fide'' fringe benefits or by 
making equivalent or differential payments in cash. However, credit for 
such payments is limited to the employer's fringe benefit obligations 
under section 2(a)(2), since the Act does not authorize any part of the 
monetary wage required by section 2(a)(1) and specified in the wage 
determination and the contract, to be offset by the fringe benefit 
payments or equivalents which are furnished or paid pursuant to section 
2(a)(2).
    (2) When a contractor substitutes fringe benefits not specified in 
the fringe benefit determination contained in the contract for fringe 
benefits which are so specified, the substituted fringe benefits, like 
those for which the contract provisions are prescribed, must be ``bona 
fide'' fringe benefits, as that term is defined in Sec. 4.171.
    (3) When a contractor discharges his fringe benefit obligation by 
furnishing, in lieu of those benefits specified in the applicable fringe 
benefit determination, other ``bona fide'' fringe benefits, cash 
payments, or a combination thereof, the substituted fringe benefits and/
or cash payments must be ``equivalent'' to the benefits specified in the 
determination. As used in this subpart, the terms equivalent fringe 
benefit and cash equivalent mean equal in terms of monetary cost to the 
contractor. Thus, as set forth in Sec. 4.172, if an applicable fringe 
benefit determination calls for a particular fringe benefit in a stated 
amount and the contractor furnished this benefit through contributions 
in a lesser amount, the contractor must furnish the employee with the 
difference between the amount stated in the determination and the actual 
cost of the benefit which the contractor provides. This principle may be 
illustrated by the example given in Sec. 4.175(a)(2).
    (b) Furnishing equivalent fringe benefits. (1) A contractor's 
obligation to furnish fringe benefits which are stated in a specified 
cash amount may be discharged by furnishing any combination of ``bona 
fide'' fringe benefits costing an equal amount. Thus, if an applicable 
determination specifies that 20 cents per hour is to be paid into a 
pension fund, this fringe benefit obligation will be deemed to be met 
if, instead, hospitalization benefits costing not less than 20 cents per 
hour are provided. The same obligation will be met if hospitalization 
benefits costing 10 cents an hour and life insurance benefits costing 10 
cents an hour are provided. As set forth in Sec. 4.171(c), no benefit 
required to be furnished the employee by any other law, such as workers' 
compensation, may be credited toward satisfying the fringe benefit 
requirements of the Act.
    (2) A contractor who wishes to furnish equivalent fringe benefits in 
lieu of those benefits which are not stated in a specified cash amount, 
such as ``one week paid vacation'', must first determine the equivalent 
cash value of such benefits in accordance with the rules set forth in 
paragraph (c) of this section.
    (c) Furnishing cash equivalents. (1) Fringe benefit obligations may 
be discharged by paying to the employee on his regular payday, in 
addition to the monetary wage required, a cash amount per hour in lieu 
of the specified fringe benefits, provided such amount is equivalent to 
the cost of the fringe benefits required. If, for example, an employee's 
monetary rate under an applicable determination is $4.50 an hour, and 
the fringe benefits to be furnished are hospitalization benefits costing 
20 cents an hour and retirement benefits costing 20 cents an hour, the 
fringe benefit obligation is discharged if instead of furnishing the 
required fringe benefits, the employer pays the employee, in cash, 40 
cents per hour as the cash equivalent of the fringe benefits in addition 
to the $4.50 per hour wage rate required under the applicable wage 
determination.
    (2) The hourly cash equivalent of those fringe benefits which are 
not stated in the applicable determination in terms of hourly cash 
amounts may be obtained by mathematical computation through the use of 
pertinent factors such as the monetary wages paid the employee and the 
hours of work attributable to the period, if any, by which fringe 
benefits are measured in the determination. If the employee's regular 
rate of pay is greater than the

[[Page 92]]

minimum monetary wage specified in the wage determination and the 
contract, the former must be used for this computation, and if the 
fringe benefit determination does not specify any daily or weekly hours 
of work by which benefits are to be measured, a standard 8-hour day and 
40-hour week will be considered applicable. The application of these 
rules in typical situations is illustrated in paragraphs (c)(3) through 
(7) of this section.
    (3) Where fringe benefits are stated as a percentage of the monetary 
rate, the hourly cash equivalent is determined by multiplying the stated 
percentage by the employees' regular or basic (i.e., wage determination) 
rate of pay, whichever is greater. For example, if the determination 
calls for a 5 percent pension fund payment and the employee is paid a 
monetary rate of $4.50 an hour, or if the employee earns $4.50 an hour 
on a piece-work basis in a particular workweek, the cash equivalent of 
that payment would be 22\1/2\ cents an hour.
    (4) If the determination lists a particular fringe benefit in such 
terms as $8 a week, the hourly cash equivalent is determined by dividing 
the amount stated in the determination by the number of working hours to 
which the amount is attributable. For example, if a determination lists 
a fringe benefit as ``pension--$8 a week'', and does not specify weekly 
hours, the hourly cash equivalent is 20 cents per hour, i.e., $8 divided 
by 40, the standard number of non-overtime working hours in a week.
    (5) In determining the hourly cash equivalent of those fringe 
benefits which are not stated in the determination in terms of a cash 
amount, but are stated, for example, as ``nine paid holidays per year'' 
or ``1 week paid vacation after one year of service'', the employee's 
hourly monetary rate of pay is multiplied by the number of hours making 
up the paid holidays or vacation. Unless the hours contemplated in the 
fringe benefit are specified in the determination, a standard 8-hour day 
and 40-hour week is considered applicable. The total annual cost so 
determined is divided by 2,080, the standard number of non-overtime 
hours in a year of work, to arrive at the hourly cash equivalent. This 
principle may be illustrated by the following examples:
    (i) If a particular determination lists as a fringe benefit ``nine 
holidays per year'' and the employee's hourly rate of pay is $4.50, the 
$4.50 is multiplied by 72 (9 days of 8 hours each) and the result, $324, 
is then divided by 2,080 to arrive at the hourly cash equivalent, 
$0.1557 an hour. See Sec. 4.174(c)(4).
    (ii) If the determination requires ``one week paid vacation after 
one year of service'', and the employee's hourly rate of pay is $4.50, 
the $4.50 is multiplied by 40 and the result, $180.00, is then divided 
by 2,080 to arrive at the hourly cash equivalent, $0.0865 an hour.
    (6) Where an employer elects to pay an hourly cash equivalent in 
lieu of a paid vacation, which is computed in accordance with paragraph 
(c)(5) of this section, such payments need commence only after the 
employee has satisfied the ``after one year of service'' requirement. 
However, should the employee terminate employment for any reason before 
receiving the full amount of vested vacation benefits due, the employee 
must be paid the full amount of any difference remaining as the final 
cash payment. For example, an employee becomes eligible for a week's 
vacation pay on March 1. The employer elects to pay this employee an 
hourly cash equivalent beginning that date; the employee terminates 
employment on March 31. Accordingly, as this employee has received only 
\1/12\ of the vacation pay to which he/she is entitled, the employee is 
due the remaining \11/12\ upon termination. As set forth in 
Sec. 4.173(e), the rate applicable to the computation of cash 
equivalents for vacation benefits is the hourly wage rate in effect at 
the time such equivalent payments are actually made.
    (d) Furnishing a combination of equivalent fringe benefits and cash 
payments. Fringe benefit obligations may be discharged by furnishing any 
combination of cash or fringe benefits as illustrated in the preceding 
paragraphs of this section, in monetary amounts the total of which is 
equivalent, under the rules therein stated, to the determined fringe 
benefits specified in the contract. For example, if an applicable 
determination specifies that 20 cents per hour is to be paid into a 
pension fund,

[[Page 93]]

this fringe benefit obligation will be deemed to be met if instead, 
hospitalization benefits costing 15 cents an hour and a cash equivalent 
payment of 5 cents an hour are provided.
    (e) Effect of equivalents in computing overtime pay. Section 6 of 
the Act excludes from the regular or basic hourly rate of an employee, 
for purposes of determining the overtime pay to which the employee is 
entitled under any other Federal law, those fringe benefit payments 
computed under the Act which are excluded from the regular rate under 
the Fair Labor Standards Act by provisions of section 7(e) (formerly 
designated as section 7(d)) of that Act (29 U.S.C. 207(e)). Fringe 
benefit payments which qualify for such exclusion are described in 
subpart C of Regulations, 29 CFR part 778. When such fringe benefits are 
required to be furnished to service employees engaged in contract 
performance, the right to compute overtime pay in accordance with the 
above rule is not lost to a contractor or subcontractor because it 
discharges its obligation under this Act to furnish such fringe benefits 
through alternative equivalents as provided in this section. If it 
furnishes equivalent benefits or makes cash payments, or both, to such 
an employee as authorized herein, the amounts thereof, which discharge 
the employer's obligation to furnish such specified fringe benefits, may 
be excluded pursuant to this Act from the employee's regular or basic 
rate of pay in computing any overtime pay due the employee under any 
other Federal law. No such exclusion can operate, however, to reduce an 
employee's regular or basic rate of pay below the monetary wage rate 
specified as the applicable minimum wage rates under sections 2(a)(1), 
2(b), or 4(c) of this Act or under other law or an employment contract.



Sec. 4.178  Computation of hours worked.

    Since employees subject to the Act are entitled to the minimum 
compensation specified under its provisions for each hour worked in 
performance of a covered contract, a computation of their hours worked 
in each workweek when such work under the contract is performed is 
essential. Determinations of hours worked will be made in accordance 
with the principles applied under the Fair Labor Standards Act as set 
forth in part 785 of this title which is incorporated herein by 
reference. In general, the hours worked by an employee include all 
periods in which the employee is suffered or permitted to work whether 
or not required to do so, and all time during which the employee is 
required to be on duty or to be on the employer's premises or to be at a 
prescribed workplace. The hours worked which are subject to the 
compensation provisions of the Act are those in which the employee is 
engaged in performing work on contracts subject to the Act. However, 
unless such hours are adequately segregated, as indicated in Sec. 4.179, 
compensation in accordance with the Act will be required for all hours 
of work in any workweek in which the employee performs any work in 
connection with the contract, in the absence of affirmative proof to the 
contrary that such work did not continue throughout the workweek.



Sec. 4.179  Identification of contract work.

    Contractors and subcontractors under contracts subject to the Act 
are required to comply with its compensation requirements throughout the 
period of performance on the contract and to do so with respect to all 
employees who in any workweek are engaged in performing work on such 
contracts. If such a contractor during any workweek is not exclusively 
engaged in performing such contracts, or if while so engaged it has 
employees who spend a portion but not all of their worktime in the 
workweek in performing work on such contracts, it is necessary for the 
contractor to identify accurately in its records, or by other means, 
those periods in each such workweek when the contractor and each such 
employee performed work on such contracts. In cases where contractors 
are not exclusively engaged in Government contract work, and there are 
adequate records segregating the periods in which work was performed on 
contracts subject to the Act from periods in which other work was 
performed, the compensation specified under the Act need not be paid for 
hours spent on non-contract work. However, in the absence of records 
adequately segregating non-

[[Page 94]]

covered work from the work performed on or in connection with the 
contract, all employees working in the establishment or department where 
such covered work is performed shall be presumed to have worked on or in 
connection with the contract during the period of its performance, 
unless affirmative proof establishing the contrary is presented. 
Similarly, in the absence of such records, an employee performing any 
work on or in connection with the contract in a workweek shall be 
presumed to have continued to perform such work throughout the workweek, 
unless affirmative proof establishing the contrary is presented. Even 
where a contractor can segregate Government from non-Government work, it 
is necessary that the contractor comply with the requirements of section 
6(e) of the FLSA discussed in Sec. 4.160.

                    Overtime Pay of Covered Employees



Sec. 4.180  Overtime pay--in general.

    The Act does not provide for compensation of covered employees at 
premium rates for overtime hours of work. Section 6 recognizes, however, 
that other Federal laws may require such compensation to be paid to 
employees working on or in connection with contracts subject to the Act 
(see Sec. 4.181) and prescribes, for purposes of such laws, the manner 
in which fringe benefits furnished pursuant to the Act shall be treated 
in computing such overtime compensation as follows: ``In determining any 
overtime pay to which such service employees are entitled under any 
Federal law, the regular or basic hourly rate of such an employee shall 
not include any fringe benefit payments computed hereunder which are 
excluded from the regular rate under the Fair Labor Standards Act by 
provisions of section 7(d) [now section 7(e)] thereof.'' Fringe benefit 
payments which qualify for such exclusion are described in part 778, 
subpart C of this title. The interpretations there set forth will be 
applied in determining the overtime pay to which covered service 
employees are entitled under other Federal statutes. The effect of 
section 6 of the Act in situations where equivalent fringe benefits or 
cash payments are provided in lieu of the specified fringe benefits is 
stated in Sec. 4.177(e) of this part, and illustrated in Sec. 4.182.



Sec. 4.181  Overtime pay provisions of other Acts.

    (a) Fair Labor Standards Act. Although provision has not been made 
for insertion in Government contracts of stipulations requiring 
compliance with the overtime provisions of the Fair Labor Standards Act, 
contractors and subcontractors performing contracts subject to the 
McNamara-O'Hara Service Contract Act may be required to compensate their 
employees working on or in connection with such contracts for overtime 
work pursuant to the overtime pay standards of the Fair Labor Standards 
Act. This is true with respect to employees engaged in interstate or 
foreign commerce or in the production of goods for such commerce 
(including occupations and processes closely related and directly 
essential to such production) and employees employed in enterprises 
which are so engaged, subject to the definitions and exceptions provided 
in such Act. Such employees, except as otherwise specifically provided 
in such Act, must receive overtime compensation at a rate of not less 
than 1\1/2\ times their regular rate of pay for all hours worked in 
excess of the applicable standard in a workweek. See part 778 of this 
title. However, the Fair Labor Standards Act provides no overtime pay 
requirements for employees, not within such interstate commerce coverage 
of the Act, who are subject to its minimum wage provisions only by 
virtue of the provisions of section 6(e), as explained in Sec. 4.180.
    (b) Contract Work Hours and Safety Standards Act. (1) The Contract 
Work Hours and Safety Standards Act (40 U.S.C. 327-332) applies 
generally to Government contracts, including service contracts in excess 
of $100,000, which may require or involve the employment of laborers and 
mechanics. Guards, watchmen, and many other classes of service employees 
are laborers or mechanics within the meaning of such Act. However, 
employees rendering only professional services, seamen, and as a general 
rule those whose work is only clerical or supervisory or nonmanual in 
nature, are not deemed

[[Page 95]]

laborers or mechanics for purposes of the Act. The wages of every 
laborer and mechanic for performance of work on such contracts must 
include compensation at a rate not less than 1\1/2\ times the employees' 
basic rate of pay for all hours worked in any workweek in excess of 40. 
Exemptions are provided for certain transportation and communications 
contracts, contracts for the purchase of supplies ordinarily available 
in the open market, and work, required to be done in accordance with the 
provisions of the Walsh-Healey Act.
    (2) Regulations concerning this Act are contained in 29 CFR part 5 
which permit overtime pay to be computed in the same manner as under the 
Fair Labor Standards Act.
    (c) Walsh-Healey Public Contracts Act. As pointed out in Sec. 4.117, 
while some Government contracts may be subject both to the McNamara-
O'Hara Service Contract Act and to the Walsh-Healey Public Contracts 
Act, the employees performing work on the contract which is subject to 
the latter Act are, when so engaged, exempt from the provisions of the 
former. They are, however, subject to the overtime provisions of the 
Walsh-Healey Act if, in any workweek, any of the work performed for the 
employer is subject to such Act and if, in such workweek, the total 
hours worked by the employee for the employer (whether wholly or only 
partly on such work) exceed 40 hours in the workweek. In any such 
workweek the Walsh-Healey Act requires payment of overtime compensation 
at a rate not less than 1\1/2\ times the employee's basic rate for such 
weekly overtime hours. The overtime pay provisions of the Walsh-Healey 
Act are discussed in greater detail in 41 CFR part 50-201.

[48 FR 49762, Oct. 27, 1983, as amended at 51 FR 12265, Apr. 9, 1986; 61 
FR 40716, Aug. 5, 1996]



Sec. 4.182  Overtime pay of service employees entitled to fringe benefits.

    Reference is made in Sec. 4.180 to the rules prescribed by section 6 
of the Act which permit exclusion of certain fringe benefits and 
equivalents provided pursuant to section 2(a)(2) of the Act from the 
regular or basic rate of pay when computing overtime compensation of a 
service employee under the provisions of any other Federal law. As 
provided in Sec. 4.177, not only those fringe benefits excludable under 
section 6 as benefits determined and specified under section 2(a)(2), 
but also equivalent fringe benefits and cash payments furnished in lieu 
of the specified benefits may be excluded from the regular or basic rate 
of such an employee. The application of this rule may be illustrated by 
the following examples:
    (a) The A company pays a service employee $4.50 an hour in cash 
under a wage determination which requires a monetary rate of not less 
than $4 and a fringe benefit contribution of 50 cents which would 
qualify for exclusion from the regular rate under section 7(e) of the 
Fair Labor Standards Act. The contractor pays the 50 cents in cash 
because he made no contributions for fringe benefits specified in the 
determination and the contract. Overtime compensation in this case would 
be computed on a regular or basic rate of $4 an hour.
    (b) The B company has for some time been paying $4.25 an hour to a 
service employee as his basic cash wage plus 25 cents an hour as a 
contribution to a welfare and pension plan, which contribution qualifies 
for exclusion from the regular rate under the Fair Labor Standards Act. 
For performance of work under a contract subject to the Act a monetary 
rate of $4 and a fringe benefit contribution of 50 cents (also 
qualifying for such exclusion) are specified because they are found to 
be prevailing for such employees in the locality. The contractor may 
credit the 25 cent welfare and pension contribution toward the discharge 
of his fringe benefit obligation under the contract but must also make 
an additional contribution of 25 cents for the specified or equivalent 
fringe benefits or pay the employee an additional 25 cents in cash. 
These contributions or equivalent payments may be excluded from the 
employee's regular rate which remains $4.25, the rate agreed upon as the 
basic cash wage.
    (c) The C company has been paying $4 an hour as its basic cash wage 
on which the firm has been computing overtime compensation. For 
performance of

[[Page 96]]

work on a contract subject to the Act the same rate of monetary wages 
and a fringe benefit contribution of 50 cents an hour (qualifying for 
exclusion from the regular rate under the Fair Labor Standards Act) are 
specified in accordance with a determination that these are the monetary 
wages and fringe benefits prevailing for such employees in the locality. 
The contractor is required to continue to pay at least $4 an hour in 
monetary wages and at least this amount must be included in the 
employee's regular or basic rate for overtime purposes under applicable 
Federal law. The fringe benefit obligation under the contract would be 
discharged if 50 cents of the contributions for fringe benefits were for 
the fringe benefits specified in the contract or equivalent benefits as 
defined in Sec. 4.177. The company may exclude such fringe benefit 
contributions from the regular or basic rate of pay of the service 
employee in computing overtime pay due.

                           Notice to Employees



Sec. 4.183  Employees must be notified of compensation required.

    The Act, in section 2(a)(4), and the regulations thereunder in 
Sec. 4.6(e), require all contracts subject to the Act which are in 
excess of $2,500 to contain a clause requiring the contractor or 
subcontractor to notify each employee commencing work on a contract to 
which the Act applies of the compensation required to be paid such 
employee under section 2(a)(1) and the fringe benefits required to be 
furnished under section 2(a)(2). A notice form (WH Publication 1313 and 
any applicable wage determination) provided by the Wage and Hour 
Division is to be used for this purpose. It may be delivered to the 
employee or posted as stated in Sec. 4.184.



Sec. 4.184  Posting of notice.

    Posting of the notice provided by the Wage and Hour Division shall 
be in a prominent and accessible place at the worksite, as required by 
Sec. 4.6(e). The display of the notice in a place where it may be seen 
by employees performing on the contract will satisfy the requirement 
that it be in a ``prominent and accessible place''. Should display be 
necessary at more than one site, in order to assure that it is seen by 
such employees, additional copies of the poster may be obtained without 
cost from the Division. The contractor or subcontractor is required to 
notify each employee of the compensation due or attach to the poster any 
applicable wage determination specified in the contract listing all 
minimum monetary wages and fringe benefits to be paid or furnished to 
the classes of service employees performing on the contract.

                                 Records



Sec. 4.185  Recordkeeping requirements.

    The records which a contractor or subcontractor is required to keep 
concerning employment of employees subject to the Act are specified in 
Sec. 4.6(g) of subpart A of this part. They are required to be 
maintained for 3 years from the completion of the work, and must be made 
available for inspection and transcription by authorized representatives 
of the Administrator. Such records must be kept for each service 
employee performing work under the contract, for each workweek during 
the performance of the contract. If the required records are not 
separately kept for the service employees performing on the contract, it 
will be presumed, in the absence of affirmative proof to the contrary, 
that all service employees in the department or establishment where the 
contract was performed were engaged in covered work during the period of 
performance. (See Sec. 4.179.)



Sec. 4.186  [Reserved]



                         Subpart E--Enforcement



Sec. 4.187  Recovery of underpayments.

    (a) The Act, in section 3(a), provides that any violations of any of 
the contract stipulations required by sections 2(a)(1), 2(a)(2), or 2(b) 
of the Act, shall render the party responsible liable for the amount of 
any deductions, rebates, refunds, or underpayments (which includes non-
payment) of compensation due to any employee engaged in the performance 
of the contract. So much of the accrued payments due either on the 
contract or on any other contract

[[Page 97]]

(whether subject to the Service Contract Act or not) between the same 
contractor and the Government may be withheld in a deposit fund as is 
necessary to pay the employees. In the case of requirements-type 
contracts, it is the contracting agency, and not the using agencies, 
which has the responsibility for complying with a withholding request by 
the Secretary or authorized representative. The Act further provides 
that on order of the Secretary (or authorized representatives), any 
compensation which the head of the Federal agency or the Secretary has 
found to be due shall be paid directly to the underpaid employees from 
any accrued payments withheld. In order to effectuate the efficient 
administration of this provision of the Act, such withheld funds shall 
be transferred to the Department of Labor for disbursement to the 
underpaid employees on order of the Secretary or his or her authorized 
representatives, an Administrative Law Judge, or the Administrative 
Review Board, and are not paid directly to such employees by the 
contracting agency without the express prior consent of the Department 
of Labor. (See Decision of the Comptroller General, B-170784, February 
17, 1971.) It is mandatory for a contracting officer to adhere to a 
request from the Department of Labor to withhold funds where such funds 
are available. (See Decision of the Comptroller General, B-109257, 
October 14, 1952, arising under the Walsh-Healey Act.) Contract funds 
which are or may become due a contractor under any contract with the 
United States may be withheld prior to the institution of administrative 
proceedings by the Secretary. (McCasland v. U.S. Postal Service, 82 CCH 
Labor Cases para. 33,607 (N.D. N.Y. 1977); G & H Machinery Co. v. 
Donovan, 96 CCH Labor Cases para.34,354 (S.D. Ill. 1982).)
    (b) Priority to withheld funds. The Comptroller General has afforded 
employee wage claims priority over an Internal Revenue Service levy for 
unpaid taxes. (See Decisions of the Comptroller General, B-170784, 
February 17, 1971; B-189137, August 1, 1977; 56 Comp. Gen. 499 (1977); 
55 Comp. Gen. 744 (1976), arising under the Davis-Bacon Act; B-178198, 
August 30, 1973; B-161460, May 25, 1967.)
    (1) As the Comptroller General has stated, ``[t]he legislative 
histories of these labor statutes [Service Contract Act and Contract 
Work Hours and Safety Standards Act, 41 U.S.C. 327, et seq.] disclose a 
progressive tendency to extend a more liberal interpretation and 
construction in successive enactments with regard to worker's benefits, 
recovery and repayment of wage underpayments. Further, as remedial 
legislation, it is axiomatic that they are to be liberally construed''. 
(Decision of the Comptroller General, B-170784, February 17, 1971.)
    (2) Since section 3(a) of the Act provides that accrued contract 
funds withheld to pay employees wages must be held in a deposit fund, it 
is the position of the Department of Labor that monies so held may not 
be used or set aside for agency reprocurement costs. To hold otherwise 
would be inequitable and contrary to public policy, since the employees 
have performed work from which the Government has received the benefit 
(see National Surety Corporation v. U.S., 132 Ct. Cl. 724, 728, 135 F. 
Supp. 381 (1955), cert. denied, 350 U.S. 902), and to give contracting 
agency reprocurement claims priority would be to require employees to 
pay for the breach of contract between the employer and the agency. The 
Comptroller General has sanctioned priority being afforded wage 
underpayments over the reprocurement costs of the contracting agency 
following a contractor's default or termination for cause. Decision of 
the Comptroller General, B-167000, June 26, 1969; B-178198, August 30, 
1973; and B-189137, August 1, 1977.
    (3) Wage claims have priority over reprocurement costs and tax liens 
without regard to when the competing claims were raised. See Decisions 
of the Comptroller General, B-161460, May 25, 1967; B-189137, August 1, 
1977.
    (4) Wages due workers underpaid on the contract have priority over 
any assignee of the contractor, including assignments made under the 
Assignment of Claims Act, 31 U.S.C. 203, 41 U.S.C. 15, to funds withheld 
under the contract, since an assignee can acquire no greater rights to 
withheld funds than the assignor has in the absence of an assignment. 
See Modern Industrial Bank

[[Page 98]]

v. U.S., 101 Ct. Cl. 808 (1944); Royal Indemnity Co. v. United States, 
178 Ct. Cl. 46, 371 F. 2d 462 (1967), cert. denied, 389 U.S. 833; Newark 
Insurance Co. v. U.S., 149 Ct. Cl. 170, 181 F. Supp. 246 (1960); 
Henningsen v. United States Fidelity and Guaranty Company, 208 U.S. 404 
(1908). Where employees have been underpaid, the assignor has no right 
to assign funds since the assignor has no property rights to amounts 
withheld from the contract to cover underpayments of workers which 
constitute a violation of the law and the terms, conditions, and 
obligations under the contract. (Decision of the Comptroller General, B-
164881, August 14, 1968; B-178198, August 30, 1973; 56 Comp. Gen. 499 
(1977); 55 Comp. Gen. 744 (1976); The National City Bank of Evansville 
v. United States, 143 Ct. Cl. 154, 163 F. Supp. 846 (1958); National 
Surety Corporation v. United States, 132 Ct. Cl. 724, 135 F. Supp. 381 
(1955), cert. denied, 350 U.S. 902.)
    (5) The Comptroller General, recognizing that unpaid laborers have 
an equitable right to be paid from contract retainages, has also held 
that wage underpayments under the Act have priority over any claim by 
the trustee in bankruptcy. 56 Comp. Gen. 499 (1977), citing Pearlman v. 
Reliance Insurance Company, 371 U.S. 132 (1962); Hadden v. United 
States, 132 Ct. Cl. 529 (1955), in which the courts gave priority to 
sureties who had paid unpaid laborers over the trustee in bankruptcy.
    (c) Section 5(b) of the Act provides that if the accrued payments 
withheld under the terms of the contract are insufficient to reimburse 
all service employees with respect to whom there has been a failure to 
pay the compensation required pursuant to the Act, the United States may 
bring action against the contractor, subcontractor, or any sureties in 
any court of competent jurisdiction to recover the remaining amount of 
underpayments. The Service Contract Act is not subject to the statute of 
limitations in the Portal to Portal Act, 29 U.S.C. 255, and contains no 
prescribed period within which such an action must be instituted; it has 
therefore been held that the general period of six years prescribed by 
28 U.S.C. 2415 applies to such actions, United States of America v. 
Deluxe Cleaners and Laundry, Inc., 511 F. 2d 929 (C.A. 4, 1975). Any 
sums thus recovered by the United States shall be held in the deposit 
fund and shall be paid, on the order of the Secretary, directly to the 
underpaid employees. Any sum not paid to an employee because of 
inability to do so within 3 years shall be covered into the Treasury of 
the United States as miscellaneous receipts.
    (d) Releases or waivers executed by employees for unpaid wages and 
fringe benefits due them are without legal effect. As stated by the 
Supreme Court in Brooklyn Savings Bank v. O'Neil, 324 U.S. 697, 704, 
(1945), arising under the Fair Labor Standards Act:

    ``Where a private right is granted in the public interest to 
effectuate a legislative policy, waiver of a right so charged or colored 
with the public interest will not be allowed where it would thwart the 
legislative policy which it was designed to effectuate.''


See also Schulte, Inc. v. Gangi, 328 U.S. 108 (1946); United States v. 
Morley Construction Company, 98 F. 2d 781 (C.A. 2, 1938), cert. denied, 
305 U.S. 651.

Further, as noted above, monies not paid to employees to whom they are 
due because of violation are covered into the U.S. Treasury as provided 
by section 5(b) of the Act.
    (e)(1) The term party responsible for violations in section 3(a) of 
the Act is the same term as contained in the Walsh-Healey Public 
Contracts Act, and therefore, the same principles are applied under both 
Acts. An officer of a corporation who actively directs and supervises 
the contract performance, including employment policies and practices 
and the work of the employees working on the contract, is a party 
responsible and liable for the violations, individually and jointly with 
the company (S & G Coal Sales, Inc., Decision of the Hearing Examiner, 
PC-946, January 21, 1965, affirmed by the Administrator June 8, 1965; 
Tennessee Processing Co., Inc., Decision of the Hearing Examiner, PC-
790, September 28, 1965).
    (2) The failure to perform a statutory public duty under the Service 
Contract Act is not only a corporate liability but also the personal 
liability of each officer charged by reason of his or her corporate 
office while performing that

[[Page 99]]

duty. United States v. Sancolmar Industries, Inc., 347 F. Supp. 404, 408 
(E.D. N.Y. 1972). Accordingly, it has been held by administrative 
decisions and by the courts that the term party responsible, as used in 
section 3(a) of the Act, imposes personal liability for violations of 
any of the contract stipulations required by sections 2(a)(1) and (2) 
and 2(b) of the Act on corporate officers who control, or are 
responsible for control of, the corporate entity, as they, individually, 
have an obligation to assure compliance with the requirements of the 
Act, the regulations, and the contracts. See, for example, Waite, Inc., 
Decision of the ALJ, SCA 530-566, October 19, 1976, Spruce-Up Corp., 
Decision of the Administrator SCA 368-370, August 19, 1976, Ventilation 
and Cleaning Engineers, Inc., Decision of the ALJ, SCA 176, August 23, 
1973, Assistant Secretary, May 17, 1974, Secretary, September 27, 1974; 
Fred Van Elk, Decision of the ALJ, SCA 254-58, May 28, 1974, 
Administrator, November 25, 1974; Murcole, Inc., Decision of the ALJ, 
SCA 195-198, April 11, 1974; Emile J. Bouchet, Decision of the ALJ, SCA 
38, February 24, 1970; Darwyn L. Grover, Decision of the ALJ, SCA 485, 
August 15, 1976; United States v. Islip Machine Works, Inc., 179 F. 
Supp. 585 (E.D. N.Y. 1959); United States v. Sancolmar Industries, Inc., 
347 F. Supp. 404 (E.D. N.Y. 1972).
    (3) In essence, individual liability attaches to the corporate 
official who is responsible for, and therefore causes or permits, the 
violation of the contract stipulations required by the Act, i.e., 
corporate officers who control the day-to-day operations and management 
policy are personally liable for underpayments because they cause or 
permit violations of the Act.
    (4) It has also been held that the personal responsibility and 
liability of individuals for violations of the Act is not limited to the 
officers of a contracting firm or to signatories to the Government 
contract who are bound by and accept responsibility for compliance with 
the Act and imposition of its sanctions set forth in the contract 
clauses in Sec. 4.6, but includes all persons, irrespective of 
proprietary interest, who exercise control, supervision, or management 
over the performance of the contract, including the labor policy or 
employment conditions regarding the employees engaged in contract 
performance, and who, by action or inaction, cause or permit a contract 
to be breached. U.S. v. Islip Machine Works, Inc., 179 F. Supp. 585 
(E.D. N.Y. 1959); U.S. v. Sancolmar Industries, Inc., 347 F. Supp. 404 
(E.D. N.Y. 1972); Oscar Hestrom Corp., Decision of the Administrator, 
PC-257, May 7, 1946, affirmed, U.S. v. Hedstrom, 8 Wage Hour Cases 302 
(N.D. Ill. 1948); Craddock-Terry Shoe Corp., Decision of the 
Administrator, PC-330, October 3, 1947; Reynolds Research Corp., 
Decision of the Administrator, PC-381, October 24, 1951; Etowah Garment 
Co., Inc., Decision of the Hearing Examiner, PC-632, August 9, 1957, 
Decision of the Administrator, April 29, 1958; Cardinal Fuel and Supply 
Co., Decision of the Hearing Examiner, PC-890, June 17, 1963.
    (5) Reliance on advice from contracting agency officials (or 
Department of Labor officials without the authority to issue rulings 
under the Act) is not a defense against a contractor's liability for 
back wages under the Act. Standard Fabrication Ltd., Decision of the 
Secretary, PC-297, August 3, 1948; Airport Machining Corp., Decision of 
the ALJ, PC-1177, June 15, 1973; James D. West, Decision of the ALJ, SCA 
397-398, November 17, 1975; Metropolitan Rehabilitation Corp., WAB Case 
No. 78-25, August 2, 1979; Fry Brothers Corp., WAB Case No. 76-6, June 
14, 1977.
    (f) The procedures for a contractor or subcontractor to dispute 
findings regarding violations of the Act, including back wage liability 
or the disposition of funds withheld by the agency for such liability, 
are contained in parts 6 and 8 of this title. Appeals in such matters 
have not been delegated to the contracting agencies and such matters 
cannot be appealed under the disputes clause in the contractor's 
contract.
    (g) While the Act provides that action may be brought against a 
surety to recover underpayments of compensation, there is no statutory 
provision requiring that contractors furnish either payment or 
performance bonds before an award can be made. The courts have held, 
however, that when such a bond has been given, including one denominated 
as a performance rather than payment bond, and such a

[[Page 100]]

bond guarantees that the principal shall fulfill ``all the undertakings, 
covenants, terms, conditions, and agreements'' of the contract, or 
similar words to the same effect, the surety-guarantor is jointly liable 
for underpayments by the contractor of the wages and fringe benefits 
required by the Act up to the amount of the bond. U.S. v. Powers 
Building Maintenance Co., 366 F. Supp. 819 (W.D. Okla. 1972); U.S. v. 
Gillespie, 72 CCH Labor Cases para. 33,986 (C.D. Cal. 1973) U.S. v. 
Glens Falls Insurance Co., 279 F. Supp. 236 (E.D. Tenn. 1967); United 
States v. Hudgins-Dize Co., 83 F. Supp. 593 (E.D. Va. 1949); U.S. v. 
Continental Casualty Company, 85 F. Supp. 573 (E.D. Pa. 1949), affirmed 
per curiam, 182 F.2d 941 (3rd Cir. 1950).



Sec. 4.188  Ineligibility for further contracts when violations occur.

    (a) Section 5 of the Act provides that any person or firm found by 
the Secretary or the Federal agencies to have violated the Act shall be 
declared ineligible to receive further Federal contracts unless the 
Secretary recommends otherwise because of unusual circumstances. It also 
directs the Comptroller General to distribute a list to all agencies of 
the Government giving the names of persons or firms that have been 
declared ineligible. No contract of the United States or the District of 
Columbia (whether or not subject to the Act) shall be awarded to the 
persons or firms appearing on this list or to any firm, corporation, 
partnership, or association in which such persons or firms have a 
substantial interest until 3 years have elapsed from the date of 
publication of the list containing the names of such persons or firms. 
This prohibition against the award of a contract to an ineligible 
contractor applies to the contractor in its capacity as either a prime 
contractor or a subcontractor. Because the Act contains no provision 
authorizing removal from the list of the names of such persons or firms 
prior to the expiration of the three-year statutory period, the 
Secretary is without authority to accomplish such removal (other than in 
situations involving mistake or legal error). On the other hand, there 
may be situations in which persons or firms already on the list are 
found in a subsequent administrative proceeding to have again violated 
the Act and their debarment ordered. In such circumstances, a new, 
three-year debarment term will commence with the republication of such 
names on the list.
    (b)(1) The term unusual circumstances is not defined in the Act. 
Accordingly, the determination must be made on a case-by-case basis in 
accordance with the particular facts present. It is clear, however, that 
the effect of the 1972 Amendments is to limit the Secretary's discretion 
to relieve violators from the debarred list (H. Rept. 92-1251, 92d 
Cong., 2d Sess. 5; S. Rept. 92-1131, 92d Cong., 2d Sess. 3-4) and that 
the violator of the Act has the burden of establishing the existence of 
unusual circumstances to warrant relief from the debarment sanction, 
Ventilation and Cleaning Engineers, Inc., SCA-176, Administrative Law 
Judge, August 23, 1973, Assistant Secretary, May 22, 1974, Secretary, 
October 2, 1974. It is also clear that unusual circumstances do not 
include any circumstances which would have been insufficient to relieve 
a contractor from the ineligible list prior to the 1972 amendments, or 
those circumstances which commonly exist in cases where violations are 
found, such as negligent or willful disregard of the contract 
requirements and of the Act and regulations, including a contractor's 
plea of ignorance of the Act's requirements where the obligation to 
comply with the Act is plain from the contract, failure to keep 
necessary records and the like. Emerald Maintenance Inc., Supplemental 
Decision of the ALJ, SCA-153, April 5, 1973.
    (2) The Subcommittee report following the oversight hearings 
conducted just prior to the 1972 amendments makes it plain that the 
limitation of the Secretary's discretion through the unusual 
circumstances language was designed in part to prevent the Secretary 
from relieving a contractor from the ineligible list provisions merely 
because the contractor paid what he was required by his contract to pay 
in the first place and promised to comply with the Act in the future. 
See, House Committee on Education and Labor, Special Subcommittee on 
Labor, The Plight of Service Workers under Government

[[Page 101]]

Contracts 12-13 (Comm. Print 1971). As Congressman O'Hara stated: 
``Restoration * * * [of wages and benefits] is not in and of itself a 
penalty. The penalty for violation is the suspension from the right to 
bid on Government contracts * * *. The authority [to relieve from 
blacklisting] was intended to be used in situations where the violation 
was a minor one, or an inadvertent one, or one in which disbarment * * * 
would have been wholly disproportionate to the offense.'' House 
Committee on Education and Labor, Special Subcommittee on Labor, 
Hearings on H.R. 6244 and H.R. 6245, 92d Cong., 1st Sess. 3 (1971).
    (3)(i) The Department of Labor has developed criteria for 
determining when there are unusual circumstances within the meaning of 
the Act. See, e.g., Washington Moving & Storage Co., Decision of the 
Assistant Secretary, SCA 68, August 16, 1973, Secretary, March 12, 1974; 
Quality Maintenance Co., Decision of the Assistant Secretary, SCA 119, 
January 11, 1974. Thus, where the respondent's conduct in causing or 
permitting violations of the Service Contract Act provisions of the 
contract is willful, deliberate or of an aggravated nature or where the 
violations are a result of culpable conduct such as culpable neglect to 
ascertain whether practices are in violation, culpable disregard of 
whether they were in violation or not, or culpable failure to comply 
with recordkeeping requirements (such as falsification of records), 
relief from the debarment sanction cannot be in order. Furthermore, 
relief from debarment cannot be in order where a contractor has a 
history of similar violations, where a contractor has repeatedly 
violated the provisions of the Act, or where previous violations were 
serious in nature.
    (ii) A good compliance history, cooperation in the investigation, 
repayment of moneys due, and sufficient assurances of future compliance 
are generally prerequisites to relief. Where these prerequisites are 
present and none of the aggravated circumstances in the preceding 
paragraph exist, a variety of factors must still be considered, 
including whether the contractor has previously been investigated for 
violations of the Act, whether the contractor has committed 
recordkeeping violations which impeded the investigation, whether 
liability was dependent upon resolution of a bona fide legal issue of 
doubtful certainty, the contractor's efforts to ensure compliance, the 
nature, extent, and seriousness of any past or present violations, 
including the impact of violations on unpaid employees, and whether the 
sums due were promptly paid.
    (4) A contractor has an affirmative obligation to ensure that its 
pay practices are in compliance with the Act, and cannot itself resolve 
questions which arise, but rather must seek advice from the Department 
of Labor. Murcole, Inc., Decision of the ALJ, SCA 195-198, April 10, 
1974; McLaughlin Storage, Inc., Decision of the ALJ, SCA 362-365, 
November 5, 1975, Administrator, March 25, 1976; Able Building & 
Maintenance & Service Co., Decision of the ALJ, SCA 389-390, May 29, 
1975, Assistant Secretary, January 13, 1976; Aarid Van Lines, Inc., 
Decision of the Administrator, SCA 423-425, May 13, 1977.
    (5) Furthermore, a contractor cannot be relieved from debarment by 
attempting to shift his/her responsibility to subordinate employees. 
Security Systems, Inc., Decision of the ALJ, SCA 774-775, April 10, 
1978; Ventilation & Cleaning Engineers, Inc., Decision of the Secretary, 
SCA 176, September 27, 1974; Ernest Roman, Decision of the Secretary, 
SCA 275, May 6, 1977. As the Comptroller General has stated in 
considering debarment under the Davis-Bacon Act, ``[n]egligence of the 
employer to instruct his employees as to the proper method of performing 
his work or to see that the employee obeys his instructions renders the 
employer liable for injuries to third parties resulting therefrom. * * * 
The employer will be liable for acts of his employee within the scope of 
the employment regardless of whether the acts were expressly or 
impliedly authorized. * * * Willful and malicious acts of the employee 
are imputable to the employer under the doctrine of respondeat superior 
although they might not have been consented to or expressly authorized 
or ratified by the employer.'' (Decision of the Comptroller General, B-
145608, August 1, 1961.)

[[Page 102]]

    (6) Negligence per se does not constitute unusual circumstances. 
Relief on no basis other than negligence would render the effect of 
section 5(a) a nullity, since it was intended that only responsible 
bidders be awarded Government contracts. Greenwood's Transfer & Storage, 
Inc., Decision of the Secretary, SCA 321-326, June 1, 1976; Ventilation 
& Cleaning Engineers, Inc., Decision of the Secretary, SCA 176, 
September 27, 1974.
    (c) Similarly, the term substantial interest is not defined in the 
Act. Accordingly, this determination, too, must be made on a case-by-
case basis in light of the particular facts, and cognizant of the 
legislative intent ``to provide to service employees safeguards similar 
to those given to employees covered by the Walsh-Healey Public Contracts 
Act''. Federal Food Services, Inc., Decision of the ALJ, SCA 585-592, 
November 22, 1977. Thus, guidance can be obtained from cases arising 
under the Walsh-Healey Act, which uses the concept ``controlling 
interest''. See Regal Mfg. Co., Decision of the Administrator, PC-245, 
March 1, 1946; Acme Sportswear Co., Decision of the Hearing Examiner, 
PC-275, May 8, 1946; Gearcraft, Inc., Decision of the ALJ, PCX-1, May 3, 
1972. In a supplemental decision of February 23, 1979, in Federal Food 
Services, Inc. the Judge ruled as a matter of law that the term ``does 
not preclude every employment or financial relationship between a party 
under sanction and another * * * [and that] it is necessary to look 
behind titles, payments, and arrangements and examine the existing 
circumstances before reaching a conclusion in this matter.''
    (1) Where a person or firm has a direct or beneficial ownership or 
control of more than 5 percent of any firm, corporation, partnership, or 
association, a ``substantial interest'' will be deemed to exist. 
Similarly, where a person is an officer or director in a firm or the 
debarred firm shares common management with another firm, a 
``substantial interest'' will be deemed to exist. Furthermore, wherever 
a firm is an affiliate as defined in Sec. 4.1a(g) of subpart A, a 
``substantial interest'' will be deemed to exist, or where a debarred 
person forms or participates in another firm in which he/she has 
comparable authority, he/she will be deemed to have a ``substantial 
interest'' in the new firm and such new firm would also be debarred 
(Etowah Garment Co., Inc., Decision of the Hearing Examiner, PC-632, 
August 9, 1957).
    (2) Nor is interest determined by ownership alone. A debarred person 
will also be deemed to have a ``substantial interest'' in a firm if such 
person has participated in contract negotiations, is a signatory to a 
contract, or has the authority to establish, control, or manage the 
contract performance and/or the labor policies of a firm. A 
``substantial interest'' may also be deemed to exist, in other 
circumstances, after consideration of the facts of the individual case. 
Factors to be examined include, among others, sharing of common premises 
or facilities, occupying any position such as manager, supervisor, or 
consultant to, any such entity, whether compensated on a salary, bonus, 
fee, dividend, profit-sharing, or other basis of remuneration, including 
indirect compensation by virtue of family relationships or otherwise. A 
firm will be particularly closely examined where there has been an 
attempt to sever an association with a debarred firm or where the firm 
was formed by a person previously affiliated with the debarred firm or a 
relative of the debarred person.
    (3) Firms with such identity of interest with a debarred person or 
firm will be placed on the debarred bidders list after the determination 
is made pursuant to procedures in Sec. 4.12 and parts 6 and 8 of this 
title. Where a determination of such ``substantial interest'' is made 
after the initiation of the debarment period, contracting agencies are 
to terminate any contract with such firm entered into after the 
initiation of the original debarment period since all persons or firms 
in which the debarred person or firm has a substantial interest were 
also ineligible to receive Government contracts from the date of 
publication of the violating person's or firm's name on the debarred 
bidders list.



Sec. 4.189  Administrative proceedings relating to enforcement of labor standards.

    The Secretary is authorized pursuant to the provisions of section 
4(a) of the

[[Page 103]]

Act to hold hearings and make decisions based upon findings of fact as 
are deemed to be necessary to enforce the provisions of the Act. 
Pursuant to section 4(a) of the Act, the Secretary's findings of fact 
after notice and hearing are conclusive upon all agencies of the United 
States and, if supported by the preponderance of the evidence, 
conclusive in any court of the United States, without a trial de novo. 
United States v. Powers Building Maintenance Co., 336 F. Supp. 819 (W.D. 
Okla. 1972). Rules of practice for administrative proceedings are set 
forth in parts 6 and 8 of this title.



Sec. 4.190  Contract cancellation.

    (a) As provided in section 3 of the Act, where a violation is found 
of any contract stipulation, the contract is subject upon written notice 
to cancellation by the contracting agency, whereupon the United States 
may enter into other contracts or arrangements for the completion of the 
original contract, charging any additional cost to the original 
contractor.
    (b) Every contractor shall certify pursuant to Sec. 4.6(n) of 
subpart A that it is not disqualified for the award of a contract by 
virtue of its name appearing on the debarred bidders list or because any 
such currently listed person or firm has a substantial interest in said 
contractor, as described in Sec. 4.188. Upon discovery of such false 
certification or determination of substantial interest in a firm 
performing on a Government contract, as the case may be, the contract is 
similarly subject upon written notice to immediate cancellation by the 
contracting agency and any additional cost for the completion of the 
contract charged to the original contractor as specified in paragraph 
(a). Such contract is without warrant of law and has no force and effect 
and is void ab initio, 33 Comp Gen. 63; Decision of the Comptroller 
General, B-115051, August 6, 1953. Furthermore, any profit derived from 
said illegal contract is forfeited (Paisner v. U.S., 138 Ct. Cl. 420, 
150 F. Supp. 835 (1957), cert. denied, 355 U.S. 941).



Sec. 4.191  Complaints and compliance assistance.

    (a) Any employer, employee, labor or trade organization, contracting 
agency, or other interested person or organization may report to any 
office of the Wage and Hour Division (or to any office of the 
Occupational Safety and Health Administration, in instances involving 
the safety and health provisions), a violation, or apparent violation, 
of the Act, or of any of the rules or regulations prescribed thereunder. 
Such offices are also available to assist or provide information to 
contractors or subcontractors desiring to insure that their practices 
are in compliance with the Act. Information furnished is treated 
confidentially. It is the policy of the Department of Labor to protect 
the identity of its confidential sources and to prevent an unwarranted 
invasion of personal privacy. Accordingly, the identity of an employee 
who makes a confidential written or oral statement as a complaint or in 
the course of an investigation, as well as portions of the statement 
which would reveal his identity, will not be disclosed without the prior 
consent of the employee. Disclosure of employee statements shall be 
governed by the provisions of the ``Freedom of Information Act'' (5 
U.S.C. 552, see 29 CFR part 70) and the ``Privacy Act of 1974'' (5 
U.S.C. 552a).
    (b) A report of breach or violation relating solely to safety and 
health requirements may be in writing and addressed to the Regional 
Administrator of an Occupational Safety and Health Administration 
Regional Office, U.S. Department of Labor, or to the Assistant Secretary 
for Occupational Safety and Health, U.S. Department of Labor, 
Washington, DC 20210.
    (c) Any other report of breach or violation may be in writing and 
addressed to the Assistant Regional Administrator of a Wage and Hour 
Division's regional office, U.S. Department of Labor, or to the 
Administrator of the Wage and Hour Division, U.S. Department of Labor, 
Washington, DC 20210.
    (d) In the event that an Assistant Regional Administrator for the 
Wage and Hour Division, Employment Standards Administration, is notified 
of a breach

[[Page 104]]

or violation which also involves safety and health standards, the 
Regional Administrator of the Employment Standards Administration shall 
notify the appropriate Regional Administrator of the Occupational Safety 
and Health Administration who shall with respect to the safety and 
health violation take action commensurate with his responsibilities 
pertaining to safety and health standards.
    (e) Any report should contain the following:
    (1) The full name and address of the person or organization 
reporting the breach or violations.
    (2) The full name and address of the person against whom the report 
is made.
    (3) A clear and concise statement of the facts constituting the 
alleged breach or violation of any of the provisions of the McNamara-
O'Hara Service Contract Act, or of any of the rules or regulations 
prescribed thereunder.



PART 5--LABOR STANDARDS PROVISIONS APPLICABLE TO CONTRACTS COVERING FEDERALLY FINANCED AND ASSISTED CONSTRUCTION (ALSO LABOR STANDARDS PROVISIONS APPLICABLE TO
 
NONCONSTRUCTION CONTRACTS SUBJECT TO THE CONTRACT WORK HOURS AND SAFETY STANDARDS ACT)--Table of Contents




    Subpart A--Davis-Bacon and Related Acts Provisions and Procedures

Sec.
5.1  Purpose and scope.
5.2  Definitions.
5.3--5.4  [Reserved]
5.5  Contract provisions and related matters.
5.6  Enforcement.
5.7  Reports to the Secretary of Labor.
5.8  Liquidated damages under the Contract Work Hours and Safety 
          Standards Act.
5.9  Suspension of funds.
5.10  Restitution, criminal action.
5.11  Disputes concerning payment of wages.
5.12  Debarment proceedings.
5.13  Rulings and interpretations.
5.14  Variations, tolerances, and exemptions from parts 1 and 3 of this 
          subtitle and this part.
5.15  Limitations, variations, tolerances, and exemptions under the 
          Contract Work Hours and Safety Standards Act.
5.16  Training plans approved or recognized by the Department of Labor 
          prior to August 20, 1975.
5.17  Withdrawal of approval of a training program.

   Subpart B--Interpretation of the Fringe Benefits Provisions of the 
                             Davis-Bacon Act

5.20  Scope and significance of this subpart.
5.21  [Reserved]
5.22  Effect of the Davis-Bacon fringe benefits provisions.
5.23  The statutory provisions.
5.24  The basic hourly rate of pay.
5.25  Rate of contribution or cost for fringe benefits.
5.26  ``* * * contribution irrevocably made * * * to a trustee or to a 
          third person''.
5.27  ``* * * fund, plan, or program.''
5.28  Unfunded plans.
5.29  Specific fringe benefits.
5.30  Types of wage determinations.
5.31  Meeting wage determination obligations.
5.32  Overtime payments.

    Authority: 40 U.S.C. 276a-176a-7; 40 U.S.C. 276c; 40 U.S.C. 327-332; 
Reorganization Plan No. 14 of 1950, 5 U.S.C. Appendix; 5 U.S.C. 301; 29 
U.S.C. 259; 108 Stat. 4104(c); and the statutes listed in section 5.1(a) 
of this part.

    Source: 48 FR l9541, Apr. 29, 1983, unless otherwise noted.



    Subpart A--Davis-Bacon and Related Acts Provisions and Procedures

    Source: 48 FR 19540, Apr. 29, 1983, unless otherwise noted.

    Editorial Note: Nomenclature changes to Subpart A appear at 61 FR 
19984, May 3, 1996.



Sec. 5.1  Purpose and scope.

    (a) The regulations contained in this part are promulgated under the 
authority conferred upon the Secretary of Labor by Reorganization Plan 
No. 14 of 1950 and the Copeland Act in order to coordinate the 
administration and enforcement of the labor standards provisions of each 
of the following acts by the Federal agencies responsible for their 
administration and of such additional statutes as may from time to time 
confer upon the Secretary of Labor additional duties and 
responsibilities similar to those conferred upon the Secretary of Labor 
under Reorganization Plan No. 14 of 1950:


[[Page 105]]


    1. The Davis-Bacon Act (sec. 1-7, 46 Stat. 1949, as amended; Pub. L. 
74-403, 40 U.S.C. 276a-276a-7).
    2. Copeland Act (40 U.S.C. 276c).
    3. The Contract Work Hours and Safety Standards Act (40 U.S.C. 327-
332).
    4. National Housing Act (sec. 212 added to c. 847, 48 Stat. 1246, by 
sec. 14, 53 Stat. 807; 12 U.S.C. 1715c and repeatedly amended).
    5. Housing Act of 1950 (college housing) (amended by Housing Act of 
1959 to add labor provisions, 73 Stat. 681; 12 U.S.C. 1749a(f)).
    6. Housing Act of 1959 (sec. 401(f) of the Housing Act of 1950 as 
amended by Pub. L. 86-372, 73 Stat. 681; 12 U.S.C. 1701q(c)(3)).
    7. Commercial Fisheries Research and Development Act of 1964 (sec. 
7, 78 Stat. 199; 16 U.S.C. 779e(b)).
    8. Library Services and Construction Act (sec. 7(a), 78 Stat. 13; 20 
U.S.C. 355c(a)(4), as amended).
    9. National Technical Institute for the Deaf Act (sec. 5(b)(5), 79 
Stat. 126; 20 U.S.C. 684(b)(5)).
    10. National Foundation on the Arts and Humanities Act of 1965 (sec. 
5(k), 79 Stat. 846 as amended; 20 U.S.C. 954(j)).
    11. Elementary and Secondary Education Act of 1965 as amended by 
Elementary and Secondary and other Education Amendments of 1969 (sec. 
423 as added by Pub. L. 91-230, title IV, sec. 401(a)(10), 84 Stat. 169, 
and renumbered sec. 433, by Pub. L. 92-318; title III, sec. 301(a)(1), 
86 Stat. 326; 20 U.S.C. 1232(b)). Under the amendment coverage is 
extended to all programs administered by the Commissioner of Education.
    12. The Federal-Aid Highway Acts (72 Stat. 895, as amended by 82 
Stat. 821; 23 U.S.C. 113, as amended by the Surface Transportation 
Assistance Act of 1982, Pub. L. 97-424).
    13. Indian Self-Determination and Education Assistance Act (sec. 7, 
88 Stat. 2205; 25 U.S.C. 450e).
    14. Indian Health Care Improvement Act (sec. 303(b), 90 Stat. 1407; 
25 U.S.C. 1633(b)).
    15. Rehabilitation Act of 1973 (sec. 306(b)(5) 87 Stat. 384, 29 
U.S.C. 776(b)(5)).
    16. Comprehensive Employment and Training Act of 1973 (sec. 606, 87 
Stat. 880, renumbered sec. 706 by 88 Stat. 1845; 29 U.S.C. 986; also 
sec. 604, 88 Stat. 1846; 29 U.S.C. 964(b)(3)).
    17. State and Local Fiscal Assistance Act of 1972 (sec. 123(a)(6), 
86 Stat. 933; 31 U.S.C. 1246(a)(6)).
    18. Federal Water Pollution Control Act (sec. 513 of sec. 2, 86 
Stat. 894; 33 U.S.C. 1372).
    19. Veterans Nursing Home Care Act of 1964 (78 Stat. 502, as 
amended; 38 U.S.C. 5035(a)(8)).
    20. Postal Reorganization Act (sec. 410(b)(4)(C); 84 Stat. 726 as 
amended; 39 U.S.C. 410(b)(4)(C)).
    21. National Visitors Center Facilities Act of 1966 (sec. 110, 32 
Stat. 45; 40 U.S.C. 808).
    22. Appalachian Regional Development Act of 1965 (sec. 402, 79 Stat. 
21; 40 U.S.C. App. 402).
    23. Health Services Research, Health Statistics, and Medical 
Libraries Act of 1974 (sec. 107, see sec. 308(h)(2) thereof, 88 Stat. 
370, as amended by 90 Stat. 378; 42 U.S.C. 242m(h)(2)).
    24. Hospital Survey and Construction Act, as amended by the Hospital 
and Medical Facilities Amendments of 1964 (sec. 605(a)(5), 78 Stat. 453; 
42 U.S.C. 291e(a)(5)).
    25. Health Professions Educational Assistance Act (sec. 303(b), 90 
Stat. 2254; 42 U.S.C. 293a(g)(1)(C); also sec. 308a, 90 Stat. 2258, 42 
U.S.C. 293a(c)(7)).
    26. Nurse Training Act of 1964 (sec. 941(a)(1)(C), 89 Stat. 384; 42 
U.S.C. 296a(b)(5)).
    27. Heart Disease, Cancer, and Stroke Amendments of 1965 (sec. 904, 
as added by sec. 2, 79 Stat. 928; 42 U.S.C. 299d(b)(4)).
    28. Safe Drinking Water Act (sec. 2(a) see sec. 1450e thereof, 88 
Stat. 1691; 42 U.S.C. 300j-9(e)).
    29. National Health Planning and Resources Act (sec. 4, see sec. 
1604(b)(1)(H), 88 Stat. 2261, 42 U.S.C. 300o-3(b)(1)(H)).
    30. U.S. Housing Act of 1937, as amended and recodified (88 Stat. 
667; 42 U.S.C. 1437j).
    31. Demonstration Cities and Metropolitan Development Act of 1966 
(secs. 110, 311, 503, 1003, 80 Stat. 1259, 1270, 1277, 1284; 42 U.S.C. 
3310; 12 U.S.C. 1715c; 42 U.S.C. 1437j).
    32. Slum clearance program: Housing Act of 1949 (sec. 109, 63 Stat. 
419, as amended; 42 U.S.C. 1459).
    33. Farm housing: Housing Act of 1964 (adds sec. 516(f) to Housing 
Act of 1949 by sec. 503, 78 Stat. 797; 42 U.S.C. 1486(f)).
    34. Housing Act of 1961 (sec. 707, added by sec. 907, 79 Stat. 496, 
as amended; 42 U.S.C. 1500c-3).
    35. Defense Housing and Community Facilities and Services Act of 
1951 (sec. 310, 65 Stat. 307; 42 U.S.C. 1592i).
    36. Special Health Revenue Sharing Act of 1975 (sec. 303, see sec. 
222(a)(5) thereof, 89 Stat. 324; 42 U.S.C. 2689j(a)(5)).
    37. Economic Opportunity Act of 1964 (sec. 607, 78 Stat. 532; 42 
U.S.C. 2947).
    38. Headstart, Economic Opportunity, and Community Partnership Act 
of 1974 (sec. 11, see sec. 811 thereof, 88 Stat. 2327; 42 U.S.C. 2992a).
    39. Housing and Urban Development Act of 1965 (sec. 707, 79 Stat. 
492 as amended; 42 U.S.C. 3107).
    40. Older Americans Act of 1965 (sec. 502, Pub. L. 89-73, as amended 
by sec. 501, Pub. L. 93-29; 87 Stat. 50; 42 U.S.C. 3041a(a)(4)).
    41. Public Works and Economic Development Act of 1965 (sec. 712; 79 
Stat. 575 as amended; 42 U.S.C. 3222).
    42. Juvenile Delinquency Prevention Act (sec. 1, 86 Stat. 536; 42 
U.S.C. 3884).
    43. New Communities Act of 1968 (sec. 410, 82 Stat. 516; 42 U.S.C. 
3909).

[[Page 106]]

    44. Urban Growth and New Community Development Act of 1970 (sec. 
727(f), 84 Stat. 1803; 42 U.S.C. 4529).
    45. Domestic Volunteer Service Act of 1973 (sec. 406, 87 Stat. 410; 
42 U.S.C. 5046).
    46. Housing and Community Development Act of 1974 (secs. 110, 
802(g), 88 Stat. 649, 724; 42 U.S.C. 5310, 1440(g)).
    47. Developmentally Disabled Assistance and Bill of Rights Act (sec. 
126(4), 89 Stat. 488; 42 U.S.C. 6042(4); title I, sec. 111, 89 Stat. 
491; 42 U.S.C. 6063(b)(19)).
    48. National Energy Conservation Policy Act (sec. 312, 92 Stat. 
3254; 42 U.S.C. 6371j).
    49. Public Works Employment Act of 1976 (sec. 109, 90 Stat. 1001; 42 
U.S.C. 6708; also sec. 208, 90 Stat. 1008; 42 U.S.C. 6728).
    50. Energy Conservation and Production Act (sec. 451(h), 90 Stat. 
1168; 42 U.S.C. 6881(h)).
    51. Solid Waste Disposal Act (sec. 2, 90 Stat. 2823; 42 U.S.C. 
6979).
    52. Rail Passenger Service Act of 1970 (sec. 405d, 84 Stat. 1337; 45 
U.S.C. 565(d)).
    53. Urban Mass Transportation Act of 1964 (sec. 10, 78 Stat. 307; 
renumbered sec. 13 by 88 Stat. 715; 49 U.S.C. 1609).
    54. Highway Speed Ground Transportation Study (sec. 6(b), 79 Stat. 
893; 49 U.S.C. 1636(b)).
    55. Airport and Airway Development Act of 1970 (sec. 22(b), 84 Stat. 
231; 49 U.S.C. 1722(b)).
    56. Federal Civil Defense Act of 1950 (50 U.S.C. App. 2281i).
    57. National Capital Transportation Act of 1965 (sec. 3(b)(4), 79 
Stat. 644; 40 U.S.C. 682(b)(4). Note.-- Repealed December 9, 1969, and 
labor standards incorporated in sec. 1-1431 of the District of Columbia 
Code).
    58. Model Secondary School for the Deaf Act (sec. 4, 80 Stat. 1027, 
Pub. L. 89-694, but not in the United States Code).
    59. Delaware River Basin Compact (sec. 15.1, 75 Stat. 714, Pub. L. 
87-328) (considered a statute for purposes of the plan but not in the 
United States Code).
    60. Energy Security Act (sec. 175(c), Pub. L. 96-294, 94 Stat. 611; 
42 U.S.C. 8701 note).

    (b) Part 1 of this subtitle contains the Department's procedural 
rules governing requests for wage determinations and the issuance and 
use of such wage determinations under the Davis-Bacon Act and its 
related statutes as listed in that part.



Sec. 5.2  Definitions.

    (a) The term Secretary includes the Secretary of Labor, the Deputy 
Under Secretary for Employment Standards, and their authorized 
representatives.
    (b) The term Administrator means the Administrator of the Wage and 
Hour Division, Employment Standards Administration, U.S. Department of 
Labor, or authorized representative.
    (c) The term Federal agency means the agency or instrumentality of 
the United States which enters into the contract or provides assistance 
through loan, grant, loan guarantee or insurance, or otherwise, to the 
project subject to a statute listed in Sec. 5.1.
    (d) The term Agency Head means the principal official of the Federal 
agency and includes those persons duly authorized to act in the behalf 
of the Agency Head.
    (e) The term Contracting Officer means the individual, a duly 
appointed successor, or authorized representative who is designated and 
authorized to enter into contracts on behalf of the Federal agency.
    (f) The term labor standards as used in this part means the 
requirements of the Davis-Bacon Act, the Contract Work Hours and Safety 
Standards Act (other than those relating to safety and health), the 
Copeland Act, and the prevailing wage provisions of the other statutes 
listed in Sec. 5.1, and the regulations in parts 1 and 3 of this 
subtitle and this part.
    (g) The term United States or the District of Columbia means the 
United States, the District of Columbia, and all executive departments, 
independent establishments, administrative agencies, and 
instrumentalities of the United States and of the District of Columbia, 
including corporations, all or substantially all of the stock of which 
is beneficially owned by the United States, by the foregoing 
departments, establishments, agencies, instrumentalities, and including 
nonappropriated fund instrumentalities.
    (h) The term contract means any prime contract which is subject 
wholly or in part to the labor standards provisions of any of the acts 
listed in Sec. 5.1 and any subcontract of any tier thereunder, let under 
the prime contract. A State or local Government is not regarded as a 
contractor under statutes providing loans, grants, or other Federal 
assistance in situations where construction is performed by its own 
employees. However, under statutes requiring payment of prevailing wages 
to all laborers and mechanics employed on the assisted project, such as 
the

[[Page 107]]

U.S. Housing Act of 1937, State and local recipients of Federal-aid must 
pay these employees according to Davis-Bacon labor standards.
    (i) The terms building or work generally include construction 
activity as distinguished from manufacturing, furnishing of materials, 
or servicing and maintenance work. The terms include without limitation, 
buildings, structures, and improvements of all types, such as bridges, 
dams, plants, highways, parkways, streets, subways, tunnels, sewers, 
mains, power lines, pumping stations, heavy generators, railways, 
airports, terminals, docks, piers, wharves, ways, lighthouses, buoys, 
jetties, breakwaters, levees, canals, dredging, shoring, rehabilitation 
and reactivation of plants, scaffolding, drilling, blasting, excavating, 
clearing, and landscaping. The manufacture or furnishing of materials, 
articles, supplies or equipment (whether or not a Federal or State 
agency acquires title to such materials, articles, supplies, or 
equipment during the course of the manufacture or furnishing, or owns 
the materials from which they are manufactured or furnished) is not a 
building or work within the meaning of the regulations in this part 
unless conducted in connection with and at the site of such a building 
or work as is described in the foregoing sentence, or under the United 
States Housing Act of 1937 and the Housing Act of 1949 in the 
construction or development of the project.
    (j) The terms construction, prosecution, completion, or repair mean 
the following:
    (1) All types of work done on a particular building or work at the 
site thereof, including work at a facility which is dedicated to and 
deemed a part of the site of the work within the meaning of section 
5.2(l) of this part by laborers and mechanics employed by a construction 
contractor or construction subcontractor (or, under the United States 
Housing Act of 1937 and the Housing Act of 1949, all work done in the 
construction or development of the project), including without 
limitation--
    (i) Altering, remodeling, installation (where appropriate) on the 
site of the work of items fabricated off-site;
    (ii) Painting and decorating;
    (iii) Manufacturing or furnishing of materials, articles, supplies 
or equipment on the site of the building or work (or, under the United 
States Housing Act of 1937 and the Housing Act of 1949, in the 
construction or development of the project); and
    (iv) Transportation between the actual construction location and a 
facility which is dedicated to such construction and deemed a part of 
the site of the work within the meaning of Sec. 5.2(l) of this part.
    (2) Except for laborers and mechanics employed in the construction 
or development of the project under the United States Housing Act of 
1937 and the Housing Act of 1949, and except as provided in paragraph 
(j)(1)(iv) of this section, the transportation of materials or supplies 
to or from the building or work by employees of the construction 
contractor or a construction subcontractor is not ``construction'' 
(etc.) (see Building and Construction Trades Department, AFL-CIO v. 
United States Department of Labor Wage Appeals Board (Midway Excavators, 
Inc.), 932 F.2d 985 (D.C. Cir. 1991)).
    (k) The term public building or public work includes building or 
work, the construction, prosecution, completion, or repair of which, as 
defined above, is carried on directly by authority of or with funds of a 
Federal agency to serve the interest of the general public regardless of 
whether title thereof is in a Federal agency.
    (l) The term site of the work is defined as follows:
    (1) The site of the work is limited to the physical place or places 
where the construction called for in the contract will remain when work 
on it has been completed and, as discussed in paragraph (l)(2) of this 
section, other adjacent or nearby property used by the contractor or 
subcontractor in such construction which can reasonably be said to be 
included in the site.
    (2) Except as provided in paragraph (l)(3) of this section, 
fabrication plants, mobile factories, batch plants, borrow pits, job 
headquarters, tool yards, etc., are part of the site of the work 
provided they are dedicated exclusively, or nearly so, to performance of 
the contract or project, and are so located in proximity to the actual 
construction location

[[Page 108]]

that it would be reasonable to include them.
    (3) Not included in the site of the work are permanent home offices, 
branch plant establishments, fabrication plants, and tool yards of a 
contractor or subcontractor whose locations and continuance in operation 
are determined wholly without regard to a particular Federal or 
federally assisted contract or project. In addition, fabrication plants, 
batch plants, borrow pits, job headquarters, tool yards, etc., of a 
commercial supplier or materialman which are established by a supplier 
of materials for the project before opening of bids and not on the 
project site, are not included in the site of the work. Such permanent, 
previously established facilities are not a part of the site of the 
work, even where the operations for a period of time may be dedicated 
exclusively, or nearly so, to the performance of a contract.
    (m) The term laborer or mechanic includes at least those workers 
whose duties are manual or physical in nature (including those workers 
who use tools or who are performing the work of a trade), as 
distinguished from mental or managerial. The term laborer or mechanic 
includes apprentices, trainees, helpers, and, in the case of contracts 
subject to the Contract Work Hours and Safety Standards Act, watchmen or 
guards. The term does not apply to workers whose duties are primarily 
administrative, executive, or clerical, rather than manual. Persons 
employed in a bona fide executive, administrative, or professional 
capacity as defined in part 541 of this title are not deemed to be 
laborers or mechanics. Working foremen who devote more than 20 percent 
of their time during a workweek to mechanic or laborer duties, and who 
do not meet the criteria of part 541, are laborers and mechanics for the 
time so spent.
    (n) The terms apprentice, trainee, and helper are defined as 
follows:
    (1) Apprentice means (i) a person employed and individually 
registered in a bona fide apprenticeship program registered with the 
U.S. Department of Labor, Employment and Training Administration, Bureau 
of Apprenticeship and Training, or with a State Apprenticeship Agency 
recognized by the Bureau, or (ii) a person in the first 90 days of 
probationary employment as an apprentice in such an apprenticeship 
program, who is not individually registered in the program, but who has 
been certified by the Bureau of Apprenticeship and Training or a State 
Apprenticeship Agency (where appropriate) to be eligible for 
probationary employment as an apprentice;
    (2) Trainee means a person registered and receiving on-the-job 
training in a construction occupation under a program which has been 
approved in advance by the U.S. Department of Labor, Employment and 
Training Administration, as meeting its standards for on-the-job 
training programs and which has been so certified by that 
Administration.
    (3) These provisions do not apply to apprentices and trainees 
employed on projects subject to 23 U.S.C. 113 who are enrolled in 
programs which have been certified by the Secretary of Transportation in 
accordance with 23 U.S.C. 113(c).
    (4) A helper is a semi-skilled worker (rather than a skilled 
journeyman mechanic) who works under the direction of and assists a 
journeyman. Under the journeyman's direction and supervision, the helper 
performs a variety of duties to assist the journeyman such as preparing, 
carrying and furnishing materials, tools, equipment, and supplies and 
maintaining them in order; cleaning and preparing work areas; lifting, 
positioning, and holding materials or tools; and other related, semi-
skilled tasks as directed by the journeyman. A helper may use tools of 
the trade at and under the direction and supervision of the journeyman. 
The particular duties performed by a helper vary according to area 
practice.
    (o) Every person performing the duties of a laborer or mechanic in 
the construction, prosecution, completion, or repair of a public 
building or public work, or building or work financed in whole or in 
part by loans, grants, or guarantees from the United States is employed 
regardless of any contractual relationship alleged to exist between the 
contractor and such person.

[[Page 109]]

    (p) The term wages means the basic hourly rate of pay; any 
contribution irrevocably made by a contractor or subcontractor to a 
trustee or to a third person pursuant to a bona fide fringe benefit 
fund, plan, or program; and the rate of costs to the contractor or 
subcontractor which may be reasonably anticipated in providing bona fide 
fringe benefits to laborers and mechanics pursuant to an enforceable 
commitment to carry out a financially responsible plan of program, which 
was communicated in writing to the laborers and mechanics affected. The 
fringe benefits enumerated in the Davis-Bacon Act include medical or 
hospital care, pensions on retirement or death, compensation for 
injuries or illness resulting from occupational activity, or insurance 
to provide any of the foregoing; unemployment benefits; life insurance, 
disability insurance, sickness insurance, or accident insurance; 
vacation or holiday pay; defraying costs of apprenticeship or other 
similar programs; or other bona fide fringe benefits. Fringe benefits do 
not include benefits required by other Federal, State, or local law.
    (q) The term wage determination includes the original decision and 
any subsequent decisions modifying, superseding, correcting, or 
otherwise changing the provisions of the original decision. The 
application of the wage determination shall be in accordance with the 
provisions of Sec. 1.6 of this title.

[48 FR 19541, Apr. 29, 1983, as amended at 48 FR 50313, Nov. 1, 1983; 55 
FR 50149, Dec. 4, 1990; 57 FR 19206, May 4, 1992]

    Effective Date Note: At 58 FR 58955, Nov. 5, 1993, Sec. 5.2 was 
amended by suspending paragraph (n)(4) indefinitely.



Secs. 5.3--5.4  [Reserved]



Sec. 5.5  Contract provisions and related matters.

    (a) The Agency head shall cause or require the contracting officer 
to insert in full in any contract in excess of $2,000 which is entered 
into for the actual construction, alteration and/or repair, including 
painting and decorating, of a public building or public work, or 
building or work financed in whole or in part from Federal funds or in 
accordance with guarantees of a Federal agency or financed from funds 
obtained by pledge of any contract of a Federal agency to make a loan, 
grant or annual contribution (except where a different meaning is 
expressly indicated), and which is subject to the labor standards 
provisions of any of the acts listed in Sec. 5.1, the following clauses 
(or any modifications thereof to meet the particular needs of the 
agency, Provided, That such modifications are first approved by the 
Department of Labor):
    (1) Minimum wages. (i) All laborers and mechanics employed or 
working upon the site of the work (or under the United States Housing 
Act of 1937 or under the Housing Act of 1949 in the construction or 
development of the project), will be paid unconditionally and not less 
often than once a week, and without subsequent deduction or rebate on 
any account (except such payroll deductions as are permitted by 
regulations issued by the Secretary of Labor under the Copeland Act (29 
CFR part 3)), the full amount of wages and bona fide fringe benefits (or 
cash equivalents thereof) due at time of payment computed at rates not 
less than those contained in the wage determination of the Secretary of 
Labor which is attached hereto and made a part hereof, regardless of any 
contractual relationship which may be alleged to exist between the 
contractor and such laborers and mechanics.

Contributions made or costs reasonably anticipated for bona fide fringe 
benefits under section 1(b)(2) of the Davis-Bacon Act on behalf of 
laborers or mechanics are considered wages paid to such laborers or 
mechanics, subject to the provisions of paragraph (a)(1)(iv) of this 
section; also, regular contributions made or costs incurred for more 
than a weekly period (but not less often than quarterly) under plans, 
funds, or programs which cover the particular weekly period, are deemed 
to be constructively made or incurred during such weekly period. Such 
laborers and mechanics shall be paid the appropriate wage rate and 
fringe benefits on the wage determination for the classification of work 
actually performed, without regard to skill, except as provided in 
Sec. 5.5(a)(4). Laborers or mechanics performing work in more than one 
classification may be compensated at

[[Page 110]]

the rate specified for each classification for the time actually worked 
therein: Provided, That the employer's payroll records accurately set 
forth the time spent in each classification in which work is performed. 
The wage determination (including any additional classification and wage 
rates conformed under paragraph (a)(1)(ii) of this section) and the 
Davis-Bacon poster (WH-1321) shall be posted at all times by the 
contractor and its subcontractors at the site of the work in a prominent 
and accessible place where it can be easily seen by the workers.
    (ii)(A) The contracting officer shall require that any class of 
laborers or mechanics, including helpers, which is not listed in the 
wage determination and which is to be employed under the contract shall 
be classified in conformance with the wage determination. The 
contracting officer shall approve an additional classification and wage 
rate and fringe benefits therefore only when the following criteria have 
been met:
    (1) Except with respect to helpers as defined in 29 CFR 5.2(n)(4), 
the work to be performed by the classification requested is not 
performed by a classification in the wage determination; and
    (2) The classification is utilized in the area by the construction 
industry; and
    (3) The proposed wage rate, including any bona fide fringe benefits, 
bears a reasonable relationship to the wage rates contained in the wage 
determination; and
    (4) With respect to helpers as defined in 29 CFR 5.2(n)(4), such a 
classification prevails in the area in which the work is performed.
    (B) If the contractor and the laborers and mechanics to be employed 
in the classification (if known), or their representatives, and the 
contracting officer agree on the classification and wage rate (including 
the amount designated for fringe benefits where appropriate), a report 
of the action taken shall be sent by the contracting officer to the 
Administrator of the Wage and Hour Division, Employment Standards 
Administration, U.S. Department of Labor, Washington, DC 20210. The 
Administrator, or an authorized representative, will approve, modify, or 
disapprove every additional classification action within 30 days of 
receipt and so advise the contracting officer or will notify the 
contracting officer within the 30-day period that additional time is 
necessary.
    (C) In the event the contractor, the laborers or mechanics to be 
employed in the classification or their representatives, and the 
contracting officer do not agree on the proposed classification and wage 
rate (including the amount designated for fringe benefits, where 
appropriate), the contracting officer shall refer the questions, 
including the views of all interested parties and the recommendation of 
the contracting officer, to the Administrator for determination. The 
Administrator, or an authorized representative, will issue a 
determination within 30 days of receipt and so advise the contracting 
officer or will notify the contracting officer within the 30-day period 
that additional time is necessary.
    (D) The wage rate (including fringe benefits where appropriate) 
determined pursuant to paragraphs (a)(1)(ii) (B) or (C) of this section, 
shall be paid to all workers performing work in the classification under 
this contract from the first day on which work is performed in the 
classification.
    (iii) Whenever the minimum wage rate prescribed in the contract for 
a class of laborers or mechanics includes a fringe benefit which is not 
expressed as an hourly rate, the contractor shall either pay the benefit 
as stated in the wage determination or shall pay another bona fide 
fringe benefit or an hourly cash equivalent thereof.
    (iv) If the contractor does not make payments to a trustee or other 
third person, the contractor may consider as part of the wages of any 
laborer or mechanic the amount of any costs reasonably anticipated in 
providing bona fide fringe benefits under a plan or program, Provided, 
That the Secretary of Labor has found, upon the written request of the 
contractor, that the applicable standards of the Davis-Bacon Act have 
been met. The Secretary of Labor may require the contractor to set aside 
in a separate account assets for the meeting of obligations under the 
plan or program.

[[Page 111]]

    (v)(A) The contracting officer shall require that any class of 
laborers or mechanics which is not listed in the wage determination and 
which is to be employed under the contract shall be classified in 
conformance with the wage determination. The contracting officer shall 
approve an additional classification and wage rate and fringe benefits 
therefor only when the following criteria have been met:
    (1) The work to be performed by the classification requested is not 
performed by a classification in the wage determination; and
    (2) The classification is utilized in the area by the construction 
industry; and
    (3) The proposed wage rate, including any bona fide fringe benefits, 
bears a reasonable relationship to the wage rates contained in the wage 
determination.
    (B) If the contractor and the laborers and mechanics to be employed 
in the classification (if known), or their representatives, and the 
contracting officer agree on the classification and wage rate (including 
the amount designated for fringe benefits where appropriate), a report 
of the action taken shall be sent by the contracting officer to the 
Administrator of the Wage and Hour Division, Employment Standards 
Administration, Washington, DC 20210. The Administrator, or an 
authorized representative, will approve, modify, or disapprove every 
additional classification action within 30 days of receipt and so advise 
the contracting officer or will notify the contracting officer within 
the 30-day period that additional time is necessary.
    (C) In the event the contractor, the laborers or mechanics to be 
employed in the classification or their representatives, and the 
contracting officer do not agree on the proposed classification and wage 
rate (including the amount designated for fringe benefits, where 
appropriate), the contracting officer shall refer the questions, 
including the views of all interested parties and the recommendation of 
the contracting officer, to the Administrator for determination. The 
Administrator, or an authorized representative, will issue a 
determination with 30 days of receipt and so advise the contracting 
officer or will notify the contracting officer within the 30-day period 
that additional time is necessary.
    (D) The wage rate (including fringe benefits where appropriate) 
determined pursuant to paragraphs (a)(1)(v) (B) or (C) of this section, 
shall be paid to all workers performing work in the classification under 
this contract from the first day on which work is performed in the 
classification.
    (2) Withholding. The (write in name of Federal Agency or the loan or 
grant recipient) shall upon its own action or upon written request of an 
authorized representative of the Department of Labor withhold or cause 
to be withheld from the contractor under this contract or any other 
Federal contract with the same prime contractor, or any other federally-
assisted contract subject to Davis-Bacon prevailing wage requirements, 
which is held by the same prime contractor, so much of the accrued 
payments or advances as may be considered necessary to pay laborers and 
mechanics, including apprentices, trainees, and helpers, employed by the 
contractor or any subcontractor the full amount of wages required by the 
contract. In the event of failure to pay any laborer or mechanic, 
including any apprentice, trainee, or helper, employed or working on the 
site of the work (or under the United States Housing Act of 1937 or 
under the Housing Act of 1949 in the construction or development of the 
project), all or part of the wages required by the contract, the 
(Agency) may, after written notice to the contractor, sponsor, 
applicant, or owner, take such action as may be necessary to cause the 
suspension of any further payment, advance, or guarantee of funds until 
such violations have ceased.
    (3) Payrolls and basic records. (i) Payrolls and basic records 
relating thereto shall be maintained by the contractor during the course 
of the work and preserved for a period of three years thereafter for all 
laborers and mechanics working at the site of the work (or under the 
United States Housing Act of 1937, or under the Housing Act of 1949, in 
the construction or development of the project). Such records shall 
contain the name, address, and social security number of each such 
worker, his or her

[[Page 112]]

correct classification, hourly rates of wages paid (including rates of 
contributions or costs anticipated for bona fide fringe benefits or cash 
equivalents thereof of the types described in section 1(b)(2)(B) of the 
Davis-Bacon Act), daily and weekly number of hours worked, deductions 
made and actual wages paid. Whenever the Secretary of Labor has found 
under 29 CFR 5.5(a)(1)(iv) that the wages of any laborer or mechanic 
include the amount of any costs reasonably anticipated in providing 
benefits under a plan or program described in section 1(b)(2)(B) of the 
Davis-Bacon Act, the contractor shall maintain records which show that 
the commitment to provide such benefits is enforceable, that the plan or 
program is financially responsible, and that the plan or program has 
been communicated in writing to the laborers or mechanics affected, and 
records which show the costs anticipated or the actual cost incurred in 
providing such benefits. Contractors employing apprentices or trainees 
under approved programs shall maintain written evidence of the 
registration of apprenticeship programs and certification of trainee 
programs, the registration of the apprentices and trainees, and the 
ratios and wage rates prescribed in the applicable programs.
    (ii)(A) The contractor shall submit weekly for each week in which 
any contract work is performed a copy of all payrolls to the (write in 
name of appropriate Federal agency) if the agency is a party to the 
contract, but if the agency is not such a party, the contractor will 
submit the payrolls to the applicant, sponsor, or owner, as the case may 
be, for transmission to the (write in name of agency). The payrolls 
submitted shall set out accurately and completely all of the information 
required to be maintained under Sec. 5.5(a)(3)(i) of Regulations, 29 CFR 
part 5. This information may be submitted in any form desired. Optional 
Form WH-347 is available for this purpose and may be purchased from the 
Superintendent of Documents (Federal Stock Number 029-005-00014-1), U.S. 
Government Printing Office, Washington, DC 20402. The prime contractor 
is responsible for the submission of copies of payrolls by all 
subcontractors.
    (B) Each payroll submitted shall be accompanied by a ``Statement of 
Compliance,'' signed by the contractor or subcontractor or his or her 
agent who pays or supervises the payment of the persons employed under 
the contract and shall certify the following:
    (1) That the payroll for the payroll period contains the information 
required to be maintained under Sec. 5.5(a)(3)(i) of Regulations, 29 CFR 
part 5 and that such information is correct and complete;
    (2) That each laborer or mechanic (including each helper, 
apprentice, and trainee) employed on the contract during the payroll 
period has been paid the full weekly wages earned, without rebate, 
either directly or indirectly, and that no deductions have been made 
either directly or indirectly from the full wages earned, other than 
permissible deductions as set forth in Regulations, 29 CFR part 3;
    (3) That each laborer or mechanic has been paid not less than the 
applicable wage rates and fringe benefits or cash equivalents for the 
classification of work performed, as specified in the applicable wage 
determination incorporated into the contract.
    (C) The weekly submission of a properly executed certification set 
forth on the reverse side of Optional Form WH-347 shall satisfy the 
requirement for submission of the ``Statement of Compliance'' required 
by paragraph (a)(3)(ii)(B) of this section.
    (D) The falsification of any of the above certifications may subject 
the contractor or subcontractor to civil or criminal prosecution under 
section 1001 of title 18 and section 231 of title 31 of the United 
States Code.
    (iii) The contractor or subcontractor shall make the records 
required under paragraph (a)(3)(i) of this section available for 
inspection, copying, or transcription by authorized representatives of 
the (write the name of the agency) or the Department of Labor, and shall 
permit such representatives to interview employees during working hours 
on the job. If the contractor or subcontractor fails to submit the 
required records or to make them available, the Federal agency may, 
after written notice to the contractor, sponsor, applicant, or owner, 
take such action as

[[Page 113]]

may be necessary to cause the suspension of any further payment, 
advance, or guarantee of funds. Furthermore, failure to submit the 
required records upon request or to make such records available may be 
grounds for debarment action pursuant to 29 CFR 5.12.
    (4) Apprentices and trainees--(i) Apprentices. Apprentices will be 
permitted to work at less than the predetermined rate for the work they 
performed when they are employed pursuant to and individually registered 
in a bona fide apprenticeship program registered with the U.S. 
Department of Labor, Employment and Training Administration, Bureau of 
Apprenticeship and Training, or with a State Apprenticeship Agency 
recognized by the Bureau, or if a person is employed in his or her first 
90 days of probationary employment as an apprentice in such an 
apprenticeship program, who is not individually registered in the 
program, but who has been certified by the Bureau of Apprenticeship and 
Training or a State Apprenticeship Agency (where appropriate) to be 
eligible for probationary employment as an apprentice. The allowable 
ratio of apprentices to journeymen on the job site in any craft 
classification shall not be greater than the ratio permitted to the 
contractor as to the entire work force under the registered program. Any 
worker listed on a payroll at an apprentice wage rate, who is not 
registered or otherwise employed as stated above, shall be paid not less 
than the applicable wage rate on the wage determination for the 
classification of work actually performed. In addition, any apprentice 
performing work on the job site in excess of the ratio permitted under 
the registered program shall be paid not less than the applicable wage 
rate on the wage determination for the work actually performed. Where a 
contractor is performing construction on a project in a locality other 
than that in which its program is registered, the ratios and wage rates 
(expressed in percentages of the journeyman's hourly rate) specified in 
the contractor's or subcontractor's registered program shall be 
observed. Every apprentice must be paid at not less than the rate 
specified in the registered program for the apprentice's level of 
progress, expressed as a percentage of the journeymen hourly rate 
specified in the applicable wage determination. Apprentices shall be 
paid fringe benefits in accordance with the provisions of the 
apprenticeship program. If the apprenticeship program does not specify 
fringe benefits, apprentices must be paid the full amount of fringe 
benefits listed on the wage determination for the applicable 
classification. If the Administrator determines that a different 
practice prevails for the applicable apprentice classification, fringes 
shall be paid in accordance with that determination. In the event the 
Bureau of Apprenticeship and Training, or a State Apprenticeship Agency 
recognized by the Bureau, withdraws approval of an apprenticeship 
program, the contractor will no longer be permitted to utilize 
apprentices at less than the applicable predetermined rate for the work 
performed until an acceptable program is approved.
    (ii) Trainees. Except as provided in 29 CFR 5.16, trainees will not 
be permitted to work at less than the predetermined rate for the work 
performed unless they are employed pursuant to and individually 
registered in a program which has received prior approval, evidenced by 
formal certification by the U.S. Department of Labor, Employment and 
Training Administration. The ratio of trainees to journeymen on the job 
site shall not be greater than permitted under the plan approved by the 
Employment and Training Administration. Every trainee must be paid at 
not less than the rate specified in the approved program for the 
trainee's level of progress, expressed as a percentage of the journeyman 
hourly rate specified in the applicable wage determination. Trainees 
shall be paid fringe benefits in accordance with the provisions of the 
trainee program. If the trainee program does not mention fringe 
benefits, trainees shall be paid the full amount of fringe benefits 
listed on the wage determination unless the Administrator of the Wage 
and Hour Division determines that there is an apprenticeship program 
associated with the corresponding journeyman wage rate on the wage 
determination which provides

[[Page 114]]

for less than full fringe benefits for apprentices. Any employee listed 
on the payroll at a trainee rate who is not registered and participating 
in a training plan approved by the Employment and Training 
Administration shall be paid not less than the applicable wage rate on 
the wage determination for the classification of work actually 
performed. In addition, any trainee performing work on the job site in 
excess of the ratio permitted under the registered program shall be paid 
not less than the applicable wage rate on the wage determination for the 
work actually performed. In the event the Employment and Training 
Administration withdraws approval of a training program, the contractor 
will no longer be permitted to utilize trainees at less than the 
applicable predetermined rate for the work performed until an acceptable 
program is approved.
    (iii) Equal employment opportunity. The utilization of apprentices, 
trainees and journeymen under this part shall be in conformity with the 
equal employment opportunity requirements of Executive Order 11246, as 
amended, and 29 CFR part 30.
    (5) Compliance with Copeland Act requirements. The contractor shall 
comply with the requirements of 29 CFR part 3, which are incorporated by 
reference in this contract.
    (6) Subcontracts. The contractor or subcontractor shall insert in 
any subcontracts the clauses contained in 29 CFR 5.5(a)(1) through (10) 
and such other clauses as the (write in the name of the Federal agency) 
may by appropriate instructions require, and also a clause requiring the 
subcontractors to include these clauses in any lower tier subcontracts. 
The prime contractor shall be responsible for the compliance by any 
subcontractor or lower tier subcontractor with all the contract clauses 
in 29 CFR 5.5.
    (7) Contract termination: debarment. A breach of the contract 
clauses in 29 CFR 5.5 may be grounds for termination of the contract, 
and for debarment as a contractor and a subcontractor as provided in 29 
CFR 5.12.
    (8) Compliance with Davis-Bacon and Related Act requirements. All 
rulings and interpretations of the Davis-Bacon and Related Acts 
contained in 29 CFR parts 1, 3, and 5 are herein incorporated by 
reference in this contract.
    (9) Disputes concerning labor standards. Disputes arising out of the 
labor standards provisions of this contract shall not be subject to the 
general disputes clause of this contract. Such disputes shall be 
resolved in accordance with the procedures of the Department of Labor 
set forth in 29 CFR parts 5, 6, and 7. Disputes within the meaning of 
this clause include disputes between the contractor (or any of its 
subcontractors) and the contracting agency, the U.S. Department of 
Labor, or the employees or their representatives.
    (10) Certification of eligibility. (i) By entering into this 
contract, the contractor certifies that neither it (nor he or she) nor 
any person or firm who has an interest in the contractor's firm is a 
person or firm ineligible to be awarded Government contracts by virtue 
of section 3(a) of the Davis-Bacon Act or 29 CFR 5.12(a)(1).
    (ii) No part of this contract shall be subcontracted to any person 
or firm ineligible for award of a Government contract by virtue of 
section 3(a) of the Davis-Bacon Act or 29 CFR 5.12(a)(1).
    (iii) The penalty for making false statements is prescribed in the 
U.S. Criminal Code, 18 U.S.C. 1001.
    (b) Contract Work Hours and Safety Standards Act. The Agency Head 
shall cause or require the contracting officer to insert the following 
clauses set forth in paragraphs (b)(1), (2), (3), and (4) of this 
section in full in any contract in an amount in excess of $100,000 and 
subject to the overtime provisions of the Contract Work Hours and Safety 
Standards Act. These clauses shall be inserted in addition to the 
clauses required by Sec. 5.5(a) or 4.6 of part 4 of this title. As used 
in this paragraph, the terms laborers and mechanics include watchmen and 
guards.
    (1) Overtime requirements. No contractor or subcontractor 
contracting for any part of the conract work which may require or 
involve the employment of laborers or mechanics shall require or permit 
any such laborer or mechanic in any workweek in which he or she is 
employed on such work to work in excess of forty hours in such workweek 
unless such laborer or mechanic receives compensation at a rate not

[[Page 115]]

less than one and one-half times the basic rate of pay for all hours 
worked in excess of forty hours in such workweek.
    (2) Violation; liability for unpaid wages; liquidated damages. In 
the event of any violation of the clause set forth in paragraph (b)(1) 
of this section the contractor and any subcontractor responsible 
therefor shall be liable for the unpaid wages. In addition, such 
contractor and subcontractor shall be liable to the United States (in 
the case of work done under contract for the District of Columbia or a 
territory, to such District or to such territory), for liquidated 
damages. Such liquidated damages shall be computed with respect to each 
individual laborer or mechanic, including watchmen and guards, employed 
in violation of the clause set forth in paragraph (b)(1) of this 
section, in the sum of $10 for each calendar day on which such 
individual was required or permitted to work in excess of the standard 
workweek of forty hours without payment of the overtime wages required 
by the clause set forth in paragraph (b)(1) of this section.
    (3) Withholding for unpaid wages and liquidated damages. The (write 
in the name of the Federal agency or the loan or grant recipient) shall 
upon its own action or upon written request of an authorized 
representative of the Department of Labor withhold or cause to be 
withheld, from any moneys payable on account of work performed by the 
contractor or subcontractor under any such contract or any other Federal 
contract with the same prime contractor, or any other federally-assisted 
contract subject to the Contract Work Hours and Safety Standards Act, 
which is held by the same prime contractor, such sums as may be 
determined to be necessary to satisfy any liabilities of such contractor 
or subcontractor for unpaid wages and liquidated damages as provided in 
the clause set forth in paragraph (b)(2) of this section.
    (4) Subcontracts. The contractor or subcontractor shall insert in 
any subcontracts the clauses set forth in paragraph (b)(1) through (4) 
of this section and also a clause requiring the subcontractors to 
include these clauses in any lower tier subcontracts. The prime 
contractor shall be responsible for compliance by any subcontractor or 
lower tier subcontractor with the clauses set forth in paragraphs (b)(1) 
through (4) of this section.
    (c) In addition to the clauses contained in paragraph (b), in any 
contract subject only to the Contract Work Hours and Safety Standards 
Act and not to any of the other statutes cited in Sec. 5.1, the Agency 
Head shall cause or require the contracting officer to insert a clause 
requiring that the contractor or subcontractor shall maintain payrolls 
and basic payroll records during the course of the work and shall 
preserve them for a period of three years from the completion of the 
contract for all laborers and mechanics, including guards and watchmen, 
working on the contract. Such records shall contain the name and address 
of each such employee, social security number, correct classifications, 
hourly rates of wages paid, daily and weekly number of hours worked, 
deductions made, and actual wages paid. Further, the Agency Head shall 
cause or require the contracting officer to insert in any such contract 
a clause providing that the records to be maintained under this 
paragraph shall be made available by the contractor or subcontractor for 
inspection, copying, or transcription by authorized representatives of 
the (write the name of agency) and the Department of Labor, and the 
contractor or subcontractor will permit such representatives to 
interview employees during working hours on the job.

(The information collection, recordkeeping, and reporting requirements 
contained in the following paragraphs of this section were approved by 
the Office of Management and Budget:

------------------------------------------------------------------------
                                                             OMB Control
                         Paragraph                              Number
------------------------------------------------------------------------
(a)(1)(ii)(B)..............................................    1215-0140
(a)(1)(ii)(C)..............................................    1215-0140
(a)(1)(iv).................................................    1215-0140
(a)(3)(i)..................................................   1215-0140,
                                                               1215-0017
(a)(3)(ii)(A)..............................................    1215-0149
(c)........................................................   1215-0140,
                                                               1215-0017
------------------------------------------------------------------------


[48 FR 19540, Apr. 29, 1983, as amended at 51 FR 12265, Apr. 9, 1986; 55 
FR 50150, Dec. 4, 1990; 57 FR 28776, June 26, 1992; 58 FR 58955, Nov. 5, 
1993; 61 FR 40716, Aug. 5, 1996]

[[Page 116]]


    Effective Date Note: At 58 FR 58955, Nov. 5, 1993, Sec. 5.5 was 
amended by suspending paragraph (a)(1)(ii) indefinitely.



Sec. 5.6  Enforcement.

    (a)(1) It shall be the responsibility of the Federal agency to 
ascertain whether the clauses required by Sec. 5.5 have been inserted in 
the contracts subject to the labor standards provisions of the Acts 
contained in Sec. 5.1. Agencies which do not directly enter into such 
contracts shall promulgate the necessary regulations or procedures to 
require the recipient of the Federal assistance to insert in its 
contracts the provisions of Sec. 5.5. No payment, advance, grant, loan, 
or guarantee of funds shall be approved by the Federal agency unless the 
agency insures that the clauses required by Sec. 5.5 and the appropriate 
wage determination of the Secretary of Labor are contained in such 
contracts. Furthermore, no payment, advance, grant, loan, or guarantee 
of funds shall be approved by the Federal agency after the beginning of 
construction unless there is on file with the agency a certification by 
the contractor that the contractor and its subcontractors have complied 
with the provisions of Sec. 5.5 or unless there is on file with the 
agency a certification by the contractor that there is a substantial 
dispute with respect to the required provisions.
    (2) Payrolls and Statements of Compliance submitted pursuant to 
Sec. 5.5(a)(3)(ii) shall be preserved by the Federal agency for a period 
of 3 years from the date of completion of the contract and shall be 
produced at the request of the Department of Labor at any time during 
the 3-year period.
    (3) The Federal agency shall cause such investigations to be made as 
may be necessary to assure compliance with the labor standards clauses 
required by Sec. 5.5 and the applicable statutes listed in Sec. 5.1. 
Investigations shall be made of all contracts with such frequency as may 
be necessary to assure compliance. Such investigations shall include 
interviews with employees, which shall be taken in confidence, and 
examinations of payroll data and evidence of registration and 
certification with respect to apprenticeship and training plans. In 
making such examinations, particular care shall be taken to determine 
the correctness of classifications and to determine whether there is a 
disproportionate employment of laborers and of apprentices or trainees 
registered in approved programs. Such investigations shall also include 
evidence of fringe benefit plans and payments thereunder. Complaints of 
alleged violations shall be given priority.
    (4) In accordance with normal operating procedures, the contracting 
agency may be furnished various investigatory material from the 
investigation files of the Department of Labor. None of the material, 
other than computations of back wages and liquidated damages and the 
summary of back wages due, may be disclosed in any manner to anyone 
other than Federal officials charged with administering the contract or 
program providing Federal assistance to the contract, without requesting 
the permission and views of the Department of Labor.
    (5) It is the policy of the Department of Labor to protect the 
identity of its confidential sources and to prevent an unwarranted 
invasion of personal privacy. Accordingly, the identity of an employee 
who makes a written or oral statement as a complaint or in the course of 
an investigation, as well as portions of the statement which would 
reveal the employee's identity, shall not be disclosed in any manner to 
anyone other than Federal officials without the prior consent of the 
employee. Disclosure of employee statements shall be governed by the 
provisions of the ``Freedom of Information Act'' (5 U.S.C. 552, see 29 
CFR part 70) and the ``Privacy Act of 1974'' (5 U.S.C. 552a).
    (b) The Administrator shall cause to be made such investigations as 
deemed necessary, in order to obtain compliance with the labor standards 
provisions of the applicable statutes listed in Sec. 5.1, or to affirm 
or reject the recommendations by the Agency Head with respect to labor 
standards matters arising under the statutes listed in Sec. 5.1. Federal 
agencies, contractors, subcontractors, sponsors, applicants, or owners 
shall cooperate with any authorized representative of the Department of 
Labor in the inspection of records, in interviews with workers,

[[Page 117]]

and in all other aspects of the investigations. The findings of such an 
investigation, including amounts found due, may not be altered or 
reduced without the approval of the Department of Labor. Where the 
underpayments disclosed by such an investigation total $1,000 or more, 
where there is reason to believe that the violations are aggravated or 
willful (or, in the case of the Davis-Bacon Act, that the contractor has 
disregarded its obligations to employees and subcontractors), or where 
liquidated damages may be assessed under the Contract Work Hours and 
Safety Standards Act, the Department of Labor will furnish the Federal 
agency an enforcement report detailing the labor standards violations 
disclosed by the investigation and any action taken by the contractor to 
correct the violative practices, including any payment of back wages. In 
other circumstances, the Federal agency will be furnished a letter of 
notification summarizing the findings of the investigation.



Sec. 5.7  Reports to the Secretary of Labor.

    (a) Enforcement reports. (1) Where underpayments by a contractor or 
subcontractor total less than $1,000, and where there is no reason to 
believe that the violations are aggravated or willful (or, in the case 
of the Davis-Bacon Act that the contractor has disregarded its 
obligations to employees and subcontractors), and where restitution has 
been effected and future compliance assured, the Federal agency need not 
submit its investigative findings and recommendations to the 
Administrator, unless the investigation was made at the request of the 
Department of Labor. In the latter case, the Federal agency shall submit 
a factual summary report detailing any violations including any data on 
the amount of restitution paid, the number of workers who received 
restitution, liquidated damages assessed under the Contract Work Hours 
and Safety Standards Act, corrective measures taken (such as ``letters 
of notice''), and any information that may be necessary to review any 
recommendations for an appropriate adjustment in liquidated damages 
under Sec. 5.8.
    (2) Where underpayments by a contractor or subcontractor total 
$1,000 or more, or where there is reason to believe that the violations 
are aggravated or willful (or, in the case of the Davis-Bacon Act, that 
the contractor has disregarded its obligations to employees and 
subcontractors), the Federal agency shall furnish within 60 days after 
completion of its investigation, a detailed enforcement report to the 
Administrator.
    (b) Semi-annual enforcement reports. To assist the Secretary in 
fulfilling the responsibilities under Reorganization Plan No. 14 of 
1950, Federal agencies shall furnish to the Administrator by April 30 
and October 31 of each calendar year semi-annual reports on compliance 
with and enforcement of the labor standards provisions of the Davis-
Bacon Act and its related acts covering the periods of October 1 through 
March 31 and April 1 through September 30, respectively. Such reports 
shall be prepared in the manner prescribed in memoranda issued to 
Federal agencies by the Administrator. This report has been cleared in 
accordance with FPMR 101-11.11 and assigned interagency report control 
number 1482-DOL-SA.
    (c) Additional information. Upon request, the Agency Head shall 
transmit to the Administrator such information available to the Agency 
with respect to contractors and subcontractors, their contracts, and the 
nature of the contract work as the Administrator may find necessary for 
the performance of his or her duties with respect to the labor standards 
provisions referred to in this part.
    (d) Contract termination. Where a contract is terminated by reason 
of violations of the labor standards provisions of the statutes listed 
in Sec. 5.1, a report shall be submitted promptly to the Administrator 
and to the Comptroller General (if the contract is subject to the Davis-
Bacon Act), giving the name and address of the contractor or 
subcontractor whose right to proceed has been terminated, and the name 
and address of the contractor or subcontractor, if any, who is to 
complete the work, the amount and number of the contract, and the 
description of the work to be performed.

[[Page 118]]



Sec. 5.8  Liquidated damages under the Contract Work Hours and Safety Standards Act.

    (a) The Contract Work Hours and Safety Standards Act requires that 
laborers or mechanics shall be paid wages at a rate not less than one 
and one-half times the basic rate of pay for all hours worked in excess 
of forty hours in any workweek. In the event of violation of this 
provision, the contractor and any subcontractor shall be liable for the 
unpaid wages and in addition for liquidated damages, computed with 
respect to each laborer or mechanic employed in violation of the Act in 
the amount of $10 for each calendar day in the workweek on which such 
individual was required or permitted to work in excess of forty hours 
without payment of required overtime wages. Any contractor of 
subcontractor aggrieved by the withholding of liquidated damages shall 
have the right to appeal to the head of the agency of the United States 
(or the territory of District of Columbia, as appropriate) for which the 
contract work was performed or for which financial assistance was 
provided.
    (b) Findings and recommendations of the Agency Head. The Agency Head 
has the authority to review the administrative determination of 
liquidated damages and to issue a final order affirming the 
determination. It is not necessary to seek the concurrence of the 
Administrator but the Administrator shall be advised of the action 
taken. Whenever the Agency Head finds that a sum of liquidated damages 
administratively determined to be due is incorrect or that the 
contractor or subcontractor violated inadvertently the provisions of the 
Act notwithstanding the exercise of due care upon the part of the 
contractor or subcontractor involved, and the amount of the liquidated 
damages computed for the contract is in excess of $500, the Agency Head 
may make recommendations to the Secretary that an appropriate adjustment 
in liquidated damages be made or that the contractor or subcontractor be 
relieved of liability for such liquidated damages. Such findings with 
respect to liquidated damages shall include findings with respect to any 
wage underpayments for which the liquidated damages are determined.
    (c) The recommendations of the Agency Head for adjustment or relief 
from liquidated damages under paragraph (a) of this section shall be 
reviewed by the Administrator or an authorized representative who shall 
issue an order concurring in the recommendations, partially concurring 
in the recommendations, or rejecting the recommendations, and the 
reasons therefor. The order shall be the final decision of the 
Department of Labor, unless a petition for review is filed pursuant to 
part 7 of this title, and the Administrative Review Board in its 
discretion reviews such decision and order; or, with respect to 
contracts subject to the Service Contract Act, unless petition for 
review is filed pursuant to part 8 of this title, and the Administrative 
Review Board in its discretion reviews such decision and order.
    (d) Whenever the Agency Head finds that a sum of liquidated damages 
administratively determined to be due under section 104(a) of the 
Contract Work Hours and Safety Standards Act for a contract is $500 or 
less and the Agency Head finds that the sum of liquidated damages is 
incorrect or that the contractor or subcontractor violated inadvertently 
the provisions of the Contract Work Hours and Safety Standards Act 
notwithstanding the exercise of due care upon the part of the contractor 
or subcontractor involved, an appropriate adjustment may be made in such 
liquidated damages or the contractor or subcontractor may be relieved of 
liability for such liquidated damages without submitting recommendations 
to this effect or a report to the Department of Labor. This delegation 
of authority is made under section 105 of the Contract Work Hours and 
Safety Standards Act and has been found to be necessary and proper in 
the public interest to prevent undue hardship and to avoid serious 
impairment of the conduct of Government business.

[48 FR 19541, Apr. 29, 1983, as amended at 51 FR 12265, Apr. 9, 1986; 51 
FR 13496, Apr. 21, 1986]

[[Page 119]]



Sec. 5.9  Suspension of funds.

    In the event of failure or refusal of the contractor or any 
subcontractor to comply with the labor standards clauses contained in 
Sec. 5.5 and the applicable statutes listed in Sec. 5.1, the Federal 
agency, upon its own action or upon written request of an authorized 
representative of the Department of Labor, shall take such action as may 
be necessary to cause the suspension of the payment, advance or 
guarantee of funds until such time as the violations are discontinued or 
until sufficient funds are withheld to compensate employees for the 
wages to which they are entitled and to cover any liquidated damages 
which may be due.



Sec. 5.10  Restitution, criminal action.

    (a) In cases other than those forwarded to the Attorney General of 
the United States under paragraph (b), of this section, where violations 
of the labor standards clauses contained in Sec. 5.5 and the applicable 
statutes listed in Sec. 5.1 result in underpayment of wages to 
employees, the Federal agency or an authorized representative of the 
Department of Labor shall request that restitution be made to such 
employees or on their behalf to plans, funds, or programs for any type 
of bona fide fringe benefits within the meaning of section 1(b)(2) of 
the Davis-Bacon Act.
    (b) In cases where the Agency Head or the Administrator finds 
substantial evidence that such violations are willful and in violation 
of a criminal statute, the matter shall be forwarded to the Attorney 
General of the United States for prosecution if the facts warrant. In 
all such cases the Administrator shall be informed simultaneously of the 
action taken.



Sec. 5.11  Disputes concerning payment of wages.

    (a) This section sets forth the procedure for resolution of disputes 
of fact or law concerning payment of prevailing wage rates, overtime 
pay, or proper classification. The procedures in this section may be 
initiated upon the Administrator's own motion, upon referral of the 
dispute by a Federal agency pursuant to Sec. 5.5(a)(9), or upon request 
of the contractor or subcontractor(s).
    (b)(1) In the event of a dispute described in paragraph (a) of this 
section in which it appears that relevant facts are at issue, the 
Administrator will notify the affected contractor and subcontractor(s) 
(if any), by registered or certified mail to the last known address, of 
the investigation findings. If the Administrator determines that there 
is reasonable cause to believe that the contractor and/or 
subcontractor(s) should also be subject to debarment under the Davis-
Bacon Act or Sec. 5.12(a)(1), the letter will so indicate.
    (2) A contractor and/or subcontractor desiring a hearing concerning 
the Administrator's investigative findings shall request such a hearing 
by letter postmarked within 30 days of the date of the Administrator's 
letter. The request shall set forth those findings which are in dispute 
and the reasons therefor, including any affirmative defenses, with 
respect to the violations and/or debarment, as appropriate.
    (3) Upon receipt of a timely request for a hearing, the 
Administrator shall refer the case to the Chief Administrative Law Judge 
by Order of Reference, to which shall be attached a copy of the letter 
from the Administrator and response thereto, for designation of an 
Administrative Law Judge to conduct such hearings as may be necessary to 
resolve the disputed matters. The hearing shall be conducted in 
accordance with the procedures set forth in 29 CFR part 6.
    (c)(1) In the event of a dispute described in paragraph (a) of this 
section in which it appears that there are no relevant facts at issue, 
and where there is not at that time reasonable cause to institute 
debarment proceedings under Sec. 5.12, the Administrator shall notify 
the contractor and subcontractor(s) (if any), by registered or certified 
mail to the last known address, of the investigation findings, and shall 
issue a ruling on any issues of law known to be in dispute.
    (2)(i) If the contractor and/or subcontractor(s) disagree with the 
factual findings of the Administrator or believe that there are relevant 
facts in dispute, the contractor or subcontractor(s) shall so advise the 
Administrator by letter postmarked within 30 days of the date of the 
Administrator's

[[Page 120]]

letter. In the response, the contractor and/or subcontractor(s) shall 
explain in detail the facts alleged to be in dispute and attach any 
supporting documentation.
    (ii) Upon receipt of a response under paragraph (c)(2)(i) of this 
section alleging the existence of a factual dispute, the Administrator 
shall examine the information submitted. If the Administrator determines 
that there is a relevant issue of fact, the Administrator shall refer 
the case to the Chief Administrative Law Judge in accordance with 
paragraph (b)(3) of this section. If the Administrator determines that 
there is no relevant issue of fact, the Administrator shall so rule and 
advise the contractor and subcontractor(s) (if any) accordingly.
    (3) If the contractor and/or subcontractor(s) desire review of the 
ruling issued by the Administrator under paragraph (c)(1) or (2) of this 
section, the contractor and/or subcontractor(s) shall file a petition 
for review thereof with the Administrative Review Board within 30 days 
of the date of the ruling, with a copy thereof the Administrator. The 
petition for review shall be filed in accordance with part 7 of this 
title.
    (d) If a timely response to the Administrator's findings or ruling 
is not made or a timely petition for review is not filed, the 
Administrator's findings and/or ruling shall be final, except that with 
respect to debarment under the Davis-Bacon Act, the Administrator shall 
advise the Comptroller General of the Administrator's recommendation in 
accordance with Sec. 5.12(a)(1). If a timely response or petition for 
review is filed, the findings and/or ruling of the Administrator shall 
be inoperative unless and until the decision is upheld by the 
Administrative Law Judge or the Administrative Review Board.



Sec. 5.12  Debarment proceedings.

    (a)(1) Whenever any contractor or subcontractor is found by the 
Secretary of Labor to be in aggravated or willful violation of the labor 
standards provisions of any of the applicable statutes listed in 
Sec. 5.1 other than the Davis-Bacon Act, such contractor or 
subcontractor or any firm, corporation, partnership, or association in 
which such contractor or subcontractor has a substantial interest shall 
be ineligible for a period not to exceed 3 years (from the date of 
publication by the Comptroller General of the name or names of said 
contractor or subcontractor on the ineligible list as provided below) to 
receive any contracts or subcontracts subject to any of the statutes 
listed in Sec. 5.1.
    (2) In cases arising under contracts covered by the Davis-Bacon Act, 
the Administrator shall transmit to the Comptroller General the names of 
the contractors or subcontractors and their responsible officers, if any 
(and any firms in which the contractors or subcontractors are known to 
have an interest), who have been found to have disregarded their 
obligations to employees, and the recommendation of the Secretary of 
Labor or authorized representative regarding debarment. The Comptroller 
General will distribute a list to all Federal agencies giving the names 
of such ineligible person or firms, who shall be ineligible to be 
awarded any contract or subcontract of the United States or the District 
of Columbia and any contract or subcontract subject to the labor 
standards provisions of the statutes listed in Sec. 5.1.
    (b)(1) In addition to cases under which debarment action is 
initiated pursuant to Sec. 5.11, whenever as a result of an 
investigation conducted by the Federal agency or the Department of 
Labor, and where the Administrator finds reasonable cause to believe 
that a contractor or subcontractor has committed willful or aggravated 
violations of the labor standards provisions of any of the statutes 
listed in Sec. 5.1 (other than the Davis-Bacon Act), or has committed 
violations of the Davis-Bacon Act which constitute a disregard of its 
obligations to employees or subcontractors under section 3(a) thereof, 
the Administrator shall notify by registered or certified mail to the 
last known address, the contractor or subcontractor and its responsible 
officers, if any (and any firms in which the contractor or subcontractor 
are known to have a substantial interest), of the finding. The 
Administrator shall afford such contractor or subcontractor and

[[Page 121]]

any other parties notified an opportunity for a hearing as to whether 
debarment action should be taken under paragraph (a)(1) of this section 
or section 3(a) of the Davis-Bacon Act. The Administrator shall furnish 
to those notified a summary of the investigative findings. If the 
contractor or subcontractor or any other parties notified wish to 
request a hearing as to whether debarment action should be taken, such a 
request shall be made by letter postmarked within 30 days of the date of 
the letter from the Administrator, and shall set forth any findings 
which are in dispute and the reasons therefor, including any affirmative 
defenses to be raised. Upon receipt of such request for a hearing, the 
Administrator shall refer the case to the Chief Administrative Law Judge 
by Order of Reference, to which shall be attached a copy of the letter 
from the Administrator and the response thereto, for designation of an 
Administrative Law Judge to conduct such hearings as may be necessary to 
determine the matters in dispute. In considering debarment under any of 
the statutes listed in Sec. 5.1 other than the Davis-Bacon Act, the 
Administrative Law Judge shall issue an order concerning whether the 
contractor or subcontractor is to be debarred in accordance with 
paragraph (a)(1) of this section. In considering debarment under the 
Davis-Bacon Act, the Administrative Law Judge shall issue a 
recommendation as to whether the contractor or subcontractor should be 
debarred under section 3(a) of the Act.
    (2) Hearings under this section shall be conducted in accordance 
with 29 CFR part 6. If no hearing is requested within 30 days of receipt 
of the letter from the Administrator, the Administrator's findings shall 
be final, except with respect to recommendations regarding debarment 
under the Davis-Bacon Act, as set forth in paragraph (a)(2) of this 
section.
    (c) Any person or firm debarred under Sec. 5.12(a)(1) may in writing 
request removal from the debarment list after six months from the date 
of publication by the Comptroller General of such person or firm's name 
on the ineligible list. Such a request should be directed to the 
Administrator of the Wage and Hour Division, Employment Standards 
Administration, U.S. Department of Labor, Washington, DC 20210, and 
shall contain a full explanation of the reasons why such person or firm 
should be removed from the ineligible list. In cases where the 
contractor or subcontractor failed to make full restitution to all 
underpaid employees, a request for removal will not be considered until 
such underpayments are made. In all other cases, the Administrator will 
examine the facts and circumstances surrounding the violative practices 
which caused the debarment, and issue a decision as to whether or not 
such person or firm has demonstrated a current responsibility to comply 
with the labor standards provisions of the statutes listed in Sec. 5.1, 
and therefore should be removed from the ineligible list. Among the 
factors to be considered in reaching such a decision are the severity of 
the violations, the contractor or subcontractor's attitude towards 
compliance, and the past compliance history of the firm. In no case will 
such removal be effected unless the Administrator determines after an 
investigation that such person or firm is in compliance with the labor 
standards provisions applicable to Federal contracts and Federally 
assisted construction work subject to any of the applicable statutes 
listed in Sec. 5.1 and other labor statutes providing wage protection, 
such as the Service Contract Act, the Walsh-Healey Public Contracts Act, 
and the Fair Labor Standards Act. If the request for removal is denied, 
the person or firm may petition for review by the Administrative Review 
Board pursuant to 29 CFR part 7.
    (d)(1) Section 3(a) of the Davis-Bacon Act provides that for a 
period of three years from date of publication on the ineligible list, 
no contract shall be awarded to any persons or firms placed on the list 
as a result of a finding by the Comptroller General that such persons or 
firms have disregarded obligations to employees and subcontractors under 
that Act, and further, that no contract shall be awarded to ``any firm, 
corporation, partnership, or association in which such persons or firms 
have an interest.'' Paragraph (a)(1) of this section similarly provides 
that for a period not to exceed three years from

[[Page 122]]

date of publication on the ineligible list, no contract subject to any 
of the statutes listed in Sec. 5.1 shall be awarded to any contractor or 
subcontractor on the ineligible list pursuant to that paragraph, or to 
``any firm, corporation, partnership, or association'' in which such 
contractor or subcontractor has a ``substantial interest.'' A finding as 
to whether persons or firms whose names appear on the ineligible list 
have an interest (or a substantial interest, as appropriate) in any 
other firm, corporation, partnership, or association, may be made 
through investigation, hearing, or otherwise.
    (2)(i) The Administrator, on his/her own motion or after receipt of 
a request for a determination pursuant to paragraph (d)(3) of this 
section may make a finding on the issue of interest (or substantial 
interest, as appropriate).
    (ii) If the Administrator determines that there may be an interest 
(or substantial interest, as appropriate), but finds that there is 
insufficient evidence to render a final ruling thereon, the 
Administrator may refer the issue to the Chief Administrative Law Judge 
in accordance with paragraph (d)(4) of this section.
    (iii) If the Administrator finds that no interest (or substantial 
interest, as appropriate) exists, or that there is not sufficient 
information to warrant the initiation of an investigation, the 
requesting party, if any, will be so notified and no further action 
taken.
    (iv)(A) If the Administrator finds that an interest (or substantial 
interest, as appropriate) exists, the person or firm affected will be 
notified of the Administrator's finding (by certified mail to the last 
known address), which shall include the reasons therefor, and such 
person or firm shall be afforded an opportunity to request that a 
hearing be held to render a decision on the issue.
    (B) Such person or firm shall have 20 days from the date of the 
Administrator's ruling to request a hearing. A detailed statement of the 
reasons why the Administrator's ruling is in error, including facts 
alleged to be in dispute, if any, shall be submitted with the request 
for a hearing.
    (C) If no hearing is requested within the time mentioned in 
paragraph (d)(2)(iv)(B) of this section, the Administrator's finding 
shall be final and the Administrator shall so notify the Comptroller 
General. If a hearing is requested, the ruling of the Administrator 
shall be inoperative unless and until the administrative law judge or 
the Administrative Review Board issues an order that there is an 
interest (or substantial interest, as appropriate).
    (3)(i) A request for a determination of interest (or substantial 
interest, as appropriate), may be made by any interested party, 
including contractors or prospective contractors and associations of 
contractor's representatives of employees, and interested Government 
agencies. Such a request shall be submitted in writing to the 
Administrator, Wage and Hour Division, Employment Standards 
Administration, U.S. Department of Labor, Washington, DC 20210.
    (ii) The request shall include a statement setting forth in detail 
why the petitioner believes that a person or firm whose name appears on 
the debarred bidders list has an interest (or a substantial interest, as 
appropriate) in any firm, corporation, partnership, or association which 
is seeking or has been awarded a contract of the United States or the 
District of Columbia, or which is subject to any of the statutes listed 
in Sec. 5.1. No particular form is prescribed for the submission of a 
request under this section.
    (4) Referral to the Chief Administrative Law Judge. The 
Administrator, on his/her own motion under paragraph (d)(2)(ii) of this 
section or upon a request for hearing where the Administrator determines 
that relevant facts are in dispute, will by order refer the issue to the 
Chief Administrative Law Judge, for designation of an Administrative Law 
Judge who shall conduct such hearings as may be necessary to render a 
decision solely on the issue of interest (or substantial interest, as 
appropriate). Such proceedings shall be conducted in accordance with the 
procedures set forth at 29 CFR part 6.

[[Page 123]]

    (5) Referral to the Administrative Review Board. If the person or 
firm affected requests a hearing and the Administrator determines that 
relevant facts are not in dispute, the Administrator will refer the 
issue and the record compiled thereon to the Administrative Review Board 
to render a decision solely on the issue of interest (or substantial 
interest, as appropriate). Such proceeding shall be conducted in 
accordance with the procedures set forth at 29 CFR part 7.

[48 FR 19541, Apr. 29, 1983, as amended at 48 FR 50313, Nov. 1, 1983]



Sec. 5.13  Rulings and interpretations.

    All questions relating to the application and interpretation of wage 
determinations (including the classifications therein) issued pursuant 
to part 1 of this subtitle, of the rules contained in this part and in 
parts 1 and 3, and of the labor standards provisions of any of the 
statutes listed in Sec. 5.1 shall be referred to the Administrator for 
appropriate ruling or interpretation. The rulings and interpretations 
shall be authoritative and those under the Davis-Bacon Act may be relied 
upon as provided for in section 10 of the Portal-to-Portal Act of 1947 
(29 U.S.C. 259). Requests for such rulings and interpretations should be 
addressed to the Administrator, Wage and Hour Division, Employment 
Standards Administration, U.S. Department of Labor, Washington, DC 
20210.



Sec. 5.14  Variations, tolerances, and exemptions from parts 1 and 3 of this subtitle and this part.

    The Secretary of Labor may make variations, tolerances, and 
exemptions from the regulatory requirements of this part and those of 
parts 1 and 3 of this subtitle whenever the Secretary finds that such 
action is necessary and proper in the public interest or to prevent 
injustice and undue hardship. Variations, tolerances, and exemptions may 
not be made from the statutory requirements of any of the statutes 
listed in Sec. 5.1 unless the statute specifically provides such 
authority.



Sec. 5.15  Limitations, variations, tolerances, and exemptions under the Contract Work Hours and Safety Standards Act.

    (a) General. Upon his or her own initiative or upon the request of 
any Federal agency, the Secretary of Labor may provide under section 105 
of the Contract Work Hours and Safety Standards Act reasonable 
limitations and allow variations, tolerances, and exemptions to and from 
any or all provisions of that Act whenever the Secretary finds such 
action to be necessary and proper in the public interest to prevent 
injustice, or undue hardship, or to avoid serious impairment of the 
conduct of Government business. Any request for such action by the 
Secretary shall be submitted in writing, and shall set forth the reasons 
for which the request is made.
    (b) Exemptions. Pursuant to section 105 of the Contract Work Hours 
and Safety Standards Act, the following classes of contracts are found 
exempt from all provisions of that Act in order to prevent injustice, 
undue hardship, or serious impairment of Government business:
    (1) Contract work performed in a workplace within a foreign country 
or within territory under the jurisdiction of the United States other 
than the following: A State of the United States; the District of 
Columbia; Puerto Rico; the Virgin Islands; Outer Continental Shelf lands 
defined in the Outer Continental Shelf Lands Act (ch. 345, 67 Stat. 
462); American Samoa; Guam; Wake Island; Eniwetok Atoll; Kwajalein 
Atoll; and Johnston Island.
    (2) Agreements entered into by or on behalf of the Commodity Credit 
Corporation providing for the storing in or handling by commercial 
warehouses of wheat, corn, oats, barley, rye, grain sorghums, soybeans, 
flaxseed, rice, naval stores, tobacco, peanuts, dry beans, seeds, 
cotton, and wool.
    (3) Sales of surplus power by the Tennessee Valley Authority to 
States, counties, municipalities, cooperative organization of citizens 
or farmers, corporations and other individuals pursuant to section 10 of 
the Tennessee Valley Authority Act of 1933 (16 U.S.C. 8311).

[[Page 124]]

    (c) Tolerances. (1) The ``basic rate of pay'' under section 102 of 
the Contract Work Hours and Safety Standards Act may be computed as an 
hourly equivalent to the rate on which time-and-one-half overtime 
compensation may be computed and paid under section 7 of the Fair Labor 
Standards Act of 1938, as amended (29 U.S.C. 207), as interpreted in 
part 778 of this title. This tolerance is found to be necessary and 
proper in the public interest in order to prevent undue hardship.
    (2) Concerning the tolerance provided in paragraph (c)(1) of this 
section, the provisions of section 7(d)(2) of the Fair Labor Standards 
Act and Sec. 778.7 of this title should be noted. Under these 
provisions, payments for occasional periods when no work is performed, 
due to vacations, and similar causes are excludable from the ``regular 
rate'' under the Fair Labor Standards Act. Such payments, therefore, are 
also excludable from the ``basic rate'' under the Contract Work Hours 
and Safety Standards Act.
    (3) See Sec. 5.8(c) providing a tolerance subdelegating authority to 
the heads of agencies to make appropriate adjustments in the assessment 
of liquidated damages totaling $500 or less under specified 
circumstances.
    (4)(i) Time spent in an organized program of related, supplemental 
instruction by laborers or mechanics employed under bona fide 
apprenticeship or training programs may be excluded from working time if 
the criteria prescribed in paragraphs (c)(4)(ii) and (iii) of this 
section are met.
    (ii) The apprentice or trainee comes within the definition contained 
in Sec. 5.2(n).
    (iii) The time in question does not involve productive work or 
performance of the apprentice's or trainee's regular duties.
    (d) Variations. (1) In the event of failure or refusal of the 
contractor or any subcontractor to comply with overtime pay requirements 
of the Contract Work Hours and Safety Standards Act, if the funds 
withheld by Federal agencies for the violations are not sufficient to 
pay fully both the unpaid wages due laborers and mechanics and the 
liquidated damages due the United States, the available funds shall be 
used first to compensate the laborers and mechanics for the wages to 
which they are entitled (or an equitable portion thereof when the funds 
are not adequate for this purpose); and the balance, if any, shall be 
used for the payment of liquidated damages.
    (2) In the performance of any contract entered into pursuant to the 
provisions of 38 U.S.C. 620 to provide nursing home care of veterans, no 
contractor or subcontractor under such contract shall be deemed in 
violation of section 102 of the Contract Work Hours and Safety Standards 
Act by virtue of failure to pay the overtime wages required by such 
section for work in excess of 40 hours in the workweek to any individual 
employed by an establishment which is an institution primarily engaged 
in the care of the sick, the aged, or the mentally ill or defective who 
reside on the premises if, pursuant to an agreement or understanding 
arrived at between the employer and the employee before performance of 
the work, a work period of 14 consecutive days is accepted in lieu of 
the workweek of 7 consecutive days for the purpose of overtime 
compensation and if such individual receives compensation for employment 
in excess of 8 hours in any workday and in excess of 80 hours in such 
14-day period at a rate not less than 1\1/2\ times the regular rate at 
which the individual is employed, computed in accordance with the 
requirements of the Fair Labor Standards Act of 1938, as amended.
    (3) Any contractor or subcontractor performing on a government 
contract the principal purpose of which is the furnishing of fire 
fighting or suppression and related services, shall not be deemed to be 
in violation of section 102 of the Contract Work Hour and Safety 
Standards Act for failing to pay the overtime compensation required by 
section 102 of the Act in accordance with the basic rate of pay as 
defined in paragraph (c)(1) of this section, to any pilot or copilot of 
a fixed-wing or rotary-wing aircraft employed on such contract if:

[[Page 125]]

    (i) Pursuant to a written employment agreement between the 
contractor and the employee which is arrived at before performance of 
the work.
    (A) The employee receives gross wages of not less than $300 per week 
regardless of the total number of hours worked in any workweek, and
    (B) Within any workweek the total wages which an employee receives 
are not less than the wages to which the employee would have been 
entitled in that workweek if the employee were paid the minimum hourly 
wage required under the contract pursuant to the provisions of the 
Service Contract Act of 1965 and any applicable wage determination 
issued thereunder for all hours worked, plus an additional premium 
payment of one-half times such minimum hourly wage for all hours worked 
in excess of 40 hours in the workweek;
    (ii) The contractor maintains accurate records of the total daily 
and weekly hours of work performed by such employee on the government 
contract. In the event these conditions for the exemption are not met, 
the requirements of section 102 of the Contract Work Hours and Safety 
Standards Act shall be applicable to the contract from the date the 
contractor or subcontractor fails to satisfy the conditions until 
completion of the contract.

(Reporting and recordkeeping requirements in paragraph (d)(2) have been 
approved by the Office of Management and Budget under control numbers 
1215-0140 and 1215-0017. Reporting and recordkeeping requirements in 
paragraph (d)(3)(ii) have been approved by the Office of Management and 
Budget under control number 1215-0017)

[48 FR 19541, Apr. 29, 1983, as amended at 51 FR 12265, Apr. 9, 1986; 61 
FR 40716, Aug. 5, 1996]



Sec. 5.16  Training plans approved or recognized by the Department of Labor prior to August 20, 1975.

    (a) Notwithstanding the provisions of Sec. 5.5(a)(4)(ii) relating to 
the utilization of trainees on Federal and federally assisted 
construction, no contractor shall be required to obtain approval of a 
training program which, prior to August 20, 1975, was approved by the 
Department of Labor for purposes of the Davis-Bacon and Related Acts, 
was established by agreement of organized labor and management and 
therefore recognized by the Department, and/or was recognized by the 
Department under Executive Order 11246, as amended. A copy of the 
program and evidence of its prior approval, if applicable shall be 
submitted to the Employment and Training Administration, which shall 
certify such prior approval or recognition of the program. In every 
other respect, the provisions of Sec. 5.5(a)(4)(ii)--including those 
relating to registration of trainees, permissible ratios, and wage rates 
to be paid--shall apply to these programs.
    (b) Every trainee employed on a contract executed on and after 
August 20, 1975, in one of the above training programs must be 
individually registered in the program in accordance with Employment and 
Training Administration procedures, and must be paid at the rate 
specified in the program for the level of progress. Any such employee 
listed on the payroll at a trainee rate who is not registered and 
participating in a program certified by ETA pursuant to this section, or 
approved and certified by ETA pursuant to Sec. 5.5(a)(4)(ii), must be 
paid the wage rate determined by the Secretary of Labor for the 
classification of work actually performed. The ratio of trainees to 
journeymen shall not be greater than permitted by the terms of the 
program.
    (c) In the event a program which was recognized or approved prior to 
August 20, 1975, is modified, revised, extended, or renewed, the changes 
in the program or its renewal must be approved by the Employment and 
Training Administration before they may be placed into effect.



Sec. 5.17  Withdrawal of approval of a training program.

    If at any time the Employment and Training Administration 
determines, after opportunity for a hearing, that the standards of any 
program, whether it is one recognized or approved prior to August 20, 
1975, or a program subsequently approved, have not been complied with, 
or that such a program fails to provide adequate training for 
participants, a contractor will no longer

[[Page 126]]

be permitted to utilize trainees at less than the predetermined rate for 
the classification of work actually performed until an acceptable 
program is approved.



   Subpart B--Interpretation of the Fringe Benefits Provisions of the 
                             Davis-Bacon Act

    Source: 29 FR 13465, Sept. 30, 1964, unless otherwise noted.



Sec. 5.20  Scope and significance of this subpart.

    The 1964 amendments (Pub. L. 88-349) to the Davis-Bacon Act require, 
among other things, that the prevailing wage determined for Federal and 
federally-assisted construction include: (a) The basic hourly rate of 
pay; and (b) the amount contributed by the contractor or subcontractor 
for certain fringe benefits (or the cost to them of such benefits). The 
purpose of this subpart is to explain the provisions of these 
amendments. This subpart makes available in one place official 
interpretations of the fringe benefits provisions of the Davis-Bacon 
Act. These interpretations will guide the Department of Labor in 
carrying out its responsibilities under these provisions. These 
interpretations are intended also for the guidance of contractors, their 
associations, laborers and mechanics and their organizations, and local, 
State and Federal agencies, who may be concerned with these provisions 
of the law. The interpretations contained in this subpart are 
authoritative and may be relied upon as provided for in section 10 of 
the Portal-to-Portal Act of 1947 (29 U.S.C. 359). The omission to 
discuss a particular problem in this subpart or in interpretations 
supplementing it should not be taken to indicate the adoption of any 
position by the Secretary of Labor with respect to such problem or to 
constitute an administrative interpretation, practice, or enforcement 
policy. Questions on matters not fully covered by this subpart may be 
referred to the Secretary for interpretation as provided in Sec. 5.12.



Sec. 5.21  [Reserved]



Sec. 5.22  Effect of the Davis-Bacon fringe benefits provisions.

    The Davis-Bacon Act and the prevailing wage provisions of the 
related statutes listed in Sec. 1.1 of this subtitle confer upon the 
Secretary of Labor the authority to predetermine, as minimum wages, 
those wage rates found to be prevailing for corresponding classes of 
laborers and mechanics employed on projects of a character similar to 
the contract work in the area in which the work is to be performed. See 
paragraphs (a) and (b) of Sec. 1.2 of this subtitle. The fringe benefits 
amendments enlarge the scope of this authority by including certain bona 
fide fringe benefits within the meaning of the terms ``wages'', ``scale 
of wages'', ``wage rates'', ``minimum wages'' and ``prevailing wages'', 
as used in the Davis-Bacon Act.



Sec. 5.23  The statutory provisions.

    The fringe benefits provisions of the 1964 amendments to the Davis-
Bacon Act are, in part, as follows:

    (b) As used in this Act the term ``wages'', ``scale of wages'', 
``wage rates'', ``minimum wages'', and ``prevailing wages'' shall 
include--
    (1) The basic hourly rate of pay; and
    (2) The amount of--
    (A) The rate of contribution irrevocably made by a contractor or 
subcontractor to a trustee or to a third person pursuant to a fund, 
plan, or program; and
    (B) The rate of costs to the contractor or subcontractor which may 
be reasonably anticipated in providing benefits to laborers and 
mechanics pursuant to an enforceable commitment to carry out a 
financially responsible plan or program which was communicated in 
writing to the laborers and mechanics affected,

for medical or hospital care, pensions on retirement or death, 
compensation for injuries or illness resulting from occupational 
activity, or insurance to provide any of the foregoing, for unemployment 
benefits, life insurance, disability and sickness insurance, or accident 
insurance, for vacation and holiday pay, for defraying costs of 
apprenticeship or other similar programs, or for other bona fide fringe 
benefits, but only where the contractor or subcontractor is not required 
by other Federal, State, or local law to provide any of such benefits * 
* *.

[[Page 127]]



Sec. 5.24  The basic hourly rate of pay.

    ``The basic hourly rate of pay'' is that part of a laborer's or 
mechanic's wages which the Secretary of Labor would have found and 
included in wage determinations prior to the 1964 amendments. The 
Secretary of Labor is required to continue to make a separate finding of 
this portion of the wage. In general, this portion of the wage is the 
cash payment made directly to the laborer or mechanic. It does not 
include fringe benefits.



Sec. 5.25  Rate of contribution or cost for fringe benefits.

    (a) Under the amendments, the Secretary is obligated to make a 
separate finding of the rate of contribution or cost of fringe benefits. 
Only the amount of contributions or costs for fringe benefits which meet 
the requirements of the act will be considered by the Secretary. These 
requirements are discussed in this subpart.
    (b) The rate of contribution or cost is ordinarily an hourly rate, 
and will be reflected in the wage determination as such. In some cases, 
however, the contribution or cost for certain fringe benefits may be 
expressed in a formula or method of payment other than an hourly rate. 
In such cases, the Secretary may in his discretion express in the wage 
determination the rate of contribution or cost used in the formula or 
method or may convert it to an hourly rate of pay whenever he finds that 
such action would facilitate the administration of the Act. See 
Sec. 5.5(a)(1)(i) and (iii).



Sec. 5.26  ``* * * contribution irrevocably made * * * to a trustee or to a third person''.

    Under the fringe benefits provisions (section 1(b)(2) of the Act) 
the amount of contributions for fringe benefits must be made to a 
trustee or to a third person irrevocably. The ``third person'' must be 
one who is not affiliated with the contractor or subcontractor. The 
trustee must assume the usual fiduciary responsibilities imposed upon 
trustees by applicable law. The trust or fund must be set up in such a 
way that in no event will the contractor or subcontractor be able to 
recapture any of the contributions paid in or any way divert the funds 
to his own use or benefit. Although contributions made to a trustee or 
third person pursuant to a benefit plan must be irrevocably made, this 
does not prevent return to the contractor or subcontractor of sums which 
he had paid in excess of the contributions actually called for by the 
plan, as where such excess payments result from error or from the 
necessity of making payments to cover the estimated cost of 
contributions at a time when the exact amount of the necessary 
contributions under the plan is not yet ascertained. For example, a 
benefit plan may provide for definite insurance benefits for employees 
in the event of the happening of a specified contingency such as death, 
sickness, accident, etc., and may provide that the cost of such definite 
benefits, either in full or any balance in excess of specified employee 
contributions, will be borne by the contractor or subcontractor. In such 
a case the return by the insurance company to the contractor or 
subcontractor of sums paid by him in excess of the amount required to 
provide the benefits which, under the plan, are to be provided through 
contributions by the contractor or subcontractor, will not be deemed a 
recapture or diversion by the employer of contributions made pursuant to 
the plan. (See Report of the Senate Committee on Labor and Public 
Welfare, S. Rep. No. 963, 88th Cong., 2d Sess., p. 5.)



Sec. 5.27  ``* * * fund, plan, or program''.

    The contributions for fringe benefits must be made pursuant to a 
fund, plan or program (sec. 1(b)(2)(A) of the act). The phrase ``fund, 
plan, or program'' is merely intended to recognize the various types of 
arrangements commonly used to provide fringe benefits through employer 
contributions. The phrase is identical with language contained in 
section 3(1) of the Welfare and Pension Plans Disclosure Act. In 
interpreting this phrase, the Secretary will be guided by the experience 
of the Department in administering the latter statute. (See Report of 
Senate Committee on Labor and Public Welfare, S. Rep. No. 963, 88th 
Cong., 2d Sess., p. 5.)

[[Page 128]]



Sec. 5.28  Unfunded plans.

    (a) The costs to a contractor or subcontractor which may be 
reasonably anticipated in providing benefits of the types described in 
the act pursuant to an enforceable commitment to carry out a financially 
responsible plan or program, are considered fringe benefits within the 
meaning of the act (see 1(b)(2)(B) of the act). The legislative history 
suggests that these provisions were intended to permit the consideration 
of fringe benefits meeting, among others, these requirements and which 
are provided from the general assets of a contractor or subcontractor. 
(Report of the House Committee on Education and Labor, H. Rep. No. 308, 
88th Cong., 1st Sess., p. 4.)
    (b) No type of fringe benefit is eligible for consideration as a so-
called unfunded plan unless:
    (1) It could be reasonably anticipated to provide benefits described 
in the act;
    (2) It represents a commitment that can be legally enforced;
    (3) It is carried out under a financially responsible plan or 
program; and
    (4) The plan or program providing the benefits has been communicated 
in writing to the laborers and mechanics affected. (See S. Rep. No. 963, 
p. 6.)
    (c) It is in this manner that the act provides for the consideration 
of unfunded plans or programs in finding prevailing wages and in 
ascertaining compliance with the Act. At the same time, however, there 
is protection against the use of this provision as a means of avoiding 
the act's requirements. The words ``reasonably anticipated'' are 
intended to require that any unfunded plan or program be able to 
withstand a test which can perhaps be best described as one of actuarial 
soundness. Moreover, as in the case of other fringe benefits payable 
under the act, an unfunded plan or program must be ``bona fide'' and not 
a mere simulation or sham for avoiding compliance with the act. (See S. 
Rep. No. 963, p. 6.) The legislative history suggests that in order to 
insure against the possibility that these provisions might be used to 
avoid compliance with the act, the committee contemplates that the 
Secretary of Labor in carrying out his responsibilities under 
Reorganization Plan No. 14 of 1950, may direct a contractor or 
subcontractor to set aside in an account assets which, under sound 
actuarial principles, will be sufficient to meet the future obligation 
under the plan. The preservation of this account for the purpose 
intended would, of course, also be essential. (S. Rep. No. 963, p. 6.) 
This is implemented by the contractual provisions required by 
Sec. 5.5(a)(1)(iv).



Sec. 5.29  Specific fringe benefits.

    (a) The act lists all types of fringe benefits which the Congress 
considered to be common in the construction industry as a whole. These 
include the following: Medical or hospital care, pensions on retirement 
or death, compensation for injuries or illness resulting from 
occupational activity, or insurance to provide any of the foregoing, 
unemployment benefits, life insurance, disability and sickness 
insurance, or accident insurance, vacation and holiday pay, defrayment 
of costs of apprenticeship or other similar programs, or other bona fide 
fringe benefits, but only where the contractor or subcontractor is not 
required by other Federal, State, or local law to provide any of such 
benefits.
    (b) The legislative history indicates that it was not the intent of 
the Congress to impose specific standards relating to administration of 
fringe benefits. It was assumed that the majority of fringe benefits 
arrangements of this nature will be those which are administered in 
accordance with requirements of section 302(c)(5) of the National Labor 
Relations Act, as amended (S. Rep. No. 963, p. 5).
    (c) The term ``other bona fide fringe benefits'' is the so-called 
``open end'' provision. This was included so that new fringe benefits 
may be recognized by the Secretary as they become prevailing. It was 
pointed out that a particular fringe benefit need not be recognized 
beyond a particular area in order for the Secretary to find that it is 
prevailing in that area. (S. Rep. No. 963, p. 6).
    (d) The legislative reports indicate that, to insure against 
considering and giving credit to any and all fringe benefits, some of 
which might be illusory or not genuine, the qualification was included 
that such fringe benefits must

[[Page 129]]

be ``bona fide'' (H. Rep. No. 308, p. 4; S. Rep. No. 963, p. 6). No 
difficulty is anticipated in determining whether a particular fringe 
benefit is ``bona fide'' in the ordinary case where the benefits are 
those common in the construction industry and which are established 
under a usual fund, plan, or program. This would be typically the case 
of those fringe benefits listed in paragraph (a) of this section which 
are funded under a trust or insurance program. Contractors may take 
credit for contributions made under such conventional plans without 
requesting the approval of the Secretary of Labor under 
Sec. 5.5(a)(1)(iv).
    (e) Where the plan is not of the conventional type described in the 
preceding paragraph, it will be necessary for the Secretary to examine 
the facts and circumstances to determine whether they are ``bona fide'' 
in accordance with requirements of the act. This is particularly true 
with respect to unfunded plans. Contractors or subcontractors seeking 
credit under the act for costs incurred for such plans must request 
specific permission from the Secretary under Sec. 5.5(a)(1)(iv).
    (f) The act excludes fringe benefits which a contractor or 
subcontractor is obligated to provide under other Federal, State, or 
local law. No credit may be taken under the act for the payments made 
for such benefits. For example, payment for workmen's compensation 
insurance under either a compulsory or elective State statute are not 
considered payments for fringe benefits under the Act. While each 
situation must be separately considered on its own merits, payments made 
for travel, subsistence or to industry promotion funds are not normally 
payments for fringe benefits under the Act. The omission in the Act of 
any express reference to these payments, which are common in the 
construction industry, suggests that these payments should not normally 
be regarded as bona fide fringe benefits under the Act.



Sec. 5.30  Types of wage determinations.

    (a) When fringe benefits are prevailing for various classes of 
laborers and mechanics in the area of proposed construction, such 
benefits are includable in any Davis-Bacon wage determination. 
Illustrations, contained in paragraph (c) of this section, demonstrate 
some of the different types of wage determinations which may be made in 
such cases.
    (b) Wage determinations of the Secretary of Labor under the act do 
not include fringe benefits for various classes of laborers and 
mechanics whenever such benefits do not prevail in the area of proposed 
construction. When this occurs the wage determination will contain only 
the basic hourly rates of pay, that is only the cash wages which are 
prevailing for the various classes of laborers and mechanics. An 
illustration of this situation is contained in paragraph (c) of this 
section.
    (c) Illustrations:

----------------------------------------------------------------------------------------------------------------
                                                                     Fringe benefits payments
                                         Basic   ---------------------------------------------------------------
               Classes                  hourly    Health and                          Apprenticeship
                                         rates      welfare    Pensions    Vacations      program       Others
----------------------------------------------------------------------------------------------------------------
Laborers............................       $3.25  ..........  ..........  ..........  ..............  ..........
Carpenters..........................        4.00       $0.15  ..........  ..........  ..............  ..........
Painters............................        3.90         .15       $0.10       $0.20  ..............  ..........
Electricians........................        4.85         .10         .15  ..........  ..............  ..........
Plumbers............................        4.95         .15         .20  ..........         $0.05    ..........
Ironworkers.........................        4.60  ..........  ..........         .10  ..............  ..........
----------------------------------------------------------------------------------------------------------------
(It should be noted this format is not necessarily in the exact form in which determinations will issue; it is
  for illustration only.)



Sec. 5.31  Meeting wage determination obligations.

    (a) A contractor or subcontractor performing work subject to a 
Davis-Bacon wage determination may discharge his minimum wage 
obligations for the payment of both straight time wages and fringe 
benefits by paying in cash, making payments or incurring costs for 
``bona fide'' fringe benefits of the types listed in the applicable wage

[[Page 130]]

determination or otherwise found prevailing by the Secretary of Labor, 
or by a combination thereof.
    (b) A contractor or subcontractor may discharge his obligations for 
the payment of the basic hourly rates and the fringe benefits where both 
are contained in a wage determination applicable to his laborers or 
mechanics in the following ways:
    (1) By paying not less than the basic hourly rate to the laborers or 
mechanics and by making the contributions for the fringe benefits in the 
wage determinations, as specified therein. For example, in the 
illustration contained in paragraph (c) of Sec. 5.30, the obligations 
for ``painters'' will be met by the payment of a straight time hourly 
rate of not less than $3.90 and by contributing not less than at the 
rate of 15 cents an hour for health and welfare benefits, 10 cents an 
hour for pensions, and 20 cents an hour for vacations; or
    (2) By paying not less than the basic hourly rate to the laborers or 
mechanics and by making contributions for ``bona fide'' fringe benefits 
in a total amount not less than the total of the fringe benefits 
required by the wage determination. For example, the obligations for 
``painters'' in the illustration in paragraph (c) of Sec. 5.30 will be 
met by the payment of a straight time hourly rate of not less than $3.90 
and by contributions of not less than a total of 45 cents an hour for 
``bona fide'' fringe benefits; or
    (3) By paying in cash directly to laborers or mechanics for the 
basic hourly rate and by making an additional cash payment in lieu of 
the required benefits. For example, where an employer does not make 
payments or incur costs for fringe benefits, he would meet his 
obligations for ``painters'' in the illustration in paragraph (c) of 
Sec. 5.30, by paying directly to the painters a straight time hourly 
rate of not less than $4.35 ($3.90 basic hourly rate plus 45 cents for 
fringe benefits); or
    (4) As stated in paragraph (a) of this section, the contractor or 
subcontractor may discharge his minimum wage obligations for the payment 
of straight time wages and fringe benefits by a combination of the 
methods illustrated in paragraphs (b)(1) thru (3) of this section. Thus, 
for example, his obligations for ``painters'' may be met by an hourly 
rate, partly in cash and partly in payments or costs for fringe benefits 
which total not less than $4.35 ($3.90 basic hourly rate plus 45 cents 
for fringe benefits). The payments in such case may be $4.10 in cash and 
25 cents in payments or costs in fringe benefits. Or, they may be $3.75 
in cash and 60 cents in payments or costs for fringe benefits.

[30 FR 13136, Oct. 15, 1965]



Sec. 5.32  Overtime payments.

    (a) The act excludes amounts paid by a contractor or subcontractor 
for fringe benefits in the computation of overtime under the Fair Labor 
Standards Act, the Contract Work Hours and Safety Standards Act, and the 
Walsh-Healey Public Contracts Act whenever the overtime provisions of 
any of these statutes apply concurrently with the Davis-Bacon Act or its 
related prevailing wage statutes. It is clear from the legislative 
history that in no event can the regular or basic rate upon which 
premium pay for overtime is calculated under the aforementioned Federal 
statutes be less than the amount determined by the Secretary of Labor as 
the basic hourly rate (i.e. cash rate) under section 1(b)(1) of the 
Davis-Bacon Act. (See S. Rep. No. 963, p. 7.) Contributions by employees 
are not excluded from the regular or basic rate upon which overtime is 
computed under these statutes; that is, an employee's regular or basic 
straight-time rate is computed on his earnings before any deductions are 
made for the employee's contributions to fringe benefits. The 
contractor's contributions or costs for fringe benefits may be excluded 
in computing such rate so long as the exclusions do not reduce the 
regular or basic rate below the basic hourly rate contained in the wage 
determination.
    (b) The legislative report notes that the phrase ``contributions 
irrevocably made by a contractor or subcontractor to a trustee or to a 
third person pursuant to a fund, plan, or program'' was added to the 
bill in Committee. This language in essence conforms to the overtime 
provisions of section 7(d)(4) of the Fair Labor Standards Act, as 
amended. The intent of the committee

[[Page 131]]

was to prevent any avoidance of overtime requirements under existing 
law. See H. Rep. No. 308, p. 5.
    (c)(1) The act permits a contractor or subcontractor to pay a cash 
equivalent of any fringe benefits found prevailing by the Secretary of 
Labor. Such a cash equivalent would also be excludable in computing the 
regular or basic rate under the Federal overtime laws mentioned in 
paragraph (a). For example, the W construction contractor pays his 
laborers or mechanics $3.50 in cash under a wage determination of the 
Secretary of Labor which requires a basic hourly rate of $3 and a fringe 
benefit contribution of 50 cents. The contractor pays the 50 cents in 
cash because he made no payments and incurred no costs for fringe 
benefits. Overtime compensation in this case would be computed on a 
regular or basic rate of $3.00 an hour. However, in some cases a 
question of fact may be presented in ascertaining whether or not a cash 
payment made to laborers or mechanics is actually in lieu of a fringe 
benefit or is simply part of their straight time cash wage. In the 
latter situation, the cash payment is not excludable in computing 
overtime compensation. Consider the examples set forth in paragraphs 
(c)(2) and (3) of this section.
    (2) The X construction contractor has for some time been paying 
$3.25 an hour to a mechanic as his basic cash wage plus 50 cents an hour 
as a contribution to a welfare and pension plan. The Secretary of Labor 
determines that a basic hourly rate of $3 an hour and a fringe benefit 
contribution of 50 cents are prevailing. The basic hourly rate or 
regular rate for overtime purposes would be $3.25, the rate actually 
paid as a basic cash wage for the employee of X, rather than the $3 rate 
determined as prevailing by the Secretary of Labor.
    (3) Under the same prevailing wage determination, discussed in 
paragraph (c)(2) of this section, the Y construction contractor who has 
been paying $3 an hour as his basic cash wage on which he has been 
computing overtime compensation reduces the cash wage to $2.75 an hour 
but computes his costs of benefits under section 1(b)(2)(B) as $1 an 
hour. In this example the regular or basic hourly rate would continue to 
be $3 an hour. See S. Rep. No. 963, p. 7.



PART 6--RULES OF PRACTICE FOR ADMINISTRATIVE PROCEEDINGS ENFORCING LABOR STANDARDS IN FEDERAL AND FEDERALLY ASSISTED CONSTRUCTION CONTRACTS AND FEDERAL SERVICE 
CONTRACTS--Table of Contents




                           Subpart A--General

Sec.
6.1  Applicability of rules.
6.2  Definitions.
6.3  Service; copies of documents and pleadings.
6.4  Subpoenas (Service Contract Act).
6.5  Production of documents and witnesses.
6.6  Administrative Law Judge.
6.7  Appearances.
6.8  Transmission of record.

 Subpart B--Enforcement Proceedings Under the Service Contract Act (and 
  Under the Contract Work Hours and Safety Standards Act for Contracts 
                  Subject to the Service Contract Act)

6.15  Complaints.
6.16  Answers.
6.17  Amendments to pleadings.
6.18  Consent findings and order.
6.19  Decision of the Administrative Law Judge.
6.20  Petition for review.
6.21  Ineligible list.

Subpart C--Enforcement Proceedings Under the Davis-Bacon Act and Related 
Prevailing Wage Statutes, the Copeland Act, and the Contract Work Hours
 
and Safety Standards Act (Except Under Contracts Subject to the Service 
                              Contract Act)

6.30  Referral to Chief Administrative Law Judge.
6.31  Amendments to pleadings.
6.32  Consent findings and order.
6.33  Decision of the Administrative Law Judge.
6.34  Petition for review.
6.35  Ineligible lists.

               Subpart D--Substantial Interest Proceedings

6.40  Scope.
6.41  Referral to Chief Administrative Law Judge.
6.42  Amendments to pleadings.
6.43  Consent findings and order.

[[Page 132]]

6.44  Decision of the Administrative Law Judge.
6.45  Petition for review.
6.46  Ineligible list.

      Subpart E--Substantial Variance and Arm's-Length Proceedings

6.50  Scope.
6.51  Referral to Chief Administrative Law Judge.
6.52  Appointment of Administrative Law Judge and notification of 
          prehearing conference and hearing date.
6.53  Prehearing conference.
6.54  Hearing.
6.55  Closing of record.
6.56  Decision of the Administrative Law Judge.
6.57  Petition for review.

    Authority: Secs. 4 and 5, 79 Stat. 1034, 1035 as amended by 86 Stat. 
789, 790, 41 U.S.C. 353 and 354; 5 U.S.C. 301; Reorg. Plan No. 14 of 
1950, 64 Stat. 1267, 5 U.S.C. Appendix; 46 Stat. 1494, as amended by 49 
Stat. 1011, 78 Stat. 238, 40 U.S.C. 276a-276a-7; 76 Stat. 357-359, 40 
U.S.C. 327-332; 48 Stat. 948, as amended by 63 Stat. 108, 72 Stat. 967, 
40 U.S.C. 276c.

    Source: 49 FR 10627, Mar. 21, 1984, unless otherwise noted.

    Editorial Note: Nomenclature changes to part 6 appear at 61 FR 
19984, May 3, 1996.



                           Subpart A--General



Sec. 6.1  Applicability of rules.

    This part provides the rules of practice for administrative 
proceedings under the Service Contract Act, the Davis-Bacon Act and 
related statutes listed in Sec. 5.1 of part 5 of this title which 
require payment of wages determined in accordance with the Davis-Bacon 
Act, the Contract Work Hours and Safety Standards Act, and the Copeland 
Act. See parts 4 and 5 of this title.



Sec. 6.2  Definitions.

    (a) Administrator means the Administrator of the Wage and Hour 
Division, Employment Standards Administration, U.S. Department of Labor, 
or authorized representative.
    (b) Associate Solicitor means the Associate Solicitor for Fair Labor 
Standards, Office of the Solicitor, U.S. Department of Labor, 
Washington, DC 20210.
    (c) Chief Administrative Law Judge means the Chief Administrative 
Law Judge, U.S. Department of Labor, 800 K Street, NW., Suite 400, 
Washington DC 20001-8002.
    (d) Respondent means the contractor, subcontractor, person alleged 
to be responsible under the contract or subcontract, and/or any firm, 
corporation, partnership, or association in which such person or firm is 
alleged to have a substantial interest (or interest, if the proceeding 
is under the Davis-Bacon Act) against whom the proceedings are brought.

[49 FR 10627, Mar. 21, 1984, as amended at 56 FR 54708, Oct. 22, 1991]



Sec. 6.3  Service; copies of documents and pleadings.

    (a) Manner of service. Service upon any party shall be made by the 
party filing the pleading or document by delivering a copy or mailing a 
copy to the last known address. When a party is represented by an 
attorney, the service should be upon the attorney.
    (b) Proof of service. A certificate of the person serving the 
pleading or other document by personal delivery or by mailing, setting 
forth the manner of said service shall be proof of the service. Where 
service is made by mail, service shall be complete upon mailing. 
However, documents are not deemed filed until received by the Chief 
Clerk at the Office of Administrative Law Judges and where documents are 
filed by mail 5 days shall be added to the prescribed period.
    (c) Service upon Department, number of copies of pleading or other 
documents. An original and three copies of all pleadings and other 
documents shall be filed with the Department of Labor: The original and 
one copy with the Administrative Law Judge before whom the case is 
pending, one copy with the attorney representing the Department during 
the hearing, and one copy with the Associate Solicitor.



Sec. 6.4  Subpoenas (Service Contract Act).

    All applications under the Service Contract Act for subpoenas ad 
testificandum and subpoenas duces tecum shall be made in writing to the 
Administrative Law Judge. Application for subpoenas duces tecum shall 
specify

[[Page 133]]

as exactly as possible the documents to be produced.



Sec. 6.5  Production of documents and witnesses.

    The parties, who shall be deemed to be the Department of Labor and 
the respondent(s), may serve on any other party a request to produce 
documents or witnesses in the control of the party served, setting forth 
with particularity the documents or witnesses requested. The party 
served shall have 15 days to respond or object thereto unless a shorter 
or longer time is ordered by the Administrative Law Judge. The parties 
shall produce documents and witnesses to which no privilege attaches 
which are in the control of the party, if so ordered by the 
Administrative Law Judge upon motion therefor by a party. If a privilege 
is claimed, it must be specifically claimed in writing prior to the 
hearing or orally at the hearing or deposition, including the reasons 
therefor. In no event shall a statement taken in confidence by the 
Department of Labor or other Federal agency be ordered to be produced 
prior to the date of testimony at trial of the person whose statement is 
at issue unless the consent of such person has been obtained.



Sec. 6.6  Administrative Law Judge.

    (a) Equal Access to Justice Act. Proceedings under this part are not 
subject to the provisions of the Equal Access to Justice Act (Pub. L. 
96-481). In any hearing conducted pursuant to the provisions of this 
part 6, Administrative Law Judges shall have no power or authority to 
award attorney fees and/or other litigation expenses pursuant to the 
provisions of the Equal Access to Justice Act.
    (b) Contumacious conduct: failure or refusal of a witness to appear 
or answer. Contumacious conduct at any hearing before an Administrative 
Law Judge shall be ground for exclusion from the hearing., In cases 
arising under the Service Contract Act, the failure or refusal of a 
witness to appear at any hearing or at a deposition when so ordered by 
the Administrative Law Judge, or to answer any question which has been 
ruled to be proper, shall be ground for the action provided in section 5 
of the Act of June 30, 1936 (41 U.S.C. 39) and, in the discretion of the 
Administrative Law Judge, for striking out all or part of the testimony 
which may have been given by such witness.



Sec. 6.7  Appearances.

    (a) Representation. The parties may appear in person, by counsel, or 
otherwise.
    (b) Failure to appear. In the event that a party appears at the 
hearing and no party appears for the opposing side, the presiding 
Administrative Law Judge is authorized, if such party fails to show good 
cause for such failure to appear, to dismiss the case or to find the 
facts as alleged in the complaint and to enter a default judgment 
containing such findings, conclusions and order as are appropriate. Only 
where a petition for review of such default judgment cites alleged 
procedural irregularities in the proceeding below and not the merits of 
the case shall a non-appearing party be permitted to file such a 
petition for review. Failure to appear at a hearing shall not be deemed 
to be a waiver of the right to be served with a copy of the 
Administrative Law Judge's decision.



Sec. 6.8  Transmission of record.

    If a petition for review of the Administrative Law Judge's decision 
is filed with the Administrative Review Board, the Chief Administrative 
Law Judge shall promptly transmit the record of the proceeding.
    If a petition for review is not filed within the time prescribed in 
this part, the Chief Administrative Law Judge shall so advise the 
Administrator.



 Subpart B--Enforcement Proceedings Under the Service Contract Act (and 
  Under the Contract Work Hours and Safety Standards Act for Contracts 
                  Subject to the Service Contract Act)



Sec. 6.15  Complaints.

    (a) Enforcement proceedings under the Service Contract Act and under 
the Contract Work Hours and Safety Standards Act for contracts subject 
to the Service Contract Act, may be instituted by the Associate 
Solicitor for

[[Page 134]]

Fair Labor Standards or a Regional Solicitor by issuing a complaint and 
causing the complaint to be served upon the respondent.
    (b) The complaint shall contain a clear and concise factual 
statement of the grounds for relief and the relief requested.
    (c) The Administrative Law Judge shall notify the parties of the 
time and place for a hearing.



Sec. 6.16  Answers.

    (a) Within 30 days after the service of the complaint the respondent 
shall file an answer with the Chief Administrative Law Judge. The answer 
shall be signed by the respondent or his/her attorney.
    (b) The answer shall (1) contain a statement of the facts which 
constitute the grounds of defense, and shall specifically admit, 
explain, or deny each of the allegations of the complaint unless the 
respondent is without knowledge, in which case the answer shall so 
state; or (2) state that the respondent admits all of the allegations of 
the complaint. The answer may contain a waiver of hearing. Failure to 
file an answer to or plead specifically to any allegation of the 
complaint shall constitute an admission of such allegation.
    (c) Failure to file an answer shall constitute grounds for waiver of 
hearing and entry of a default judgment unless respondent shows good 
cause for such failure to file. In preparing the decision of default 
judgment the Administrative Law Judge shall adopt as findings of fact 
the material facts alleged in the complaint and shall order the 
appropriate relief and/or sanctions.



Sec. 6.17  Amendments to pleadings.

    At any time prior to the close of the hearing record, the complaint 
or answer may be amended with the permission of the Administrative Law 
Judge and on such terms as he/she may approve. When issues not raised by 
the pleadings are reasonably within the scope of the original complaint 
and are tried by express or implied consent of the parties, they shall 
be treated in all respects as if they had been raised in the pleadings, 
and such amendments may be made as necessary to make them conform to the 
evidence. Such amendments shall be allowed when justice and the 
presentation of the merits are served thereby, provided there is no 
prejudice to the objecting party's presentation on the merits. A 
continuance in the hearing may be granted or the record left open to 
enable the new allegations to be addressed. The presiding Administrative 
Law Judge may, upon reasonable notice and upon such terms as are just, 
permit supplemental pleadings setting forth transactions, occurrences or 
events which have happened since the data of the pleadings and which are 
relevant to any of the issues involved.



Sec. 6.18  Consent findings and order.

    (a) At any time prior to the receipt of evidence or, at the 
discretion of the Administrative Law Judge, prior to the issuance of the 
decision of the Administrative Law Judge, the parties may enter into 
consent findings and an order disposing of the processings in whole or 
in part.
    (b) Any agreement containing consent findings and an order disposing 
of a proceeding in whole or in part shall also provide:
    (1) That the order shall have the same force and effect as an order 
made after full hearing;
    (2) That the entire record on which any order may be based shall 
consist solely of the complaint and the agreement;
    (3) A waiver of any further procedural steps before the 
Administrative Law Judge and Administrative Review Board regarding those 
matters which are the subject of the agreement; and
    (4) A waiver of any right to challenge or contest the validity of 
the findings and order entered into in accordance with the agreement.
    (c) Within 30 days after receipt of an agreement containing consent 
findings and an order disposing of the disputed matter in whole, the 
Administrative Law Judge shall, if satisfied with its form and 
substance, accept such agreement by issuing a decision based upon the 
agreed findings and order. If such agreement disposes of only a part of 
the disputed matter, a hearing shall be conducted on the matters 
remaining in dispute.

[[Page 135]]



Sec. 6.19  Decision of the Administrative Law Judge.

    (a) Proposed findings of fact, conclusions, and order. Within 20 
days of filing of the transcript of the testimony or such additional 
time as the Administrative Law Judge may allow each party may file with 
the Administrative Law Judge proposed findings of fact, conclusion of 
law, and order, together with a supporting brief expressing the reasons 
for such proposals. Such proposals and brief shall be served on all 
parties, and shall refer to all portions of the record and to all 
authorities relied upon in support of each proposal.
    (b) Decision of the Administrative Law Judge. (1) Within a 
reasonable time after the time allowed for the filing of proposed 
findings of fact, conclusions of law, and order, or within 30 days after 
receipt of an agreement containing consent findings and order disposing 
of the disputed matter in whole, the Administrative Law Judge shall make 
his/her decision. If any aggrieved party desires review of the decision, 
a petition for review thereof shall be filed as provided in Sec. 6.20 of 
this title, and such decision and order shall be inoperative unless and 
until the Administrative Review Board issues an order affirming the 
decision. The decision of the Administrative Law Judge shall include 
findings of fact and conclusions of law, with reasons and bases 
therefor, upon each material issue of fact, law, or discretion presented 
on the record. The decision of the Administrative Law Judge shall be 
based upon a consideration of the whole record, including any admissions 
made under Secs. 6.16, 6.17 and 6.18 of this title. It shall be 
supported by reliable and probative evidence. Such decision shall be in 
accordance with the regulations and rulings contained in parts 4 and 5 
and other pertinent parts of this title.
    (2) If the respondent is found to have violated the Service Contract 
Act, the Administrative Law Judge shall include in his/her decision an 
order as to whether the respondent is to be relieved from the ineligible 
list as provided in section 5(a) of the Act, and, if relief is ordered, 
findings of the unusual circumstance, within the meaning of section 5(a) 
of the Act, which are the basis therefor. If respondent is found to have 
violated the provisions of the Contract Work Hours and Safety Standards 
Act, the Administrative Law Judge shall issue an order as to whether the 
respondent is to be subject to the ineligible list as provided in 
Sec. 5.12(a)(1) of part 4 of this title, including findings regarding 
the existence of aggravated or willful violations. If wages and/or 
fringe benefits are found due under the Service Contract Act and/or the 
Contract Work Safety Standards Act and are unpaid, no relief from the 
ineligible list shall be ordered except on condition that such wages 
and/or fringe benefits are paid.
    (3) The Administrative Law Judge shall make no findings regarding 
liquidated damages under the Contract Work Hours and Safety Standards 
Act.



Sec. 6.20  Petition for review.

    Within 40 days after the date of the decision of the Administrative 
Law Judge (or such additional time as is granted by the Administrative 
Review Board), any party aggrieved thereby who desires review thereof 
shall file a petition for review of the decision with supporting 
reasons. Such party shall transmit the petition in writing to the 
Administrative Review Board pursuant to 29 CFR part 8, with a copy 
thereof to the Chief Administrative Law Judge. The petition shall refer 
to the specific findings of fact, conclusions of law, or order at issue. 
A petition concerning the decision on the ineligibility list shall also 
state the unusual circumstances or lack thereof under the Service 
Contract Act, and/or the aggravated or willful violations of the 
Contract Work Hours and Safety Standards Act or lack thereof, as 
appropriate.



Sec. 6.21  Ineligible list.

    (a) Upon the final decision of the Administrative Law Judge or 
Administrative Review Board, as appropriate, the Administrator shall 
within 90 days forward to the Comptroller General the name of any 
respondent found in violation of the Service Contract Act, including the 
name of any firm, corporation, partnership, or association in which the 
respondent has a substantial

[[Page 136]]

interest, unless such decision orders relief from the ineligible list 
because of unusual circumstances.
    (b) Upon the final decision of the Administrative Law Judge or the 
Administrative Review Board, as appropriate, the Administrator promptly 
shall forward to the Comptroller General the name of any respondent 
found to be in aggravated or willful violation of the Contract Work 
Hours and Safety Standards Act, and the name of any firm, corporation, 
partnership, or association in which the respondent has a substantial 
interest.



Subpart C--Enforcement Proceedings Under the Davis-Bacon Act and Related 
Prevailing Wage Statutes, the Copeland Act, and the Contract Work Hours
 
and Safety Standards Act (Except Under Contracts Subject to the Service 
                              Contract Act)



Sec. 6.30  Referral to Chief Administrative Law Judge.

    (a) Upon timely receipt of a request for a hearing under Sec. 5.11 
(where the Administrator has determined that relevant facts are in 
dispute) or Sec. 5.12 of part 5 of this title, the Administrator shall 
refer the case to the Chief Administrative Law Judge by Order of 
Reference, to which shall be attached a copy of the notification letter 
to the respondent from the Administrator and response thereto, for 
designation of an Administrative Law Judge to conduct such hearings as 
may be necessary to decide the disputed matters. A copy of the Order of 
Reference and attachments thereto shall be served upon the respondent.
    (b) The notification letter from the Administrator and response 
thereto shall be given the effect of a complaint and answer, 
respectively, for purposes of the administrative proceedings. The 
notification letter and response shall be in accordance with the 
provisions of Sec. 5.11 or Sec. 5.12(b)(1) of part 5 of this title, as 
appropriate.



Sec. 6.31  Amendments to pleadings.

    At any time prior to the closing of the hearing record, the 
complaint (notification letter) or answer (response) may be amended with 
the permission of the Administrative Law Judge and upon such terms as 
he/she may approve. For proceedings pursuant to Sec. 5.11 of part 5 of 
this title, such an amendment may include a statement that debarment 
action is warranted under Sec. 5.12(a)(1) of part 5 of this title or 
under section 3(a) of the Davis-Bacon Act. Such amendments shall be 
allowed when justice and the presentation of the merits are served 
thereby, provided there is no prejudice to the objecting party's 
presentation on the merits. When issues not raised by the pleadings are 
reasonably within the scope of the original complaint and are tried by 
express or implied consent of the parties, they shall be treated in all 
respects as if they had been raised in the pleadings, and such 
amendments may be made as necessary to make them conform to the 
evidence. The presiding Administrative Law Judge may, upon reasonable 
notice and upon such terms as are just, permit supplemental pleadings 
setting forth transactions, occurrences or events which have happened 
since the date of the pleadings and which are relevant to any of the 
issues involved. A continuance in the hearing may be granted or the 
record left open to enable the new allegations to be addressed.



Sec. 6.32  Consent findings and order.

    (a) At any time prior to the receipt of evidence or, at the 
discretion of the Administrative Law Judge, prior to the issuance of the 
decision of the Administrative Law Judge, the parties may enter into 
consent findings and an order disposing of the proceeding in whole or in 
part.
    (b) Any agreement containing consent findings and an order disposing 
of a proceeding in whole or in part shall also provide:
    (1) That the order shall have the same force and effect as an order 
made after full hearing;
    (2) That the entire record on which any order may be based shall 
consist solely of the complaint and the agreement;
    (3) That any order concerning debarment under the Davis-Bacon Act 
(but not under any of the other statutes

[[Page 137]]

listed in Sec. 5.1 of part 5 of this title) shall constitute a 
recommendation to the Comptroller General;
    (4) A waiver of any further procedural steps before the 
Administrative Law Judge and the Administrative Review Board regarding 
those matters which are the subject of the agreement; and
    (5) A waiver of any right to challenge or contest the validity of 
the findings and order entered into in accordance with the agreement.
    (c) Within 30 days after receipt of an agreement containing consent 
findings and an order disposing of the disputed matter in whole, the 
Administrative Law Judge shall, if satisfied with its form and 
substance, accept such agreement by issuing a decision based upon the 
agreed findings and order. If such agreement disposes of only a part of 
the disputed matter, a hearing shall be conducted on the matters 
remaining in dispute.



Sec. 6.33  Decision of the Administrative Law Judge.

    (a) Proposed findings of fact, conclusions, and order. Within 20 
days of filing of the transcript of the testimony or such additional 
time as the Administrative Law Judge may allow, each party may file with 
the Administrative Law Judge proposed findings of fact, conclusions of 
law, and order, together with a supporting brief expressing the reasons 
for such proposals. Such proposals and brief shall be served on all 
parties, and shall refer to all portions of the record and to all 
authorities relied upon in support of each proposal.
    (b) Decision of the Administrative Law Judge. (1) Within a 
reasonable time after the time allowed for filing of proposed findings 
of fact, conclusions of law, and order, or within 30 days of receipt of 
an agreement containing consent findings and order disposing of the 
disputed matter in whole, the Administrative Law Judge shall make his/
her decision. If any aggrieved party desires review of the decision, a 
petition for review thereof shall be filed as provided in Sec. 6.34 of 
this title, and such decision and order shall be inoperative unless and 
until the Administrative Review Board either declines to review the 
decision or issues an order affirming the decision. The decision of the 
Administrative Law Judge shall include findings of fact and conclusions 
of law, with reasons and bases therefor, upon each material issue of 
fact, law, or discretion presented on the record. Such decision shall be 
in accordance with the regulations and rulings contained in part 5 and 
other pertinent parts of this title. The decision of the Administrative 
Law Judge shall be based upon a consideration of the whole record, 
including any admissions made in the respondent's answer (response) and 
Sec. 6.32 of this title. It shall be supported by reliable and probative 
evidence.
    (2) If the respondent is found to have violated the labor standards 
provisions of any of the statutes listed in Sec. 5.1 of part 5 of this 
title other than the Davis-Bacon Act, and if debarment action was 
requested pursuant to the complaint (notification letter) or any 
amendment thereto, the Administrative Law Judge shall issue an order as 
to whether the respondent is to be subject to the ineligible list as 
provided in Sec. 5.12(a)(1) of this title, including any findings of 
aggravated or willful violations. If the respondent is found to have 
violated the Davis-Bacon Act, and if debarment action was requested, the 
Administrative Law Judge shall issue as a part of the order a 
recommendation as to whether respondent should be subject to the 
ineligible list pursuant to section 3(a) of the Act, including any 
findings regarding respondent's disregard of obligations to employees 
and subcontractors. If wages are found due and are unpaid, no relief 
from the ineligible list shall be ordered or recommended except on 
condition that such wages are paid.
    (3) The Administrative Law Judge shall make no findings regarding 
liquidated damages under the Contract Work Hours and Safety Standards 
Act.



Sec. 6.34  Petition for review.

    Within 40 days after the date of the decision of the Administrative 
Law judge (or such additional time as is granted by the Administrative 
Review Board). any party aggrieved thereby who desires review thereof 
shall file a petition for review of the decision with supporting 
reasons. Such party shall

[[Page 138]]

transmit the petition in writing to the Administrative Review Board, 
pursuant to part 7 of this title, with a copy thereof to the Chief 
Administrative Law judge. The petition shall refer to the specific 
findings of fact, conclusions of law, or order at issue. A petition 
concerning the decision on debarment shall also state the aggravated or 
willful violations and/or disregard of obligations to employees and 
subcontractors, or lack thereof, as appropriate.



Sec. 6.35  Ineligible lists.

    Upon the final decision of the Administrative Law Judge or 
Administrative Review Board, as appropriate, regarding violations of any 
statute listed in Sec. 5.1 of part 5 of this title other than the Davis-
Bacon Act, the Administrator promptly shall foward to the Comptroller 
General the name of any respondent found to have committed aggravated or 
willful violations of the labor standards provisions of such statute, 
and the name of any firm, corporation, partnership, or association in 
which such respondent has a substantial interest. Upon the final 
decision of the Administrative Law Judge or Administrative Review Board, 
as appropriate, regarding violations of the Davis-Bacon Act, the 
Administrator promptly shall forward to the Comptroller General any 
recommendation regarding debarment action against a respondent, and the 
name of any firm, corporation, partnership, or association in which such 
respondent has an interest.



               Subpart D--Substantial Interest Proceedings



Sec. 6.40  Scope.

    This subpart supplements the procedures contained in Sec. 4.12 of 
part 4 and Sec. 5.12(d) of part 5 of this title, and states the rules of 
practice applicable to hearings to determine whether persons of firms 
whose names appear on the ineligible list pursuant to section 5(a) of 
the Service Contract Act or Sec. 5.12(a)(1) of part 5 of this title have 
a substantial interest in any firm, corporation, partnership, or 
association other than those listed on the ineligible list; and/or to 
determine whether persons or firms whose names appear on the ineligible 
list pursuant to section 3(a) of the Davis-Bacon Act have an interest in 
any firm, corporation, partnership, or association other than those 
listed on the ineligible list.



Sec. 6.41  Referral to Chief Administrative Law Judge.

    (a) Upon timely receipt of a request for a hearing under Sec. 4.12 
of part 4 or Sec. 5.12 of part 5 of this title, where the Administrator 
has determined that relevant facts are in dispute, or on his/her own 
motion, the Administrator shall refer the case to the Chief 
Administrative Law Judge by Order of Reference, to which shall be 
attached a copy of any findings of the Administrator and response 
thereto, for designation of an Administrative Law Judge to conduct such 
hearings as may be necessary to decide the disputed matters. A copy of 
the Order of Reference and attachments thereto shall be served upon the 
person or firm requesting the hearing, if any and upon the respondents.
    (b) The findings of the Administrator and response thereto shall be 
given the effect of a complaint and answer, respectively, for purposes 
of the administrative preceedings.



Sec. 6.42  Amendments to pleadings.

    At any time prior to the closing of the hearing record, the 
complaint (Administrator's findings) or answer (response) may be amended 
with the permission of the Administrative Law Judge and upon such terms 
as he/she may approve. Such amendments shall be allowed when justice and 
the presentation of the merits are served thereby, provided there is no 
prejudice to the objecting party's presentation on the merits. When 
issues not raised by the pleadings are reasonably within the scope of 
the original complaint and are tried by express or implied consent of 
the parties, they shall be treated in all respects as if they had been 
raised in the pleadings, and such amendments may be made as necessary to 
make them conform to the evidence. The presiding Administative Law Judge 
may, upon such terms as are just, permit supplemental pleadings setting 
forth transactions, occurrences or events which have happened a since 
the data

[[Page 139]]

of the pleadings and which are relevant to any of the issues involved. A 
continuance in the hearing may be granted or the record left open to 
enable the new allegations to be addressed.



Sec. 6.43  Consent findings and order.

    (a) At any time prior to the receipt of evidence or, at the 
discretion of the Administrative Law Judge, prior to the issuance of the 
decision of the Administrative Law Judge, the parties may enter into 
consent findings and an order disposing of the proceeding in whole or in 
part.
    (b) Any agreement containing consent findings and an order disposing 
of a proceeding in whole or in part shall provide:
    (1) That the order shall have the same force and effect as an order 
made after full hearing:
    (2) That the entire record on which any order may be based shall 
consist solely of the complaint and the agreement;
    (3) A waiver of any further procedural steps before the 
Administrative Law Judge and the Administrative Review Board, as 
appropriate, regarding those matters which are the subject of the 
agreement; and
    (4) A waiver of any right to challenge or contest the validity of 
the findings and order entered into in accordance with the agreement.
    (c) Within 30 days after receipt of an agreement containing consent 
findings and an order disposing of the disputed matter in whole, the 
Administrative Law Judge shall accept such agreement by issuing a 
decision based upon the agreed findings and order. If a such agreement 
disposes of only a part of the disputed matter, a hearing shall be 
conducted on the matters remaining in dispute.



Sec. 6.44  Decision of the Administrative Law Judge.

    (a) Proposed findings of fact, conclusions, and order. Within 30 
days of filing of the transcript of the testimony, each party may file 
with the Administrative Law Judge proposed findings of fact, conclusions 
of law, and order, together with a supporting brief expressing the 
reasons for such proposals. Such proposals and brief shall be served on 
all parties, and shall refer to all portions of the record and to all 
authorities relied upon in support of each proposal.
    (b) Decision of the Administrative Law Judge. Within 60 days after 
the time allowed for filing of proposed findings of fact, conclusions of 
law, and order, or within 30 days after receipt of an agreement 
containing consent findings and order disposing of the disputed matter 
in whole, the Administrative Law Judge shall make his/her decision. If 
any aggrieved party desires review of the decision a petition for review 
thereof shall be filed as provided in Sec. 6.45 of this title, and such 
decision and order shall be inoperative unless and until the 
Administrative Review Board issues an order affirming the decision. The 
decision of the Administrative Law Judge shall include findings of fact 
and conclusions of law, with reasons and bases therefor, upon each 
material issue of fact, law, or discretion presented on the record. Such 
decision shall be in accordance with the regulations and rulings 
contained in parts 4 and 5 and other pertinent parts of this title. The 
decision of the Administrative Law Judge shall be based upon a 
consideration of the whole record, including any admissions made in the 
respondents' answer (response) and Sec. 6.43 of this title.



Sec. 6.45  Petition for review.

    Within 30 days after the date of the decision of the Administrative 
Law Judge, any party aggrieved thereby who desires review thereof shall 
file a petition for review of the decision with supporting reasons. Such 
party shall transmit the petition in writing to the Administrative 
Review Board pursuant to 29 CFR part 8 if the proceeding was under the 
Service Contract Act, or to the Administrative Review Board pursuant to 
29 CFR part 7 if the proceeding was under Sec. 5.12(a)(1) of part 5 of 
this title or under section 3(a) of the Davis-Bacon Act, with a copy 
thereof to the Chief Administrative Law Judge. The petition for review 
shall refer to the specific findings of fact, conclusions of law, or 
order at issue.



Sec. 6.46  Ineligible list.

    Upon the final decision of the Administrative Law Judge, 
Administrative

[[Page 140]]

Review Board, as appropriate, the Administrator promptly shall forward 
to the Comptroller General the names of any firm, corporation, 
partnership, or association in which a person or firm debarred pursuant 
to section 5(a) of the Service Contract Act or Sec. 5.12(a) of part 5 of 
this title has a substantial interest; and/or the name of any firm, 
corporation, partnership, or association in which a person or firm 
debarred pursuant to section 3(a) of the Davis-Bacon Act has an 
interest.



      Subpart E--Substantial Variance and Arm's Length Proceedings



Sec. 6.50  Scope.

    This subpart supplements the procedures contained in Secs. 4.10 and 
4.11 of part 4 of this title and states the rules of practice applicable 
to hearings under section 4(c) of the Act to determine whether the 
collectively bargained wages and/or fringe benefits otherwise required 
to be paid under that section and sections 2(a)(1) and (2) of the Act 
are substantially at variance with those which prevail for services of a 
character similar in the locality, and/or to determine whether the wages 
and/or fringe benefits provided in the collective bargaining agreement 
were reached as a result of arm's-length negotiations.



Sec. 6.51  Referral to Chief Administrative Law Judge.

    (a) Referral pursuant to Sec. 4.10 or Sec. 4.11 of part 4 of this 
title will be by an Order of Reference from the Administrator to the 
Chief Administrative Law Judge, to which will be attached the material 
submitted by the applicant or any other material the Administrator 
considers relevant and, for proceedings pursuant to Sec. 4.11 of this 
title, a copy of any findings of the Administrator. A copy of the Order 
of Reference and all attachments will be sent by mail to the following 
parties: The agency whose contract is involved, the parties to the 
collective bargaining agreement, any contractor or subcontractor 
performing on the contract, any contractor or subcontractor known to be 
desirous of bidding thereon or performing services thereunder who is 
known or believed to be interested in the determination of the issue, 
any unions or other authorized representatives of service employees 
employed or who may be expected to be employed by such contractor or 
subcontractor on the contract work, and any other affected parties known 
to be interested in the determination of the issue. The Order of 
Reference will have attached a certificate of service naming all 
interested parties who have been served.
    (b) Accompanying the Order of Reference and attachments will be a 
notice advising that any interested party, including the applicant, who 
intends to participate in the proceeding shall submit a written response 
to the Chief Administrative Law Judge within 20 days of the date on 
which the certificate of service indicates the Order of Reference was 
mailed. The notice will state that such a response shall include:
    (1) A statement of the interested party's case;
    (2) A list of witnesses the interested party will present, a summary 
of the testimony each is expected to give, and copies of all exhibits 
proposed to be proffered;
    (3) A list of persons who have knowledge of the facts for whom the 
interested party requests that subpoenas be issued and a brief statement 
of the purpose of their testimony; and
    (4) A certificate of service in accordance with Sec. 6.3 of this 
title on all interested parties, including the Administrator.



Sec. 6.52  Appointment of Administrative Law Judge and notification of prehearing conference and hearing date.

    Upon receipt from the Administrator of an Order of Reference, notice 
to the parties, attachments and certificate of service, the Chief 
Administrative Law Judge shall appoint an Administrative Law Judge to 
hear the case. The Administrative Law Judge shall promptly notify all 
interested parties of the time and place of a prehearing conference and 
of the hearing which shall be held immediately upon the completion of 
prehearing conference. The date of the prehearing conference and hearing 
shall be not more than 60 days from the date on which the certificate of 
service

[[Page 141]]

indicates the Order of Reference was mailed.



Sec. 6.53  Prehearing conference.

    (a) At the prehearing conference the Administrative Law Judge shall 
attempt to determine the exact areas of agreement and disagreement 
raised by the Administrator's Order of Reference and replies thereto, so 
that the evidence and arguments presented at the hearing will be 
relevant, complete, and as brief and concise as possible.
    (b) Any interested party desiring to file proposed findings of fact 
and conclusions of law shall submit them to the Administrative Law Judge 
at the prehearing conference.
    (c) If the parties agree that no hearing is necessary to supplement 
the written evidence and the views and arguments that have been 
presented, the Administrative Law Judge shall forthwith render his/her 
final decision. The Administrative Law Judge with the agreement of the 
parties may permit submission of additional written evidence or 
argument, such as data accompanied by affidavits attesting to its 
validity or depositions, within ten days of commencement of the 
prehearing conference.



Sec. 6.54  Hearing.

    (a) Except as provided in Sec. 6.53(c) of this title, the hearing 
shall commence immediately upon the close of the prehearing conference. 
All matters remaining in controversy, including the presentation of 
additional evidence, shall be considered at the hearing. There shall be 
a minimum of formality in the proceeding consistent with orderly 
procedure.
    (b) To expedite the proceeding the Administrative Law Judge shall, 
after consultation with the parties, set reasonable guidelines and 
limitations for the presentations to be made at the hearing. The 
Administrative Law Judge may limit cross-examination and may question 
witnesses.
    (c) Under no circumstances shall source data obtained by the Bureau 
of Labor Statistics, U.S. Department of Labor, or the names of 
establishments contacted by the Bureau be submitted into evidence or 
otherwise disclosed. Where the Bureau has conducted a survey, the 
published summary of the data may be submitted into evidence.
    (d) Affidavits or depositions may be admitted at the discretion of 
the Administrative Law Judge. The Administrative Law Judge may also 
require that unduly repetitious testimony be submitted as affidavits. 
Such affidavits shall be submitted within three days of the conclusions 
of the hearing.
    (e) Counsel for the Administrator shall participate in the 
proceeding to the degree he/she deems appropriate.
    (f) An expedited transcript shall be made of the hearing and of the 
prehearing conference.



Sec. 6.55  Closing of record.

    The Administrative Law Judge shall close the record promptly and not 
later than 10 days after the date of commencement of the prehearing 
conference. Post-hearing briefs may be permitted, but the filing of 
briefs shall not delay issuance of the decision of the Administrative 
Law Judge pursuant to Sec. 6.56 of this title.



Sec. 6.56  Decision of the Administrative Law Judge.

    Within 15 days of receipt of the transcript, the Administrative Law 
Judge shall render his/her decision containing findings of fact and 
conclusions of law. The decision of the Administrative Law Judge shall 
be based upon consideration of the whole record, and shall be in 
accordance with the regulations and rulings contained in part 4 and 
other pertinent parts of this title. If any party desires review of the 
decision, a petition for review thereof shall be filed as provided in 
Sec. 6.57 of this title, and such decision and order shall be 
inoperative unless and until the Administrative Review Board issues an 
order affirming the decision. If a petition has not been filed within 10 
days of issuance of the Administrative Law Judge's decision, the 
Administrator shall promptly issue any wage determination which may be 
required as a result of the decision.



Sec. 6.57  Petition for review.

    Within 10 days after the date of the decision of the Administrative 
Law Judge, any interested party who participated in the proceedings 
before the

[[Page 142]]

Administrative Law Judge and desires review of the decision shall file a 
petition for review by the Administrative Review Board pursuant to 29 
CFR part 8. The petition shall refer to the specific findings of fact, 
conclusions of law, or order excepted to and the specific pages of 
transcript relevant to the petition for review.



PART 7--PRACTICE BEFORE THE ADMINISTRATIVE REVIEW BOARD WITH REGARD TO FEDERAL AND FEDERALLY ASSISTED CONSTRUCTION CONTRACTS--Table of Contents




                      Subpart A--Purpose and Scope

Sec.
7.1  Purpose and scope.

                Subpart B--Review of Wage Determinations

7.2  Who may file petitions for review.
7.3  Where to file.
7.4  When to file.
7.5  Contents of petitions.
7.6  Filing of wage determination record.
7.7  Presentations of other interested persons.
7.8  Disposition by the Administrative Review Board.

       Subpart C--Review of Other Proceedings and Related Matters

7.9  Review of decisions in other proceedings.

               Subpart D--Some General Procedural Matters

7.11  Right to counsel.
7.12  Intervention; other participation.
7.13  Consolidations.
7.14  Oral proceedings.
7.15  Public information.
7.16  Filing and service.
7.17  Variations in procedures.
7.18  Motions; extensions of time.

    Authority: Reorg. Plan No. 14 of 1950, 64 Stat. 1267; 5 U.S.C. 301, 
3 CFR, 1949-1953 Comp., p. 1007; sec. 2, 48 Stat. 948 as amended; 40 
U.S.C. 276c; secs. 104, 105, 76 Stat. 358, 359; 40 U.S.C. 330, 331; 65 
Stat. 290; 36 FR 306, 8755.

    Source: 36 FR 10863, June 4, 1971, unless otherwise noted.

    Editorial Note: Nomenclature changes to part 7 appear at 61 FR 
19985, May 3, 1996.



                      Subpart A--Purpose and Scope



Sec. 7.1  Purpose and scope.

    (a) This part contains the rules of practice of the Administrative 
Review Board when it is exercising its jurisdiction described in 
paragraph (b) of this section.
    (b) The Board has jurisdiction to hear and decide in its discretion 
appeals concerning questions of law and fact from final decisions under 
parts 1, 3, and 5 of this subtitle including decisions as to the 
following: (1) Wage determinations issued under the Davis-Bacon Act and 
its related minimum wage statutes; (2) debarment cases arising under 
part 5 of this subtitle; (3) controversies concerning the payment of 
prevailing wage rates or proper classifications which involve 
significant sums of money, large groups of employees, or novel or 
unusual situations; and (4) recommendations of a Federal agency for 
appropriate adjustment of liquidated damages which are assessed under 
the Contract Work Hours and Safety Standards Act.
    (c) In exercising its discretion to hear and decide appeals, the 
Board shall consider, among other things, timeliness, the nature of the 
relief sought, matters of undue hardship or injustice, or the public 
interest.
    (d) In considering the matters within the scope of its jurisdiction 
the Board shall act as the authorized representative of the Secretary of 
Labor. The Board shall act as fully and finally as might the Secretary 
of Labor concerning such matters.
    (e) The Board is an essentially appellate agency. It will not hear 
matters de novo except upon a showing of extraordinary circumstances. It 
may remand under appropriate instructions any case for the taking of 
additional evidence and the making of new or modified findings by reason 
of the additional evidence.

[36 FR 10863, June 4, 1971, as amended at 61 FR 19985, May 3, 1996]

[[Page 143]]



                Subpart B--Review of Wage Determinations.



Sec. 7.2  Who may file petitions for review.

    (a) Any interested person who is seeking a modification or other 
change in a wage determination under part 1 of this subtitle and who has 
requested the administrative officer authorized to make such 
modification or other change under part 1 and the request has been 
denied, after appropriate reconsideration shall have a right to petition 
for review of the action taken by that officer.
    (b) For purpose of this section, the term interested person is 
considered to include, without limitation:
    (1) Any contractor, or an association representing a contractor, who 
is likely to seek or to work under a contract containing a particular 
wage determination, or any laborer or mechanic, or any labor 
organization which represents a laborer or mechanic, who is likely to be 
employed or to seek employment under a contract containing a particular 
wage determination, and
    (2) any Federal, State, or local agency concerned with the 
administration of a proposed contract or a contract containing a 
particular wage determination issued pursuant to the Davis-Bacon Act or 
any of its related statutes.



Sec. 7.3  Where to file.

    The petition (original and four copies) accompanied by a statement 
of service shall be filed with the Administrative Review Board, U.S. 
Department of Labor, Washington, DC 20210. In addition, copies of the 
petition shall be served upon each of the following: (a) The Federal, 
State, or local agency, or agencies involved; (b) the officer issuing 
the wage determination; and (c) any other person (or the authorized 
representatives of such persons) known, or reasonably expected, to be 
interested in the subject matter of the petition.



Sec. 7.4  When to file.

    (a) Requests for review of wage determinations must be timely made. 
Timeliness is dependent upon the pertinent facts and circumstances 
involved, including without limitation the contract schedule of the 
administering agency, the nature of the work involved, and its location.
    (b) The Board shall under no circumstances request any administering 
agency to postpone any contract action because of the filing of a 
petition. This is a matter which must be resolved directly with the 
administering agency by the petitioner or other interested person.



Sec. 7.5  Contents of petitions.

    (a) A petition for the review of a wage determination shall: (1) Be 
in writing and signed by the petitioner or his counsel (or other 
authorized representative); (2) be described as a petition for review by 
the Administrative Review Board; (3) identify clearly the wage 
determination, location of the project or projects in question, and the 
agency concerned; (4) state that the petitioner has requested 
reconsideration of the wage determination in question and describe 
briefly the action taken in response to the request; (5) contain a short 
and plain statement of the grounds for review; and (6) be accompanied by 
supporting data, views, or arguments.
    (b) A petition shall indicate whether or not the petitioner consents 
to the disposition of the questions involved by a single member of the 
Board.



Sec. 7.6  Filing of wage determination record.

    (a) In representing the officer issuing the wage determination the 
Solicitor shall, among other things, file promptly with the Board a 
record supporting his findings and conclusions, after receipt of service 
of the petition.
    (b) In representing the officer issuing the wage determination the 
Solicitor shall file with the Board a statement of the position of the 
officer issuing the wage determination concerning any findings 
challenged in the petition; and shall make service on the petitioner and 
any other interested persons.



Sec. 7.7  Presentations of other interested persons.

    Interested persons other than the petitioner shall have a reasonable 
opportunity as specified by the Board in particular cases to submit to 
the Board

[[Page 144]]

written data, views, or arguments relating to the petition. Such matter 
(original and four copies) should be filed with the Administrative 
Review Board, U.S. Department of Labor, Washington, DC 20210. Copies of 
any such matter shall be served on the petitioner and other interested 
persons.



Sec. 7.8  Disposition by the Administrative Review Board.

    (a) The Board may decline review of any case whenever in its 
judgement a review would be inappropriate or because of lack of 
timeliness, the nature of the relief sought, or other reasons.
    (b) The Board shall decide the case upon the basis of all relevant 
matter contained in the entire record before it. The Board shall notify 
interested persons participating in the proceeding of its decision.
    (c) Decisions of the Board shall be by majority vote. A case will be 
reviewed upon the affirmative vote of one member.



       Subpart C--Review of Other Proceedings and Related Matters



Sec. 7.9  Review of decisions in other proceedings.

    (a) Any party or aggrieved person shall have a right to file a 
petition for review with the Board (original and four copies), within a 
reasonable time from any final decision in any agency action under part 
1, 3, or 5 of this subtitle.
    (b) The petition shall state concisely the points relied upon, and 
shall be accompanied by a statement setting forth supporting reasons. 
Further, the petition shall indicate whether or not the petitioner 
consents to the disposition of the questions involved by a single 
member.
    (c) A copy of the presentation shall be served upon the officer who 
issued the decision, and upon any other party or known interested 
person, as the case may be. In representing the officer who issued the 
final decision in any agency action under parts 1, 3, or 5 of the 
subtitle, the Solicitor shall, among other things, file promptly with 
the Board a record supporting the officer's decision, including any 
findings upon which the decision is based, after receipt of service of 
the petition.
    (d) In representing the officer issuing a final decision in any 
agency action under parts 1, 3, and 5 of this subtitle, the Solicitor 
shall file with the Board a statement of the position of the officer who 
issued the final decision at issue, concerning the decision challenged; 
and shall make service on the petitioner and any other interested 
persons.
    (e) The Board shall afford any other parties or known interested 
persons a reasonable opportunity to respond to the petition. Copies of 
any such response shall be served upon the officer issuing the decision 
below and upon the petitioner.
    (f) The Board shall pass upon the points raised in the petition upon 
the basis of the entire record before it, and shall notify the parties 
to the proceeding of its decision. In any remand of a case as provided 
in Sec. 7.1(e), the Board shall include any appropriate instructions.



               Subpart D--Some General Procedural Matters



Sec. 7.11  Right to counsel.

    Each interested person or party shall have the right to appear in 
person or by or with counsel or other qualified representative in any 
proceeding before the Board.



Sec. 7.12  Intervention; other participation.

    For good cause shown, the Board may permit any interested person or 
party to intervene or otherwise participate in any proceeding held by 
the Board. Except when requested orally before the Board, a petition to 
intervene or otherwise participate shall be in writing (original and 
four copies) and shall state with precision and particularity: (a) The 
petitioner's relationship to the matters involved in the proceedings, 
and (b) the nature of the presentation which he would make. Copies of 
the petition shall be served to all parties or interested persons known 
to participate in the proceeding, who may respond to the petition. 
Appropriate service shall be made of any response.

[[Page 145]]



Sec. 7.13  Consolidations.

    Upon its own initiative or upon motion of any interested person or 
party, the Board may consolidate in any proceeding or concurrently 
consider two or more appeals which involve substantially the same 
persons or parties, or issues which are the same or closely related, if 
it finds that such consolidation or concurrent review will contribute to 
a proper dispatch of its business and to the ends of justice, and it 
will not unduly delay consideration of any such appeals.



Sec. 7.14  Oral proceedings.

    (a) With respect to any proceeding before it, the Board may upon its 
own initiative or upon request of any interested person or party direct 
the interested persons or parties to appear before the Board or its 
designee at a specified time and place in order to simplify the issues 
presented or to take up any other matters which may tend to expedite or 
facilitate the disposition of the proceeding.
    (b) In its discretion, the Board, or a single presiding member, may 
permit oral argument in any proceeding. The Board or the presiding 
member, shall prescribe the time and place for argument and the time 
allotted for argument. A petitioner wishing to make oral argument should 
make the request therefor in his petition.



Sec. 7.15  Public information.

    (a) Subject to the provisions of Secs. 1.15, 5.6, and part 70 of 
this subtitle, all papers and documents made a part of the official 
record in the proceedings of the Board and decisions of the Board shall 
be made available for public inspection during usual business hours at 
the office of the Administrative Review Board, U.S. Department of Labor, 
Washington, DC 20210.
    (b) Facsimile copies of such papers, documents and decisions shall 
be furnished upon request. There shall be a charge of 25 cents for each 
facsimile page reproduction except for copies of materials duplicated 
for distribution for no charge as provided in paragraph (c) of this 
section. Postal fees in excess of domestic first class postal rates as 
are necessary for transmittal of copies will be added to the per-page 
fee specified unless stamps or stamped envelopes are furnished with the 
request.
    (c) No charge need to be made for furnishing:
    (1) Unauthenticated copies of any rules, regulations, or decisions 
of general import,
    (2) Copies to agencies which will aid in the administration of the 
Davis-Bacon and related acts,
    (3) Copies to contractor associations and labor organizations for 
general dissemination of the information contained therein, and
    (4) Only occasionally unauthenticated copies of papers and 
documents.



Sec. 7.16  Filing and service.

    (a) Filing. All papers submitted to the Board under this part shall 
be filed with the Executive Director of the Administrative Review Board, 
U.S. Department of Labor, Washington, DC 20210.
    (b) Number of copies. An original and four copies of all papers 
shall be submitted.
    (c) Manner of service. Service under this part shall be by the 
filing party or interested person, service may be personal or may be by 
mail. Service by mail is complete on mailing.
    (d) Proof of service. Papers filed with the Board shall contain an 
acknowledgement of service by the person served or proof of service in 
the form of a statement of the date and the manner of service and the 
names of the person or persons served, certified by the person who made 
service.



Sec. 7.17  Variations in procedures.

    Upon reasonable notice to the parties or interested persons, the 
Board may vary the procedures specified in this part in particular 
cases.



Sec. 7.18  Motions; extensions of time.

    (a) Except as otherwise provided in this part, any application for 
an order or other relief shall be made by motion for such order or 
relief. Except when made orally before the Board, motions shall be in 
writing and shall be accompanied by proof of service on all other 
parties or interested persons. If a motion is supported by briefs, 
affidavits, or other papers, they shall be served

[[Page 146]]

and filed with the motion. Any party or interested person, as the case 
may be, may respond to the motion within such time as may be provided by 
the Board.
    (b) Requests for extensions of time in any proceeding as to the 
filing of papers or oral presentations shall be in the form of a motion 
under paragraph (a) of this section.



PART 8--PRACTICE BEFORE THE ADMINISTRATIVE REVIEW BOARD WITH REGARD TO FEDERAL SERVICE CONTRACTS--Table of Contents




                      Subpart A--Purpose and Scope

Sec.
8.1  Purpose and scope.

                Subpart B--Review of Wage Determinations

8.2  Who may file petitions of review.
8.3  When to file.
8.4  Contents of petition.
8.5  Filing of wage determination record.
8.6  Disposition by the Administrative Review Board.

       Subpart C--Review of Other Proceedings and Related Matters

8.7  Review of decisions in other proceedings.
8.8  Filing of administrative record.
8.9  Disposition by the Administrative Review Board.

                  Subpart D--General Procedural Matters

8.10  Filing and service.
8.11  Presentations of other interested persons.
8.12  Intervention; other participation.
8.13  Right to counsel.
8.14  Consolidations.
8.15  Motions; extensions of time.
8.16  Oral proceedings.
8.17  Decision of the Board.
8.18  Public information.
8.19  Equal Access to Justice Act.

    Authority: Secs. 4 and 5, 79 Stat. 1034, 1035, as amended by 86 
Stat. 789, 790, 41 U.S.C. 353, 354; 5 U.S.C. 301; Reorg. Plan No. 14 of 
1950, 64 Stat. 1267, 5 U.S.C. Appendix; 76 Stat. 357-359, 40 U.S.C. 327-
332.

    Source: 49 FR 10637, Mar. 21, 1984, unless otherwise noted.

    Editorial Note: Nomenclature changes appear at 61 FR 19985, May 3, 
1996.



                      Subpart A--Purpose and Scope



Sec. 8.1  Purpose and scope.

    (a) This part contains the rules of practice of the Administrative 
Review Board when it is exercising its jurisdiction described in 
paragraph (b) of this section.
    (b) The Board has jurisdiction to hear and decide in its discretion 
appeals concerning questions of law and fact from final decisions of the 
Administrator of the Wage and Hour Division or authorized 
representative, and from decisions of Administrative Law Judges under 
subparts B, D, and E of part 6 of this title, arising under the Service 
Contract Act and the Contract Work Hours and Safety Standards Act where 
the contract is also subject to the Service Contract Act. The Board 
shall not have jurisdiction to pass on the validity of any portion of 
the Code of Federal Regulations which has been duly promulgated through 
notice and comment by the Department of Labor and shall observe the 
provisions thereof, where pertinent, in its decisions. The jurisdiction 
of the Board includes:
    (1) Wage determinations issued under the Service Contract Act;
    (2) Substantial variance proceedings or arm's-length negotiations 
proceedings pursuant to section 4(c) of the Service Contract Act;
    (3) Debarment or other enforcement proceedings;
    (4) Proceedings to determine substantial interest of debarred 
persons or firms;
    (5) Decisions of the Wage-Hour Administrator or authorized 
representative regarding recommendations of a Federal agency for 
adjustment or waiver of liquidated damages assessed under the Contract 
Work Hours and Safety Standards Act;
    (6) Other final actions of the Wage-Hour Administrator or authorized 
representative (e.g., additional classification actions and rulings with 
respect to application of the Act(s), or the regulations, or of wage 
determinations issued thereunder).
    (7) Other matters specifically referred to the Board by the 
Secretary of Labor.
    (c) In considering the matters within the scope of its jurisdiction 
the Board

[[Page 147]]

shall act as the authorized representative of the Secretary of Labor and 
shall act as fully and finally as might the Secretary of Labor 
concerning such matters.
    (d) The Board is an appellate body and shall decide cases properly 
brought before it on the basis of all relevant matter contained in the 
entire record before it. Decisions by the Board shall be based upon the 
preponderance of the evidence before it. It may remand with appropriate 
instructions any case for the taking of additional evidence and the 
making of new or modified findings by reason of the additional evidence. 
However, unless the petition for review cities alleged procedural 
irregularities in the proceeding below and not the merits of a case, the 
Board shall not consider a petition for review filed by any party 
against whom default judgment has been entered pursuant to the 
provisions of part 6 of this title.

[49 FR 10637, Mar. 21, 1984, as amended at 61 FR 19985, May 3, 1996]



                Subpart B--Review of Wage Determinations



Sec. 8.2  Who may file petitions of review.

    (a) Any interested party who is seeking a modification of other 
change in a wage determination under the Service Contract Act and who 
has requested the Wage-Hour Administrator or authorized representative 
to make such modification or other change under Sec. 4.55 of part 4 of 
this title, and the request has been denied, shall have a right to 
petition of review of the action taken by that officer.
    (b) For purposes of this subpart, the term interested party shall 
mean:
    (1) Any employee or any labor organization which represents an 
employee who is likely to be employed or to seek employment under a 
contract containing a particular wage determination, or any contractor 
or an association representing a contractor who is likely to seek a 
contract or to work under a contract containing a particular wage 
determination;
    (2) The Federal agency(s) which will administer a proposed contract 
containing a particular wage determination issued pursuant to the 
Service Contract Act; and
    (3) Any other party whom the Board finds to have a sufficient 
interest in the wage determination.



Sec. 8.3  When to file.

    (a) Requests for review of wage determinations must be filed within 
20 days of issuance of the Wage-Hour Administrator's decision denying a 
request to make a change in the wage determination.
    (b) The Board shall under no circumstances request any administering 
agency to postpone any contract action because of the filing of a 
petition.



Sec. 8.4  Contents of petition.

    (a) A petition for review of a wage determination shall:
    (1) Be in writing and signed by the petitioner or his/her counsel 
(or other authorized representative);
    (2) Be addressed to the Administrative Review Board;
    (3) Identify clearly the wage determination, location where the 
contract will be performed, if known, and the agency concerned;
    (4) State that the petitioner has requested reconsideration of the 
wage determination in question pursuant to 29 CFR 4.55 and describe 
briefly the action taken in response to the request;
    (5) Contain a short and plain statement of the grounds for review;
    (6) Be accompanied by supporting data, views, or arguments; and
    (7) Contain a statement that all data or other evidence submitted 
have previously been submitted to the Administrator.
    (b) A petition shall indicate whether or not the petitioner consents 
to the disposition of the questions involved by a single member of the 
Board.



Sec. 8.5  Filing of wage determination record.

    The Associate Solicitor for Fair Labor Standards shall, promptly 
after service of the petition, file with the Board the record upon which 
the wage determination was based. Under no circumstances shall source 
data obtained by the Bureau of Labor Statistics, U.S. Department of 
Labor, or the names of

[[Page 148]]

establishments contacted by the Bureau be filed with the Board or 
otherwise disclosed. Where the Bureau has conducted a survey, the 
published summary of the data may be filed.



Sec. 8.6  Disposition by the Administrative Review Board.

    (a) The Board may decline review of any case whenever in its 
judgment review would be inappropriate because of lack of timeliness, 
the nature of the relief sought, the case involves only settled issues 
of law, the appeal is frivolous on its face, or other reasons. A case 
will be reviewed upon the affirmative vote of one member.
    (b) Except as provided in paragraphs (c) and (d) of this section, 
the Board will not review a wage determination after award, exercise of 
option, or extension of a contract, unless such procurement action was 
taken without the wage determination required pursuant to Secs. 4.4 and 
4.5 of part 4 of this title.
    (c) A wage determination may be reviewed after award, exercise of 
option, or extension of a contract if it is issued after a finding by an 
Administrative Law Judge or the Board that a substantial variance exists 
between collectively bargained wage rates and/or fringe benefits 
otherwise required to be paid pursuant to section 4(c) of the Act and 
those prevailing for services of a character similar in the locality, or 
after a finding that such collective bargaining agreement was not 
reached as a result of arm's length negotiations.
    (d) Where a petition for review of a wage determination is filed 
prior to award, exercise of option, or extension of a contract, the 
Board may review the wage determination after such award, exercise of 
option, or extension of a contract if the issue is a significant issue 
of general applicability. The Board's decision shall not affect the 
contract after such award, exercise of option, or extension.
    (e) In issuing its decision the Board will act expeditiously, taking 
into consideration procurement deadlines. The Board shall decide the 
case upon the basis of all relevant matters contained in the entire 
record before it and shall not consider any data not submitted to the 
Wage-Hour Administrator with the request for reconsideration. The Board 
in its decision affirming, modifying, or setting aside the wage 
determination, shall include a statement of reasons or bases for the 
actions taken. In any remand of a case as provided in Sec. 8.1(d) of 
this title, the Board shall include appropriate instructions.



       Subpart C--Review of Other Proceedings and Related Matters



Sec. 8.7  Review of decisions in other proceedings.

    (a) A petition for review of a decision of an Administrative Law 
Judge pursuant to subparts B, D or E of part 6 of this title may be 
filed by any aggrieved party in accordance with the provisions therein.
    (b) A petition for review of a final written decision (other than a 
wage determination) of the Administrator or authorized representative 
may be filed by any aggrieved party within 60 days of the date of the 
decision of which review is sought. Where a case has been referred 
directly to the Board pursuant to Sec. 4.11 or Sec. 4.12 of this title, 
no petition for review shall be necessary; a brief in support of the 
aggrieved party's position shall be filed within 30 days of filing of 
the administrative record by the Administrator.
    (c) A petition shall state concisely the points relied upon, and 
shall be accompanied by a statement setting forth supporting reasons. 
The petition shall also indicate whether or not the petitioner consents 
to the disposition of the questions involved by a single member.



Sec. 8.8  Filing of administrative record.

    (a) If a petition for review has been filed concerning a decision 
pursuant to part 6 of this title, the Chief Administrative Law Judge 
shall promptly forward the record of the proceeding before the 
Administrative Law Judge to the Board.
    (b) If a petition for review has been filed concerning a final 
decision of the Wage-Hour Administrator or authorized representative, 
the Associate Solicitor for Fair Labor Standards shall promptly file 
with the Board a record upon which the decision was based.

[[Page 149]]



Sec. 8.9  Disposition by the Administrative Review Board.

    (a) The Board may decline review of any case whenever in its 
judgment review would be inappropriate because of lack of timeliness, 
the nature of the relief sought, the case involves only settled issues 
of law, the appeal is frivolous on its face, or other reasons. A case 
will be reviewed upon the affirmative vote of one member.
    (b) In issuing its decision the Board will take into consideration 
procurement deadlines where appropriate. The Board shall pass upon the 
points raised in the petition upon the basis of the entire record before 
it. The Board may affirm, modify or set aside, in whole or in part, the 
decision under review and shall issue a decision including a statement 
of reasons or bases for the actions taken. The Board shall modify or set 
aside findings of fact only when it determines that those findings are 
not supported by a preponderance of the evidence. In any remand of a 
case as provided in Sec. 8.1(e) of this title, the Board shall include 
any appropriate instructions.



                  Subpart D--General Procedural Matters



Sec. 8.10  Filing and service.

    (a) Filing. All papers submitted to the Board under this part shall 
be filed with the Executive Director of the Administrative Review Board, 
U.S. Department of Labor, Washington, DC 20210.
    (b) Number of copies. An original and four copies of all papers 
shall be submitted.
    (c) Manner of service. Service under this part shall be personal or 
by mail. Service by mail is complete on mailing. For purposes of this 
part, filing is accomplished upon the day of service, by mail or 
otherwise.
    (d) Proof of service. Papers filed with the Board shall contain an 
acknowledgement of service by the person served or proof of service in 
the form of a statement of the date and the manner of service and the 
names of the person or persons served, certified by the person who made 
service.
    (e) Service upon the Department of Labor and other interested 
parties. A copy of all documents filed with the Board shall be served 
upon the Associate Solicitor, Division of Fair Labor Standards, U.S. 
Department of Labor, Washington, DC 20210; the Administrator, Wage and 
Hour Division, U.S. Department of Labor, Washington, DC 20210; the 
Federal contracting agency involved; and all other interested parties.



Sec. 8.11  Presentations of other interested persons.

    (a) Where a petition has been filed for review of a wage 
determination or other final decision of the Administrator or authorized 
representative, the Board shall notify the parties known or believed to 
be interested in the case. The Associate Solicitor and any other parties 
interested in presenting their views shall file a statement within 30 
days of the filing of the petition (or such other time as is specified 
by the Board, with consideration of procurement deadlines, as 
appropriate).
    (b) Where a petition has been filed for review of a decision issued 
pursuant to subparts B, D or E of part 6 of this title, any other 
parties to the proceeding interested in presenting their views shall 
file a statement within 30 days of the filing of the petition (or such 
other time as is specified by the Board, with consideration of 
procurement deadlines, as appropriate).



Sec. 8.12  Intervention; other participation.

    For good cause shown, the Board may permit any interested party to 
intervene or otherwise participate in any proceeding held by the Board. 
Except when requested orally before the Board, a petition to intervene 
or otherwise participate shall be in writing (original and four copies) 
and shall state with precision and particularity:
    (a) The petitioner's relationship to the matters involved in the 
proceedings, and
    (b) The nature of the presentation which the peititioner would make.

[[Page 150]]



Sec. 8.13  Right to counsel.

    Each interested party shall have the right to appear in person or by 
counsel or other representative in any proceeding before the Board.



Sec. 8.14  Consolidations.

    Upon its own initative or upon motion of any interested party, the 
Board may consolidate any proceeding or concurrently consider two or 
more appeals which involve substantially the same parties, or issues 
which are the same or closely related, if it finds that such 
consolidation or concurrent review will contribute to a proper dispatch 
of its business and to the ends of justice, and it will not unduly delay 
consideration of any such appeals.



Sec. 8.15  Motions; extensions of time.

    (a) Except as otherwise provided in this part, any application for 
an order or other relief shall be made by motion. Except when made 
orally before the Board, motions shall be in writing and shall be 
accompanied by proof of service on all other parties. If a motion is 
supported by briefs, affidavits, or other papers, they shall be served 
and filed with the motion. Any party may respond to the motion within 
such time as may be provided by the Board.
    (b) Requests for extension of time as to the filing of papers or 
oral presentation shall be in the form of a motion under paragraph (a) 
of this section.



Sec. 8.16  Oral proceedings.

    (a) With respect to any proceedings before it, the Board may upon 
its own initative or upon request of any interested party direct the 
interested parties to appear before the Board or its designee at a 
specified time and place in order to simplify the issues persented or to 
take up any other matters which may tend to expedite or facilitate the 
disposition of the proceeding.
    (b) In its discretion, the Board or a single presiding member may 
permit oral argument in any proceeding. The Board or the presiding 
member shall prescribe the time and place for argument and the time 
allocated for argument. A petitioner wishing to make oral argument 
should make the request therefore in the petition.



Sec. 8.17  Decision of the Board.

    (a) Unless the petitioner consents to disposition by a single 
member, decisions of the Board shall be by majority vote.
    (b) Where petitioner consents to disposition by a single member, 
other interested parties shall have an opportunity to oppose such 
disposition, and such opposition shall be taken into consideration by 
the Board in determining whether the decision shall be by a single 
member or majority vote.



Sec. 8.18  Public information.

    Subject to the provisions of part 70 of this title, all papers and 
documents made a part of the official record in the proceedings of the 
Board and decisions of the Board shall be made available for public 
inspection during usual business hours at the Office of the 
Administrative Review Board, U.S. Department of Labor, Washington, DC 
20210.



Sec. 8.19  Equal Access to Justice Act.

    Proceedings under the Service Contract Act and the Contract Work 
Hours and Safety Standards Act are not subject to the Equal Access to 
Justice Act (Pub. L. 96-481). Accordingly, in any proceeding conducted 
pursuant to the provisions of this part 8, the Board shall have no power 
or authority to award attorney fees and/or other litigation expenses 
pursuant to the Equal Access to Justice Act.



PART 9--NONDISPLACEMENT OF QUALIFIED WORKERS UNDER CERTAIN CONTRACTS--Table of Contents




            Subpart A--How is Executive Order 12933 Applied?

                       Covered Contracts Generally

Sec.
9.1  What is the purpose of Executive Order 12933?
9.2  Which contracts are covered by Executive Order 12933?
9.3  What is a ``building service contract?''
9.4  What is a ``public building?''
9.5  Which contracts are not covered by Executive Order 12933?

[[Page 151]]

                            Contract Clauses

9.6  What contract clauses must be included in covered contracts?

                         Contractor Obligations

9.7  May a contractor employ persons other than the predecessor 
          contractor's employees?
9.8  Must the successor contractor offer a right of first refusal to all 
          employees of the predecessor contractor?
9.9  In what manner must the successor contractor offer employment?
9.10  What constitutes a bona fide offer of employment?
9.11  What are the obligations of the predecessor contractor?

                           Notice to Employees

9.12  How will employees learn of their rights?

   Subpart B--What Enforcement Mechanisms does Executive Order 12933 
                                Provide?

                          Complaint Procedures

9.100  What may employees do if they believe that their rights under the 
          Executive Order have been violated?
9.101  What action will the Wage and Hour Division take to try to 
          resolve the complaint?
9.102  How are complaints resolved if conciliation is unsuccessful?
9.103  How are decisions of the Administrator appealed?

                   Administrative Law Judge Procedures

9.104  How may cases be settled without formal hearing?
9.105  What procedures are followed if a complaint cannot be resolved 
          through conciliation or settlement agreement?
9.106  What rules apply to the decision of the administrative law judge?

                            Appeal Procedures

9.107  How may an administrative law judge's decision or the 
          Administrator's determination be appealed?

                          Enforcement Remedies

9.108  What are the consequences to a contractor of not complying with 
          the Executive Order?
9.109  Under what circumstances will ineligibility sanctions be imposed?

                         Subpart C--Definitions

9.200  Definitions.

    Appendix to Part 9--Notice to Building Service Contract Employees

    Authority: Secs. 4-6, Executive Order 12933; 5 U.S.C. 301.

    Source: 62 FR 28185, May 22, 1997, unless otherwise noted.



            Subpart A--How is Executive Order 12933 Applied?

                       Covered Contracts Generally



Sec. 9.1  What is the purpose of Executive Order 12933?

    The Government's procurement interests in both economy and 
efficiency are furthered when a successor contractor carries over an 
existing work force. A carryover work force minimizes disruption in the 
delivery of services during a period of transition and provides the 
Government the benefit of an experienced and trained work force. 
Executive Order 12933 therefore generally requires that successor 
contractors performing building service contracts for public buildings 
offer a right of first refusal to employment under the contract to those 
employees under the predecessor contract whose employment will be 
terminated as a result of the award of the successor contract.



Sec. 9.2  Which contracts are covered by Executive Order 12933?

    (a) The Executive Order and these rules apply to ``building service 
contracts'' for ``public buildings'' where the contract is entered into 
by the United States in an amount equal to or greater than the 
simplified acquisition threshold of $100,000, as set forth in section 
4(11) of the Office of Federal Procurement Policy Act (41 U.S.C. 
403(11)).
    (b)(1) Except as provided in paragraph (b)(2) of this section, a 
contract which includes a requirement for recurring building services is 
subject to the Executive Order and these regulations even if the 
contract also contains other non-covered services or non-service 
requirements, such as construction or supplies, and even if the contract 
is not subject to the McNamara-O'Hara Service Contract Act, 41 U.S.C. 
351 et seq. However, the requirements of the Executive Order apply only 
to the building

[[Page 152]]

services portion of the contract, and only to those buildings for which 
services were provided under a predecessor contract.
    (2) The requirements of the Executive Order do not apply to building 
services which are only incidental to a contract for another purpose, 
such as incidental maintenance under a contract to operate a day-care 
center.
    (i) Building service requirements will not be considered incidental, 
and therefore will be subject to the Executive Order, where
    (A) The contract contains specific requirements for a substantial 
amount of building services or it is ascertainable that a substantial 
amount of building services will be necessary to the performance of the 
contract (the word ``substantial'' relates to the type and quantity of 
building services to be performed and not merely to the total value of 
such work, whether in absolute dollars or cost percentages as compared 
to the total value of the contract); and
    (B) The building services work is physically or functionally 
separate from, and as a practical matter is capable of being performed 
on a segregated basis from the other work called for by the contract.
    (ii) Building services performed on a building being leased to the 
Government pursuant to a lease-purchase contract are considered 
incidental and not covered unless the services are being performed under 
a contract directly with the Government.



Sec. 9.3  What is a ``building service contract?''

    (a) A building service contract is a contract for recurring services 
related to the maintenance of a public building. Recurring services are 
services which are required to be performed regularly or periodically 
throughout the course of a contract, and throughout the course of the 
succeeding or follow-on contract(s) at one or more of the same 
buildings. Examples of building services contracts include, but are not 
limited to, contracts for the recurring provision of custodial or 
janitorial services; window washing; laundry; food services; guard or 
other protective services; landscaping and groundskeeping services; and 
inspection, maintenance, and repair of fixed equipment such as 
elevators, air conditioning, and heating systems.
    (b)(1) Contracts which provide maintenance services only on a non-
recurring basis are not ``building service contracts'' within the 
meaning of the Executive Order and are not subject to its provisions. 
For example, a contract to perform servicing of fixed equipment once a 
year, or to mulch a garden on a one-time or annual basis, is a non-
recurring maintenance contract that is not covered by the Executive 
Order.
    (2) Contracts for the provision of services which may be performed 
in a public building but are not ``building service contracts'' as 
defined in paragraph (a) of this section are not covered by the 
Executive Order and these rules. For example, a contract for day care 
services in a Federal office building would not be subject to the 
Executive Order.



Sec. 9.4  What is a ``public building?''

    (a) A public building is any building owned by the United States 
which is generally suitable for office or storage space or both for the 
use of one or more Federal agencies or mixed ownership corporations, 
together with its grounds, approaches, and appurtenances. Public 
buildings shall include:
    (1) Federal office buildings;
    (2) Customhouses;
    (3) Courthouses;
    (4) Border inspection facilities;
    (5) Warehouses;
    (6) Records centers;
    (7) Appraiser stores;
    (8) Relocation facilities; and
    (9) Similar Federal facilities.
    (b)(1) Public buildings do not include any building on the public 
domain. The public domain includes only: those public lands owned by the 
United States and administered by the Department of Interior, Bureau of 
Land Management; and the National Forest System administered by the 
Department of Agriculture, U.S. Forest Service. The public domain does 
not include Federal buildings, such as office buildings in cities or 
towns, which are occupied by the Bureau of Land Management or

[[Page 153]]

U.S. Forest Service where such buildings are not on lands administered 
by those agencies.
    (2) Also not covered are any buildings:
    (i) On properties of the United States in foreign countries;
    (ii) On Native American and Native Eskimo properties held in trust 
by the United States;
    (iii) On lands used in connection with Federal programs for 
agricultural, recreational, and conservation purposes, including 
research in connection therewith;
    (iv) On or used in connection with river, harbor, flood control, 
reclamation, or power projects; or for chemical manufacturing or 
development projects; or for nuclear production, research, or 
development projects;
    (v) On or used in connection with housing and residential projects;
    (vi) On properties of the United States Postal Service;
    (vii) On military installations (including any fort, camp, post, 
naval training station, airfield, proving ground, military supply depot, 
military school, or any similar facility of the Department of Defense, 
but not including the Pentagon);
    (viii) On installations of the National Aeronautic and Space 
Administration, except regular office buildings; and
    (ix) On Department of Veterans Affairs installations used for 
hospital or domiciliary purposes.
    (3) Buildings leased to the Government are not public buildings 
unless the building is leased pursuant to a lease-purchase contract.



Sec. 9.5  Which contracts are not covered by Executive Order 12933?

    (a) A contract is not covered by the Executive Order unless it 
requires the provision of recurring building services, and unless the 
contract succeeds a contract for similar work at one or more of the same 
public building(s).
    (b) The Executive Order expressly excludes:
    (1) Contracts for services under the simplified acquisition 
threshold ($100,000);
    (2) Contracts for commodities or services produced or provided by 
the blind or severely handicapped, awarded pursuant to the Javits-
Wagner-O'Day Act, 41 U.S.C. 46-48a, and any future enacted law creating 
an employment preference for some group of workers under building 
service contracts;
    (3) Guard, elevator operator, messenger, or custodial services 
provided to the Government under contracts with sheltered workshops 
employing the severely handicapped as outlined in the Edgar Amendment, 
section 505 of the Treasury, Postal Services and General Government 
Appropriations Act, 1995, Pub. L.103-329;
    (4) Agreements for vending facilities operated by the blind, entered 
into under the preference provisions of the Randolph-Sheppard Act, 20 
U.S.C. 107; and
    (5)(i) As explained in paragraph (b)(5)(ii) of this section, 
services where the contractor's employees perform work at the public 
building and at other locations under contracts not subject to the 
Executive Order and these regulations, provided that the employees are 
not deployed in a manner that is designed to avoid the purposes of the 
Order.
    (ii) The successor contractor is not required to offer a right of 
first refusal for employment where a majority of the successor 
contractor's employees performing the particular service under the 
contract work at the public building and at other locations under 
contracts not subject to the Executive Order and these regulations. 
Examples include, but are not limited to, pest control or trash removal 
services where the employees periodically visit various Government and 
non-Government sites, and make service calls to repair equipment at 
various Government and non-Government buildings. This exclusion does not 
apply, however, where the service employees' work on non-covered 
contracts is not performed as a part of the same job as their work on 
the Federal contract in question, or where they separately apply for 
work on the non-Federal contracts. This exclusion also does not apply 
where the employees are deployed in a manner that is designed to avoid 
the purposes of the Executive Order. In making this determination, all 
the facts and circumstances are examined, including particularly the 
manner in which the

[[Page 154]]

predecessor contractor deployed its workforce to perform the services, 
the manner in which the work force is typically deployed to perform such 
services, and the manner in which the contract is structured.

                            Contract Clauses



Sec. 9.6  What contract clauses must be included in covered contracts?

    The clauses set forth in paragraphs (a) through (h) of this section 
shall be included in full by the contracting agency in every 
solicitation and contract entered into by the United States equal to or 
in excess of the simplified acquisition threshold of $100,000, where the 
contract requires the provision of building services and succeeds a 
contract for the performance of similar services at one or more of the 
same public building(s), except that such clauses need not be included 
in any contract which is excluded from coverage of the Executive Order 
pursuant to paragraph (b)(2), (3) or (4) of Sec. 9.5 of this part.
    (a) Consistent with the efficient performance of this contract, the 
contractor shall, except as otherwise provided herein, in good faith 
offer those employees (other than managerial and supervisory employees) 
under the predecessor contract whose employment will be terminated as a 
result of award of this contract or the expiration of the contract under 
which the employees were hired, a right of first refusal to employment 
under the contract in positions for which the employees are qualified. 
The contractor shall determine the number of employees necessary for 
efficient performance of this contract and may elect to employ fewer 
employees than the predecessor contractor employed in connection with 
performance of the work. Except as provided in paragraph (b) of this 
section, there shall be no employment opening under the contract, and 
the contractor shall not offer employment under the contract, to any 
person prior to having complied fully with this obligation. The 
contractor shall make an express offer of employment to each employee as 
provided herein and shall state the time within which the employee must 
accept such offer, but in no case shall the period within which the 
employee must accept such offer be less than 10 days.
    (b) Notwithstanding the contractor's obligation under paragraph (a) 
of this section, the contractor:
    (1) May employ on the contract any employee who has worked for the 
contractor for at least 3 months immediately preceding the commencement 
of this contract and who would otherwise face lay-off or discharge, and
    (2) Is not required to offer a right of first refusal to any 
employee(s) of the predecessor contractor who are not service employees 
within the meaning of the McNamara-O'Hara Service Contract Act, 41 
U.S.C. 357(b), and
    (3) Is not required to offer a right of first refusal to any 
employee(s) of the predecessor contractor who the contractor reasonably 
believes, based on the particular employee's past performance, has 
failed to perform suitably on the job.
    (c) In accordance with paragraph (n) of the clause of this contract 
entitled ``Service Contract Act of 1965, as Amended'' and 29 CFR 
4.6(l)(2), the contractor shall, no less than 60 days before completion 
of this contract, furnish the Contracting Officer with a certified list 
of the names of all service employees working at the Federal facility at 
the time the list is submitted. The list shall also contain anniversary 
dates of employment on the contract either with the current or 
predecessor contractors of each service employee, as appropriate. The 
Contracting Officer will provide the list to the successor contractor 
and the list shall be provided on request to employees or their 
representatives. Compliance with this paragraph shall constitute 
compliance with paragraph (n) of the clause entitled ``Service Contract 
Act of 1965, as Amended'' and 29 CFR 4.6(l)(2).

(Approved by the Office of Management and Budget under control numbers 
1215-0150 and 1215-0190)

    (d) The requirements of this clause do not apply to services where a 
majority of the contractor's employees performing the particular 
services under the contract work at the public building and at other 
locations under contracts not subject to Executive Order 12933, provided 
that the employees are

[[Page 155]]

not deployed in a manner that is designed to avoid the purposes of the 
Executive Order.
    (e) If it is determined, pursuant to regulations issued by the 
Secretary of Labor, that the contractor is not in compliance with the 
requirements of this clause or any regulation or order of the Secretary, 
appropriate sanctions may be imposed and remedies invoked against the 
contractor, as provided in Executive Order No. 12933, the regulations of 
the Secretary of Labor at 29 CFR part 9, and relevant orders of the 
Secretary of Labor, or as otherwise provided by law.
    (f) The Contracting Officer shall withhold or cause to be withheld 
from the prime contractor under this or any other Government contract 
with the same prime contractor such sums as an authorized official of 
the Department of Labor requests, upon a determination by the 
Administrator, the Administrative Law Judge, or the Administrative 
Review Board, that the prime contractor failed to comply with the terms 
of this clause, and that wages lost as a result of the violations are 
due to employees or that other monetary relief is appropriate.
    (g) The contractor shall cooperate in any investigation by the 
contracting agency or the Department of Labor into possible violations 
of the provisions of this clause and shall make records requested by 
such official(s) available for inspection, copying, or transcription 
upon request.
    (h) Disputes concerning the requirements of this clause shall not be 
subject to the general disputes clause of this contract. Such disputes 
shall be resolved in accordance with the procedures of the Department of 
Labor set forth in 29 CFR part 9. Disputes within the meaning of this 
clause include disputes between or among any of the following: The 
contractor, the contracting agency, the U.S. Department of Labor, and 
the employees under the contract or its predecessor contract.

                         Contractor Obligations



Sec. 9.7  May a contractor employ persons other than the predecessor contractor's employees?

    (a) There shall be no employment openings under a contract subject 
to the Executive Order and the successor contractor shall not offer 
employment under the contract until it fully complies with its 
obligation to offer a right of first refusal, except as provided under 
paragraph (b) of this section and Sec. 9.8.
    (b) A successor contractor may employ on the contract any employee 
who the contractor demonstrates has worked for that contractor for at 
least 3 months immediately preceding the commencement of the contract 
and would face lay-off or discharge if not employed on the subject 
contract.



Sec. 9.8  Must the successor contractor offer a right of first refusal to all employees of the predecessor contractor?

    (a)(1) Except as provided in this section, a successor contractor 
shall offer employment under the contract (i.e., a ``right of first 
refusal'') to those employees of the predecessor contractor who, in the 
final month of the contract, provided recurring building services 
similar to the services to be performed at one or more of the same 
public building(s) under the successor contract, and whose employment 
will be terminated as a result of the award of the successor contract or 
expiration of the contract under which the employees were hired.
    (2) Unless the predecessor contractor (either directly or through 
the contracting agency) or the individual employee in question provides 
evidence to the contrary, the successor contractor must presume that all 
service employees of the predecessor contractor who are working at the 
same public building during the final month of contract performance will 
be terminated when the contract ends.
    (b)(1) A successor contractor is not required to offer a right of 
first refusal to any managerial or supervisory employee or to any 
employee of the predecessor contractor who is not a service employee 
within the meaning of the McNamara-O'Hara Service Contract Act, 41 
U.S.C. 357(b). ``Managerial and supervisory'' employees and employees 
who are not ``service employees'' are those persons engaged in the 
performance of services under the contract who are employed in a bona 
fide executive,

[[Page 156]]

administrative, or professional capacity, as those terms are defined in 
the Fair Labor Standards Act regulations, 29 CFR part 541.
    (2) The successor contractor must presume that all employees working 
under the predecessor contract in the last month of performance 
performed suitable work on the contract. However, a successor contractor 
is not required to offer a right of first refusal to an employee of the 
predecessor contractor if the successor contractor is able to 
demonstrate its reasonable belief that the employee in fact failed to 
perform suitably on the predecessor contract--for example, through 
evidence of disciplinary action taken for poor performance or evidence 
directly from the contracting agency that the particular employee did 
not perform suitably. The successor contractor must demonstrate that its 
belief that an employee has failed to perform suitably on the 
predecessor contract is reasonable and based upon credible information 
provided by a knowledgeable source such as the predecessor contractor, 
the employee's supervisor, or the contracting agency. Information 
regarding the general performance of the predecessor contractor is not 
sufficient.
    (3) The successor contractor is not required to offer a right of 
first refusal for employment where a majority of the contractor's 
employees performing the service in question under the contract work 
both at the public building and at other locations under contracts not 
subject to the Executive Order and these regulations. See 
Sec. 9.5(b)(5)(ii) of this part.
    (c) The successor contractor shall determine the number of employees 
necessary for the efficient performance of the contract. The contractor 
may, for bona fide staffing or work assignment reasons, employ fewer 
employees than the predecessor contractor. Thus, the successor 
contractor need not extend the right of first refusal to all employees 
of the predecessor contractor, but must offer employment only to the 
number of eligible employees it believes necessary to meet its 
anticipated staffing pattern, except that:
    (1) Where a successor contractor offers a right of first refusal to 
fewer employees than were employed by the predecessor contractor, its 
obligation to offer employment under the contract to the predecessor's 
employees continues for three months after commencement of the contract 
to fill vacancies created by employee termination, either voluntarily or 
for cause. For example, a contractor with eighteen (18) employment 
openings and a list of twenty (20) predecessor contractor's employees 
must continue to offer a right of first refusal to individuals on the 
list until eighteen (18) of the employees accept the contractor's 
employment offer, or until all of the employees have either accepted or 
refused the job offer. Further, if an employee quits or is terminated 
within three months of contract commencement and the contractor 
determines that it must hire an additional employee to sufficiently 
perform the contract requirements, the contractor must first offer a 
right of first refusal to an eligible employee of the predecessor 
contractor and must continue to offer a right of first refusal to the 
predecessor's employees until one of the employees accepts the 
contractor's employment offer, or, except as otherwise provided in this 
Section, until all of the employees have refused a job offer.
    (2) If a successor contractor raises its staffing level within three 
months of the commencement of contract performance, its obligation to 
offer employment under the contract to eligible employees continues 
until the higher staffing level is reached. For example, if a contractor 
determines two months into the contract period that it must hire an 
additional ten (10) employees to sufficiently perform the contract 
requirements, the contractor must first offer a right of first refusal 
to ten (10) eligible employees of the predecessor contractor (or to all 
of the employees of the predecessor contractor who have not previously 
been offered a right of first refusal if less than ten remain), and must 
continue to offer a right of first refusal to the predecessor's 
employees until ten (10) of the employees accept the contractor's 
employment offer, or, except as otherwise provided in this Section, 
until all of the employees have refused a job offer.

[[Page 157]]



Sec. 9.9  In what manner must the successor contractor offer employment?

    (a) Except as provided in Sec. 9.7 and 9.8 of this part, a successor 
contractor must make a bona-fide express offer of employment to each of 
the predecessor contractor's employees before offering employment on the 
contract to any other person. The successor contractor must offer 
employment to each employee, either individually in writing or orally at 
a meeting attended by a group of the predecessor contractor's employees. 
In order to ensure that the offer is effectively communicated, the 
successor contractor should take reasonable efforts to make the offer in 
a language that each worker understands, for example, by having a co-
worker or other person fluent in the worker's language at the meeting to 
translate or otherwise assist an employee who is not fluent in English.
    (b) For a period of one year, the contractor must maintain copies of 
any written offers of employment or a contemporaneous written record of 
any oral offers of employment, including the date, location and 
attendance roster of any employee meeting(s) at which the offers were 
extended, a summary of each meeting and a copy of any written notice 
which may have been distributed, and the names of the predecessor 
contractor's employees to whom an offer was made. The contractor must 
provide copies of such documentation upon request of any authorized 
representative of the contracting agency or Department of Labor.

(Approved by the Office of Management and Budget under control number 
1215-0190)
    (c) The contractor shall state the time within which an employee 
must accept an employment offer, but in no case may the period in which 
the employee has to accept the offer be less than 10 days.
    (d) The successor contractor's obligation to offer a right of first 
refusal exists even if the successor contractor has not been provided a 
list of the predecessor contractor's employees, or the list does not 
contain the names of all persons employed during the final month of 
contract performance.



Sec. 9.10  What constitutes a bona fide offer of employment?

    (a) As a general matter, an offer of employment will be presumed to 
be a bona fide offer of employment. An offer of employment need not be 
to a position similar to that which the employee previously held, but 
the employee must be qualified for the position. Information regarding 
an employee's qualifications shall ordinarily come directly from the 
employee. If a question arises concerning an employee's qualifications, 
that question shall be decided based upon the employee's education and 
employment history with particular emphasis on the employee's experience 
on the predecessor contract.
    (b) An offer of employment to a position providing lower pay or 
benefits than the employee held with the predecessor contractor will be 
considered bona fide if the contractor shows valid business reasons (not 
related to a desire that the employee refuse the offer, or that other 
employees be hired). Where the timing of an employee's termination 
suggests that the offer of employment may not have been bona fide, the 
facts and circumstances of the offer and the termination will be closely 
examined to be sure the offer was bona fide.



Sec. 9.11  What are the obligations of the predecessor contractor?

    (a) Not less than 60 days before completion of its contract, the 
predecessor contractor must furnish the contracting officer with a 
certified list of the names of all service employees working for the 
contractor at the Federal facility at the time the list is submitted, 
together with their anniversary dates of employment. The contracting 
officer in turn shall provide the list to the successor contractor and, 
if requested, to employees of the predecessor contractor or their 
representatives.
    (b) Unless the predecessor contractor (either directly or through 
the contracting agency) or the individual employee in question provides 
evidence to the contrary, the successor contractor must presume that all 
service employees of the predecessor contractor who

[[Page 158]]

are working at the same public building during the final month of 
contract performance will be terminated when the contract ends.

(Approved by the Office of Management and Budget under control numbers 
1215-0150 and 1215-0190)

                           Notice to Employees



Sec. 9.12  How will employees learn of their rights?

    Where the successor contract is a contract subject to the Executive 
Order and these regulations, the contracting officer (or designee) will 
provide written notice to service employees of the predecessor 
contractor who are engaged in building services of their possible right 
to an offer of employment. Such notice may either be posted in a 
conspicuous place at the worksite or may be delivered to the employees 
individually. Contracting officers may either use the notice set forth 
in Appendix A to this part or another form with the same information.



   Subpart B--What Enforcement Mechanisms does Executive Order 12933 
                                Provide?

                          Complaint Procedures



Sec. 9.100  What may employees do if they believe that their rights under the Executive Order have been violated?

    (a) Any employee of the predecessor contractor who believes he or 
she was not offered employment by the successor contractor as required 
by the Executive Order and these regulations may file a complaint with 
the contracting officer of the appropriate Federal agency.
    (b) Upon receipt of a complaint, the contracting officer (or 
designee) shall provide information to the employee(s) and the successor 
contractor about their rights and responsibilities under the Executive 
Order. If the matter is not resolved through such actions, the 
contracting officer shall, within 30 days from receipt of the complaint, 
obtain statements of the positions of the parties and forward the 
complaint and statements, together with a summary of the issues and any 
relevant facts known to the contracting officer, to the nearest District 
Office of the Wage and Hour Division, Employment Standards 
Administration, U.S. Department of Labor, with copies to the contractor 
and the complaining employee(s).
    (c) If the contracting officer has not forwarded the complaint to 
the Wage and Hour Division within 30 days of receipt of the complaint, 
as required by paragraph (b) of this section, the complainant may refile 
the complaint directly with the nearest District Office of the Wage and 
Hour Division.



Sec. 9.101  What action will the Wage and Hour Division take to try to resolve the complaint?

    After obtaining the necessary information from the contracting 
officer regarding the alleged violations, the Wage and Hour Division may 
promptly contact the successor contractor and attempt, through 
conciliation procedures, to obtain a resolution to the matter which is 
satisfactory to both the complainant(s) and the successor contractor and 
consistent with the requirements of the Executive Order and these 
regulations. The Wage and Hour Division will commence an investigation 
in accordance with Sec. 9.102 of this part if the dispute has not been 
satisfactorily resolved within 15 days of receipt of the contracting 
officer's report or the complaint, unless the successor contractor and 
the complainant(s) agree to a delay in the commencement of the 
investigation.



Sec. 9.102  How are complaints resolved if conciliation is unsuccessful?

    (a) Upon receipt of a contracting officer's report or a complaint 
filed in accordance with Sec. 9.100(c) of this part, the Wage and Hour 
Division, U.S. Department of Labor, will investigate as necessary to 
gather sufficient data concerning such case unless the dispute has been 
resolved through conciliation between the parties. Such an investigation 
will be commenced within 15 days of receipt of the contracting officer's 
report or the complaint unless conciliation efforts are still underway 
and the complainant(s) and the successor contractor have agreed to a 
delay in the investigation so that conciliation

[[Page 159]]

efforts may be completed. The Administrator may also initiate an 
investigation at any time on his or her own initiative. As part of the 
investigation, the Administrator may inspect the records of the 
predecessor and successor contractors (and make copies thereof), may 
question the predecessor and successor contractors and any employees of 
these contractors, and may require the production of any documentary or 
other evidence deemed necessary to determine whether a violation of the 
Executive Order (including conduct warranting imposition of 
ineligibility sanctions pursuant to Sec. 9.109 of this part) has been 
committed.
    (b) The contractor and the predecessor contractor shall cooperate in 
any investigation conducted pursuant to this subpart, and shall not 
interfere with the investigation or intimidate, blacklist, discharge, or 
in any other manner discriminate against any person because such person 
has cooperated in an investigation or proceeding under this subpart or 
has attempted to exercise any rights afforded under this part.
    (c) Upon completion of the investigation, the Administrator shall 
issue a written determination of whether a violation has occurred which 
shall contain a statement of findings and conclusions. A determination 
that a violation occurred shall address appropriate relief and the issue 
of ineligibility sanctions where appropriate. Notice of the 
determination shall be given by certified mail to the complainant (if 
any) and his/her representatives (if any), and to the successor 
contractor and their representatives (if any).
    (d) The Administrator may conduct a new investigation or issue a new 
determination if the Administrator concludes circumstances warrant, such 
as where the proceedings before an Administrative Law Judge reveal that 
there may have been violations with respect to other employees of the 
predecessor contractor, where imposition of ineligibility sanctions is 
appropriate, or where the contractor has failed to comply with an order 
of the Secretary.



Sec. 9.103  How are decisions of the Administrator appealed?

    (a) Except as provided in paragraph (b) of this section, the 
determination of the Administrator shall advise the parties (ordinarily 
the complainant (if any), the successor contractor, and their 
representatives (if any)), that the notice of determination shall become 
the final order of the Secretary and shall not be appealable in any 
administrative or judicial proceeding unless, within 20 days of the date 
of the determination of the Administrator, the Chief Administrative Law 
Judge receives a request for a hearing. Any aggrieved party may file a 
request for a hearing. The request for a hearing shall be accompanied by 
a copy of the Administrator's determination and may be filed by U.S. 
mail, facsimile (FAX), telegram, hand delivery, or next-day delivery 
service. At the same time, a copy of any request for a hearing shall be 
sent to the complainant(s) or successor contractor, and their 
representatives, if any, as appropriate; the Administrator of the Wage 
and Hour Division; and the Associate Solicitor, Division of Fair Labor 
Standards, U.S. Department of Labor, Washington, DC 20210. The 
Administrator's failure or refusal to seek ineligibility sanctions shall 
not be appealable.
    (b) If the Administrator concludes that no relevant facts are in 
dispute, the parties and their representatives, if any, will be so 
advised and will be further advised that the determination shall become 
the final order of the Secretary and shall not be appealable in any 
administrative or judicial proceeding unless, within 20 days of the date 
of the determination of the Administrator, a petition for review is 
filed with the Administrative Review Board pursuant to Sec. 9.107 of 
this part. The determination will further advise that if an aggrieved 
party disagrees with the factual findings or believes there are relevant 
facts in dispute, the aggrieved party may advise the Administrator of 
the disputed facts and request a hearing by letter, which must be 
received within 20 days of the date of the determination. The 
Administrator will either refer the request for

[[Page 160]]

a hearing to the Chief Administrative Law Judge, or notify the parties 
and their representatives, if any, of the Administrator's determination 
that there is no relevant issue of fact and that a petition for review 
may be filed with the Administrative Review Board within 20 days of the 
date of the notice, in accordance with the procedures at Sec. 9.107 of 
this part.
    (c) If any party desires review of the determination of the 
Administrator, including judicial review, a request for an 
administrative law judge hearing (or petition for review by the 
Administrative Review Board) must first be filed in accordance with 
paragraph (a) (or (b)) of this section. If a timely request for hearing 
(or petition for review) is filed, the determination of the 
Administrator shall be inoperative unless and until the administrative 
law judge or the Administrative Review Board issues an order affirming 
the determination.

                   Administrative Law Judge Procedures



Sec. 9.104  How may cases be settled without formal hearing?

    (a) In accordance with the Executive Order's directive to favor the 
resolution of disputes by efficient and informal alternative dispute 
resolution methods, the parties are encouraged to resolve disputes in 
accordance with the conciliation procedures set forth in Secs. 9.100 and 
9.101 of this subpart, or, where such efforts have failed, to utilize 
settlement judges to mediate settlement negotiations pursuant to 29 CFR 
part 18, Sec. 18.9. At any time after commencement of a proceeding, the 
parties jointly may move to defer the hearing for a reasonable time to 
permit negotiation of a settlement or an agreement containing findings 
and an order disposing of the whole or any part of the proceeding.
    (b) A settlement judge may be appointed by the Chief Administrative 
Law Judge upon a request by a party or the presiding administrative law 
judge. The Chief Administrative Law Judge has sole discretion to decide 
whether to appoint a settlement judge, except that a settlement judge 
shall not be appointed when a party objects to referral of the matter to 
a settlement judge.



Sec. 9.105  What procedures are followed if a complaint cannot be resolved through conciliation or settlement agreement?

    (a) If the case is not stayed to attempt settlement, the 
administrative law judge to whom the case is assigned shall within 
fifteen (15) calendar days following receipt of the request for hearing, 
notify the parties and their representatives, if any, of the day, time 
and place for hearing. The date of the hearing shall not be more than 60 
days from the date of receipt of the request for hearing.
    (b) The administrative law judge may, at the request of a party, or 
on his/her own motion, dismiss a challenge to a determination of the 
Administrator upon the failure of the party requesting a hearing or his/
her representative to attend a hearing without good cause; or upon the 
failure of said party to comply with a lawful order of the 
administrative law judge.
    (c) At the Administrator's discretion, the Administrator has the 
right to participate as a party or as amicus curiae at any time in the 
proceedings, including the right to petition for review of a decision of 
an administrative law judge in a case in which the Administrator has not 
previously participated. The Administrator shall participate as a party 
in any proceeding in which the Administrator's determination has sought 
imposition of ineligibility sanctions.
    (d) Copies of the request for hearing and documents filed in all 
cases, whether or not the Administrator is participating in the 
proceeding, shall be sent to the Administrator, Wage and Hour Division, 
and to the Associate Solicitor, Division of Fair Labor Standards, U.S. 
Department of Labor, Washington, DC 20210.
    (e) A Federal agency which is interested in a proceeding may 
participate as amicus curiae at any time in the proceedings, at the 
agency's discretion. At the request of a Federal agency which is 
interested in a proceeding, copies of all pleadings in a case shall be 
served on the Federal agency, whether or not

[[Page 161]]

the agency is participating in the proceeding.
    (f)(1) The rules of practice and procedure for administrative 
hearings before the Office of Administrative Law Judges at 29 CFR part 
18 shall be applicable to the proceedings provided by this section, 
except that the Rules of Evidence at 29 CFR part 18, subpart B shall not 
apply. Rules or principles designed to assure production of the most 
probative evidence available shall be applied. The administrative law 
judge may exclude evidence which is immaterial, irrelevant, or unduly 
repetitive.
    (2) To the extent the rules in 29 CFR part 18 are inconsistent with 
a rule of special application provided by these regulations or the 
Executive Order, these regulations and the Executive Order are 
controlling.



Sec. 9.106  What rules apply to the decision of the administrative law judge?

    (a) The administrative law judge shall issue a decision within 60 
days after completion of the proceeding at which evidence was submitted. 
The decision shall contain appropriate findings, conclusions, and an 
order and be served upon all parties to the proceeding.
    (b) Upon the conclusion of the hearing and the issuance of a 
decision that a violation has occurred, the administrative law judge 
shall issue an order that the successor contractor take appropriate 
action to abate the violation, which may include hiring the affected 
employee(s) in the same or a substantially equivalent position(s) to 
that which the employee(s) held under the predecessor contract, together 
with compensation (including lost wages), terms, conditions, and 
privileges of that employment. Where ineligibility sanctions have been 
sought by the Administrator, the order shall also address whether such 
sanctions are appropriate.
    (c) If an order is issued finding that the contractor violated the 
Executive Order and these regulations, the administrative law judge may 
assess a sum equal to the aggregate amount of all costs (not including 
attorney fees) and expenses reasonably incurred by the aggrieved 
employee(s) in the proceeding.
    (d) A proceeding under subpart B of this part is not subject to the 
Equal Access to Justice Act, as amended, 5 U.S.C. 504. In such a 
proceeding, the administrative law judge shall have no authority to 
award attorney fees and/or other litigation expenses pursuant to the 
provisions of the Equal Access to Justice Act.
    (e) The decision of the administrative law judge shall become the 
final order of the Secretary unless a petition for review is timely 
filed with the Administrative Review Board.

                            Appeal Procedures



Sec. 9.107  How may an administrative law judge's decision or the Administrator's determination be appealed?

    (a) The Administrative Review Board has jurisdiction to hear and 
decide in its discretion appeals concerning questions of law and fact 
from determinations of the Administrator pursuant to Sec. 9.103(b) of 
this part and from decisions of administrative law judges pursuant to 
Sec. 9.106 of this part.
    (b) Any aggrieved party desiring review of a decision of the 
administrative law judge (or of the Administrator, pursuant to 
Sec. 9.103(b)) shall file a petition for review, in writing, with the 
Administrative Review Board. No administrative or judicial review shall 
be available unless a timely petition for review to the Administrative 
Review Board is first filed. To be effective, such a petition for review 
must be received within 20 days of the date of the decision of the 
administrative law judge (or Administrator), and shall be served on all 
parties and the Chief Administrative Law Judge (where the case involves 
an appeal from an administrative law judge's decision). If a timely 
petition for review is filed, the decision of the administrative law 
judge (or Administrator) shall be inoperative unless and until the 
Administrative Review Board issues an order affirming the decision or 
declining review of the matter. If a petition for review concerns only 
the imposition of ineligibility sanctions, however, the remainder of the 
decision shall be effective immediately.

[[Page 162]]

    (c)(1) A petition for review shall refer to the specific findings of 
fact, conclusions of law, or order at issue.
    (2) Copies of the petition and all briefs shall be served on the 
Administrator, Wage and Hour Division, and on the Associate Solicitor, 
Division of Fair Labor Standards, U.S. Department of Labor, Washington, 
DC 20210.
    (d) The Board's final decision shall be issued within 90 days of the 
receipt of the petition for review and shall be served upon all parties 
by mail to the last known address, and on the Chief Administrative Law 
Judge (in cases involving an appeal from an administrative law judge's 
decision).
    (e) If the Board concludes that the contractor has violated the 
Executive Order, the final order shall order action to abate the 
violation, which may include hiring the affected employee(s) in the same 
or a substantially equivalent position(s) to that which the employee(s) 
held under the predecessor contract, together with compensation 
(including lost wages), terms, conditions, and privileges of that 
employment. Where the Administrator has sought imposition of 
ineligibility sanctions, the Board shall also determine whether an order 
imposing ineligibility sanctions is appropriate.
    (f) If a final order finding violations of the Executive Order is 
issued, the Board may assess against the successor contractor a sum 
equal to the aggregate amount of all costs (not including attorney fees) 
and expenses reasonably incurred by the employee(s) in the proceeding.
    (g) In considering the matters within the scope of its jurisdiction 
the Board shall act as the authorized representative of the Secretary 
and shall act fully and finally on behalf of the Secretary concerning 
such matters. The Board shall not have jurisdiction to pass on the 
validity of any provision of this part. The Board is an appellate body 
and shall decide cases properly before it on the basis of all relevant 
matter contained in the entire record before it. The Board shall not 
hear cases de novo or receive new evidence into the record.
    (h) Proceedings under Executive Order 12933 are not subject to the 
Equal Access to Justice Act (Pub. L. 96-481). Accordingly, in any 
proceeding conducted pursuant to the provisions of Secs. 9.105-9.107, 
the Administrative Review Board shall have no power or authority to 
award attorney fees and/or other litigation expenses pursuant to the 
Equal Access to Justice Act.

                          Enforcement Remedies



Sec. 9.108  What are the consequences to a contractor of not complying with the Executive Order?

    (a) The Executive Order provides that the Secretary shall have the 
authority to issue orders prescribing appropriate remedies, including, 
but not limited to, requiring employment of the predecessor contractor's 
employees and payment of wages lost.
    (b) After an investigation and a determination by the Administrator 
that lost wages or other monetary relief is due, the Administrator may 
direct that so much of the accrued payments due on either the contract 
or any other contract between the contractor and the Government shall be 
withheld in a deposit fund as are necessary to pay the moneys due. Upon 
the final order of the Secretary that such moneys are due, the 
Administrator may direct that such withheld funds be transferred to the 
Department of Labor for disbursement.
    (c) If the contracting officer or the Secretary finds that the 
predecessor contractor has failed to provide a list of the names of 
employees working under the contract in accordance with Sec. 9.6(c), the 
contracting officer may take such action as may be necessary to cause 
the suspension of the payment of funds until such time as the list is 
provided to the contracting officer.



Sec. 9.109  Under what circumstances will ineligibility sanctions be imposed?

    (a) Where the Secretary finds that a contractor has failed to comply 
with any order of the Secretary or has committed willful violations of 
the Executive Order or these regulations, the Secretary may order that 
the contractor and its responsible officers, and any firm in which the 
contractor has a substantial interest, shall be ineligible to be awarded 
any contract or subcontract of the United States for a period of three 
years.

[[Page 163]]

    (b) Upon order of the Secretary, the names of persons or firms found 
to be ineligible for contracts in accordance with this section shall be 
added to the ``List of Parties Excluded from Federal Procurement and 
Nonprocurement Programs,'' compiled, maintained and distributed by the 
General Services Administration in accordance with 48 CFR 9.404. No 
contract of the United States shall be awarded to the persons or firms 
appearing on this list or to any firm, corporation, partnership, or 
association in which such persons or firms have a substantial interest 
until three years have elapsed from the date the persons' or firms' name 
was entered on the electronic version of the list.



                         Subpart C--Definitions



Sec. 9.200  Definitions.

    For purposes of this part:
    Administrator means the Administrator of the Wage and Hour Division, 
Employment Standards Administration, U.S. Department of Labor, and 
includes any official of the Wage and Hour Division authorized to 
perform any of the functions of the Administrator under this part.
    Contract means any prime contract subject wholly or in part to the 
provisions of the Executive Order.
    Contracting officer means the individual, a duly appointed 
successor, or authorized representative who is designated and authorized 
to enter into contracts on behalf of the Federal agency.
    Executive Order or Order means Executive Order 12933 (59 FR 53559, 
October 24, 1994).
    Federal Government means an agency or instrumentality of the United 
States which enters into a contract pursuant to authority derived from 
the Constitution and the laws of the United States.
    Secretary means the Secretary of Labor or his/her authorized 
representative.
    Service employee means any person engaged in the performance of 
recurring building services other than a person employed in a bona fide 
executive, administrative, or professional capacity, as those terms are 
defined in part 541 of title 29, Code of Federal Regulations, and shall 
include all such persons regardless of any contractual relationship that 
may be alleged to exist between a contractor and such person.
    United States means the United States and all executive departments, 
independent establishments, administrative agencies, and 
instrumentalities of the United States, including corporations, all or 
substantially all of the stock of which is owned by the United States, 
by the foregoing departments, establishments, agencies, 
instrumentalities, and including non-appropriated fund 
instrumentalities.

    Appendix to Part 9--Notice to Building Service Contract Employees

    The contract for (type of service) services currently performed by 
(predecessor contractor) has been awarded to a new contractor. 
(successor contractor) will begin performance on (date successor 
contract begins).
    As a condition of the new contract(successor contractor) is required 
to offer employment to the employees of (predecessor contractor) working 
at (the contract worksite or worksites) except in the following 
situations:
     Managerial or supervisory employees on the current contract 
are not entitled to an offer of employment.
     (successor contractor) may reduce the size of the current 
work force. Therefore, only a portion of the existing work force may 
receive employment offers. However, (successor contractor) must offer 
employment to the employees of (predecessor contractor) if any vacancies 
occur in the first three months of the new contract.
    (successor contractor) may employ a current employee on the new 
contract before offering employment to (predecessor contractor's) 
employees only if the current employee has worked for (successor 
contractor) for at least three months immediately preceding the 
commencement of the new contract and would face layoff or discharge if 
not employed under the new contract.
     Where (successor contractor) has reason to believe, based 
on credible information from a knowledgeable source, that an employee's 
performance has been unsuitable on the current contract, the employee is 
not entitled to employment with the new contractor.
     If you are offered employment on the new contract, you will 
have at least ten (10) days to accept the offer.
    Any employee of (predecessor contractor) who believes that he or she 
is entitled to an

[[Page 164]]

offer of employment with (successor contractor) and has not received an 
offer, may file a complaint with (contracting officer or 
representative), the contracting officer handling this contract at: 
(address and telephone number of contracting officer). If the 
contracting officer is unable to resolve the complaint, the contracting 
officer shall promptly forward a report to the U.S. Department of Labor, 
Wage and Hour Division.
    If you have any questions about your right to employment on the new 
contract, contact: (Name, address, and telephone # for the contracting 
officer or the contracting officer's representative)



PART 11--DEPARTMENT OF LABOR NATIONAL ENVIRONMENTAL POLICY ACT (NEPA) COMPLIANCE PROCEDURES--Table of Contents




                      Subpart A--General Provisions

Sec.
11.1  Purpose and scope.
11.2  Applicability.
11.3  Responsible agency officials.

                  Subpart B--Administrative Procedures

11.10  Identification of agency actions.
11.11  Development of environmental analyses and documents.
11.12  Content and format of environmental documents.
11.13  Public participation.
11.14  Legislation.

    Authority: NEPA, (42 U.S.C. 4321 et seq.), Executive Order 11514, 
Protection and Enhancement of Environmental Quality (March 5, 1970, as 
amended by Executive Order 11991, May 24, 1977) and Council on 
Environmental Quality Regulations (National Environmental Policy Act, 
Implementation of Procedural Provisions) 40 CFR parts 1500-1508 (43 FR 
55978).

    Source: 45 FR 51188, Aug. 1, 1980, unless otherwise noted.



                      Subpart A--General Provisions



Sec. 11.1  Purpose and scope.

    (a) The National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 
4321 et seq.) directs that, ``to the fullest extent possible, * * * the 
policies, regulations and public laws of the United States shall be 
interpreted and administered in accordance with the policies set forth'' 
in the Act for the preservation of the environment. As a means for 
achieving this objective, Executive Order 11991 of May 24, 1977 
(amending E.O. 11514 of March 5, 1970) directed the Council on 
Environmental Quality (CEQ) to issue uniform regulations for 
implementation of NEPA by all Federal agencies. These regulations were 
published in final form on November 29, 1978 (43 FR 55978) as 40 CFR 
parts 1500-1508. The CEQ's NEPA regulations require that each Federal 
agency adopt implementing procedures to supplement their regulations (40 
CFR 1507.3). Accordingly, the purpose of this part is to prescribe 
procedures to be followed by Department of Labor agencies when such 
agencies are contemplating actions which may be subject to the 
requirements of NEPA. These regulations do not replace 40 CFR parts 
1500-1508; rather they are to be read together with, and as a supplement 
to, the CEQ's regulations.
    (b) It is the responsibility of each agency to comply with the 
policies set forth in NEPA to the fullest extent possible and consistent 
with its statutory authority. Each agency shall comply with all 
applicable requirements of this part except where compliance would be 
inconsistent with other statutory requirements. However, no trivial 
violation of, or noncompliance with, these procedures shall give rise to 
an independent cause of action (cf. 40 CFR 1500.3 and 1507.3(b)).



Sec. 11.2  Applicability.

    Although all Department of Labor agencies are subject to NEPA, only 
three of its agencies routinely propose or consider actions which may 
require the preparation of environment assessments or environmental 
impact statements. These are the Occupational Safety and Health 
Administration (OSHA), which acts pursuant to the Occupational Safety 
and Health Act of 1970 (29 U.S.C. 651, et seq.); the Mine Safety and 
Health Administration (MSHA), which acts pursuant to the Federal Mine 
Safety and Health Act of 1977 (30 U.S.C. 801, et seq.); and the 
Employment and Training Administration (ETA) (through one of its major 
programs, the Job Corps) which purchases and leases land and constructs 
Job Corps centers pursuant to the Comprehensive Employment and Training 
Act (29 U.S.C. 801, et. seq.). Therefore, these procedures have been 
designed

[[Page 165]]

primarily with the duties and rulemaking processes of these agencies in 
mind. If and when other Department of Labor agencies propose actions 
requiring environmental impact analyses, they shall use these 
procedures, to the extent that they are applicable, in performing such 
analyses.



Sec. 11.3  Responsible agency officials.

    (a) The Assistant Secretary of Labor for Policy, Evaluation and 
Research (ASPER) shall be responsible for the following:
    (1) Overall review of Department of Labor agency compliance with the 
requirements of NEPA, the CEQ's regulations and these Departmental 
procedures;
    (2) Maintaining contacts with CEQ and the Environmental Protection 
Agency (EPA) as the Departmental NEPA liaison; and
    (3) Preparing and coordinating Departmental comments in response to 
environmental impact statements prepared by other Federal agencies which 
have been submitted to the Department for review, as required by 40 CFR 
1503.2.
    (b) Assistant Secretaries of Labor and other officials of equivalent 
rank or responsibility (hereinafter ``agency heads'') shall be 
responsible for their agencies' compliance with NEPA.
    (1) These responsibilities shall include the following:
    (i) Assuring that the agencies under their control observe the 
requirements of 40 CFR 1507.2 on compliance capability;
    (ii) Preparing environmental impact assessments and statements in 
accordance with the requirements of these regulations and 40 CFR parts 
1501 and 1502, and advising private applicants, or other non-Federal 
entities, of the possible need for information foreseeably required for 
later Federal action pursuant to 40 CFR 1501.2(d);
    (iii) Assuring public participation in the NEPA process in 
accordance with 40 CFR parts 1503 and 1506;
    (iv) Commenting on environmental impact statements prepared by other 
agencies, when their agencies have jurisdiction by law or special 
expertise with respect to any environmental impacts connected with a 
proposed action, as required by 40 CFR part 1503;
    (v) Assuring that environmental documents prepared by their agencies 
accompany proposed actions through existing agency review processes, and 
that, along with other relevant materials, and consistent with 40 CFR 
1505.1(e), the full range of alternatives discussed in these documents 
are considered in the planning of agency actions and in the making of 
decisions and that the alternatives considered are encompassed by those 
discussed in the documents; and
    (vi) Assuring, where possible, the mitigation of adverse 
environmental effects of agency actions.
    (2) In accordance with 40 CFR 1506.5(c), agency heads will also be 
responsible for assuring the quality of environmental impact statements 
prepared by their agencies. Where environmental impact statements will 
be prepared by a contractor, the agency heads will assure that their 
agencies furnish guidance to the contractor, participate in the 
document's preparation, independently evaluate the statement prior to 
approval and take responsibility for the scope and contents.
    (c) Agency heads may designate program offices or individuals as 
NEPA contacts for their agencies. The name and address of the NEPA 
contact shall be included on the cover sheet of each environmental 
document published by the agency, or if no cover sheet is provided, the 
name and address of this office or individual shall be included with any 
instructions to the public on obtaining further information or 
submitting comments on the document.
    (1) It shall be the duty of an agency's NEPA contact to know the 
status of all environmental documents being prepared by the agency or in 
cooperation with another agency.
    (2) The NEPA contact shall receive and respond to inquiries 
concerning the status of all environmental documents being prepared 
within the agency or in cooperation with another agency.

[[Page 166]]



                  Subpart B--Administrative Procedures



Sec. 11.10  Identification of agency actions.

    Pursuant to the CEQ definition of ``major Federal action'' (40 CFR 
1508.18) and 40 CFR 1507.3(b)(2), the following paragraphs identify and 
classify Department of Labor actions which: normally will not require 
preparation of an environmental document (i.e. an environmental 
assessment or an environmental impact statement); or usually will 
require preparation of an environmental document.
    (a) OSHA/MSHA actions. Actions of the Occupational Safety and Health 
Administration (OSHA) and the Mine Safety and Health Administration 
(MSHA) are classified as follows:
    (1) Categorically excluded actions. OSHA/MSHA actions listed in the 
following Table will normally qualify for categorical exclusion from 
NEPA requirements: i.e., such actions do not require preparation of 
either an environmental assessment or an environmental impact statement, 
because they do not have a significant impact on the quality of the 
human environment. Classification as a categorical exclusion, however, 
does not prohibit OSHA or MSHA from preparing an environmental 
assessment or environmental impact statement on any of the following 
actions when OSHA or MSHA determines it to be appropriate. Also, in 
extraordinary circumstances where a normally excluded action is found to 
have a potentially significant environmental effect, OSHA or MSHA shall 
prepare an environmental assessment and/or an environmental impact 
statement as required.

                    OSHA/MSHA Categorical Exclusions
------------------------------------------------------------------------
              Type of action                    Reason for exclusion
------------------------------------------------------------------------
(i) Promulgation, modification or          Safety standards promote
 revocation of any safety standard.         injury avoidance by means of
 Examples of these actions are: Machine     mechanical applications or
 guarding requirements, safety lines,       work practices, the effects
 warning signals, etc.                      of which do not impact on
                                            air, water or soil quality,
                                            plant or animal life, the
                                            use of land or other aspects
                                            of the human environment.
(ii) Approval of petitions for variances   Variances are taken from
 from MSHA/OSHA safety standards or OSHA    existing standards. Thus
 health standards.                          environmental documents, as
                                            appropriate, will already
                                            have been prepared. In terms
                                            of worker health and safety,
                                            any variance must be at
                                            least as effective as the
                                            original standard.
(iii) Agency legislative requests for      Exempted by 40 CFR 1508.17.
 appropriations.
(iv) Recordkeeping and reporting           No possibility of significant
 requirements.                              environmental impact.
(v) Routine agency personnel actions.....  Such actions typically
                                            involve small numbers of
                                            individuals and have no
                                            possibility of significant
                                            environmental impact.
(vi) Training of employers, employees,     These actions involve
 agency personnel and others in the         educational activities which
 recognition, avoidance or abatement of     have no possibility of
 occupational hazards. Providing            significant environmental
 consultative services to industry.         impact.
(vii) Enforcement proceedings............  Exempted by 40 CFR 1508.18.
(viii) Equipment approvals...............  No possibility of significant
                                            environmental impact.
(ix) State grants under Sec. 503 of the    These grants assist States in
 Federal Mine Safety and Health Act.        developing and implementing
                                            laws to improve mine safety
                                            and health and to promote
                                            coordination between State
                                            and Federal governments.
                                            They have no possibility of
                                            significant environmental
                                            impact.
(x) Certification or qualification         No possibility of significant
 proceedings.                               environmental impact.
------------------------------------------------------------------------

    (2) Actions requiring environmental assessment. Several classes of 
OSHA/MSHA actions normally require the preparation of an environmental 
assessment prior to determining whether either a finding of no 
significant impact or an environmental impact statement must be 
prepared. (However, OSHA or MSHA may proceed to prepare an environmental 
impact statement, without first preparing an environmental assessment, 
if it determines such action to be appropriate or necessary, as provided 
by 40 CFR 1501.3(a)). Actions in this classification include:
    (i) Promulgation, modification or revocation of a health standard; 
and
    (ii) Approval or revocation of State plans for the enforcement of 
safety and health standards (not applicable to MSHA).

[[Page 167]]

    (3) Actions requiring preparation of an environmental impact 
statement. Preparation of an environmental impact statement will always 
be required for proposals for promulgation, modification or revocation 
of health standards which will significantly affect air, water or soil 
quality, plant or animal life, the use of land or other aspects of the 
human environment.
    (4) Emergency temporary standards. Situations requiring the issuance 
of emergency temporary standards (issued for a period of up to six 
months, pursuant to section 6(c) of the Occupational Safety and Health 
Act of 1970, and for a period of up to nine months, pursuant to section 
101(b) of the Federal Mine Safety and Health Act of 1977) are of such 
nature that the provisions of 40 CFR parts 1500 et seq. may not be 
strictly observable. Pursuant to 40 CFR 1506.11, however, OSHA and MSHA 
will consult with the Council on Environmental Quality in connection 
with such situations, and will, in any event, prepare environmental 
assessments or environmental impact statements, as appropriate, on any 
proposed permanent regulation to be promulgated for the purpose of 
replacing the temporary action.
    (b) Real property actions. Actions that will involve construction, 
or the purchase or lease of property, in connection with the 
establishment or substantial alteration of a Job Corps center, of any 
similar Job Corps facility, or other property actions of a similar 
character by another agency, will normally require the preparation of an 
environmental assessment prior to determining whether either a finding 
of no significant impact or an environmental impact statement must be 
prepared.
    (c) Other Departmental actions. Certain actions taken to implement 
other Department of Labor programs will normally qualify for categorical 
exclusion from NEPA requirements. These matters are excluded because the 
possibility of environmental impact is remote. However, classification 
as a categorical exclusion does not prohibit or release an agency from 
preparing an environmental assessment or environmental impact statement 
when the agency determines it to be appropriate. These actions include:
    (1) U.S. Employment Service activities and related placement, 
counseling, recruitment, information, testing, certification and 
associated actions;
    (2) Apprenticeship activities and related certification and 
technical assistance actions;
    (3) Training activities, other than Job Corps, including work 
experience, classroom training and public service employment;
    (4) Unemployment insurance, trade adjustment assistance, workers' 
compensation programs, retirement programs, employee protection 
programs, and related employees benefit programs or activities involving 
the replacement or regulation of employee wages;
    (5) Wage and hour programs to protect low-income workers, eliminate 
discriminatory employment practices, prevent curtailment of employment 
and earnings for certain groups of workers, minimize loss of income due 
to indebtedness, protect farm and migrant labor and related activities;
    (6) Contract compliance programs to ensure equal employment 
opportunity and related actions;
    (7) Labor-management relations activities and activities of labor 
organizations, employers and their officers or representatives;
    (8) Research, evaluation, development and information collection 
projects related to any of the aforementioned activities;
    (9) Labor statistics programs; and
    (10) Matters involving personnel policy, procurement policy, freedom 
of information and privacy policy, and related matters of Departmental 
management.



Sec. 11.11  Development of environmental analyses and documents.

    (a) Potential environmental effects of agency actions shall begin to 
be examined at the time a topic for potential action is submitted to the 
agency staff for research, proposal development, or other consideration. 
During this stage the agency shall determine whether the type of action 
which may be proposed may be categorically excluded from NEPA 
environmental analysis requirements pursuant to Sec. 11.10. If the type 
of action being considered is

[[Page 168]]

not categorically excluded, or is an extraordinary case of a normally 
excluded action which may have significant environmental impacts, 
development of the information needed to make an environmental 
assessment shall begin. Actions described in Sec. 11.10(b) shall be 
submitted to the Assistant Secretary for Administration and Management 
at this point, pursuant to applicable Departmental procedures, for 
appropriate review, including a determination with respect to whether or 
not the action is located in or near a floodplain or wetlands area in 
connection with the requirements of Executive Orders 11988 and 11990.
    (b) When information gathered during the early stages of proposal 
development indicates that preparation of an environmental impact 
statement will be required, the agency shall begin preparation of such a 
document by initiating the scoping process in accordance with 40 CFR 
1501.7. However, if the information is not clearly indicative of the 
need for preparation of an environmental impact statement, an 
environmental assessment shall be prepared.
    (c) Agencies are encouraged, in developing environmental 
assessments, to explore all factors which it may become necessary to 
examine should it be determined that preparation of an environmental 
impact statement is necessary, even though some of those factors, such 
as economic and social effects, ``are not intended by themselves to 
require preparation of an environmental impact statement'' (40 CFR 
1508.14). Thus in making environmental assessments of real property 
actions described in Sec. 11.10(b), agencies are encouraged to consider 
the following factors, among others:
    (1) The nature and degree of any former use of a proposed facility 
and the number of individuals the facility formerly served, as compared 
with its use and population to be served under the new proposal;
    (2) The population of the area (numbers, density and makeup);
    (3) Community facilities and services, taking into consideration 
capacity and present and former use, including: Health services 
(hospitals, physicians), business and community development policy, 
recreational facilities (parks, theaters), fire and police protection, 
schools, energy resources, waste disposal, water, traffic and roadway 
systems, sewage systems, communications, and public transportation;
    (4) The proximity of the facility to residential areas;
    (5) The potential impact on the quality of drinking water, air 
quality, noise levels, designated scenic areas, land use, soil quality 
(including drainage or erosion problems), buildings valued for their 
design or which are otherwise locally significant, the listing or 
eligibility for listing of a site in the National Register for Historic 
places, consistent with the requirements of 20 CFR 684.24a where 
applicable, neighborhood character, and health and safety of residents;
    (6) The potential impact on natural systems and resources including 
rivers and streams, forests, wetlands, floodplains, wilderness areas or 
places, and species designated for preservation, including species of 
plants and animals and their critical habitats as identified in 
regulations published by the Secretary of the Interior (50 CFR chapter 
I, part 17), and by the Secretary of Commerce (50 CFR chapter II, parts 
217, 222.23, 223, and 227.4); and
    (7) Other considerations appropriate in light of the nature and size 
of the project.
    (d) If an agency determines, on the basis of an environmental 
assessment, that preparation of an environmental impact statement is not 
required, notice of a finding of no significant impact and the 
availability of the environmental assessment shall be prepared and 
published in the Federal Register. In the case of proposed rulemaking, 
the notice of a finding of no significant impact may be published in the 
Federal Register at any time prior to the publication of the proposed 
action, or it may be included in the Federal Register notice of proposed 
rulemaking. Issuance of a finding of no significant impact at the 
proposal stage of rulemaking shall not foreclose further consideration 
of environmental issues during the rulemaking proceedings. Therefore the 
Department of Labor notes that, consistent with 40 CFR 1500.3, the 
finding shall not be considered final until promulgation of

[[Page 169]]

the rule involved (the action affecting the environment).
    (1) If it is determined that preparation of an environmental impact 
statement is not required for an action, but that action is one which 
would normally require the preparation of an environmental impact 
statement, an action closely similar to one which would normally require 
the preparation of an environmental impact statement, or an action 
without precedent in this regard, the agency shall make a preliminary 
finding of no significant impact available for public review and 
comment. In accordance with 40 CFR 1501.4(e)(2), this finding shall be 
made available for at least 30 days before a final determination is made 
as to whether an environmental impact statement will be prepared, and 
before any public record may be closed and the proposed action may 
become effective.
    (2) Although not required by 40 CFR 1501.4(e)(2), an agency may use 
the procedure described in Sec. 11.11(d)(1) whenever the agency 
determines it to be appropriate.
    (e) If it is determined on the basis of an environmental assessment, 
prepared in connection with an action described in Sec. 11.10(b), that 
preparation of an environmental impact statement is required, or that 
public review is required in connection with actions in floodplains or 
wetlands that do not require environmental impact statements under E.O. 
11988 or E.O. 11990, the agency shall consider altering the proposed 
action or changing the site of the proposed project, and shall proceed 
with preparation of an environmental impact statement or appropriate 
public review actions only after obtaining written authorization from 
the Assistant Secretary for Administration and Management.
    (f) Filing of any draft environmental impact statement with the 
Environmental Protection Agency (EPA), pursuant to 40 CFR 1506.9, and 
circulation to the public, will ordinarily coincide with publication of 
the proposed agency action, which is the subject of that document, in 
the Federal Register. In any event, the statement will be made available 
for public comment for at least a 45-day period.
    (g) The final decision on the proposed action shall be made not 
earlier than 90 days following publication of EPA's notice of the filing 
of the draft environmental impact statement, and, except as provided 
below, not earlier than 30 days following publication of EPA's notice of 
the filing of the final environmental impact statement.
    (1) In accordance with 40 CFR 1506.10, an agency engaged in 
rulemaking under the Administrative Procedure Act or other statute, for 
the purpose of protecting the public health or safety, may waive the 30-
day time period noted above and publish a decision on a final rule 
simultaneously with publication of the notice of the availability of the 
final environmental impact statement. Therefore, Departmental agencies 
(such as OSHA and MSHA) meeting these requirements, may file and 
circulate the final environmental impact statement at the same time a 
notice of decision is being published, provided that the final rule or 
action may not become effective for at least 30 days from the date of 
publication of the EPA's notice of filing of the final environmental 
impact statement.
    (2) If a supplement to a final environmental impact statement is 
prepared, it shall be incorporated into the rulemaking record. If the 
supplement is prepared following the close of the rulemaking record and 
is based on, or introduces, new data or major new alternatives or 
analyses, the rulemaking record will be reopened for at least 30 days to 
receive public comments. The final action may not become effective for 
at least 30 days following EPA publication of the filing of the 
supplemental statement.
    (h) In accordance with 40 CFR 1505.2, when an agency prepares a 
final environmental impact statement, the agency shall prepare a concise 
public record of decision detailing what the decision was, what 
alternatives were considered (specifying the environmentally preferable 
alternative), how those considerations entered into the decision, and 
whether all practicable means to avoid or minimize environmental harm 
from the alternative selected have been adopted, and if not, the reason 
they were not. This record may be contained in, or integrated with, the 
preamble to

[[Page 170]]

the Federal Register notice of final action or in any other public 
document considered appropriate by the agency.



Sec. 11.12  Content and format of environmental documents.

    (a) An environmental assessment may be prepared in any format 
considered effective by the agency involved. When such a document is 
prepared in connection with a proposed action, it must be made readily 
available to the public either by placement into the public record (with 
public notice provided in accordance with 40 CFR part 1506) or by 
publication in the Federal Register. The preamble to the Federal 
Register notice of proposed rulemaking may be considered the 
environmental assessment provided that the document contains the 
elements required by 40 CFR 1508.9(b).
    (b) A finding of no significant impact (40 CFR 1508.13) may be 
prepared in any format considered to be effective or necessary by the 
agency involved in the proposed action.
    (c) The finding of no significant impact, and the environmental 
assessment on which it was based, as well as any comments received in 
response to these documents shall be included in the public record of 
the proposed action.
    (d) Department of Labor agencies shall comply with the format 
requirements for environmental impact statements as set forth at 40 CFR 
1502.10, except when an agency determines that there is a compelling 
reason to do otherwise, such as more effective communication or reduced 
duplication of effort and paperwork (40 CFR 1506.4). For example, in 
OSHA/MSHA informal rulemaking proceedings, environmental documents may 
be combined with the Federal Register notice of proposed or final 
rulemaking. Filing and circulation of the combined preamble/
environmental document shall be in accordance with the requirements of 
40 CFR 1506.9.
    (e) The final environmental impact statement shall contain any 
changes in information or supplemental information received since the 
filing and circulation of the draft environmental impact statement, as 
well as a summary, or copies of the substantive comments received in 
response to the draft environmental impact statement. If such changes 
and comments are minor, an agency may circulate only the changes and 
comments, including responses to the comments, rather than the entire 
impact statement, to the extent permitted by 40 CFR 1502.19. However, 
the entire document, with a new cover sheet, shall be filed with EPA and 
placed in the rulemaking record.



Sec. 11.13  Public participation.

    (a) When an agency has determined that preparation of an 
environmental impact statement is required, the agency shall publish a 
notice of intent to prepare an environmental impact statement in the 
Federal Register and shall invite public participation in the agency's 
scoping process as required by 40 CFR 1501.7.
    (b) When the draft environmental impact statement has been prepared 
and filed with the EPA pursuant to Sec. 11.11(f), comments on the 
document shall be solicited from appropriate Federal, State and local 
agencies, Indian tribes, and other persons or organizations who may be 
interested or affected, as required by 40 CFR 1503.1.
    (c) In the case of an action with effects primarily of local 
concern, agencies shall consider the use of clearinghouses, newspapers 
and other public media likely to generate local participation in the 
agency process as ways of supplementing the notices otherwise specified 
in this part. The use of such public media does not, however, require or 
authorized the use of paid advertising.



Sec. 11.14  Legislation.

    Notwithstanding any provisions of this part, environmental 
assessments or impact statements prepared in connection with requests 
for new legislation or modification of existing statutes shall be 
handled in accordance with applicable OMB and Department of Labor 
procedures on the preparation and submission of legislative proposals 
and the requirements of 40 CFR 1506.8.

[[Page 171]]



PART 12--UNIFORM RELOCATION ASSISTANCE AND REAL PROPERTY ACQUISITION FOR FEDERAL AND FEDERALLY ASSISTED PROGRAMS--Table of Contents




    Authority: Section 213, Uniform Relocation Assistance and Real 
Property Acquisition Policies Act of 1970, Public Law 91-646, 84 Stat. 
1894 (42 U.S.C. 4601) as amended by the Surface Transportation and 
Uniform Relocation Assistance Act of 1987. title IV of Public Law 100-
17, 101 Stat. 246-256 (42 U.S.C. 4601 note).



Sec. 12.1  Uniform relocation assistance and real property acquisition.

    Regulations and procedures for complying with the Uniform Relocation 
Assistance and Real Property Acquisition Policies Act of 1970 (Pub. L 
91-646, 84 Stat. 1894, 42 U.S.C. 4601), as amended by the Surface 
Transportation and Uniform Relocation Assistance Act of 1987 (title IV 
of Pub. L. 100-17, 101 Stat. 246-255, 42 U.S.C. 4601 note) are set forth 
in 49 CFR part 24.

[52 FR 48020, Dec. 17, 1987, and 54 FR 8912, Mar. 2, 1989]



PART 14--SECURITY REGULATIONS--Table of Contents




             Subpart A--Introduction to Security Regulations

Sec.
14.1  Purpose.
14.2  Policy.
14.3  DOL Classification Review Committee.
14.4  Definitions.

               Subpart B--Review of Classified Information

14.10  Mandatory review for declassification.

            Subpart C--Transmission of Classified Information

14.20  Dissemination to individuals and firms outside the executive 
          branch.
14.21  Release of classified information to foreign governments.
14.22  Availability of classified information to persons not employed by 
          the Department of Labor.

    Authority: E.O. 12356 of April 2, 1982 (47 FR 14874).

    Source: 50 FR 51391, Dec. 17, 1985, unless otherwise noted.



             Subpart A--Introduction to Security Regulations



Sec. 14.1  Purpose.

    These regulations implement Executive Order 12356, entitled National 
Security Information, dated April 2, 1982, and directives issued 
pursuant to that Order through the National Security Council and the 
Atomic Energy Act of 1954, as amended.



Sec. 14.2  Policy.

    The interests of the United States and its citizens are best served 
when information regarding the affairs of Government is readily 
available to the public. Provisions for such an informed citizenry are 
reflected in the Freedom of Information Act (5 U.S.C. 552) and in the 
current public information policies of the executive branch.
    (a) Safeguarding national security information. Some official 
information within the Federal Government is directly concerned with 
matters of national defense and the conduct of foreign relations. This 
information must, therefore, be subject to security constraints, and 
limited in term of its distribution.
    (b) Exemption from public disclosure. Official information of a 
sensitive nature, hereinafter referred to as national security 
information, is expressly exempted from compulsory public disclosure by 
Section 552(b)(1) of title 5 U.S.C. Persons wrongfully disclosing such 
information are subject to prosecution under United States criminal 
laws.
    (c) Scope. To ensure that national security information is 
protected, but only to the extent and for such a period as is necessary, 
these regulations:
    (1) Identify information to be protected.
    (2) Prescribe procedures on classification, declassification, 
downgrading, and safeguarding of information.
    (3) Establish a monitoring system to ensure the effectiveness of the 
Department of Labor (DOL) security program and regulations.
    (d) Limitation. The need to safeguard national security information 
in no way implies an indiscriminate license to withhold information from 
the public. It is important that the citizens of

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the United States have access, consistent with national security, to 
information concerning the policies and programs of their Government.



Sec. 14.3  DOL Classification Review Committee.

    A DOL Classification Review Committee is hereby established.
    (a) Composition of committee. The members of this Committee are:

Chairperson--Director, Directorate or Administrative Service and Safety 
and Health Programs, OASAM
Member--Director, Office of Management, Administration and Planning, 
Bureau of International Labor Affairs
Member--Security Officer, Bureau of Labor Statistics
Member--Security Officer, Occupational Safety and Health Administration
Member--Director, Office of Management, Office of the Solicitor
Member--Assistant Inspector General for Investigations.

    (b) Responsibilities. The Committee is responsible for:
    (1) Acting on all suggestions and complaints arising with respect to 
the DOL's information security program.
    (2) Reviewing all requests for records under the Freedom of 
Information Act, 5 U.S.C. 552, when a proposed denial is based on 
classification under Executive Order 1356 to determine if such 
classification is current.
    (3) Recommending to the Secretary of Labor appropriate 
administrative actions to correct abuses or violations of any provision 
of Executive Order 12356 or directives thereunder. Recommended 
administrative actions may include notification by warning letter, 
formal reprimand, and, to the extent permitted by law, suspension 
without pay and removal. Upon receipt of any such recommendation, the 
Secretary shall immediately advise the Committee of the action taken.



Sec. 14.4  Definitions.

    The following definitions apply under these regulations:
    (a) Primary organization unit--refers to an agency headed by an 
official reporting to the Secretary or Under Secretary.
    (b) Classify--to assign information to one of the classification 
categories after determining that the information requires protection in 
the interest of national security.
    (c) Courier--an individual designated by appropriate authority to 
protect classified and administratively controlled information in 
transit.
    (d) Custodian--the person who has custody or is responsible for the 
custody of classified information.
    (e) Declassify--the authorized removal of an assigned 
classification.
    (f) Document--any recorded information regardless of its physical 
form or characteristics, including (but not limited to):
    (1) Written material--(whether handwritten, printed or typed).
    (2) Painted, drawn, or engraved material.
    (3) Sound or voice recordings.
    (4) Printed photographs and exposed or printed films (either still 
or motion picture).
    (5) Reproductions of the foregoing, by whatever process.
    (g) Downgrade--to assign lower classfication than that previously 
assigned.
    (h) Derivative classification--a determination that information is 
in substance the same as information that is currently classified. It is 
to incorporate, paraphrase, restate or generate in new form information 
that is already classified (usually by another Federal agency).
    (i) Information Security Oversight Office (ISOO)--an office located 
in the General Services Administration (GSA) that monitors the 
implementation of E.O. 12356.
    (j) Marking--the physical act of indicating the assigned security 
classification on national security information.
    (k) Material--any document, product, or substance on or in which 
information is recorded or embodied.
    (l) Nonrecord material--extra copies and duplicates, the use of 
which is temporary, including shorthand notes, used carbon paper, 
preliminary drafts, and other material of similar nature.
    (m) Paraphrasing--a restatement of the text without alteration of 
its meaning.
    (n) Product and substance--any item of material (other than a 
document) in all stages of development, processing,

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or construction and including elements, ingredients, components, 
accessories, fixtures, dies, models, and mockup associated with such 
items.
    (o) Record material--all books, papers, maps, photographs, or other 
documentary materials, regardless of physical form or characteristics, 
made or received by the U.S. Government in connection with the 
transaction of public business; this includes material preserved by an 
agency or its legitimate successor as evidence of its organization, 
functions, policies, decisions, procedures, or other activities, or 
because of the informational data contained herein.
    (p) True reading--the paraphrased literal text.
    (q) Upgraded-- to assign a higher classification than that 
previously assigned.



               Subpart B--Review of Classified Information



Sec. 14.10  Mandatory review for declassification.

    (a) Scope of review. The mandatory review procedures apply to 
information originally classified by the DOL when it had such authority, 
i.e., before December 1, 1978. Requests may come from members of the 
public or a government employee or agency. The procedures do not apply 
to information originated by other agencies and merely held in 
possession of the DOL. Requests for disclosure submitted under 
provisions of the Freedom of Information Act are to be processed in 
accordance with provisions of that Act.
    (b) Where requests should be directed. Requests for mandatory review 
for declassification should be directed to the Department of Labor, 
Office of the Assistant Secretary for Administration and Management 
(OASAM), Washington, DC 20210. Requests should be in writing and should 
reasonably describe the classified information to allow identification. 
Whenever a request does not reasonably describe the information sought, 
the requestor will be notified that unless additional information is 
provided or the scope of the request is narrowed, no further action will 
be undertaken.
    (c) Processing. The OASAM will assign the request for information to 
the appropriate DOL office for declassification consideration. A 
decision will be made within 60 days as to whether the requested 
information may be declassified and, if so, made available to the 
requestor. If the information may not be released in whole or in part, 
the requestor will be given a brief statement as to the reasons for 
denial, and a notice of the right to appeal the determination to the DOL 
Classification Review Committee, Office of the Assistant Secretary for 
Administration and Management, Washington, DC 20210. The requestor is to 
be told that such an appeal must be filed with the DOL within 60 days.
    (d) Appeals procedure. The DOL Classification Review Committee will 
review and act within 30 days on all applications and appeals for the 
declassification of information. The Committee is authorized to overrule 
on behalf of the Secretary, Agency determinations in whole or in part, 
when it decides that continued protection is not required. It will 
notify the requestor of the declassification and provide the 
information. If the Committee determines that continued classification 
is required, it will promply notify the requestor and provide the 
reasons for the determination.
    (e) Burden of proof. In evaluating requests for declassification the 
DOL Classification Review Committee will require the DOL office having 
jurisdiction over the document to prove that continued classification is 
warranted.
    (f) Fees. If the request requires a service for which fair and 
equitable fees may be charged pursuant to title 5 of the Independent 
Office Appropriation Act, 31 U.S.C. 483a (1976), the requestor will be 
notified and charged.



            Subpart C--Transmission of Classified Information



Sec. 14.20  Dissemination to individuals and firms outside the executive branch.

    Request for classified information received from sources outside the 
executive branch of the Federal Government, provided the information has 
been originated by the DOL, will be honored

[[Page 174]]

in accordance with the following guidelines:
    (a) Top Secret information. All requests for Top Secret information 
by an individual or firm outside the executive branch must be referred 
promptly to the OASAM for consideration on an individual basis.
    (b) Secret and Confidential information. Subject to the restrictions 
below, Secret or Confidential information may be furnished to an 
individual or firm outside the executive branch if the action furthers 
the official program of the organization unit in which the information 
originated. The official furnishing such information must ensure that 
the individuals to whom the information is to be furnished have the 
appropriate DOL clearance, or at least clearance for the same or higher 
classification for another Federal department, or outside agency whose 
security clearances are acceptable to the DOL. The official must also 
ensure that the person to whom the classified information is being 
furnished possess the proper facilities for safeguarding such 
information. No Secret or Confidential information may be furnished to 
an individual or firm outside the executive branch without written 
concurrence from the primary organizational unit head or the Security 
Officer of that unit.
    (c) Unauthorized knowledge of classified information. Upon receipt 
of a request for classified information which raised a suspicion that an 
individual or organization outside the executive branch has unauthorized 
knowledge of the existence of Confidential, Secret, or Top Secret 
information, a report providing all available details must be 
immediately submitted to the DOL Document Security Officer for 
appropriate action and disposition.
    (d) Requests from outside the United States. All requests from 
outside the United States for Top Secret, Secret or Confidential 
information, except those received from foreign offices of the primary 
organizational unit or from U.S. embassies or similar missions, will be 
referred to the Deputy Under Secretary for International Affairs.
    (e) Access by historical researchers. Individuals outside the 
executive branch engaged in historical research may be authorized access 
to classified information over which the DOL has jurisdiction provided:
    (1) The research and need for access conform to the requirements of 
section 4-3 of Executive Order 12356.
    (2) The information requested is reasonably accessible and can be 
located and compiled with a reasonable amount of effort.
    (3) The researcher agrees to safeguard the information in a manner 
consistent with E.O. 12356 and directives thereunder.
    (4) The researcher agrees to a review of the notes and manuscript to 
determine that no classified information is contained therein.

Authorization for access is valid for the period required but no longer 
than two years from the date of issuance unless it is renewed under the 
conditions and regulations governing its original authorization.
    (f) Access by former presidential appointees. Individuals who have 
previously occupied policymaking positions to which they were appointed 
by the President may be authorized access to classified information 
which they originated, reviewed, signed, or received while in public 
office. Upon request, information identified by such individuals will be 
reviewed for declassification in accordance with the provisions of these 
regulations.



Sec. 14.21  Release of classified information to foreign governments.

    National security information will be released to foreign 
governments in accordance with the criteria and procedures stated in the 
President's Directive entitled ``Basic Policy Governing the Release of 
Classified Defense Information to Foreign Governments'' dated September 
25, 1985. All requests for the release of such information will be 
referred to the Deputy Under Secretary for International Affairs.



Sec. 14.22  Availability of classified information to persons not employed by the Department of Labor.

    (a) Approval for access. Access to classified information in the 
possession or custody of the primary organizational units of the 
Department by individuals who are not employees of the executive

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branch shall be approved in advance by the DOL Document Security 
Officer.
    (b) Access to Top Secret material. Access to Top Secret Information 
within the primary organizational units of the DOL by employees of other 
Federal agencies must be approved in advance by the Top Secret Control 
Officer of the primary organizational unit.
    (c) Access to Secret and Confidential information. Secret and 
Confidential information may be made available to properly cleared 
employees of other Federal departments or outside agencies if authorized 
by the primary organizational units having custody of the information.



PART 15--ADMINISTRATIVE CLAIMS UNDER THE FEDERAL TORT CLAIMS ACT AND RELATED STATUTES--Table of Contents




 Subpart A--Claims Against the Government Under the Federal Tort Claims 
                                   Act

Sec.
15.1  Scope and purpose.
15.2  Definitions.
15.3  Administrative claim; who may file.
15.4  Administrative claim; where to file.
15.5  Administrative claim; evidence or information to substantiate.
15.6  Administrative action.
15.7  Determination of claims.
15.8  Referral to Department of Justice.
15.9  Final denial of claim.
15.10  Action on approved claimed.

 Subpart B--Claims Under the Military Personnel and Civilian Employee' 
                           Claims Act of 1964

15.20  General provisions.
15.21  Filing of claims.
15.22  Allowable claims.
15.23  Restrictions on certain claims.
15.24  Unallowable claims.
15.25  Claims involving carriers or insurers.
15.26  Claims procedures.
15.27  Computation of award and finality of settlement.
15.28  Attorney fees.
15.29  Reconsideration.

     Subpart C--Claims Arising Out of the Operation of the Job Corps

15.40  Scope and purpose.
15.41  Allowable claims.
15.42  Claim procedure.

    Authority: 28 U.S.C. 2672; 28 CFR 14.11; 31 U.S.C. 3721; 29 U.S.C. 
1706(b).

    Source: 60 FR 19658, Apr. 19, 1995, unless otherwise noted.



 Subpart A--Claims Against the Government Under the Federal Tort Claims 
                                   Act



Sec. 15.1  Scope and purpose.

    (a) The purpose of this subpart is to set forth regulations relating 
to claims asserted under the Federal Tort Claims Act, as amended, 
accruing on or after January 18, 1967, for money damages against the 
United States for injury to or loss of property or personal injury or 
death caused by the negligent or wrongful act or omission of an officer 
or employee of the Department of Labor while acting within the scope of 
his or her office or employment.
    (b) This subpart is issued subject to and consistent with applicable 
regulations on administrative claims under the Federal Tort Claims Act 
issued by the Attorney General (28 CFR part 14).



Sec. 15.2  Definitions.

    (a) Department means the Department of Labor.
    (b) Organizational unit means the jurisdictional area of each 
Assistant Secretary and each office head reporting directly to the 
Secretary.
    (c) Act means the Federal Tort Claims Act, as amended, (28 U.S.C. 
1346(b), 28 U.S.C. 2671, et seq.).



Sec. 15.3  Administrative claim; who may file.

    (a) A claim for the injury to or loss of property may be presented 
by the owner of the property, his or her duly authorized agent, or his 
or her legal representative.
    (b) A claim for personal injury may be presented by the injured 
person, his or her duly authorized agent, or his or her legal 
representative.
    (c) A claim for death may be presented by the executor or 
administrator of the decedent's estate, or by any other person legally 
entitled to assert such a claim in accordance with applicable State law.
    (d) A claim for loss wholly compensated by an insurer with the 
rights of a subrogee may be presented by the insurer. A claim for loss 
partially compensated by an insurer with the rights

[[Page 176]]

of a subrogee may be presented by the insurer or the insured 
individually, as their respective interests appears, or jointly. 
Whenever an insurer presents a claim asserting the rights of a subrogee, 
it shall present with its claim appropriate evidence that it has the 
rights of a subrogee.
    (e) A claim presented by an agent or legal representative shall be 
presented in the name of the claimant, be signed by the agent or 
representative, show the title or legal capacity of the person signing 
and be accompanied by evidence of his or her authority to present a 
claim on behalf of the claimant as agent, executor, administrator, 
parent, guardian, or legal representative.



Sec. 15.4  Administrative claim; where to file.

    (a) For the purposes of this subpart, a claim shall be deemed to 
have been presented when the Department receives, at a place designated 
in paragraph (b) of this section, a properly executed ``Claim for 
Damage, Injury, or Death'' on Standard Form 95, or other written 
notification of an incident accompanied by a claim for money damages in 
a sum certain for injury to or loss of property or personal injury or 
death by reason of the incident.
    (b) In any case where the claim seeks damages in excess of $25,000 
or which involves an alleged act or omission of an employee of the 
Department whose official duty station is in Washington, D.C., a 
claimant shall mail or deliver his or her claim for money damages for 
injury to or loss of property or personal injury or death caused by the 
negligent or wrongful act or omission of any employee of the Department 
while acting within the scope of his or her office or employment 
hereunder to the Council for Claims and Compensation, Office of the 
Solicitor of Labor, U.S. Department of Labor, 200 Constitution Avenue, 
NW., Suite S4325, Washington, DC 20210.
    (c) In all other cases, the claimant shall address his or her claim 
to the official duty station of the employee whose act or omission forms 
the basis of the complaint.



Sec. 15.5  Administrative claim; evidence or information to substantiate.

    (a) Personal injury. In support of a claim for personal injury, 
including pain and suffering, the claimant is required to submit the 
following evidence or information:
    (1) A written report by the attending physician or dentist setting 
forth the nature and extent of the injury, nature and extent of 
treatment, any degree of temporary or permanent impairment, the 
prognosis, period of hospitalization, if any, and any diminished earning 
capacity. In addition, the claimant may be required to submit to a 
physical or mental examination by a physician employed or designated by 
the Department or another federal agency. A copy of the report of the 
examining physician shall be made available to the claimant upon the 
claimant's written request: Provided, That he or she has, upon request, 
furnished the report referred to in the first sentence of this 
subparagraph and has made, or agrees to make available to the 
Department, any other physician's report previously or thereafter made 
of the physical or mental condition which is the subject matter of the 
claim.
    (2) Itemized bills for medical, dental and hospital, or any other, 
expenses incurred or itemized receipts of payment for such expenses.
    (3) If the prognosis reveals the necessity for future treatment, a 
statement of expected expenses for such treatment.
    (4) If a claim is made for loss of time from employment, a written 
statement from his or her employer showing actual time lost from 
employment, whether he or she is a full or part-time employee, and wages 
or salary actually lost.
    (5) If a claim is made for loss of income and the claimant is self-
employed, documentary evidence showing the amount of earnings lost. For 
example, income tax returns for several years prior to the injury in 
question and the year in which the injury occurred may be used to 
indicate or measure lost income; a statement of how much it did or would 
cost the claimant to hire someone else to do the same work he or she was 
doing at the

[[Page 177]]

time of injury might also be used in measuring lost income.
    (6) Any other evidence or information which may have a bearing on 
either the responsibility of the United States for the personal injury 
or the damages claimed.
    (b) Death. In support of a claim based on death, the claimant may be 
required to submit the following evidence or information:
    (1) An authenticated death certificate or other competent evidence 
showing cause of death, date of death, and age of the decedent.
    (2) Decedent's employment or occupation at the time of death, 
including his or her monthly or yearly salary or earnings (if any), and 
the duration of his or her last employment or occupation.
    (3) Full name, address, birth date, kinship and marital status of 
the decedent's survivors, including identification of those survivors 
who were dependent for support upon the decedent at the time of his or 
her death.
    (4) Degree of support afforded by the decedent to each survivor 
dependent upon him or her for support at the time of his or her death.
    (5) Decedent's general physical and mental condition before his or 
her death.
    (6) Itemized bills for medical and burial expenses incurred by 
reason of the incident causing death, or itemized receipts of payment 
for such expenses.
    (7) If damages for pain and suffering prior to death are claimed, a 
physician's detailed statement specifying the injuries suffered, 
duration of pain and suffering, any drugs administered for pain, and the 
decedent's physical condition in the interval between injury and death.
    (8) Any other evidence or information which may have a bearing on 
either the responsibility of the United States for the death or damages 
claimed.
    (c) Property damages. In support of a claim for injury to or loss of 
property, real or personal, the claimant may be required to submit the 
following evidence or information with respect to each item of property:
    (1) Proof of ownership.
    (2) A detailed statement of the amount claimed.
    (3) An itemized receipt of payment for necessary repairs or itemized 
written estimates of the cost of such repairs.
    (4) A statement listing date of purchase, purchase price, and 
salvage value where repair is not economical.
    (5) Any other evidence or information which may have a bearing on 
either the responsibility of the United States for the injury to or loss 
of property or the damages claimed.



Sec. 15.6  Administrative action.

    (a) Investigation. When an organizational unit learns of an incident 
that reasonably can be expected to result in an allegation of harm 
caused to an individual or organization by an alleged negligent act or 
omission by an employee of that organizational unit or when it learns of 
an administrative claim or of litigation alleging such harm, it has the 
responsibility to fully investigate the incident and to take all actions 
necessary to preserve all relevant documents and other evidence. Each 
organizational unit should institute appropriate procedures to ensure 
that notification of such incidents are reported to the office 
responsible for ensuring that evidence is preserved and investigation 
undertaken.
    (b) Notification. Upon receipt of an administrative claim under the 
Act or of notice of litigation seeking damages for an alleged negligent 
act or omission of an employee of the Department acting within the scope 
of his or her employment, the Office of the Solicitor shall notify the 
organizational unit responsible for the activity which gave rise to the 
claim or litigation and shall provide a copy of the administrative claim 
or the claim filed in the litigation.
    (c) Administrative Report. (1) Upon receiving notification of an 
administrative claim or litigation, the organizational unit or units 
involved in the circumstances of the claim or litigation shall be 
responsible for preparing an Administrative Report and forwarding it to 
the Office of the Solicitor in a timely manner. The Administrative 
Report shall be in the form of a single memorandum in narrative form 
with attachments. It should contain all of

[[Page 178]]

the following elements, unless permission is obtained from the Office of 
the Solicitor to dispense with a particular element:
    (i) a brief explanation of the organization and operation of the 
program involved including statutory authority and applicable 
regulations;
    (ii) a complete description of the events which gave rise to the 
claim or litigation, including a specific response to every allegation 
in the claim or litigation;
    (iii) any information available regarding the questions of whether 
the claimant or plaintiff actually suffered the harm alleged in the 
claim or litigation and what individual or organization caused any harm 
which appears to have occurred;
    (iv) any information available regarding the damages claimed;
    (v) any policy reasons which the organizational unit wishes to 
advance for or against settlement of the claim or litigation; and
    (vi) details of any claims the Department may have against the 
claimant or plaintiff, whether or not they appear to be related to the 
subject matter of the claim or litigation.
    (2) A copy of all documents relevant to the issues involved in the 
claim or litigation should be attached to each copy of the 
Administrative Report. Original records should not be forwarded to the 
Office of the Solicitor unless specifically requested. They should be 
preserved, however, and remain available for litigation if necessary.
    (3) Organizational units should ensure that all Administrative 
Reports are either prepared or reviewed by an official of the 
organizational unit who was not personally involved in the incident in 
question prior to filing of the claim or suit.
    (d) Litigation. During the course of any litigation, organizational 
units are responsible for providing assistance to the Office of the 
Solicitor in responding to discovery requests such as interrogatories 
and requests to produce documents, for providing assistance in analyzing 
factual and program issues, for providing witnesses for depositions and 
trials, and for assistance in producing affidavits and exhibits for use 
in the litigation.



Sec. 15.7  Determination of claims.

    (a) Authority to consider, ascertain, adjust, determine, compromise 
and settle claims. The Counsel for Claims and Compensation shall have 
the authority to consider, ascertain, adjust, determine, compromise and 
settle claims pursuant to the Federal Tort Claims Act which involve an 
alleged negligent or wrongful act or omission of an employee whose 
official duty station is the Department's national office in Washington, 
D.C., or which exceed $25,000 in amount, or which involve a new 
precedent, a new point of law, or a question of policy. Regional 
Solicitors and the Associate Regional Solicitors are authorized to 
consider, ascertain, adjust, determine, compromise and settle, claims 
arising in their respective jurisdictions pursuant to the Federal Tort 
Claims Act which do not exceed $25,000 in amount and which do not 
involve a new precedent, new point of law, or a question of policy.
    (b) Payment. Any award, compromise, or settlement in the amount of 
$2,500 or less made pursuant to this section shall be paid by the 
Secretary of Labor out of appropriations available to the Department. 
Payment of an award, compromise, or settlement in an amount in excess of 
$2,500 made pursuant to this subpart shall be made in accordance with 28 
CFR 14.10.



Sec. 15.8  Referral to Department of Justice.

    An award, compromise or settlement of a claim under Sec. 2672 title 
28, United States Code, and this subpart, in excess of $25,000 may be 
effected only with the prior written approval of the Attorney General or 
his designee. For the purpose of this subpart, a principle claim and any 
derivative or subrogated claim shall be treated as a single claim.



Sec. 15.9  Final denial of claim.

    Final denial of an administrative claim under this subpart shall be 
in writing, and notification of denial shall be sent to the claimant, or 
his or her attorney or legal representative by certified or registered 
mail. The notification of final denial shall include a

[[Page 179]]

statement of the reasons for the denial and shall include a statement 
that, if the claimant is dissatisfied with the Department's action, he 
or she may file suit in an appropriate U.S. District Court not later 
than 6 months after the date of mailing of the notification.



Sec. 15.10  Action on approved claim.

    (a) Payment. Payment of a claim approved under this subpart is 
contingent upon claimant's execution of a ``Voucher for Payment Under 
Federal Tort Claims Act,'' Standard Form 1145. When a claimant is 
represented by an attorney, the voucher for payment shall designate both 
the claimant and his or her attorney as payees, and the check shall be 
delivered to the attorney whose address shall appear on the voucher.
    (b) Acceptance. Acceptance by the claimant, or his or her agent or 
legal representative, of an award, compromise, or settlement under 
Sec. 2672 or Sec. 2677 of title 28, U.S.C., is final and conclusive on 
the claimant, his or her agent or legal representative, and any other 
person on whose behalf or for whose benefit the claim has been presented 
and constitutes a complete release of any claim against the United 
States and against any officer or employee of the Government whose act 
or omission gave rise to the claim by reason of the same subject matter.



 Subpart B--Claims Under the Military Personnel and Civilian Employees' 
                           Claims Act of 1964



Sec. 15.20  General provisions.

    (a) Scope and Purpose. This subpart applies to all claims filed by 
or on behalf of employees of the Department for loss of or damage to 
personal property incident to their service with the Department under 
the Military Personnel and Civilian Employees' Claims Act of 1964, 
(hereinafter referred to as the Act). A claim must be substantiated and 
the possession of the property determined to be reasonable, useful or 
proper.
    (b) Payment. The maximum amount that can be paid for any claim under 
the Act is $40,000 and property may be replaced in kind at the option of 
the Government.
    (c) Policy. The Department is not an insurer and does not underwrite 
all personal property losses that an employee may sustain. Employees are 
encouraged to carry private insurance to the maximum extent practicable 
to avoid losses which may not be recoverable from the Department. The 
procedures set forth in this subpart are designed to enable the claimant 
to obtain the proper amount of compensation for the loss or damage. 
Failure of the claimant to comply with these procedures any reduce or 
preclude payment of the claim under this subpart.
    (d) Definition. Quarters means a house, apartment or other residence 
that is a Department employee's principal residence.



Sec. 15.21  Filing of claims.

    (a) Who may file. (1) A claim may be made pursuant to this subpart 
by an employee or by a spouse or authorized agent, or legal 
representative on behalf of the employee. If the employee is deceased, 
the claim may be filed by a survivor in the following order of 
preference: spouse, children, parent, brother or sister or the 
authorized agent or legal representative of such person or persons.
    (2) A claim may not be made hereunder by or for the benefit of a 
subrogee, assignee, conditional vendor or other third party.
    (b) Where to file. A claim hereunder must be presented in writing. 
If the claimant's official duty station is at the Department's national 
office in Washington, DC., or if the claim is for an amount in excess of 
$25,000, the claim should be filed with the Counsel for Claims and 
Compensation, Office of the Solicitor of Labor, U.S. Department of 
Labor, Suite S4325, 200 Constitution Avenue, NW., Washington, DC 20210. 
In all other cases the claimant shall address the claim to the regional 
or branch office of the Solicitor of Labor servicing the claimant's 
official duty station.
    (c) Evidence required. The claimant is responsible for 
substantiating ownership or possession, the facts surrounding the loss 
or damage, and the value of the property. Any claim filed

[[Page 180]]

hereunder must be accompanied by the following:
    (1) A written statement, signed by the claimant or his or her 
authorized agent, setting forth the circumstances under which the damage 
or loss occurred. This statement shall also include:
    (i) A description of the type, design, model number or other 
identification of the property.
    (ii) The date of purchase or acquisition and the original cost of 
the property.
    (iii) The location of the property when the loss or damage occurred.
    (iv) The value of the property when lost or damaged.
    (v) The actual or estimated cost of the repair of any damaged item.
    (vi) The purpose of and authority for travel, if the loss or damage 
occurred incident to transportation or to the use of a motor vehicle.
    (vii) Any and all available information as to the party responsible 
for the loss or damage, if such party is someone other than the 
claimant, and all information as to insurance contracts, whether held by 
the claimant or by the party responsible.
    (2) Copies of all available and appropriate documents such as bills 
of sale, estimates of repairs, or travel orders. In the case of an 
automobile, the claimant must file two estimates of repair or a 
certified paid bill showing the damage incurred and the cost of all 
parts, labor and other items necessary to the repair of the vehicle or a 
statement from an authorized dealer or repair garage showing that the 
cost of such repairs exceeds the value of the vehicle.
    (3) A copy of the power of attorney or other authorization if the 
claim is filed by someone other than the employee.
    (4) A statement from the employee's immediate supervisor confirming 
that possession of the property was reasonable, useful or proper under 
the circumstances and that the damage or loss was incident to service.
    (d) Time limitations. A claim under this part may be allowed only if 
it is filed in writing within 2 years after accrual of the claim. For 
the purpose of this part, a claim accrues at the later of:
    (1) the time of the accident or incident causing the loss or damage;
    (2) such time as the loss or damage should have been discovered by 
the claimant by the exercise of due diligence; or
    (3) such time as cause preventing filing no longer exists or as war 
or armed conflict ends, whichever is earlier, if a claim otherwise 
accrues during war or an armed conflict or has accrued within two years 
before war or an armed conflict begins, and for cause shown.



Sec. 15.22  Allowable claims.

    (a) A claim may be allowed only if the property involved was being 
used incident to service with the Department and:
    (l) The damage or loss was not caused wholly or partly by the 
negligent or wrongful act or omission of the claimant, his or her agent, 
the members of his or her family, or his or her private employee (the 
standard to be applied is that of reasonable care under the 
circumstances); and
    (2) The possession of the property lost or damaged and the quantity 
and the quality possessed is determined to have been reasonable, useful 
or proper under the circumstances; and
    (3) The claim is substantiated by proper and convincing evidence.
    (b) Claims which are otherwise allowable under this subpart shall 
not be disallowed solely because the claimant was not the legal owner of 
the property for which the claim is made.
    (c) Subject to the conditions in paragraph (a) of this section and 
the other provisions of this subpart, any claim for damage to, or loss, 
of personal property incident to service with the Department may be 
considered and allowed. For the purpose of subpart B of this part, an 
alternative work location at which an employee is performing duties 
pursuant to an approved Flexiplace agreement shall be considered an 
official duty station. The following are examples of the principal types 
of claims which may be allowed, but these examples are not exclusive and 
other types of claims may be allowed, unless hereinafter excluded:
    (1) Property or damage in quarters or other authorized places. 
Claims may be allowable for damage to, or loss of,

[[Page 181]]

property arising from fire, flood, hurricane, other natural disaster, 
theft, or other unusual occurrence, while such property is located at:
    (i) Quarters within the 50 States or the District of Columbia that 
were assigned to the claimant or otherwise provided in kind by the 
United States; or
    (ii) Quarters outside the 50 States and the District of Columbia 
that were occupied by the claimant, whether or not they were assigned or 
otherwise provided in kind by the United States, except when the 
claimant is a civilian employee who is a local inhabitant; or
    (iii) Any warehouse, office, working area or other place (except 
quarters) authorized or apparently authorized for the reception or 
storage of property.
    (2) Transportation or travel losses. Claims may be allowed for 
damage to, or loss of, property incident to transportation or storage 
pursuant to order or in connection with travel under orders, including 
property in the custody of a carrier, an agent or agency of the 
Government, or the claimant.
    (3) Mobile homes. Claims may be allowed for damage to, or loss of, 
mobile homes and their contents under the provisions of paragraph (c)(2) 
of this section. Claims for structural damage to mobile homes, other 
than that caused by collision, and damage to contents of mobile homes 
resulting from such structural damage, must contain conclusive evidence 
that the damage was not caused by structural deficiency of the mobile 
home and that it was not overloaded. Claims for damage to, or loss of, 
tires mounted on mobile homes will not be allowed, except in cases of 
collision, theft or vandalism.
    (4) Enemy action or public service. Claims may be allowed for damage 
to, or loss of, property as a direct consequence of:
    (i) Enemy action or threat thereof, or combat, guerrilla, 
brigandage, or other belligerent activity, or unjust confiscation by a 
foreign power or its nationals.
    (ii) Action by the claimant to quiet a civil disturbance or to 
alleviate a public disaster.
    (iii) Efforts by the claimant to save human life or Government 
property.
    (5) Property used for the benefit of the Government. Claims may be 
allowed for damage to, or loss, of property when used for the benefit of 
the Government at the request of, or with the knowledge and consent of 
superior authority.
    (6) Clothing and Accessories. Claims may be allowed for damage to, 
or loss of, clothing and accessories customarily worn on the person, 
such as eyeglasses, hearing aids, or dentures.
    (7) Expenses incident to repair. Claimants may be reimbursed for the 
payment of any sales tax incurred in connection with repairs to an item. 
The costs of obtaining estimates of repair (subject to the limitations 
set forth in Sec. 15.14(c)) are also allowable.



Sec. 15.23  Restrictions on certain claims.

    Claims of the type described in this section are only allowable 
subject to the restrictions noted:
    (a) Money or currency. Claims may be allowed for loss of money or 
currency (which includes coin collections) only when lost incident to 
fire, flood, hurricane, other natural disaster, or by theft from 
quarters (as limited by Sec. 15.22(c)(1)). In incidents of theft from 
quarters, it must be conclusively shown that the quarters were locked at 
the time of the theft. Reimbursement for loss of money or currency is 
limited to an amount which is determined to have been reasonable for the 
claimant to have had in his or her possession at the time of the loss.
    (b) Government property. Claims may only be allowed for property 
owned by the United States for which the claimant is financially 
responsible to an agency of the Government other than the Department.
    (c) Estimate fees. Claims may include fees paid to obtain estimates 
of repairs only when it is clear that an estimate could not have been 
obtained without paying a fee. In that case, the fee may be allowed only 
in an amount determined to be reasonable in relation to the value of the 
property or the cost of the repairs.
    (d) Automobiles and motor vehicles. Claims may only be allowed for 
damage to, or loss of automobiles and other motor vehicles if:
    (1) Such motor vehicles were required to be used for official 
Government

[[Page 182]]

business (official Government business, as used here, does not include 
travel, or parking incident thereto, between quarters and office, or use 
of vehicles for the convenience of the owner. However, it does include 
travel, and parking incident thereto, between quarters and an assigned 
place of duty specifically authorized by the employee's supervisor as 
being more advantageous to the Government); or
    (2) Shipment of such motor vehicles was being furnished or provided 
by the Government, subject to the provisions of Sec. 15.25.
    (e) Computers and Electronics. Claims may be allowed for loss of, or 
damage to, cellular phones, fax machines, computers and related hardware 
and software only when lost or damaged incident to fire, flood, 
hurricane, other natural disaster, or by theft from quarters (as limited 
by Sec. 15.22((c)(1)) or unless it is being shipped as a part of a 
change of duty station paid for by the Department. In incidents of theft 
from quarters, it must be conclusively shown that the quarters were 
locked at the time of the theft.



Sec. 15.24  Unallowable claims.

    Claims are not allowable for the following:
    (a) Unassigned quarters in United States. Property loss or damage in 
quarters occupied by the claimant within the 50 States or the District 
of Columbia that were not assigned to him or otherwise provided in kind 
by the United States.
    (b) Business property. Property used for business or profit.
    (c) Unserviceable property. Wornout or unserviceable property.
    (d) Illegal possession. Property acquired, possessed or transferred 
in violation of the law or in violation of applicable regulations or 
directives.
    (e) Articles of extraordinary value. Valuable articles, such as 
cameras, watches, jewelry, furs or other articles of extraordinary 
value. This prohibition does not apply to articles in the personal 
custody of the claimant or articles properly checked, if reasonable 
protection or security measures have been taken by claimant.
    (f) Intangible property. Loss of property that has no extrinsic and 
marketable value but is merely representative or evidence of value, such 
as non-negotiable stock certificates, promissory notes, bonds, bills of 
lading, warehouse receipts, insurance policies, baggage checks, and bank 
books, is not compensable. Loss of a thesis, or other similar item, is 
compensable only to the extent of the out-of-pocket expenses incurred by 
the claimant in preparing the item such as the cost of the paper or 
other materials. No compensation is authorized for the time spent by the 
claimant in its preparation or for supposed literary value.
    (g) Incidental expenses and consequential damages. The Act and this 
subpart authorize payment for loss of or damage to personal property 
only. Except as provided in Sec. 15.22(c)(7), consequential damages or 
other types of loss or incidental expenses (such as loss of use, 
interest, carrying charges, cost of lodging or food while awaiting 
arrival of shipment, attorney fees, telephone calls, cost of 
transporting claimant or family members, inconvenience, time spent in 
preparation of claim, or cost of insurance premiums) are not 
compensable.
    (h) Real property. Damage to real property is not compensable. In 
determining whether an item is considered to be an item of personal 
property, as opposed to real property, normally, any movable item is 
considered personal property even if physically joined to the land.
    (i) Commercial property. Articles acquired or held for sale or 
disposition by other commercial transactions on more than an occasional 
basis, or for use in a private profession or business enterprise.
    (j) Commercial storage. Property stored at a commercial facility for 
the convenience of the claimant and at his or her expense.
    (k) Minimum amount. Loss or damage amounting to less than $25.



Sec. 15.25  Claims involving carriers or insurers.

    In the event the property which is the subject of the claim was lost 
or damaged while in the possession of a commercial carrier or was 
insured, the following procedures will apply:

[[Page 183]]

    (a) Whenever property is damaged, lost or destroyed while being 
shipped pursuant to authorized travel orders, the owner must file a 
written claim for reimbursement with the last commercial carrier known 
or believed to have handled the goods, or the carrier known to be in 
possession of the property when the damage or loss occurred, according 
to the terms of its bill of lading or contract, before submitting a 
claim against the Government under this subpart.
    (b) Whenever property is damaged, lost or destroyed incident to the 
claimant's service and is insured in whole or in part, the claimant must 
make demand in writing against the insurer for reimbursement under the 
terms and conditions of the insurance coverage, prior to the filing of 
the claim against the Government.
    (c) Failure to make a demand on a carrier or insurer or to make all 
reasonable efforts to protect and prosecute rights available against a 
carrier or insurer and to collect the amount recoverable from the 
carrier or insurer may result in reducing the amount recoverable from 
the Government by the maximum amount which would have been recoverable 
from the carrier or insurer had the claim been timely or diligently 
prosecuted.Sec. However, no deduction will be made where the 
circumstances of the claimant's service preclude reasonable filing of 
such a claim or diligent prosecution, or the evidence indicates a demand 
was impracticable or would have been unavailing.
    (d) Following the submission of the claim against the carrier or 
insurer, the claimant may immediately submit his claim against the 
Government in accordance with the provisions of this subpart, without 
waiting until either final approval or denial of the claim is made by 
the carrier or insurer.
    (1) Upon submitting his or her claim, the claimant shall certify in 
his claim that he or she has or has not gained any recovery from a 
carrier or insurer, and enclose all correspondence pertinent thereto.
    (2) If final action has not been taken by the carrier or insurer on 
the claim, the claimant shall immediately notify them to address all 
correspondence in regard to the claim to the appropriate Office of the 
Solicitor of Labor.
    (3) The claimant shall advise the appropriate Office of the 
Solicitor of any action taken by the carrier or insurer on the claim 
and, upon request, shall furnish all correspondence, documents, and 
other evidence pertinent to the matter.
    (e) The claimant shall assign to the United States, to the extent of 
any payment on the claim accepted by him or her, all rights, title and 
interest in any claim he or she may have against any carrier, insurer, 
or other party arising out of the incident on which the claim against 
the United States is based. After payment of the claim by the United 
States, the claimant shall, upon receipt of any payment from a carrier 
or insurer, pay the proceeds to the United States to the extent of the 
payment received by him or her from the United States.
    (f) Where a claimant recovers for the loss from the carrier or 
insurer before his or her claim under this subpart is settled, the 
amount of recovery shall be applied to the claim as follows:
    (1) When the amount recovered from a carrier, insurer, or other 
third party is greater than or equal to the claimant's total loss as 
determined under this part, no compensation is allowable under this 
subpart.
    (2) When the amount recovered is less than such total loss, the 
allowable amount is determined by deducting the recovery from the amount 
of such total loss.
    (3) For this purpose, the claimant's total loss is to be determined 
without regard to the maximum payment limitations set forth in 
Sec. 15.20. However, if the resulting amount, after making this 
deduction exceeds the maximum payment limitations, the claimant shall be 
allowed only the maximum amount set forth in Sec. 15.20.



Sec. 15.26  Claims procedures.

    (a) Award. The Counsel for Claims and Compensation, the Regional 
Solicitors, and the Associate Regional Solicitors are authorized to 
consider, ascertain, adjust, determine, compromise and settle claims 
filed under this subpart that arose within their respective 
jurisdictions, except that any claim for

[[Page 184]]

an amount in excess of $25,000 shall fall within the exclusive 
jurisdiction of the Counsel for Claims and Compensation.
    (b) Form of claim. Any writing received by the Office of the 
Solicitor within the time limits set forth in Sec. 15.21(d) will be 
accepted and considered a claim under the Act if it constitutes a demand 
for compensation from the Department. A demand is not required to be for 
a specific sum of money.
    (c) Notification. The determination upon the claim shall be provided 
to the claimant in writing by the deciding official.



Sec. 15.27  Computation of award and finality of settlement.

    (a) The amount allowable for damage to or loss of any item of 
property may not exceed the lowest of:
    (1) the amount requested by the claimant for the item as a result of 
its loss, damage or the cost of its repair;
    (2) the actual or estimated cost of its repair; or
    (3) the actual value at the time of its loss, damage, or 
destruction. The actual value is determined by using the current 
replacement cost or the depreciated value of the item since its 
acquisition, whichever is lower, less any salvage value of the item in 
question.
    (b) Depreciation in value is determined by considering the type of 
article involved, its cost, its condition when damaged or lost, and the 
time elapsed between the date of acquisition and the date of damage or 
loss.
    (c) Current replacement cost and depreciated value are determined by 
use of publicly available adjustment rates or through use of other 
reasonable methods at the discretion of the official authorized to issue 
a determination upon the claim in question.
    (d) Replacement of lost or damaged property may be made in kind 
wherever appropriate.
    (e) At the discretion of the official authorized to issue the 
determination upon the claim in question, a claimant may be required to 
turn over an item alleged to have been damaged beyond economical repair 
to the United States, in which case no deduction for salvage value will 
be made in the calculation of actual value.
    (f) Notwithstanding any other provisions of law, settlement of 
claims under the Act are final and conclusive.



Sec. 15.28  Attorney fees.

    No more than 10 per centum of the amount in settlement of each 
individual claim submitted and settled under this subpart shall be paid 
or delivered to or received by any agent or attorney on account of 
services rendered in connection with that claim.



Sec. 15.29  Reconsideration.

    (a) Deciding Official. While there is no appeal from the decision of 
the deciding official in regard to claims under the Act, the deciding 
official may always reconsider his or her determination of a claim.
    (b) Claimant. A claimant may request reconsideration from the 
deciding official by directing a written request for reconsideration to 
the deciding official within 180 days of the date of the original 
determination. The claimant must clearly state the factual or legal 
basis upon which he or she rests the request for a more favorable 
determination.
    (c) Notification. The determination upon the reconsideration will be 
provided to the claimant in writing by the deciding official.



     Subpart C--Claims Arising Out of the Operation of the Job Corps



Sec. 15.40  Scope and purpose.

    (a) The purpose of this subpart is to set forth regulations relating 
to claims for damage to persons or property arising out of the operation 
of Job Corps which the Secretary of Labor finds to be a proper charge 
against the United States but which are not cognizable under the Federal 
Tort Claims Act.
    (b) This subpart further amplifies the regulatory provisions set 
forth in 20 CFR 638.526(b) regarding such claims.



Sec. 15.41  Allowable claims.

    (a)(1) A claim for damage to persons or property arising out of an 
act or omission of a student enrolled in the Job Corps may be considered 
pursuant to Sec. 436(b) of the Job Training Partnership Act (29 U.S.C. 
1706(b)):

[[Page 185]]

    (i) if the act or omission which gave rise to the claim took place 
at the center to which the student involved was assigned, or
    (ii) if the student involved was not within the geographical limits 
of his hometown and was within 100 miles of the center to which he or 
she was assigned, or while he or she was on authorized travel to or from 
the center.
    (2) The claim may be paid if the deciding official, in his or her 
discretion, finds the claim to be a proper charge against the United 
States resulting from an act or omission of a student enrolled in the 
Job Corps.
    (b) A claim for damage to person or property hereunder may not be 
paid if the claim is cognizable under the Federal Tort Claims Act (28 
U.S.C. 2677).
    (c) A claim for damage to person or property may be adjusted and 
settled hereunder in an amount not exceeding $1500.



Sec. 15.42  Claim procedures.

    (a) Claim. A claim under this subpart must be in writing and signed 
by the claimant or by an authorized representative. It must be received 
by the Office of the Solicitor within two years of the date upon which 
the claim accrued.
    (b) Award. The Regional Solicitors and Associate Regional Solicitors 
are authorized to consider, ascertain, adjust, determine, compromise and 
settle claims filed under this subpart that arose within their 
respective jurisdictions.
    (c) Notification. The determination upon the claim shall be provided 
to the claimant in writing by the deciding official.
    (d) Reconsideration. Reconsideration of a determination under this 
subpart shall be available pursuant to the procedures and limitations 
set forth in Sec. 15.29.



PART 16--EQUAL ACCESS TO JUSTICE ACT--Table of Contents




                      Subpart A--General Provisions

Sec.
16.101  Purpose of these rules.
16.102  Definitions.
16.103  When the Act applies.
16.104  Proceedings covered.
16.105  Eligibility of applicants.
16.106  Standards for awards.
16.107  Allowable fees and expenses.
16.108  Awards against other agencies.

             Subpart B--Information Required From Applicants

16.201  Contents of application.
16.202  Net worth exhibit.
16.203  Documentation of fees and expenses.
16.204  When an application may be filed.

           Subpart C--Procedures for Considering Applications

16.301  Filing and service of documents.
16.302  Answer to application.
16.303  Settlement.
16.304  Further proceedings.
16.305  Decision.
16.306  Review by the Secretary.
16.307  Judicial review.
16.308  Payment of award.

    Authority: Pub. L. 96-481, 94 Stat. 2327 (5 U.S.C. 504).

    Source: 46 FR 63021, Dec. 29, 1981, unless otherwise noted.



                      Subpart A--General Provisions



Sec. 16.101  Purpose of these rules.

    Section 203(a)(1) of the Equal Access to Justice Act amends section 
504 of the Administrative Procedure Act to provide for the award of 
attorney fees and other expenses to eligible individuals and entities 
who are parties to certain administrative proceedings before the 
Department of Labor. An eligible party may receive an award when it 
prevails over an agency, unless the agency's position in the proceeding 
was substantially justified or special circumstances make an award 
unjust. The rules in this part describe the parties eligible for awards, 
the proceedings that are covered, how to apply for awards, and the 
standards under which awards will be granted.



Sec. 16.102  Definitions.

    As used in this part:
    (a) The Act means section 504 of title 5 U.S.C., as amended by 
section 203(a)(1) of the Equal Access to Justice Act, Public Law No. 96-
481.
    (b) Adversary adjudication means an adjudication under 5 U.S.C. 554 
or other proceeding required by statute to be

[[Page 186]]

determined on the record after an opportunity for an agency hearing, but 
excludes an adjudication for the purpose of establishing or fixing a 
rate or for the purpose of granting or renewing a license.
    (c) Adjudicative officer means the official who presides at the 
adversary adjudication, without regard to whether the official is 
designated as an administrative law judge, a hearing officer or 
examiner, or otherwise.
    (d) Department refers to the cognizant departmental component which 
is participating in the adversary adjudication, (e.g., Occupational 
Safety and Health Administration, Mine Safety and Health Administration, 
and Employment Standards Administration).
    (e) Proceeding means an adversary adjudication as defined in 
paragraph (b) of this section.



Sec. 16.103  When the Act applies.

    The Act applies to any adversary adjudication pending before the 
Department at any time between October 1, 1981 and September 30, 1984. 
This includes proceedings begun before October 1, 1981 if final agency 
action has not been taken before that date, and proceedings pending on 
September 30, 1984, regardless of when they were initiated or when final 
agency action occurs, except that it shall not apply in any case pending 
on October 1, 1981 in which a decision has been issued, but final agency 
action has not been taken by reason of an abatement.



Sec. 16.104  Proceedings covered.

    (a) The Act applies in adversary adjudications in which the position 
of the Department or another agency of the United States is presented by 
an attorney or other representative who enters an appearance and 
participates in the proceeding in an adversarial capacity. Any 
proceeding which prescribes a lawful present or future rate or is 
primarily rule-making is not covered. Proceedings to grant or renew 
licenses are also excluded, but proceedings to modify, suspend or revoke 
licenses are covered if they are otherwise adversary adjudications. The 
following types of proceedings are deemed to be adversarial 
adjudications which will be covered by the Act, when all other 
conditions in the Act and in these rules are met:
    (1) Hearings conducted by the Occupational Safety and Health Review 
Commission under the authority of 29 U.S.C. 661 of the Occupational 
Safety and Health Act; and hearings conducted by the Federal Mine Safety 
and Health Review Commission under the authority of 30 U.S.C. 823 of the 
Mine Safety and Health Act. In these proceedings, the rules of the 
respective Commissions rather than the instant rules will be applicable.
    (2) Wage and Hour Division, Employment Standards Administration:
    (i) Civil money penalties under the child labor provisions of the 
Fair Labor Standards Act at 29 U.S.C. 216(e) and 29 CFR part 579.
    (ii) Violations and debarment in Federal contracts under the Walsh-
Healey Act at 41 U.S.C. 39 and 41 CFR 50-203.1.
    (iii) Revocation, modification and suspension of licenses under the 
Farm Labor Contractor Registration Act at 7 U.S.C. 2045(b) and 29 CFR 
40.101.
    (iv) Civil money penalties under the Farm Labor Contractor 
Registration Act at 7 U.S.C. 2048(b)(2) and 29 CFR 40.101.
    (v) Revocation and suspension of certificates under the Migrant and 
Seasonal Agricultural Worker Protection Act at 29 U.S.C. 1813(b) and 29 
CFR 500.200.
    (vi) Civil money penalties under the Migrant and Seasonal 
Agricultural Worker Protection Act at 29 U.S.C. 1853(b) and 29 CFR 
500.200.
    (3) Office of Federal Contract Compliance Programs, Employment 
Standards Administration hearings prior to the denial, withholding, 
termination or suspension of a government contract or any portion of a 
contract under title VII of the Civil Rights Act of 1964, as amended, at 
42 U.S.C. 2000e-17 and 41 CFR part 60-30.
    (4) Office of Civil Rights:
    (i) Fund termination under title VI of the Civil Rights Act at 42 
U.S.C. 2000d2 and 29 CFR part 31.
    (ii) Fund termination under the Age Discrimination in Federally 
Assisted Programs Act of 1975 at 42 U.S.C. 6104(a).

[[Page 187]]

    (iii) Fund termination or refusal to grant because of discrimination 
under 20 U.S.C. 1682.
    (5) Employment and Training Administration:
    (i) Proceedings under the Comprehensive Employment and Training Act 
at 29 U.S.C. 818, where the Department determines that a recipient of 
CETA funds is failing to comply with the requirements of the Act and the 
implementing regulations.
    (ii) Conformity and compliance under the Federal Unemployment Tax 
Act at 26 U.S.C. 3303(b) and 3304(c).
    (iii) Proceedings under section 303(b) of the Social Security Act of 
1935, as amended, 42 U.S.C. 503(b).
    (6) Mine Safety and Health Administration:
    (i) Petitions for modification of a mandatory safety standard under 
the Mine Safety and Health Act at 30 U.S.C. 811(c) and 30 CFR 44.20.
    (7) Occupational Safety and Health Administration:
    (i) Exemptions, tolerances and variances under the Occupational 
Safety and Health Act at 29 U.S.C. 655 and 29 CFR 1905.3.
    (b) If a proceeding includes both matters covered by the Act and 
matters specifically excluded from coverage, any award made will include 
only fees and expenses related to the covered issues.

[46 FR 63021, Dec. 29, 1981, as amended at 48 FR 43322, Sept. 23, 1983]



Sec. 16.105  Eligibility of applicants.

    (a) To be eligible for an award of attorney fees and other expenses 
under the Act, the applicant must be a party, as that term is defined in 
5 U.S.C. 551(3), to an adversary adjudication for which it seeks an 
award; the applicant must prevail; and must meet all the conditions of 
eligibility set out in this subpart and subpart B.
    (b) To be eligible for an award, the applicant must be:
    (1) An individual with a net worth of not more than $1 million;
    (2) The sole owner of an unincorporated business which has a net 
worth of not more than $5 million, including both personal and business 
interests, and not more than 500 employees;
    (3) A charitable or other tax exempt organization described in 
section 501(c)(3) of the Internal Revenue Code (26 U.S.C. 501(c)(3)) 
with not more than 500 employees;
    (4) A cooperative association as defined in section 15(a) of the 
Agricultural Marketing Act (12 U.S.C. 1141j(a)) with not more than 500 
employees;
    (5) Any other partnership, corporation, association or public or 
private organization with a net worth of not more than $5 million and 
not more than 500 employees. A unit of state or local government is not 
a public organization within the meaning of this provision.
    (c) For purposes of eligibility, the net worth and number of 
employees of an applicant shall be determined as of the date the 
proceeding was initiated.
    (d) An applicant who owns an unincorporated business will be 
considered as an individual rather than a sole owner of an 
unincorporated business if the issues on which the applicant prevails 
are related primarily to personal interests rather than to business 
interests.
    (e) The employees of an applicant include all persons who perform 
services for remuneration for the applicant, under the applicant's 
direction and control. Part-time employees shall be included.
    (f) The net worth and number of employees of the applicant and all 
of its affiliates shall be aggregated to determine eligibility. Any 
individual, corporation or other entity that directly or indirectly 
controls or owns a majority of the voting shares of another business, or 
controls, in any manner, the election of a majority of that business' 
board of directors, trustees or other persons exercising similar 
functions, shall be considered an affiliate for purposes of this part, 
unless the adjudicative officer determines that such treatment would be 
unjust and contrary to the purposes of the Act in light of the actual 
relationship between the affiliated entities. In addition, the 
adjudicative officer may determine that financial relationships of the 
applicant other than those described in this paragraph constitute 
special circumstances that would make an award unjust.

[[Page 188]]

    (g) An applicant that participates in a proceeding primarily on 
behalf of one or more other persons or entities that would be ineligible 
is not itself eligible for an award.



Sec. 16.106  Standards for awards.

    (a) A prevailing applicant may receive an award for fees and 
expenses incurred in connection with a proceeding, or in a significant 
and discrete substantive portion of the proceeding, unless the position 
of the Department as a party over which the applicant has prevailed was 
substantially justified or if special circumstances make the award 
sought unjust. No presumption arises that the Department's position was 
not substantially justified simply because the Department did not 
prevail.
    (b) An award will be reduced or denied if the applicant has unduly 
or unreasonably protracted the proceeding.



Sec. 16.107  Allowable fees and expenses.

    (a) The following fees and other expenses are allowable under the 
Act:
    (1) Reasonable expenses of expert witnesses;
    (2) Reasonable cost of any study, analysis, engineering report, 
test, or project necessary for the preparation of the party's case;
    (3) Reasonable attorney or agent fees;
    (b) Awards will be based on the prevailing market rates for the kind 
and quality of services furnished not to exceed the rates set forth in 
paragraph (c) of this section.
    (c) No award under these rules for the fee of an attorney or agent 
may exceed $75.00 per hour. No award to compensate an expert witness may 
exceed $24.09 per hour.
    (d) In determining the reasonableness of the fee sought, the 
adjudicative officer shall consider the following:
    (1) The prevailing rate for similar services in the community in 
which the attorney, agent or witness ordinarily performs services;
    (2) The time actually spent in the representation of the applicant;
    (3) The difficulty or complexity of the issues in the proceeding;
    (4) Such other factors as may bear on the value of the services 
performed.



Sec. 16.108  Awards against other agencies.

    If an applicant is entitled to an award because it prevails over 
another agency of the United States that participates in a proceeding 
before the Department of Labor and the other agency takes a position 
that is not substantially justified, the award or an appropriate portion 
of the award shall be made against that agency by the adjudicative 
officer for the Department of Labor.



             Subpart B--Information Required From Applicants



Sec. 16.201  Contents of application.

    (a) An application for an award of fees and expenses under the Act 
shall identify the applicant and the proceeding for which an award is 
sought. The application shall show that the applicant has prevailed and 
identify the position of an agency or agencies in the proceeding that 
the applicant alleges was not substantially justified. Unless the 
applicant is an individual, the application shall also state the number 
of employees of the applicant at the time the proceeding was instituted 
and describe briefly the type and purpose of its organization or 
business.
    (b) The application shall also include a statement that the 
applicant's net worth at the time the formal proceedings were instituted 
did not exceed $1 million (if an individual) or $5 million (for all 
other applicants, including their affiliates). However, an applicant may 
omit this statement if:
    (1) It attaches a copy of a ruling by the Internal Revenue Service 
that it qualifies as an organization described in section 501(c)(3) of 
the Internal Revenue Code (26 U.S.C. 501(c)(3)) or, in the case of a 
tax-exempt organization not required to obtain a ruling from the 
Internal Revenue Service on its exempt status, a statement that 
describes the basis for the applicant's belief that it qualifies under 
such section; or
    (2) It states that it is a cooperative association as defined in 
section 15(a) of the Agricultural Marketing Act (12 U.S.C. 1141j(a)).

[[Page 189]]

    (c) If the applicant is a partnership, corporation, association, or 
organization, or a sole owner of an unincorporated business, the 
application shall certify that it did not have more than 500 employees 
at the time the formal proceedings were initiated, giving the number of 
its employees and describing briefly the type and purpose of its 
organization or business.
    (d) The application shall state the amount of fees and expenses for 
which an award is sought.
    (e) The application may also include any other matters that the 
applicant wishes the adjudicative officer to consider in determining 
whether and in what amount an award should be made.
    (f) The application shall be signed by the applicant with respect to 
the eligibility of the applicant and by the attorney of the applicant 
with respect to fees and expenses sought. It shall also contain or be 
accompanied by a written verification under oath or under penalty of 
perjury that the information provided in the application is true and 
correct.

(Approved by the Office of Management and Budget under control number 
1225-0013)

[46 FR 63021, Dec. 29, 1981, as amended at 47 FR 14696, Apr. 6, 1982]



Sec. 16.202  Net worth exhibit.

    (a) Each applicant except a qualified tax-exempt organization or 
cooperative association must provide with its application a detailed 
exhibit showing the net worth of the applicant and any affiliates (as 
defined in Sec. 16.105(f) of this part) as of the date when the 
proceeding was initiated, i.e. the date the complaint was filed. The 
exhibit may be in any form convenient to the applicant that provides 
full disclosure of the applicant's and its affiliates' assets and 
liabilities and is sufficient to determine whether the applicant 
qualifies under the standards in this part. The adjudicative officer may 
require an applicant to file additional information to determine its 
eligibility for an award.
    (b) The net worth exhibit shall be included in the public record of 
the proceeding in which an award is sought.

(Approved by the Office of Management and Budget under control number 
1225-0013)

[46 FR 63021, Dec. 29, 1981, as amended at 47 FR 14696, Apr. 6, 1982]



Sec. 16.203  Documentation of fees and expenses.

    (a) The application shall be accompanied by full documentation of 
the fees and expenses, including the cost of any study, analysis, 
engineering report, test, project or similar matter, for which an award 
is sought.
    (b) The document shall include an affidavit from each professional 
firm or individual whose services are covered by the application, 
showing the hours spent in connection with the proceeding by each 
individual, a description of the specific services performed, the rate 
at which each fee has been computed, any expenses for which 
reimbursement is sought, the total amount claimed, and the total amount 
paid or payable by the applicant or by any other person or entity for 
the services provided.
    (1) The affidavit shall itemize in detail the services performed by 
the date, number of hours per date and the services performed during 
those hours. In order to establish the hourly rate, the affidavit shall 
state the hourly rate which is billed and paid by the majority of 
clients during the relevant time periods.
    (2) If no hourly rate is paid by the majority of clients because, 
for instance, the attorney or agent represents most clients on a 
contingency basis, the attorney or agent shall provide affidavits from 
two attorneys or agents with similar experience, who perform similar 
work, stating the hourly rate which they bill and are paid by the 
majority of their clients during a comparable time period.
    (c) The documentation shall also include a description of any 
expenses for which reimbursement is sought and a statement of the 
amounts paid and payable by the applicant or by any

[[Page 190]]

other person or entity for the services provided.
    (d) The adjudicative officer may require the applicant to provide 
vouchers, receipts, or other substantiation for any expenses claimed.

(Approved by the Office of Management and Budget under control number 
1225-0013)

[46 FR 63021, Dec. 29, 1981, as amended at 47 FR 14696, Apr. 6, 1982]



Sec. 16.204  When an application may be filed.

    (a) An application may be filed whenever the applicant has prevailed 
in the proceeding or in a significant and discrete substantive portion 
of the proceeding, but in no case later than 30 days after the agency's 
final disposition of the proceeding.
    (b) If review or reconsideration is sought or taken of a decision as 
to which an applicant believes it has prevailed, matters related to the 
consideration of an award of fees and expenses shall be stayed pending 
final disposition of the underlying controversy.
    (c) For purposes of this rule final disposition means the later of: 
(1) The date on which an initial decision or other recommended 
disposition of the merits of the proceeding by an adjudicative officer 
or intermediate review board becomes administratively final; (2) 
issuance of an order disposing of any petitions for reconsideration of 
this agency's final order in the proceeding; (3) if no petition for 
reconsideration is filed, the last date on which such a petition could 
have been filed; or (4) issuance of a final order or any other final 
resolution of a proceeding, such as a settlement or voluntary dismissal, 
which is not subject to a petition for reconsideration, or, in the case 
of an abatement, the end of the abatement period or the date on which an 
order is issued terminating the abatement period.

(Approved by the Office of Management and Budget under control number 
1225-0013)

[46 FR 63021, Dec. 29, 1981, as amended at 47 FR 14696, Apr. 6, 1982]



           Subpart C--Procedures for Considering Applications



Sec. 16.301  Filing and service of documents.

    Any application for an award or other pleading or document related 
to an application shall be filed with the adjudicative officer and 
served on all parties to the proceeding in the same manner as other 
pleadings in the proceeding.



Sec. 16.302  Answer to application.

    (a) Within 30 days after service of an application, counsel 
representing the agency against which an award is sought may file an 
answer to the application. Unless agency counsel requests an extension 
of time for filing or files a statement of intent to negotiate under 
paragraph (b) of this section, failure to file an answer within the 30 
day period may be treated as a consent to the award requested.
    (b) If agency counsel and the applicant believe that the issues in 
the fee application can be settled, they may jointly file a statement of 
their intent to negotiate a settlement. The filing of this statement 
shall extend the time for filing an answer for an additional 30 days, 
and further extensions may be granted by the adjudicative officer upon 
request by agency counsel and the applicant.
    (c) The answer shall explain in detail any objections to the award 
requested and identify the facts relied on in support of agency 
counsel's position. If the answer is based on any alleged facts not 
already in the record of the proceeding, agency counsel shall include 
with the answer either supporting affidavits or a request for further 
proceedings under Sec. 16.304.



Sec. 16.303  Settlement.

    The applicant and agency counsel may agree on a proposed settlement 
of the award before final action on the application, either in 
connection with a settlement of the underlying proceeding, or after the 
underlying proceeding has been concluded, in accordance with the 
agency's standard settlement procedure. If a prevailing party

[[Page 191]]

and agency counsel agree on a proposed settlement of an award before an 
application has been filed, the application shall be filed with the 
proposed settlement.



Sec. 16.304  Further proceedings.

    (a) Ordinarily, the determination of an award will be made on the 
basis of the written record. However, on request of either the applicant 
or agency counsel, or on his or her own initiative, the adjudicative 
officer may order further proceedings, such as an informal conference, 
oral argument, additional written submissions or an evidentiary hearing. 
Such further proceedings shall be held only when necessary for full and 
fair resolution of the issues arising from the application, and shall be 
conducted as promptly as possible.
    (b) A request that the adjudicative officer order further 
proceedings under this section shall specifically identify the 
information sought or the disputed issues and shall explain why the 
additional proceedings are necessary to resolve the issues.



Sec. 16.305  Decision.

    The adjudicative officer shall issue a recommended decision on the 
application which shall include written findings and conclusions on the 
applicant's eligibility and status as a prevailing party, and an 
explanation of the reasons for any difference between the amount 
requested and the amount awarded. The decisions shall also include, if 
at issue, findings on whether the agency's position was substantially 
justified, whether the applicant unduly protracted the proceedings, or 
whether special circumstances make an award unjust. If the applicant has 
sought an award against more than one agency, the decision shall 
allocate responsibility for payment of any award made among the 
agencies, and shall explain the reasons for the allocation made.



Sec. 16.306  Review by the Secretary.

    The Secretary, for purposes of this subsection, means the Secretary 
of Labor or a person, board or other organizational unit authorized to 
perform the review function. Either the applicant or agency counsel may 
seek review of the recommended decision on the fee application, or the 
Secretary may decide to review the decision on his or her own 
initiative, in accordance with the Department of Labor's regular review 
procedures. If neither the applicant nor agency counsel seeks review and 
the Secretary does not take review on his or her own initiative, the 
adjudicative officer's decision on the application shall become a final 
decision of the Department 45 days after it is issued. If review is 
taken, the Secretary will issue a final decision on the application or 
remand the application to the adjudicative officer for further 
proceedings.



Sec. 16.307  Judicial review.

    Judicial review of final agency decisions on awards may be sought as 
provided in 5 U.S.C. 504(c)(2).



Sec. 16.308  Payment of award.

    An applicant seeking payment of an award shall submit to the 
Comptroller for the Department of Labor a copy of the final decision 
granting the award, accompanied by a statement that the applicant will 
not seek review of the decision in the United States courts. The request 
for payment shall be addressed to: Comptroller, U.S. Department of 
Labor, Frances S. Perkins Building, 200 Constitution Avenue, NW., 
Washington, DC 20210.



PART 17--INTERGOVERNMENTAL REVIEW OF DEPARTMENT OF LABOR PROGRAMS AND ACTIVITIES--Table of Contents




Sec.
17.1  What is the purpose of these regulations?
17.2  What definitions apply to these regulations?
17.3  What programs and activities of the Department are subject to 
          these regulations?
17.4  What are the Secretary's general responsibilities under the Order?
17.5  What is the Secretary's obligation with respect to Federal 
          interagency coordination?
17.6  What procedures apply to the selection of programs and activities 
          under these regulations?
17.7  How does the Secretary communicate with state and local officials 
          concerning the Department's programs and activities?

[[Page 192]]

17.8  How does the Secretary provide states an opportunity to comment on 
          proposed Federal financial assistance?
17.9  How does the Secretary receive and respond to comments?
17.10  How does the Secretary make efforts to accommodate 
          intergovernmental concerns?
17.11  What are the Secretary's obligations in interstate situations?
17.12  How may a state simplify, consolidate, or substitute federally 
          required state plans?
17.13  May the Secretary waive any provision of these regulations?

    Authority: E.O. 12372, July 14, 1982 (47 FR 30959), as amended April 
8, 1983 (48 FR 15887): sec. 401 of the Intergovernmental Cooperation Act 
of 1968, as amended (31 U.S.C. 6506).

    Source: 48 FR 29258, June 24, 1983, unless otherwise noted.



Sec. 17.1  What is the purpose of these regulations?

    (a) The regulations in this part implement E.O. 12372, 
``Intergovernmental Review of Federal Programs,'' issued July 14, 1982 
and amended on April 8, 1983. These regulations also implement 
applicable provisions of section 401 of the Intergovernmental 
Cooperation Act of 1968.
    (b) These regulations are intended to foster an intergovernmental 
partnership and a strengthened Federalism by relying on state processes 
and on state, areawide, regional and local coordination for review of 
proposed Federal financial assistance and direct Federal development.
    (c) These regulations are intended to aid the internal management of 
the Department, and are not intended to create any right or benefit 
enforceable at law by a party against the Department or its officers.



Sec. 17.2  What definitions apply to these regulations?

    Department means the U.S. Department of Labor.
    Order means E.O. 12372, issued July 14, 1982, and amended April 8, 
1983 and titled ``Intergovernmental Review of Federal Programs.''
    Secretary means the Secretary of the U.S. Department of Labor or an 
official or employee of the Department acting for the Secretary under a 
delegation of authority.
    State means any of the 50 states, the District of Columbia, the 
Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana 
Islands, Guam, American Samoa, the U.S. Virgin Islands, or the Trust 
Territory of the Pacific Islands.



Sec. 17.3  What programs and activities of the Department are subject to these regulations?

    The Secretary publishes in the Federal Register a list of the 
Department's programs and activities that are subject to these 
regulations.



Sec. 17.4  What are the Secretary's general responsibilities under the Order?

    (a) The Secretary provides opportunities for consultation by elected 
officials of those state and local governments that would provide the 
non-Federal funds for, or that would be directly affected by, proposed 
Federal financial assistance from, or direct Federal development by, the 
Department.
    (b) If a state adopts a process under the Order to review and 
coordinate proposed Federal financial assistance and direct Federal 
development, the Secretary, to the extent permitted by law:
    (1) Uses the state process to determine official views of state and 
local elected officials;
    (2) Communicates with state and local elected officials as early in 
a program planning cycle as is reasonably feasible to explain specific 
plans and actions;
    (3) Makes efforts to accommodate state and local elected officials' 
concerns with proposed Federal financial assistance and direct Federal 
development that are communicated through the state process;
    (4) Allows the states to simplify and consolidate existing federally 
required state plan submissions;
    (5) Where state planning and budgeting systems are sufficient and 
where permitted by law, encourages the substitution of state plans for 
federally required state plans;
    (6) Seeks the coordination of views of affected state and local 
elected officials in one state with those of another state when proposed 
Federal financial

[[Page 193]]

assistance or direct Federal development has an impact on interstate 
metropolitan urban centers or other interstate areas; and
    (7) Supports state and local governments by discouraging the 
reauthorization or creation of any planning organization which is 
federally-funded, which has a limited purpose, and which is not 
adequately representative of, or accountable to, state or local elected 
officials.



Sec. 17.5  What is the Secretary's obligation with respect to Federal interagency coordination?

    The Secretary, to the extent practicable, consults with and seeks 
advice from all other substantially affected Federal departments and 
agencies in an effort to assure full coordination between such agencies 
and the Department regarding programs and activities covered under these 
regulations.



Sec. 17.6  What procedures apply to the selection of programs and activities under these regulations?

    (a) A state may select any program or activity published in the 
Federal Register in accordance with Sec. 17.3 of this part for 
intergovernmental review under these regulations. Each state, before 
selecting programs and activities shall consult with local elected 
officials.
    (b) Each state that adopts a process shall notify the Secretary of 
the Department's programs and activities selected for that process.
    (c) A state may notify the Secretary of changes in its selections at 
any time. For each change, the state shall submit to the Secretary an 
assurance that the state has consulted with elected local officials 
regarding the change. The Department may establish deadlines by which 
states are required to inform the Secretary of changes in their program 
selections.
    (d) The Secretary uses a state's process as soon as feasible, 
depending on individual programs and activities, after the Secretary is 
notified of its selections.



Sec. 17.7  How does the Secretary communicate with state and local officials concerning the Department's programs and activities?

    (a) For those programs and activities covered by a state process 
under Sec. 17.6, the Secretary, to the extent permitted by law:
    (1) Uses the official state process to determine views of state and 
local elected officials; and,
    (2) Communicates with state and local elected officials, through the 
official state process, as early in a program planning cycle as is 
reasonably feasible to explain specific plans and actions.
    (b) The Secretary provides notice to directly affected state, 
areawide, regional, and local entities in a state of proposed Federal 
financial assistance if:
    (1) The state has not adopted a process under the Order; or
    (2) The assistance involves a program or activity not selected for 
the state process.

This notice may be made by publication in the Federal Register or other 
appropriate means, which the Department in its discretion deems 
appropriate.



Sec. 17.8  How does the Secretary provide states an opportunity to comment on proposal Federal financial assistance?

    (a) Except in unusual circumstances, the Secretary gives state 
processes or directly affected state, areawide, regional and local 
officials and entities:
    (1) At least 30 days from the date established by the Secretary to 
comment on proposed Federal financial assistance in the form of 
noncompeting continuation awards; and
    (2) At least 60 days from the date established by the Secretary to 
comment on proposed Federal financial assistance other than noncompeting 
continuation awards.
    (b) This section also applies to comments in cases in which the 
review, coordination, and communication with the Department have been 
delegated.

[[Page 194]]



Sec. 17.9  How does the Secretary receive and respond to comments?

    (a) The Secretary follows the procedures in Sec. 17.10 if:
    (1) A state office or official is designated to act as a single 
point of contact between a state process and all Federal agencies, and
    (2) That office or official transmits a state process recommendation 
for a program selected under Sec. 17.6.
    (b)(1) The single point of contact is not obligated to transmit 
comments from state, areawide, regional or local officials and entities 
where there is no state process recommendation.
    (2) If a state process recommendation is transmitted by a single 
point of contact, all comments from state, areawide, regional, and local 
officials and entities that differ from it must also be transmitted.
    (c) If a state has not established a process, or is unable to submit 
a state process recommendation, state, areawide, regional and local 
officials and entities may submit comments to the Department.
    (d) If a program or activity is not selected for a state process, 
state, areawide, regional and local officials and entities may submit 
comments to the Department. In addition, if a state process 
recommendation for a nonselected program or activity is transmitted to 
the Department by the single point of contact, the Secretary follows the 
procedures of Sec. 17.10 of this part.
    (e) The Secretary considers comments which do not constitute a state 
process recommendation submitted under these regulations and for which 
the Secretary is not required to apply the procedures of Sec. 17.10 of 
this part, when such comments are provided by a single point of contact, 
or directly to the Department by a commenting party.



Sec. 17.10  How does the Secretary make efforts to accommodate intergovernmental concerns?

    (a) If a state process provides a state process recommendation to 
the Department through its single point of contact, the Secretary 
either--
    (1) Accepts the recommendation;
    (2) Reaches a mutually agreeable solution with the state process; or
    (3) Provides the single point of contact with such written 
explanation of the decision, as the Secretary in his or her discretion 
deems appropriate. The Secretary may also supplement the written 
explanation by providing the explanation to the single point of contact 
by telephone, other telecommunication, or other means.
    (b) In any explanation under paragraph (a)(3) of this section, the 
Secretary informs the single point of contact that:
    (1) The Department will not implement its decision for at least ten 
days after the single point of contact receives the explanation; or
    (2) The Secretary has reviewed the decision and determined that, 
because of unusual circumstances, the waiting period of at least ten 
days is not feasible.
    (c) For purposes of computing the waiting period under paragraph 
(b)(1) of this section, a single point of contact is presumed to have 
received written notification 5 days after the date of mailing of such 
notification.



Sec. 17.11  What are the Secretary's obligations in interstate situations?

    (a) The Secretary is responsible for:
    (1) Identifying proposed Federal financial assistance that have an 
impact on interstate areas;
    (2) Notifying appropriate officials and entities in states which 
have adopted a process and which select the Department's program or 
activity.
    (3) Making efforts to identify and notify the affected state, 
areawide, regional, and local officials and entities in those states 
that have not adopted a process under the Order or do not select the 
Department's program or activity;
    (4) Responding pursuant to Sec. 17.10 of this part if the Secretary 
receives a recommendation from a designated areawide agency transmitted 
by a single point of contact, in cases in which the review, 
coordination, and communication with the Department have been delegated.
    (b) The Secretary uses the procedures in Sec. 17.10 if a state 
process provides a state process recommendation to the Department 
through a single point of contact.

[[Page 195]]



Sec. 17.12  How may a state simplify, consolidate, or substitute federally required state plans?

    (a) As used in this section:
    (1) Simplify means that a state may develop its own format, choose 
its own submission date, and select the planning period for a state 
plan.
    (2) Consolidate means that a state may meet statutory and regulatory 
requirements by combining two or more plans into one document and that 
the state can select the format, submission date, and planning period 
for the consolidated plan.
    (3) Substitute means that a state may use a plan or other document 
that it has developed for its own purposes to meet Federal requirements.
    (b) If not consistent with law, a state may decide to try to 
simplify, consolidate, or substitute federally required state plans 
without prior approval by the Secretary.
    (c) The Secretary reviews each state plan that a state has 
simplified, consolidated, or substituted and accepts the plan only if 
its contents meet Federal requirements.



Sec. 17.13  May the Secretary waive any provision of these regulations?

    In an emergency, the Secretary may waive any provision of these 
regulations.



PART 18--RULES OF PRACTICE AND PROCEDURE FOR ADMINISTRATIVE HEARINGS BEFORE THE OFFICE OF ADMINISTRATIVE LAW JUDGES--Table of Contents




                           Subpart A--General

Sec.
18.1  Scope of rules.
18.2  Definitions.
18.3  Service and filing of documents.
18.4  Time computations.
18.5  Responsive pleadings--answer and request for hearing.
18.6  Motions and requests.
18.7  Prehearing statements.
18.8  Prehearing conferences.
18.9  Consent order or settlement; settlement judge procedure.
18.10  Parties, how designated.
18.11  Consolidation of hearings.
18.12  Amicus curiae.
18.13  Discovery methods.
18.14  Scope of discovery.
18.15  Protective orders.
18.16  Supplementation of responses.
18.17  Stipulations regarding discovery.
18.18  Written interrogatories to parties.
18.19  Production of documents and other evidence; entry upon land for 
          inspection and other purposes; and physical and mental 
          examination.
18.20  Admissions.
18.21  Motion to compel discovery.
18.22  Depositions.
18.23  Use of depositions at hearings.
18.24  Subpoenas.
18.25  Designation of administrative law judge.
18.26  Conduct of hearings.
18.27  Notice of hearing.
18.28  Continuances.
18.29  Authority of administrative law judge.
18.30  Unavailability of administrative law judge.
18.31  Disqualification.
18.32  Separation of functions.
18.33  Expedition.
18.34  Representation.
18.35  Legal assistance.
18.36  Standards of conduct.
18.37  Hearing room conduct.
18.38  Ex parte communications.
18.39  Waiver of right to appear and failure to participate or to 
          appear.
18.40  Motion for summary decision.
18.41  Summary decision.
18.42  Expedited proceedings.
18.43  Formal hearings.
18.44  [Reserved]
18.45  Official notice.
18.46  In camera and protective orders.
18.47  Exhibits.
18.48  Records in other proceedings.
18.49  Designation of parts of documents.
18.50  Authenticity.
18.51  Stipulations.
18.52  Record of hearings.
18.53  Closing of hearings.
18.54  Closing the record.
18.55  Receipt of documents after hearing.
18.56  Restricted access.
18.57  Decision of the administrative law judge.
18.58  Appeals.
18.59  Certification of official record.

                      Subpart B--Rules of Evidence

                           General Provisions

18.101  Scope.
18.102  Purpose and construction.
18.103  Rulings on evidence.
18.104  Preliminary questions.
18.105  Limited admissibility.
18.106  Remainder of or related writings or recorded statements.

                             Official Notice

18.201  Official notice of adjudicative facts.

[[Page 196]]

                              Presumptions

18.301  Presumptions in general.
18.302  Applicability of state law.

                        Relevancy and Its Limits

18.401  Definition of relevant evidence.
18.402  Relevant evidence generally admissible; irrelevant evidence 
          inadmissible.
18.403  Exclusion of relevant evidence on grounds of confusion or waste 
          of time.
18.404  Character evidence not admissible to prove conduct; exceptions; 
          other crimes.
18.405  Methods of proving character.
18.406  Habit; routine practice.
18.407  Subsequent remedial measures.
18.408  Compromise and offers to compromise.
18.409  Payment of medical and similar expenses.
18.410  Inadmissibility of pleas, plea discussion, and related 
          statements.
18.411  Liability insurance.

                               Privileges

18.501  General rule.

                                Witnesses

18.601  General rule of competency.
18.602  Lack of personal knowledge.
18.603  Oath or affirmation.
18.604  Interpreters.
18.605  Competency of judge as witness.
18.606  [Reserved]
18.607  Who may impeach.
18.608  Evidence of character and conduct of witness.
18.609  Impeachment by evidence of conviction of crime.
18.610  Religious beliefs or opinions.
18.611  Mode and order of interrogation and presentation.
18.612  Writing used to refresh memory.
18.613  Prior statements of witnesses.
18.614  Calling and interrogation of witnesses by judge.
18.615  Exclusion of witnesses.

                      Opinions and Expert Testimony

18.701  Opinion testimony by lay witnesses.
18.702  Testimony by experts.
18.703  Bases of opinion testimony by experts.
18.704  Opinion on ultimate issue.
18.705  Disclosure of facts or data underlying expert opinion.
18.706  Judge appointed experts.

                                 Hearsay

18.801  Definitions.
18.802  Hearsay rule.
18.803  Hearsay exceptions; availability of declarant immaterial.
18.804  Hearsay exceptions; declarant unavailable.
18.805  Hearsay within hearsay.
18.806  Attacking and supporting credibility of declarant.

                    Authentication and Identification

18.901  Requirement of authentication or identification.
18.902  Self-authentication.
18.903  Subscribing witness' testimony unnecessary.

            Contents of Writings, Recordings, and Photographs

18.1001  Definitions.
18.1002  Requirement of original.
18.1003  Admissibility of duplicates.
18.1004  Admissibility of other evidence of contents.
18.1005  Public records.
18.1006  Summaries.
18.1007  Testimony or written admission of party.
18.1008  Functions of the judge.

                              Applicability

18.1101  Applicability of the rules.
18.1102  [Reserved]
18.1103  Title.
18.1104  Effective date.

Appendix to Subpart B--Reporter's Notes

    Authority: 5 U.S.C. 301; 5 U.S.C. 551-553; 5 U.S.C. 571 note; E.O. 
12778; 57 FR 7292.

    Source: 48 FR 32538, July 15, 1983, unless otherwise noted.



                           Subpart A--General



Sec. 18.1  Scope of rules.

    (a) General application. These rules of practice are generally 
applicable to adjudicatory proceedings before the Office of 
Administrative Law Judges, United States Department of Labor. Such 
proceedings shall be conducted expeditiously and the parties shall make 
every effort at each stage of a proceeding to avoid delay. To the extent 
that these rules may be inconsistent with a rule of special application 
as provided by statute, executive order, or regulation, the latter is 
controlling. The Rules of Civil Procedure for the District Courts of the 
United States shall be applied in any situation not provided for or 
controlled by these rules, or by any statute, executive order or 
regulation.
    (b) Waiver, modification, or suspension. Upon notice to all parties, 
the administrative law judge may, with respect to matters pending before 
him or her, modify or waive any rule herein upon a

[[Page 197]]

determination that no party will be prejudiced and that the ends of 
justice will be served thereby. These rules may, from time to time, be 
suspended, modified or revoked in whole or part.



Sec. 18.2  Definitions.

    For purposes of these rules:
    (a) Adjudicatory proceeding means a judicial-type proceeding leading 
to the formulation of a final order;
    (b) Administrative law judge means an administrative law judge 
appointed pursuant to the provisions of 5 U.S.C. 3105 (provisions of the 
rules in this part which refer to administrative law judges may be 
applicable to other Presiding Officers as well);
    (c) Administrative Procedure Act means those provisions of the 
Administrative Procedure Act, as codified, which are contained in 5 
U.S.C. 551 through 559;
    (d) Complaint means any document initiating an adjudicatory 
proceeding, whether designated a complaint, appeal or an order for 
proceeding or otherwise;
    (e) Hearing means that part of a proceeding which involves the 
submission of evidence, either by oral presentation or written 
submission;
    (f) Order means the whole or any part of a final procedural or 
substantive disposition of a matter by the administrative law judge in a 
matter other than rulemaking;
    (g) Party includes a person or agency named or admitted as a party 
to a proceeding;
    (h) Person includes an individual, partnership, corporation, 
association, exchange or other entity or organization;
    (i) Pleading means the complaint, the answer to the complaint, any 
supplement or amendment thereto, and any reply that may be permitted to 
any answer, supplement or amendment;
    (j) Respondent means a party to an adjudicatory proceeding against 
whom findings may be made or who may be required to provide relief or 
take remedial action;
    (k) Secretary means the Secretary of Labor and includes any 
administrator, commissioner, appellate body, board, or other official 
thereunder for purposes of appeal of recommended or final decisions of 
administrative law judges;
    (l) Complainant means a person who is seeking relief from any act or 
omission in violation of a statute, executive order or regulation;
    (m) The term petition means a written request, made by a person or 
party, for some affirmative action;
    (n) The term Consent Agreement means any written document containing 
a specified proposed remedy or other relief acceptable to all parties;
    (o) Commencement of Proceeding is the filing of a request for 
hearing, order of reference, or referral of a claim for hearing.



Sec. 18.3  Service and filing of documents.

    (a) Generally. Except as otherwise provided in this part, copies of 
all documents shall be served on all parties of record. All documents 
should clearly designate the docket number, if any, and short title of 
the matter. If the matter involves a program administered by the Office 
of Workers' Compensation Programs (OWCP), the document should contain 
the OWCP number in addition to the docket number. All documents to be 
filed shall be delivered or mailed to the Chief Docket Clerk, Office of 
Administrative Law Judges (OALJ), 800 K Street, NW., Suite 400, 
Washington, DC 20001-8002, or to the OALJ Regional Office to which the 
proceeding may have been transferred for hearing. Each document filed 
shall be clear and legible.
    (b) How made; by parties. All documents shall be filed with the 
Office of Administrative Law Judges, except that notices of deposition, 
depositions, interrogatories, requests for admissions, and answers and 
responses thereto, shall not be so filed unless the presiding judge so 
orders, the document is being offered into evidence, the document is 
submitted in support of a motion or a response to a motion, filing is 
required by a specialized rule, or there is some other compelling reason 
for its submission. Whenever under this part service by a party is 
required to be made upon a party represented by an attorney or other 
representative the service shall be made upon the attorney or other 
representative unless service upon the party is ordered by

[[Page 198]]

the presiding administrative law judge. Service of any document upon any 
party may be made by personal delivery or by mailing a copy to the last 
known address. The person serving the document shall certify to the 
manner and date of service.
    (c) By the Office of Administrative Law Judges. Service of notices, 
orders, decisions and all other documents, except complaints, shall be 
made by regular mail to the last known address.
    (d) Service of complaints. Service of complaints or charges in 
enforcement proceedings shall be made either: (1) By delivering a copy 
to the individual, partner, officer of a corporation, or attorney of 
record; (2) by leaving a copy at the principal office, place of 
business, or residence; (3) by mailing to the last known address of such 
individual, partner, officer or attorney. If done by certified mail, 
service is complete upon mailing. If done by regular mail, service is 
complete upon receipt by addressee.
    (e) Form of pleadings. (1) Every pleading shall contain a caption 
setting forth the name of the agency under which the proceeding is 
instituted, the title of the proceeding, the docket number assigned by 
the Office of Administrative Law Judges, and a designation of the type 
of pleading or paper (e.g., complaint, motion to dismiss, etc.). The 
pleading or papers shall be signed and shall contain the address and 
telephone number of the party or person representing the party. Although 
there are no formal specifications for documents, they should be 
typewritten when possible on standards size (8\1/2\ x 11) paper legal 
size (8\1/2\ x 14) paper will not be accepted after July 31, 1983.
    (2) Illegible documents, whether handwritten, typewritten, 
photocopied, or otherwise will not be accepted. Papers may be reproduced 
by any duplicating process, provided all copies are clear and legible.
    (f) Filing and service by facsimile.
    (1) Filing by a party; when permitted. Filings by a party may be 
made by facsimile (fax) when explicitly permitted by statute or 
regulation, or when directed or permitted by the administrative law 
judge assigned to the case. If prior permission to file by facsimile 
cannot be obtained because the presiding administrative law judge is not 
available, a party may file by facsimile and attach a statement of the 
circumstances requiring that the document be filed by facsimile rather 
than by regular mail. That statement does not ensure that the filing 
will be accepted, but will be considered by the presiding judge in 
determining whether the facsimile will be accepted nunc pro tunc as a 
filing.
    (2) Service by facsimile; when permitted. Service upon a party by 
another party or by the administrative law judge may be made by 
facsimile (fax) when explicitly permitted by statute or regulation, or 
when the receiving party consents to service by facsimile.
    (3) Service sheet and proof of service. Docments filed or served by 
facsimile (fax) shall include a service sheet which states the means by 
which filing and/or service was made. A facsimile transmission report 
generated by the sender's facsimile equipment and which indicates that 
the transmission was successful shall be presumed adequate proof of 
filing or service.
    (4) Cover sheet. Filings or service by facsimile (fax) shall include 
a cover sheet that identifies the sender, the total number of pages 
transmitted, and the caption and docket number of the case, if known.
    (5) Originals. Documents filed or served by facsimile (fax) shall be 
presumed to be accurate reproductions of the original document until 
proven otherwise. The party proferring the document shall retain the 
original in the event of a dispute over authenticity or the accuracy of 
the transmission. The original document need not be submitted unless so 
ordered by the presiding judge, or unless an original signature is 
required by statute or regulation. If an original signature is required 
to be filed, the date of the facsimile transmission shall govern the 
effective date of the filing provided that the document containing the 
original signature is filed within ten calendar days of the facsimile 
transmission.
    (6) Length of document. Documents filed by facsimile (fax) should 
not exceed 12 pages including the cover sheet, the service sheet and all 
accompanying

[[Page 199]]

exhibits or appendices, except that this page limitation may be exceeded 
if prior permission is granted by the presiding judge or if the 
document's length cannot be conformed because of statutory or regulatory 
requirements.
    (7) Hours for filing by facsimile. Filings by facsimile (fax) should 
normally be made between 8:00 am and 5:00 pm, local time at the 
receiving location.
    (g) Filing and service by courier service. Documents transmitted by 
courier service shall be deemed transmitted by regular mail in 
proceedings before the Office of Administrative Law Judges.

[48 FR 32538, July 15, 1983, as amended at 56 FR 54708, Oct. 22, 1991; 
59 FR 41876, Aug. 15, 1994; 60 FR 26970, May 19, 1995]



Sec. 18.4  Time computations.

    (a) Generally. In computing any period of time under these rules or 
in an order issued hereunder the time begins with the day following the 
act, event, or default, and includes the last day of the period, unless 
it is a Saturday, Sunday or legal holiday observed by the Federal 
Government in which case the time period includes the next business day. 
When the period of time prescribed is seven (7) days or less, 
intermediate Saturdays, Sundays, and holidays shall be excluded in the 
computation.
    (b) Date of entry of orders. In computing any period of time 
involving the date of the entry of an order, the date of entry shall be 
the date the order is served by the Chief Docket Clerk.
    (c) Computation of time for delivery by mail. (1) Documents are not 
deemed filed until received by the Chief Clerk at the Office of 
Administrative Law Judges. However, when documents are filed by mail, 
five (5) days shall be added to the prescribed period.
    (2) Service of all documents other than complaints is deemed 
effected at the time of mailing.
    (3) Whenever a party has the right or is required to take some 
action within a prescribed period after the service of a pleading, 
notice, or other document upon said party, and the pleading, notice or 
document is served upon said party by mail, five (5) days shall be added 
to the prescribed period.
    (d) Filing or service by facsimile. Filing or service by facsimile 
(fax) is effective upon receipt of the entire document by the receiving 
facsimile machine. For purposes of filings by facsimile the time printed 
on the transmission by the facsimile equipment constitutes the date 
stamp of the Chief Docket Clerk.

[48 FR 32538, July 15, 1983, as amended at 59 FR 41877, Aug. 15, 1994]



Sec. 18.5  Responsive pleadings--answer and request for hearing.

    (a) Time for answer. Within thirty (30) days after the service of a 
complaint, each respondent shall file an answer.
    (b) Default. Failure of the respondent to file an answer within the 
time provided shall be deemed to constitute a waiver of his right to 
appear and contest the allegations of the complaint and to authorize the 
administrative law judge to find the facts as alleged in the complaint 
and to enter an initial or final decision containing such findings, 
appropriate conclusions, and order.
    (c) Signature required. Every answer filed pursuant to these rules 
shall be signed by the party filing it or by at least one attorney, in 
his or her individual name, representing such party. The signature 
constitutes a certificate by the signer that he or she has read the 
answer; that to the best of his or her knowledge, information and belief 
there is good ground to support it; and that it is not interposed for 
delay.
    (d) Content of answer--(1) Orders to show cause. Any person to whom 
an order to show cause has been directed and served shall respond to the 
same by filing an answer in writing. Arguments opposing the proposed 
sanction should be supported by reference to specific circumstances or 
facts surrounding the basis for the order to show cause.
    (2) Complaints. Any respondent contesting any material fact alleged 
in a complaint, or contending that the amount of a proposed penalty or 
award is excessive or inappropriate or contending that he or she is 
entitled to judgment as a matter of law, shall file an answer in 
writing. An answer shall include:
    (i) A statement that the respondent admits, denies, or does not have 
and is unable to obtain sufficient information to admit or deny each 
allegation; a

[[Page 200]]

statement of lack of information shall have the effect of a denial; any 
allegation not expressly denied shall be deemed to be admitted;
    (ii) A statement of the facts supporting each affirmative defense.
    (e) Amendments and supplemental pleadings. If and whenever 
determination of a controversy on the merits will be facilitated 
thereby, the administrative law judge may, upon such conditions as are 
necessary to avoid prejudicing the public interest and the rights of the 
parties, allow appropriate amendments to complaints, answers, or other 
pleadings; provided, however, that a complaint may be amended once as a 
matter of right prior to the answer, and thereafter if the 
administrative law judge determines that the amendment is reasonably 
within the scope of the original complaint. When issues not raised by 
the pleadings are reasonably within the scope of the original complaint 
and are tried by express or implied consent of the parties, they shall 
be treated in all respects as if they had been raised in the pleadings, 
and such amendments may be made as necessary to make them conform to the 
evidence. The administrative law judge may, upon reasonable notice and 
such terms as are just, permit supplemental pleadings setting forth 
transactions, occurrences or events which have happened since the date 
of the pleadings and which are relevant to any of the issues involved.



Sec. 18.6  Motions and requests.

    (a) Generally. Any application for an order or any other request 
shall be made by motion which, unless made during a hearing or trial, 
shall be made in writing unless good cause is established to preclude 
such submission, shall state with particularity the grounds therefor, 
and shall set forth the relief or order sought. Motions or requests made 
during the course of any hearing or appearance before an administrative 
law judge shall be stated orally and made part of the transcript. 
Whether made orally or in writing, all parties shall be given reasonable 
opportunity to state an objection to the motion or request.
    (b) Answers to motions. Within ten (10) days after a motion is 
served, or within such other period as the administrative law judge may 
fix, any party to the proceeding may file an answer in support or in 
opposition to the motion, accompanied by such affidavits or other 
evidence as he or she desires to rely upon. Unless the administrative 
law judge provides otherwise, no reply to an answer, response to a 
reply, or any further responsive document shall be filed.
    (c) Oral arguments or briefs. No oral argument will be heard on 
motions unless the administrative law judge otherwise directs. Written 
memoranda or briefs may be filed with motions or answers to motions, 
stating the points and authorities relied upon in support of the 
position taken.
    (d) Motion for order compelling answer: sanctions. (1) A party who 
has requested admissions or who has served interrogatories may move to 
determine the sufficiency of the answers or objections thereto. Unless 
the objecting party sustains his or her burden of showing that the 
objection is justified, the administrative law judge shall order that an 
answer be served. If the administrative law judge determines that an 
answer does not comply with the requirements of these rules, he or she 
may order either that the matter is admitted or that an amended answer 
be served.
    (2) If a party or an officer or agent of a party fails to comply 
with a subpoena or with an order, including, but not limited to, an 
order for the taking of a deposition, the production of documents, or 
the answering of interrogatories, or requests for admissions, or any 
other order of the administrative law judge, the administrative law 
judge, for the purpose of permitting resolution of the relevant issues 
and disposition of the proceeding without unnecessary delay despite such 
failure, may take such action in regard thereto as is just, including 
but not limited to the following:
    (i) Infer that the admission, testimony, documents or other evidence 
would have been adverse to the non-complying party;
    (ii) Rule that for the purposes of the proceeding the matter or 
matters concerning which the order or subpoena was issued be taken as 
established adversely to the non-complying party;

[[Page 201]]

    (iii) Rule that the non-complying party may not introduce into 
evidence or otherwise rely upon testimony by such party, officer or 
agent, or the documents or other evidence, in support of or in 
opposition to any claim or defense;
    (iv) Rule that the non-complying party may not be heard to object to 
introduction and use of secondary evidence to show what the withheld 
admission, testimony, documents, or other evidence should have shown.
    (v) Rule that a pleading, or part of a pleading, or a motion or 
other submission by the non-complying party, concerning which the order 
or subpoena was issued, be stricken, or that a decision of the 
proceeding be rendered against the non-complying party, or both.



Sec. 18.7  Prehearing statements.

    (a) At any time prior to the commencement of the hearing, the 
administrative law judge may order any party to file a prehearing 
statement of position.
    (b) A prehearing statement shall state the name of the party or 
parties on whose behalf it is presented and shall briefly set forth the 
following matters, unless otherwise ordered by the administrative law 
judge:
    (1) Issues involved in the proceeding;
    (2) Facts stipulated pursuant to the procedures together with a 
statement that the party or parties have communicated or conferred in a 
good faith effort to reach stipulation to the fullest extent possible;
    (3) Facts in dispute;
    (4) Witnesses, except to the extent that disclosure would be 
privileged, and exhibits by which disputed facts will be litigated;
    (5) A brief statement of applicable law;
    (6) The conclusion to be drawn;
    (7) Suggested time and location of hearing and estimated time 
required for presentation of the party's or parties' case;
    (8) Any appropriate comments, suggestions or information which might 
assist the parties in preparing for the hearing or otherwise aid in the 
disposition of the proceeding.



Sec. 18.8  Prehearing conferences.

    (a) Purpose and scope. (1) Upon motion of a party or upon the 
administrative law judge's own motion, the judge may direct the parties 
or their counsel to participate in a conference at any reasonable time, 
prior to or during the course of the hearing, when the administrative 
law judge finds that the proceeding would be expedited by a prehearing 
conference. Such conferences normally shall be conducted by conference 
telephonic communication unless, in the opinion of the administrative 
law judge, such method would be impractical, or when such conferences 
can be conducted in a more expeditious or effective manner by 
correspondence or personal appearance. Reasonable notice of the time, 
place and manner of the conference shall be given.
    (2) At the conference, the following matters shall be considered:
    (i) The simplification of issues;
    (ii) The necessity of amendments to pleadings;
    (iii) The possibility of obtaining stipulations of facts and of the 
authenticity, accuracy, and admissibility of documents, which will avoid 
unnecessary proof;
    (iv) The limitation of the number of expert or other witnesses;
    (v) Negotiation, compromise, or settlement of issues;
    (vi) The exchange of copies of proposed exhibits;
    (vii) The identification of documents or matters of which official 
notice may be requested;
    (viii) A schedule to be followed by the parties for completion of 
the actions decided at the conference; and
    (ix) Such other matters as may expedite and aid in the disposition 
of the proceeding.
    (b) Reporting. A prehearing conference will be stenographically 
reported, unless otherwise directed by the administrative law judge.
    (c) Order. Actions taken as a result of a conference shall be 
reduced to a written order, unless the administrative law judge 
concludes that a stenographic report shall suffice, or, if the 
conference takes place within 7 days of the beginning of the hearing, 
the administrative law judge elects to make

[[Page 202]]

a statement on the record at the hearing summarizing the actions taken.



Sec. 18.9  Consent order or settlement; settlement judge procedure.

    (a) Generally. At any time after the commencement of a proceeding, 
the parties jointly may move to defer the hearing for a reasonable time 
to permit negotiation of a settlement or an agreement containing 
findings and an order disposing of the whole or any part of the 
proceeding. The allowance of such deferment and the duration thereof 
shall be in the discretion of the administrative law judge, after 
consideration of such factors as the nature of the proceeding, the 
requirements of the public interest, the representations of the parties 
and the probability of reaching an agreement which will result in a just 
disposition of the issues involved.
    (b) Content. Any agreement containing consent findings and an order 
disposing of a proceeding or any part thereof shall also provide:
    (1) That the order shall have the same force and effect as an order 
made after full hearing;
    (2) That the entire record on which any order may be based shall 
consist solely of the complaint, order of reference or notice of 
administrative determination (or amended notice, if one is filed), as 
appropriate, and the agreement;
    (3) A waiver of any further procedural steps before the 
administrative law judge; and
    (4) A waiver of any right to challenge or contest the validity of 
the order entered into in accordance with the agreement.
    (c) Submission. On or before the expiration of the time granted for 
negotiations, the parties or their authorized representative or their 
counsel may:
    (1) Submit the proposed agreement containing consent findings and an 
order for consideration by the administrative law judge, or
    (2) Notify the administrative law judge that the parties have 
reached a full settlement and have agreed to dismissal of the action, or
    (3) Inform the administrative law judge that agreement cannot be 
reached.
    (d) Disposition. In the event an agreement containing consent 
findings and an order is submitted within the time allowed therefor, the 
administrative law judge, within thirty (30) days thereafter, shall, if 
satisfied with its form and substance, accept such agreement by issuing 
a decision based upon the agreed findings.
    (e)(1) Settlement judge procedure; purpose. This paragraph 
establishes a voluntary process whereby the parties may use a settlement 
judge to mediate settlement negotiations. A settlement judge is an 
active or retired administrative law judge who convenes and presides 
over settlement conferences and negotiations, confers with the parties 
jointly and/or individually, and seeks voluntary resolution of issues. 
Unlike a presiding judge, a settlement judge does not render a formal 
judgment or decision in the case; his or her role is solely to 
facilitate fair and equitable solutions and to provide an assessment of 
the relative merits of the respective positions of the parties.
    (2) How initiated. A settlement judge may be appointed by the Chief 
Administrative Law judge upon a request by a party or the presiding 
administrative law judge. The Chief Administrative Law Judge has sole 
discretion to decide whether to appoint a settlement judge, except that 
a settlement judge shall not be appointed when--
    (i) A party objects to referral of the matter to a settlement judge;
    (ii) Such appointment is inconsistent with a statute, executive 
order, or regulation;
    (iii) The proceeding arises pursuant to Title IV of the Federal Mine 
Safety and Health Act, 30 U.S.C. 901 et seq., also known as the Black 
Lung Benefits Act.
    (3) Selection of settlement judge. (i) The selection of a settlement 
judge is at the sole discretion of the Chief Administrative Law Judge, 
provided that the individual selected--
    (A) is an active or retired administrative law judge, and
    (B) is not the administrative law judge assigned to hear and decide 
the case.
    (ii) The settlement judge shall not be appointed to hear and decide 
the case.

[[Page 203]]

    (4) Duration of proceeding. Unless the Chief Administrative Law 
Judge directs otherwise, settlement negotiations under this section 
shall not exceed thirty days from the date of appointment of the 
settlement judge, except that with the consent of the parties, the 
settlement judge may request an extension from the Chief Administrative 
Law Judge. The negotiations will be terminated immediately if a party 
unambiguously indicates that it no longer wishes to participate, or if 
in the judgment of the settlement judge, further negotiations would be 
fruitless or otherwise inappropriate.
    (5) General powers of the settlement judge. The settlement judge has 
the power to convene settlement conferences; to require that parties, or 
representatives of the parties having the authority to settle, 
participate in conferences; and to impose other reasonable requirements 
on the parties to expedite an amicable resolution of the case, provided 
that all such powers shall terminate immediately if negotiations are 
terminated pursuant to paragraph (e)(4).
    (6) Suspension of discovery. Requests for suspension of discovery 
during the settlement negotiations shall be directed to the presiding 
administrative law judge who shall have sole discretion in granting or 
denying such requests.
    (7) Settlement conference. In general the settlement judge should 
communicate with the parties by telephone conference call. The 
settlement judge may, however, schedule a personal conference with the 
parties when:
    (i) The settlement judge is scheduled to preside in other 
proceedings in a place convenient to all parties and representatives 
involved;
    (ii) The offices of the attorneys or other representatives of the 
parties, and the settlement judge, are in the same metropolitan area; or
    (iii) The settlement judge, with the concurrence of the Chief 
Administrative Law Judge, determines that a personal meeting is 
necessary for a resolution of substantial issues, and represents a 
prudent use of resources.
    (8) Confidentiality of settlement discussions. All discussions 
between the parties and the settlement judge shall be off-the-record. No 
evidence regarding statements or conduct in the proceedings under this 
section is admissible in the instant proceeding or any subsequent 
administrative proceeding before the Department, except by stipulation 
of the parties. Documents disclosed in the settlement process may not be 
used in litigation unless obtained through appropriate discovery or 
subpoena. The settlement judge shall not discuss any aspect of the case 
with any administrative law judge or other person, nor be subpoenaed or 
called as a witness in any hearing of the case or any subsequent 
administrative proceedings before the Department with respect to any 
statement or conduct during the settlement discussions.
    (9) Contents of consent order or settlement agreement. Any agreement 
disposing of all or part of the proceeding shall be written and signed 
by a parties. Such agreement shall conform to the requirements of 
paragraph (b) of this section.
    (10) Report of the settlement. If a settlement is reached, the 
parties shall report to the presiding judge in writing within seven 
working days of the termination of negotiations. The report shall 
include a copy of the settlement agreement and/or proposed consent 
order. If a settlement is not reached, the parties shall report this to 
the presiding judge without further elaboration.
    (11) Review of agreement by presiding judge. A settlement agreement 
arrived at with the help of a settlement judge shall be treated by the 
presiding judge as would be any other settlement agreement.
    (12) Non-reviewable decisions. Decisions concerning whether a 
settlement judge should be appointed, the selection of a particular 
settlement judge, or the termination of proceedings under this section, 
are not subject to review by Department officials.

[48 FR 32538, July 15, 1983, as amended at 58 FR 38500, July 16, 1993; 
64 FR 47089, Aug. 27, 1999]



Sec. 18.10  Parties, how designated.

    (a) The term party whenever used in these rules shall include any 
natural person, corporation, association, firm, partnership, trustee, 
receiver, agency,

[[Page 204]]

public or private organization, or governmental agency. A party who 
seeks relief or other affirmative action shall be designated as 
plaintiff, complainant or claimant, as appropriate. A party against whom 
relief or other affirmative action is sought in any proceeding shall be 
designated as a defendant or respondent, as appropriate. When a party to 
the proceeding, the Department of Labor shall be either a party or 
party-in-interest.
    (b) Other persons or organizations shall have the right to 
participate as parties if the administrative law judge determines that 
the final decision could directly and adversely affect them or the class 
they represent, and if they may contribute materially to the disposition 
of the proceedings and their interest is not adequately represented by 
existing parties.
    (c) A person or organization wishing to participate as a party under 
this section shall submit a petition to the administrative law judge 
within fifteen (15) days after the person or organization has knowledge 
of or should have known about the proceeding. The petition shall be 
filed with the administrative law judge and served on each person or 
organization who has been made a party at the time of filing. Such 
petition shall concisely state: (1) Petitioner's interest in the 
proceeding, (2) how his or her participation as a party will contribute 
materially to the disposition of the proceeding, (3) who will appear for 
petitioner, (4) the issues on which petitioner wishes to participate, 
and (5) whether petitioner intends to present witnesses.
    (d) If objections to the petition are filed, the administrative law 
judge shall then determine whether petitioners have the requisite 
interest to be a party in the proceedings, as defined in paragraphs (a) 
and (b) of this section, and shall permit or deny participation 
accordingly. Where petitions to participate as parties are made by 
individuals or groups with common interests, the administrative law 
judge may request all such petitioners to designate a single 
representative, or he or she may recognize one or more of such 
petitioners. The administrative law judge shall give each such 
petitioner written notice of the decision on his or her petition. If the 
petition is denied, he or she shall briefly state the grounds for denial 
and shall then treat the petition as a request for participation as 
amicus curiae. The administrative law judge shall give written notice to 
each party of each petition granted.



Sec. 18.11  Consolidation of hearings.

    When two or more hearings are to be held, and the same or 
substantially similar evidence is relevant and material to the matters 
at issue at each such hearing, the Chief Administrative Law Judge or the 
administrative law judge assigned may, upon motion by any party or on 
his or her own motion, order that a consolidated hearing be conducted. 
Where consolidated hearings are held, a single record of the proceedings 
may be made and the evidence introduced in one matter may be considered 
as introduced in the others, and a separate or joint decision shall be 
made, at the discretion of the administrative law judge as appropriate.



Sec. 18.12  Amicus curiae.

    A brief of an amicus curiae may be filed only with the written 
consent of all parties, or by leave of the administrative law judge 
granted upon motion, or on the request of the administrative law judge, 
except that consent or leave shall not be required when the brief is 
presented by an officer of an agency of the United States, or by a 
state, territory or commonwealth. The amicus curiae shall not 
participate in any way in the conduct of the hearing, including the 
presentation of evidence and the examination of witnesses.



Sec. 18.13  Discovery methods.

    Parties may obtain discovery by one or more of the following 
methods: Depositions upon oral examination or written questions; written 
interrogatories; production of documents or other evidence for 
inspection and other purposes; and requests for admission. Unless the 
administrative law judge orders otherwise, the frequency or sequence of 
these methods is not limited.



Sec. 18.14  Scope of discovery.

    (a) Unless otherwise limited by order of the administrative law 
judge in accordance with these rules, the parties

[[Page 205]]

may obtain discovery regarding any matter, not privileged, which is 
relevant to the subject matter involved in the proceeding, including the 
existence, description, nature, custody, condition, and location of any 
books, documents, or other tangible things and the identity and location 
of persons having knowledge of any discoverable matter.
    (b) It is not ground for objection that information sought will not 
be admissible at the hearing if the information sought appears 
reasonably calculated to lead to the discovery of admissible evidence.
    (c) A party may obtain discovery of documents and tangible things 
otherwise discoverable under paragraph (a) of this section and prepared 
in anticipation of or for the hearing by or for another party's 
representative (including his or her attorney, consultant, surety, 
indemnitor, insurer, or agent) only upon a showing that the party 
seeking discovery has substantial need of the materials in the 
preparation of his or her case and that he or she is unable without 
undue hardship to obtain the substantial equivalent of the materials by 
other means. In ordering discovery of such materials when the required 
showing has been made, the administrative law judge shall protect 
against disclosure of the mental impressions, conclusions, opinions, or 
legal theories of an attorney or other representative of a party 
concerning the proceeding.



Sec. 18.15  Protective orders.

    (a) Upon motion by a party or the person from whom discovery is 
sought, and for good cause shown, the administrative law judge may make 
any order which justice requires to protect a party or person from 
annoyance, embarrassment, oppression, or undue burden or expense, 
including one or more of the following:
    (1) The discovery not be had;
    (2) The discovery may be had only on specified terms and conditions, 
including a designation of the time or place;
    (3) The discovery may be had only by a method of discovery other 
than that selected by the party seeking discovery;
    (4) Certain matters not relevant may not be inquired into, or that 
the scope of discovery be limited to certain matters;
    (5) Discovery be conducted with no one present except persons 
designated by the administrative law judge; or
    (6) A trade secret or other confidential research, development or 
commercial information may not be disclosed or be disclosed only in a 
designated way.



Sec. 18.16  Supplementation of responses.

    A party who has responded to a request for discovery with a response 
that was complete when made is under no duty to supplement his response 
to include information thereafter acquired, except as follows:
    (a) A party is under a duty to supplement timely his response with 
respect to any question directly addressed to:
    (1) The identity and location of persons having knowledge of 
discoverable matters; and
    (2) The identity of each person expected to be called as an expert 
witness at the hearing, the subject matter on which he or she is 
expected to testify and the substance of his or her testimony.
    (b) A party is under a duty to amend timely a prior response if he 
or she later obtains information upon the basis of which:
    (1) He or she knows the response was incorrect when made; or
    (2) He or she knows that the response though correct when made is no 
longer true and the circumstances are such that a failure to amend the 
response is in substance a knowing concealment.
    (c) A duty to supplement responses may be imposed by order of the 
administrative law judge or agreement of the parties.



Sec. 18.17  Stipulations regarding discovery.

    Unless otherwise ordered, a written stipulation entered into by all 
the parties and filed with the Chief Administrative Law Judge or the 
administrative law judge assigned may: (a) Provide that depositions be 
taken before any person, at any time or place, upon sufficient notice, 
and in any manner and when so taken may be used like other depositions, 
and (b) modify the

[[Page 206]]

procedures provided by these rules for other methods of discovery.



Sec. 18.18  Written interrogatories to parties.

    (a) Any party may serve upon any other party written interrogatories 
to be answered in writing by the party served, or if the party served is 
a public or private corporation or a partnership or association or 
governmental agency, by any authorized officer or agent, who shall 
furnish such information as is available to the party. A copy of the 
interrogatories, answers, and all related pleadings shall be served on 
all parties to the proceeding. Copies of interrogatories and responses 
thereto shall not be filed with the Office of Administrative Law Judges 
unless the presiding judge so orders, the document is being offered into 
evidence, the document is submitted in support of a motion or a response 
to a motion, filing is required by a specialized rule, or there is some 
other compelling reason for its submission.
    (b) Each interrogatory shall be answered separately and fully in 
writing under oath or affirmation, unless it is objected to, in which 
event the reasons for objection shall be stated in lieu of an answer. 
The answers and objections shall be signed by the person making them. 
The party upon whom the interrogatories were served shall serve a copy 
of the answer and objections upon all parties to the proceeding within 
thirty (30) days after service of the interrogatories, or within such 
shorter or longer period as the administrative law judge may allow.
    (c) An interrogatory otherwise proper is not necessarily 
objectionable merely because an answer to the interrogatory involves an 
opinion or contention that relates to fact or the application of law to 
fact, but the administrative law judge may order that such an 
interrogatory need not be answered until after designated discovery has 
been completed or until a prehearing conference or other later time.

[48 FR 32538, July 15, 1983, as amended at 59 FR 41877, Aug. 15, 1994]



Sec. 18.19  Production of documents and other evidence; entry upon land for inspection and other purposes; and physical and mental examination.

    (a) Any party may serve on any other party a request to:
    (1) Produce and permit the party making the request, or a person 
acting on his or her behalf, to inspect and copy any designated 
documents, or to inspect and copy, test, or sample any tangible things 
which are in the possession, custody, or control of the party upon whom 
the request is served; or
    (2) Permit entry upon designated land or other property in the 
possession or control of the party upon whom the request is served for 
the purpose of inspection and measuring, photographing, testing, or for 
other purposes as stated in paragraph (a)(1) of this section.
    (3) Submit to a physical or mental examination by a physician.
    (b) The request may be served on any party without leave of the 
administrative law judge.
    (c) The request shall:
    (1) Set forth the items to be inspected either by individual item or 
by category;
    (2) Describe each item or category with reasonable particularity;
    (3) Specify a reasonable time, place, and manner of making the 
inspection and performing the related acts;
    (4) Specify the time, place, manner, conditions, and scope of the 
physical or mental examination and the person or persons by whom it is 
to be made. A report of examining physician shall be made in accordance 
with Rule 35(b) of the Federal Rules of Civil Procedure, title 28 
U.S.C., as amended.
    (d) The party upon whom the request is served shall serve on the 
party submitting the request a written response within thirty (30) days 
after service of the request.
    (e) The response shall state, with respect to each item or category:
    (1) That inspection and related activities will be permitted as 
requested; or
    (2) That objection is made in whole or in part, in which case the 
reasons for objection shall be stated.
    (f) A copy of each request for production and each written response 
shall be

[[Page 207]]

served on all parties, but shall not be filed with the Office of 
Administrative Law Judges unless the presiding judge so orders, the 
document is being offered into evidence, the document is submitted in 
support of a motion or a response to a motion, filing is required by a 
specialized rule, or there is some other compelling reason for its 
submission.

[48 FR 32538, July 15, 1983, as amended at 59 FR 41877, Aug. 15, 1994]



Sec. 18.20  Admissions.

    (a) A party may serve upon any other party a written request for the 
admission, for purposes of the pending action only, of the genuineness 
and authenticity of any relevant document described in or attached to 
the request, or for the admission of the truth of any specified relevant 
matter of fact.
    (b) Each matter of which an admission is requested is admitted 
unless, within thirty (30) days after service of the request or such 
shorter or longer time as the administrative law judge may allow, the 
party to whom the request is directed serves on the requesting party:
    (1) A written statement denying specifically the relevant matters of 
which an admission is requested;
    (2) A written statement setting forth in detail the reasons why he 
or she can neither truthfully admit nor deny them; or
    (3) Written objections on the ground that some or all of the matters 
involved are privileged or irrelevant or that the request is otherwise 
improper in whole or in part.
    (c) An answering party may not give lack of information or knowledge 
as a reason for failure to admit or deny unless the party states that he 
or she has made reasonable inquiry and that the information known or 
readily obtainable by him or her is insufficient to enable the party to 
admit or deny.
    (d) The party who has requested the admissions may move to determine 
the sufficiency of the answers or objections. Unless the administrative 
law judge determines that an objection is justified, he or she shall 
order that an answer be served. If the administrative law judge 
determines that an answer does not comply with the requirements of this 
section, he or she may order either that the matter is admitted or that 
an amended answer be served. The administrative law judge may, in lieu 
of these orders, determine that final disposition of the request be made 
at a prehearing conference or at a designated time prior to hearing.
    (e) Any matter admitted under this section is conclusively 
established unless the administrative law judge on motion permits 
withdrawal or amendment of the admission.
    (f) Any admission made by a party under this section is for the 
purpose of the pending action only and is not an admission by him or her 
for any other purpose nor may it be used against him or her in any other 
proceeding.
    (g) A copy of each request for admission and each written response 
shall be served on all parties, but shall not be filed with the Office 
of Administrative Law Judges unless the presiding judge so orders, the 
document is being offered into evidence, the document is submitted in 
support of a motion or a response to a motion, filing is required by a 
specialized rule, or there is some other compelling reason for its 
submission.

[48 FR 32538, July 15, 1983, as amended at 59 FR 41877, Aug. 15, 1994]



Sec. 18.21  Motion to compel discovery.

    (a) If a deponent fails to answer a question propounded or a party 
upon whom a request is made pursuant to Secs. 18.18 through 18.20, or a 
party upon whom interrogatories are served fails to respond adequately 
or objects to the request, or any part thereof, or fails to permit 
inspection as requested, the discovering party may move the 
administrative law judge for an order compelling a response or 
inspection in accordance with the request.
    (b) The motion shall set forth:
    (1) The nature of the questions or request;
    (2) The response or objections of the party upon whom the request 
was served; and
    (3) Arguments in support of the motion.
    (c) For purposes of this section, an evasive answer or incomplete 
answer or response shall be treated as a failure to answer or respond.

[[Page 208]]

    (d) In ruling on a motion made pursuant to this section, the 
administrative law judge may make and enter a protective order such as 
he or she is authorized to enter on a motion made pursuant to 
Sec. 18.15(a).



Sec. 18.22  Depositions.

    (a) When, how, and by whom taken. The deposition of any witness may 
be taken at any stage of the proceeding at reasonable times. Depositions 
may be taken by oral examination or upon written interrogatories before 
any person having power to administer oaths.
    (b) Application. Any party desiring to take the deposition of a 
witness shall indicate to the witness and all other parties the time 
when, the place where, and the name and post office address of the 
person before whom the deposition is to be taken; the name and address 
of each witness; and the subject matter concerning which each such 
witness is expected to testify.
    (c) Notice. Notice shall be given for the taking of a deposition, 
which shall not be less than five (5) days written notice when the 
deposition is to be taken within the continental United States and not 
less than twenty (20) days written notice when the deposition is to be 
taken elsewhere. A copy of the Notice shall not be filed with the Office 
of Administrative Law Judges unless the presiding judge so orders, the 
document is being offered into evidence, the document is submitted in 
support of a motion or a response to a motion, filing is required by a 
specialized rule, or there is some other compelling reason for its 
submission.
    (d) Taking and receiving in evidence. Each witness testifying upon 
deposition shall be sworn, and any other party shall have the right to 
cross-examine. The questions propounded and the answers thereto, 
together with all objections made, shall be reduced to writing; read by 
or to, and subscribed by the witness; and certified by the person 
administering the oath. Subject to such objections to the questions and 
answers as were noted at the time of taking the deposition and which 
would have been valid if the witness were personally present and 
testifying, such deposition may be read and offered in evidence by the 
party taking it as against any party who was present or represented at 
the taking of the deposition or who had due notice thereof.
    (e) Motion to terminate or limit examination. During the taking of a 
deposition, a party or deponent may request suspension of the deposition 
on grounds of bad faith in the conduct of the examination, oppression of 
a deponent or party or improper questions propounded. The deposition 
will then be adjourned. However, the objecting party or deponent must 
immediately move the administrative law judge for a ruling on his or her 
objections to the deposition conduct or proceedings. The administrative 
law judge may then limit the scope or manner of the taking of the 
deposition.

[48 FR 32538, July 15, 1983; 49 FR 2739, Jan. 20, 1984; 59 FR 41877, 
Aug. 15, 1994]



Sec. 18.23  Use of depositions at hearings.

    (a) Generally. At the hearing, any part or all of a deposition, so 
far as admissible under the rules of evidence, may be used against any 
party who was present or represented at the taking of the deposition or 
who had due notice thereof in accordance with any one of the following 
provisions:
    (1) Any deposition may be used by any party for the purpose of 
contradicting or impeaching the testimony of the deponent as a witness.
    (2) The deposition of expert witnesses, particularly the deposition 
of physicians, may be used by any party for any purpose, unless the 
administrative law judge rules that such use would be unfair or a 
violation of due process.
    (3) The deposition of a party or of anyone who at the time of taking 
the deposition was an officer, director, or duly authorized agent of a 
public or private corporation, partnership, or association which is a 
party, may be used by any other party for any purpose.
    (4) The deposition of a witness, whether or not a party, may be used 
by any party for any purpose if the presiding officer finds:
    (i) That the witness is dead; or
    (ii) That the witness is out of the United States or more than 100 
miles from the place of hearing unless it appears that the absence of 
the witness

[[Page 209]]

was procured by the party offering the deposition; or
    (iii) That the witness is unable to attend to testify because of 
age, sickness, infirmity, or imprisonment; or
    (iv) That the party offering the deposition has been unable to 
procure the attendance of the witness by subpoena; or
    (v) Upon application and notice, that such exceptional circumstances 
exist at to make it desirable, in the interest of justice and with due 
regard to the importance of presenting the testimony of witnesses orally 
in open hearing, to allow the deposition to be used.
    (5) If only part of a deposition is offered in evidence by a party, 
any other party may require him or her to introduce all of it which is 
relevant to the part introduced, and any party may introduce any other 
parts.
    (6) Substitution of parties does not affect the right to use 
depositions previously taken; and, when a proceeding in any hearing has 
been dismissed and another proceeding involving the same subject matter 
is afterward brought between the same parties or their representatives 
or successors in interest, all depositions lawfully taken and duly filed 
in the former proceeding may be used in the latter as if originally 
taken therefor.
    (b) Objections to admissibility. Except as provided in this 
paragraph, objection may be made at the hearing to receiving in evidence 
any deposition or part thereof for any reason which would require the 
exclusion of the evidence if the witness were then present and 
testifying.
    (1) Objections to the competency of a witness or to the competency, 
relevancy, or materiality of testimony are not waived by failure to make 
them before or during the taking of the deposition, unless the ground of 
the objection is one which might have been obviated or removed if 
presented at that time.
    (2) Errors and irregularities occurring at the oral examination in 
the manner of taking the deposition, in the form of the questions or 
answers, in the oath or affirmation, or in the conduct of parties and 
errors of any kind which might be obviated, removed, or cured if 
promptly presented, are waived unless reasonable objection thereto is 
made at the taking of the deposition.
    (3) Objections to the form or written interrogatories are waived 
unless served in writing upon the party propounding them.
    (c) Effect of taking or using depositions. A party shall not be 
deemed to make a person his or her own witness for any purpose by taking 
his or her deposition. The introduction in evidence of the deposition or 
any part thereof for any purpose other than that of contradicting or 
impeaching the deponent makes the deponent the witness of the party 
introducing the deposition, but this shall not apply to the use by any 
other party of a deposition as described in paragraph (a)(2) of this 
section. At the hearing, any party may rebut any relevant evidence 
contained in a deposition whether introduced by him or her or by any 
other party.



Sec. 18.24  Subpoenas.

    (a) Except as provided in paragraph (b) of this section, the Chief 
Administrative Law Judge or the presiding administrative law judge, as 
appropriate, may issue subpoenas as authorized by statute or law upon 
written application of a party requiring attendance of witnesses and 
production of relevant papers, books, documents, or tangible things in 
their possession and under their control. A subpoena may be served by 
certified mail or by any person who is not less than 18 years of age. A 
witness, other than a witness for the Federal Government, may not be 
required to attend a deposition or hearing unless the mileage and 
witness fee applicable to witnesses in courts of the United States for 
each date of attendance is paid in advance of the date of the 
proceeding.
    (b) If a party's written application for subpoena is submitted three 
(3) working days or less before the hearing to which it relates, a 
subpoena shall issue at the discretion of the Chief Administrative Law 
Judge or presiding administrative law judge, as appropriate.
    (c) Motion to quash or limit subpoena. Within ten (10) days of 
receipt of a subpoena but no later than the date of the hearing, the 
person against whom it is directed may file a motion to quash or

[[Page 210]]

limit the subpoena, setting forth the reasons why the subpoena should be 
withdrawn or why it should by limited in scope. Any such motion shall be 
answered within ten (10) days of service, and shall be ruled on 
immediately thereafter. The order shall specify the date, if any, for 
compliance with the specifications of the subpoena.
    (d) Failure to comply. Upon the failure of any person to comply with 
an order to testify or a subpoena, the party adversely affected by such 
failure to comply may, where authorized by statute or by law, apply to 
the appropriate district court for enforcement of the order or subpoena.



Sec. 18.25  Designation of administrative law judge.

    Hearings shall be held before an administrative law judge appointed 
under 5 U.S.C. 3105 and assigned to the Department of Labor. The 
presiding judge shall be designated by the Chief Administrative Law 
Judge.



Sec. 18.26  Conduct of hearings.

    Unless otherwise required by statute or regulations, hearings shall 
be conducted in conformance with the Administrative Procedure Act, 5 
U.S.C. 554.



Sec. 18.27  Notice of hearing.

    (a) Generally. Except when hearings are scheduled by calendar call, 
the administrative law judge to whom the matter is referred shall notify 
the parties by mail of a day, time, and place set for hearing thereon or 
for a prehearing conference, or both. No date earlier than fifteen (15) 
days after the date of such notice shall be set for such hearing or 
conference, except by agreement of the parties. Service of such notice 
shall be made by regular, first-class mail, unless under the 
circumstances it appears to the administrative law judge that certified 
mail, mailgram, telephone, or any combination of these methods should be 
used instead.
    (b) Change of date, time and place. The Chief Administrative Law 
Judge or the administrative law judge assigned to the case may change 
the time, date and place of the hearing, or temporarily adjourn a 
hearing, on his or her own motion or for good cause shown by a party. 
The parties shall be given not less than ten (10) days notice of the new 
hearing date, unless they agree to such change without such notice.
    (c) Place of hearing. Unless otherwise required by statute or 
regulation, due regard shall be given to the convenience of the parties 
and the witnesses in selecting a place for the hearing.



Sec. 18.28  Continuances.

    (a) When granted. Continuances will only by granted in cases of 
prior judicial commitments or undue hardship, or a showing of other good 
cause.
    (b) Time limit for requesting. Except for good cause arising 
thereafter, requests for continuances must be filed within fourteen (14) 
days prior to the date set for hearing.
    (c) How filed. Motions for continuances shall be in writing. At 
least 3"x3\1/2\" of blank space shall be provided on the last page of 
the motion to permit space for the entry of an order by the 
administrative law judge. Copies shall be served on all parties. Any 
motions for continuances made within ten (10) days of the date of the 
scheduled proceeding shall, in addition to the written request, be 
telephonically conveyed to the administrative law judge or a member of 
his or her staff and to all other parties. Motions for continuances, 
based on reasons not reasonably ascertainable prior thereto, may also be 
made on the record at calendar calls, prehearing conferences or 
hearings.
    (d) Ruling. Time permitting, the administrative law judge shall 
issue a written order in advance of the scheduled proceeding date which 
either allows or denies the request. Otherwise the ruling may be made 
orally by telephonic communication to the party requesting same who 
shall be responsible for telephonically notifying all other parties. 
Oral orders shall be confirmed in writing.

[48 FR 32538, July 15, 1983; 49 FR 2739, Jan. 20, 1984]



Sec. 18.29  Authority of administrative law judge.

    (a) General powers. In any proceeding under this part, the 
administrative law judge shall have all powers necessary

[[Page 211]]

to the conduct of fair and impartial hearings, including, but not 
limited to, the following:
    (1) Conduct formal hearings in accordance with the provisions of 
this part;
    (2) Administer oaths and examine witnesses;
    (3) Compel the production of documents and appearance of witnesses 
in control of the parties;
    (4) Compel the appearance of witnesses by the issuance of subpoenas 
as authorized by statute or law;
    (5) Issue decisions and orders;
    (6) Take any action authorized by the Administrative Procedure Act;
    (7) Exercise, for the purpose of the hearing and in regulating the 
conduct of the proceeding, such powers vested in the Secretary of Labor 
as are necessary and appropriate therefor;
    (8) Where applicable, take any appropriate action authorized by the 
Rules of Civil Procedure for the United States District Courts, issued 
from time to time and amended pursuant to 28 U.S.C. 2072; and
    (9) Do all other things necessary to enable him or her to discharge 
the duties of the office.
    (b) Enforcement. If any person in proceedings before an adjudication 
officer disobeys or resists any lawful order or process, or misbehaves 
during a hearing or so near the place thereof as to obstruct the same, 
or neglects to produce, after having been ordered to do so, any 
pertinent book, paper or document, or refuses to appear after having 
been subpoenaed, or upon appearing refuses to take the oath as a 
witness, or after having taken the oath refuses to be examined according 
to law, the administrative law judge responsible for the adjudication, 
where authorized by statute or law, may certify the facts to the Federal 
District Court having jurisdiction in the place in which he or she is 
sitting to request appropriate remedies.



Sec. 18.30  Unavailability of administrative law judge.

    In the event the administrative law judge designated to conduct the 
hearing becomes unavailable, the Chief Administrative Law Judge may 
designate another administrative law judge for the purpose of further 
hearing or other appropriate action.



Sec. 18.31  Disqualification.

    (a) When an administrative law judge deems himself or herself 
disqualified to preside in a particular proceeding, such judge shall 
withdraw therefrom by notice on the record directed to the Chief 
Administrative Law Judge.
    (b) Whenever any party shall deem the administrative law judge for 
any reason to be disqualified to preside, or to continue to preside, in 
a particular proceeding, that party shall file with the administrative 
law judge a motion to recuse. The motion shall be supported by an 
affidavit setting forth the alleged grounds for disqualification. The 
administrative law judge shall rule upon the motion.
    (c) In the event of disqualification or recusal of an administrative 
law judge as provided in paragraph (a) or (b) of this section, the Chief 
Administrative Law Judge shall refer the matter to another 
administrative law judge for further proceedings.



Sec. 18.32  Separation of functions.

    No officer, employee, or agent of the Federal Government engaged in 
the performance of investigative or prosecutorial functions in 
connection with any proceeding shall, in that proceeding or a factually 
related proceeding, participate or advise in the decision of the 
administrative law judge, except as a witness or counsel in the 
proceedings.



Sec. 18.33  Expedition.

    Hearings shall proceed with all reasonable speed, insofar as 
practicable and with due regard to the convenience of the parties.



Sec. 18.34  Representation.

    (a) Appearances. Any party shall have the right to appear at a 
hearing in person, by counsel, or by other representative, to examine 
and cross-examine witnesses, and to introduce into the record 
documentary or other relevant evidence, except that the participation of 
any intervenor shall be limited to the extent prescribed by the 
administrative law judge.

[[Page 212]]

    (b) Each attorney or other representative shall file a notice of 
appearance. Such notice shall indicate the name of the case or 
controversy, the docket number if assigned, and the party on whose 
behalf the appearance is made.
    (c) Rights of parties. Every party shall have the right of timely 
notice and all other rights essential to a fair hearing, including, but 
not limited to, the rights to present evidence, to conduct such cross-
examination as may be necessary for a full and complete disclosure of 
the facts, and to be heard by objection, motion, and argument.
    (d) Rights of participants. Every participant shall have the right 
to make a written or oral statement of position. At the discretion of 
the administrative law judge, participants may file proposed findings of 
fact, conclusions of law and a post hearing brief.
    (e) Rights of witnesses. Any person compelled to testify in a 
proceeding in response to a subpoena may be accompanied, represented, 
and advised by counsel or other representative, and may purchase a 
transcript of his or her testimony.
    (f) Office of the Solicitor. The Department of Labor shall be 
represented by the Solicitor of Labor or his or her designee and shall 
participate to the degree deemed appropriate by the Solicitor.
    (g) Qualifications--(1) Attorneys. An attorney at law who is 
admitted to practice before the Federal courts or before the highest 
court of any State, the District of Columbia, or any territory or 
commonwealth of the United States, may practice before the Office of 
Administrative Law Judges. An attorney's own representation that he or 
she is in good standing before any of such courts shall be sufficient 
proof thereof, unless otherwise ordered by the administrative law judge. 
Any attorney of record must file prior notice in writing of intent to 
withdraw as counsel.
    (2) Persons not attorneys. Any citizen of the United States who is 
not an attorney at law shall be admitted to appear in a representative 
capacity in an adjudicative proceeding. An application by a person not 
an attorney at law for admission to appear in a proceeding shall be 
submitted in writing to the Chief Administrative Law Judge prior to the 
hearing in the proceedings or to the administrative law judge assigned 
at the commencement of the hearing. The application shall state 
generally the applicant's qualifications to appear in the proceedings. 
The administrative law judge may, at any time, inquire as to the 
qualification or ability of such person to render legal assistance.
    (3) Denial of authority to appear. The administrative law judge may 
deny the privilege of appearing to any person, within applicable 
statutory constraints, e.g. 5 U.S.C. 555, who he or she finds after 
notice of and opportunity for hearing in the matter does not possess the 
requisite qualifications to represent others; or is lacking in character 
or integrity; has engaged in unethical or improper professional conduct; 
or has engaged in an act involving moral turpitude. No provision hereof 
shall apply to any person who appears on his or her own behalf or on 
behalf of any corporation, partnership, or association of which the 
person is a partner, officer, or regular employee.
    (h) Authority for representation. Any individual acting in a 
representative capacity in any adjudicative proceeding may be required 
by the administrative law judge to show his or her authority to act in 
such capacity. A regular employee of a party who appears on behalf of 
the party may be required by the administrative law judge to show his or 
her authority to so appear.

[48 FR 32538, July 15, 1983; 49 FR 2739, Jan. 20, 1984]



Sec. 18.35  Legal assistance.

    The Office of Administrative Law Judges does not have authority to 
appoint counsel, nor does it refer parties to attorneys.



Sec. 18.36  Standards of conduct.

    (a) All persons appearing in proceedings before an administrative 
law judge are expected to act with integrity, and in an ethical manner.
    (b) The administrative law judge may exclude parties, participants, 
and their representatives for refusal to comply

[[Page 213]]

with directions, continued use of dilatory tactics, refusal to adhere to 
reasonable standards of orderly and ethical conduct, failure to act in 
good faith, or violation of the prohibition against ex parte 
communications. The administrative law judge shall state in the record 
the cause for suspending or barring an attorney or other representative 
from participation in a particular proceeding. Any attorney or other 
representative so suspended or barred may appeal to the Chief Judge but 
no proceeding shall be delayed or suspended pending disposition of the 
appeal; provided, however, that the administrative law judge shall 
suspend the proceeding for a reasonable time for the purpose of enabling 
the party to obtain another attorney or representative.



Sec. 18.37  Hearing room conduct.

    Proceedings shall be conducted in an orderly manner. The consumption 
of food or beverage, smoking, or rearranging of courtroom furniture, 
unless specifically authorized by the administrative law judge, are 
prohibited.

[48 FR 32538, July 15, 1983; 49 FR 2739, Jan. 20, 1984]



Sec. 18.38  Ex parte communications.

    (a) The administrative law judge shall not consult any person, or 
party, on any fact in issue unless upon notice and opportunity for all 
parties to participate. Communications by the Office of Administrative 
Law Judges, the assigned judge, or any party for the sole purpose of 
scheduling hearings or requesting extensions of time are not considered 
ex-parte communications, except that all other parties shall be notified 
of such request by the requesting party and be given an opportunity to 
respond thereto.
    (b) Sanctions. A party or participant who makes a prohibited ex 
parte communication, or who encourages or solicits another to make any 
such communication, may be subject to any appropriate sanction or 
sanctions, including, but not limited to, exclusion from the proceedings 
and adverse ruling on the issue which is the subject of the prohibited 
communication.



Sec. 18.39  Waiver of right to appear and failure to participate or to appear.

    (a) Waiver of right to appear. If all parties waive their right to 
appear before the administrative law judge or to present evidence or 
argument personally or by representative, it shall not be necessary for 
the administrative law judge to give notice of and conduct an oral 
hearing. A waiver of the right to appear and present evidence and 
allegations as to facts and law shall be made in writing and filed with 
the Chief Administrative Law Judge or the administrative law judge. 
Where such a waiver has been filed by all parties and they do not appear 
before the administrative law judge personally or by representative, the 
administrative law judge shall make a record of the relevant written 
evidence submitted by the parties, together with any pleadings they may 
submit with respect to the issues in the case. Such documents shall be 
considered as all of the evidence in the case, and the decision shall be 
based on them.
    (b) Dismissal--Abandonment by Party. A request for hearing may be 
dismissed upon its abandonment or settlement by the party or parties who 
filed it. A party shall be deemed to have abandoned a request for 
hearing if neither the party nor his or her representative appears at 
the time and place fixed for the hearing and either (a) prior to the 
time for hearing such party does not show good cause as to why neither 
he or she nor his or her representative can appear or (b) within ten 
(10) days after the mailing of a notice to him or her by the 
administrative law judge to show cause, such party does not show good 
cause for such failure to appear and fails to notify the administrative 
law judge prior to the time fixed for hearing that he or she cannot 
appear. A default decision, under Sec. 18.5(b), may be entered against 
any party failing, without good cause, to appear at a hearing.



Sec. 18.40  Motion for summary decision.

    (a) Any party may, at least twenty (20) days before the date fixed 
for any hearing, move with or without supporting affidavits for a 
summary decision on all or any part of the proceeding. Any other party 
may, within

[[Page 214]]

ten (10) days after service of the motion, serve opposing affidavits or 
countermove for summary decision. The administrative law judge may set 
the matter for argument and/or call for submission of briefs.
    (b) Filing of any documents under paragraph (a) of this section 
shall be with the administrative law judge, and copies of such documents 
shall be served on all parties.
    (c) Any affidavits submitted with the motion shall set forth such 
facts as would be admissible in evidence in a proceeding subject to 5 
U.S.C. 556 and 557 and shall show affirmatively that the affiant is 
competent to testify to the matters stated therein. When a motion for 
summary decision is made and supported as provided in this section, a 
party opposing the motion may not rest upon the mere allegations or 
denials of such pleading. Such response must set forth specific facts 
showing that there is a genuine issue of fact for the hearing.
    (d) The administrative law judge may enter summary judgment for 
either party if the pleadings, affidavits, material obtained by 
discovery or otherwise, or matters officially noticed show that there is 
no genuine issue as to any material fact and that a party is entitled to 
summary decision. The administrative law judge may deny the motion 
whenever the moving party denies access to information by means of 
discovery to a party opposing the motion.



Sec. 18.41  Summary decision.

    (a) No genuine issue of material fact. (1) Where no genuine issue of 
a material fact is found to have been raised, the administrative law 
judge may issue a decision to become final as provided by the statute or 
regulations under which the matter is to be heard. Any final decision 
issued as a summary decision shall conform to the requirements for all 
final decisions.
    (2) An initial decision and a final decision made under this 
paragraph shall include a statement of:
    (i) Findings of fact and conclusions of law, and the reasons 
therefor, on all issues presented; and
    (ii) Any terms and conditions of the rule or order.
    (3) A copy of any initial decision and final decision under this 
paragraph shall be served on each party.
    (b) Hearings on issue of fact. Where a genuine question of material 
fact is raised, the administrative law judge shall, and in any other 
case may, set the case for an evidentiary hearing.



Sec. 18.42  Expedited proceedings.

    (a) When expedited proceedings are required by statute or 
regulation, or at any time after commencement of a proceeding, any party 
may move to advance the scheduling of a proceeding.
    (b) Except when such proceedings are required or as otherwise 
directed by the Chief Administrative Law Judge or the administrative law 
judge assigned, any party filing a motion under this section shall:
    (1) Make the motion in writing;
    (2) Describe the circumstances justifying advancement;
    (3) Describe the irreparable harm that would result if the motion is 
not granted; and
    (4) Incorporate in the motion affidavits to support any 
representations of fact.
    (c) Service of a motion under this section shall be accomplished by 
personal delivery or by telephonic or telegraphic communication followed 
by mail. Service is complete upon personal delivery or mailing.
    (d) Except when such proceedings are required, or unless otherwise 
directed by the Chief Administrative Law Judge or the administrative law 
judge assigned, all parties to the proceeding in which the motion is 
filed shall have ten (10) days from the date of service of the motion to 
file an opposition in response to the motion.
    (e) Following the timely receipt by the administrative law judge of 
statements in response to the motion, the administrative law judge may 
advance pleading schedules, prehearing conferences, and the hearing, as 
deemed appropriate: provided, however, that a hearing on the merits 
shall not be scheduled with less than five (5) working days notice to 
the parties, unless all parties consent to an earlier hearing.
    (f) When expedited hearings are required by statute or regulation, 
such

[[Page 215]]

hearing shall be scheduled within sixty (60) days from the receipt of 
request for hearing or order of reference. The decision of the 
administrative law judge shall be issued within twenty (20) days after 
receipt of the transcript of any oral hearing or within twenty (20) days 
after the filing of all documentary evidence if no oral hearing is 
conducted.



Sec. 18.43  Formal hearings.

    (a) Public. Hearings shall be open to the public. However, in 
unusual circumstances, the administrative law judge may order a hearing 
or any part thereof closed, where to do so would be in the best 
interests of the parties, a witness, the public or other affected 
persons. Any order closing the hearing shall set forth the reasons for 
the decision. Any objections thereto shall be made a part of the record.
    (b) Jurisdiction. The administrative law judge shall have 
jurisdiction to decide all issues of fact and related issues of law.
    (c) Amendments to conform to the evidence. When issues not raised by 
the request for hearing, prehearing stipulation, or prehearing order are 
tried by express or implied consent of the parties, they shall be 
treated in all respects as if they had been raised in the pleadings. 
Such amendment of the pleadings as may be necessary to cause them to 
conform to the evidence may be made on motion of any party at any time; 
but failure to so amend does not affect the result of the hearing of 
these issues. The administrative law judge may grant a continuance to 
enable the objecting party to meet such evidence.



Sec. 18.44  [Reserved]



Sec. 18.45  Official notice.

    Official notice may be taken of any material fact, not appearing in 
evidence in the record, which is among the traditional matters of 
judicial notice: Provided, however, that the parties shall be given 
adequate notice, at the hearing or by reference in the administrative 
law judge's decision, of the matters so noticed, and shall be given 
adequate opportunity to show the contrary.



Sec. 18.46  In camera and protective orders.

    (a) Privileges. Upon application of any person the administrative 
law judge may limit discovery or introduction of evidence or issue such 
protective or other orders as in his or her judgment may be consistent 
with the objective of protecting privileged communications.
    (b) Classified or sensitive matter. (1) Without limiting the 
discretion of the administrative law judge to give effect to any other 
applicable privilege, it shall be proper for the administrative law 
judge to limit discovery or introduction of evidence or to issue such 
protective or other orders as in his or her judgment may be consistent 
with the objective of preventing undue disclosure of classified or 
sensitive matter. Where the administrative law judge determines that 
information in documents containing sensitive matter should be made 
available to a respondent, he or she may direct the party to prepare an 
unclassified or nonsensitive summary or extract of the original. The 
summary or extract may be admitted as evidence in the record.
    (2) If the administrative law judge determines that this procedure 
is inadequate and that classified or otherwise sensitive matter must 
form part of the record in order to avoid prejudice to a party, he or 
she may advise the parties and provide opportunity for arrangements to 
permit a party or a representative to have access to such matter. Such 
arrangements may include obtaining security clearances or giving counsel 
for a party access to sensitive information and documents subject to 
assurances against further disclosure.



Sec. 18.47  Exhibits.

    (a) Identification. All exhibits offered in evidence shall be 
numbered and marked with a designation identifying the party or 
intervenor by whom the exhibit is offered.
    (b) Exchange of exhibits. When written exhibits are offered in 
evidence, one copy must be furnished to each of the parties at the 
hearing, and one copy to the administrative law judge, unless the 
parties previously have been furnished with copies or the administrative 
law judge directs otherwise. If the administrative law judge has not 
fixed

[[Page 216]]

a time for the exchange of exhibits the parties shall exchange copies of 
exhibits at the earliest practicable time, preferably before the 
hearing, or at the latest at the commencement of the hearing.
    (c) Substitution of copies for original exhibits. The administrative 
law judge may permit a party to withdraw original documents offered in 
evidence and substitute true copies in lieu thereof.



Sec. 18.48  Records in other proceedings.

    In case any portion of the record in any other proceeding or civil 
or criminal action is offered in evidence, a true copy of such portion 
shall be presented for the record in the form of an exhibit unless the 
administrative law judge directs otherwise.



Sec. 18.49  Designation of parts of documents.

    Where relevant and material matter offered in evidence is embraced 
in a document containing other matter not material or relevant and not 
intended to be put in evidence, the participant offering the same shall 
plainly designate the matter so offered, segregating and excluding 
insofar as practicable the immaterial or irrelevant parts. If other 
matter in such document is in such bulk or extent as would necessarily 
encumber the record, such document will not be received in evidence, but 
may be marked for identification, and if properly authenticated, the 
relevant and material parts thereof may be read into the record, or if 
the administrative law judge so directs, a true copy of such matter in 
proper form shall be received in evidence as an exhibit, and copies 
shall be delivered by the participant offering the same to the other 
parties or their attorneys appearing at the hearing, who shall be 
afforded an opportunity to examine the entire document and to offer in 
evidence in like manner other material and relevant portions thereof.



Sec. 18.50  Authenticity.

    The authenticity of all documents submitted as proposed exhibits in 
advance of the hearing shall be deemed admitted unless written objection 
thereto is filed prior to the hearing, except that a party will be 
permitted to challenge such autheniticity at a later time upon a clear 
showing of good cause for failure to have filed such written objection.



Sec. 18.51  Stipulations.

    The parties may by stipulation in writing at any stage of the 
proceeding, or orally made at hearing, agree upon any pertinent facts in 
the proceeding. It is desirable that the facts be thus agreed upon so 
far as and whenever practicable. Stipulations may be received in 
evidence at a hearing or prior thereto, and when received in evidence, 
shall be binding on the parties thereto.



Sec. 18.52  Record of hearings.

    (a) All hearings shall be mechanically or stenographically reported. 
All evidence upon which the administrative law judge relies for decision 
shall be contained in the transcript of testimony, either directly or by 
appropriate reference. All exhibits introduced as evidence shall be 
marked for identification and incorporated into the record. Transcripts 
may be obtained by the parties and the public from the official reporter 
at rates not to exceed the applicable rates fixed by the contract with 
the reporter.
    (b) Corrections. Corrections to the official transcript will be 
permitted upon motion. Motions for correction must be submitted within 
ten (10) days of the receipt of the transcript unless additional time is 
permitted by the administrative law judge. Corrections of the official 
transcript will be permitted only when errors of substance are involved 
and only upon approval of the administrative law judge.



Sec. 18.53  Closing of hearings.

    The administrative law judge may hear arguments of counsel and may 
limit the time of such arguments at his or her discretion, and may allow 
briefs to be filed on behalf of either party but shall closely limit the 
time within which the briefs for both parties shall be filed, so as to 
avoid unreasonable delay.



Sec. 18.54  Closing the record.

    (a) When there is a hearing, the record shall be closed at the 
conclusion

[[Page 217]]

of the hearing unless the administrative law judge directs otherwise.
    (b) If any party waives a hearing, the record shall be closed on the 
date set by the administrative law judge as the final date for the 
receipt of submissions of the parties to the matter.
    (c) Once the record is closed, no additional evidence shall be 
accepted into the record except upon a showing that new and material 
evidence has become available which was not readily available prior to 
the closing of the record. However, the administrative law judge shall 
make part of the record, any motions for attorney fees authorized by 
statutes, and any supporting documentation, any determinations thereon, 
and any approved correction to the transcript.



Sec. 18.55  Receipt of documents after hearing.

    Documents submitted for the record after the close of the hearing 
will not be received in evidence except upon ruling of the 
administrative law judge. Such documents when submitted shall be 
accompanied by proof that copies have been served upon all parties, who 
shall have an opportunity to comment thereon. Copies shall be received 
not later than twenty (20) days after the close of the hearing except 
for good cause shown, and not less than ten (10) days prior to the date 
set for filing briefs. Exhibit numbers should be assigned by counsel or 
the party.



Sec. 18.56  Restricted access.

    On his or her own motion, or on the motion of any party, the 
administrative law judge may direct that there be a restricted access 
portion of the record to contain any material in the record to which 
public access is restricted by law or by the terms of a protective order 
entered in the proceedings. This portion of the record shall be place in 
a separate file and clearly marked to avoid improper disclosure and to 
identify it as a portion of the official record in the proceedings.



Sec. 18.57  Decision of the administrative law judge.

    (a) Proposed findings of fact, conclusions, and order. Within twenty 
(20) days of filing of the transcript of the testimony or such 
additional time as the administrative law judge may allow, each party 
may file with the administrative law judge, subject to the judge's 
discretion under Sec. 18.55, proposed findings of fact, conclusions of 
law, and order together with a supporting brief expressing the reasons 
for such proposals. Such proposals and brief shall be served on all 
parties, and shall refer to all portions of the record and to all 
authorities relied upon in support of each proposal.
    (b) Decision of the administrative law judge. Within a reasonable 
time after the time allowed for the filing of the proposed findings of 
fact, conclusions of law, and order, or within thirty (30) days after 
receipt of an agreement containing consent findings and order disposing 
of the disputed matter in whole, the administrative law judge shall make 
his or her decision. The decision of the administrative law judge shall 
include findings of fact and conclusions of law, with reasons therefor, 
upon each material issue of fact or law presented on the record. The 
decision of the administrative law judge shall be based upon the whole 
record. It shall be supported by reliable and probative evidence. Such 
decision shall be in accordance with the regulations and rulings of the 
statute or regulation conferring jurisdiction.



Sec. 18.58  Appeals.

    The procedures for appeals shall be as provided by the statute or 
regulation under which hearing jurisdiction is conferred. If no 
provision is made therefor, the decision of the administrative law judge 
shall become the final administrative decision of the Secretary.



Sec. 18.59  Certification of official record.

    Upon timely receipt of either a notice or a petition, the Chief 
Administrative Law Judge shall promptly certify and file with the 
reviewing authority, appellate body, or appropriate United States 
District Court, a full, true, and correct copy of the entire record, 
including the transcript of proceedings.

[[Page 218]]



                      Subpart B--Rules of Evidence

    Source: 55 FR 13219, Apr. 9, 1990, unless otherwise noted.

                           General Provisions



Sec. 18.101  Scope.

    These rules govern formal adversarial adjudications of the United 
States Department of Labor conducted before a presiding officer.
    (a) Which are required by Act of Congress to be determined on the 
record after opportunity for an administrative agency hearing in 
accordance with the Administrative Procedure Act, 5 U.S.C. 554, 556 and 
557, or
    (b) Which by United States Department of Labor regulation are 
conducted in conformance with the foregoing provisions, to the extent 
and with the exceptions stated in Sec. 18.1101. Presiding officer, 
referred to in these rules as the judge, means an Administrative Law 
Judge, an agency head, or other officer who presides at the reception of 
evidence at a hearing in such an adjudication.



Sec. 18.102  Purpose and construction.

    These rules shall be construed to secure fairness in administration, 
elimination of unjustifiable expense and delay, and promotion of growth 
and development of the law of evidence to the end that the truth may be 
ascertained and proceedings justly determined.



Sec. 18.103  Rulings on evidence.

    (a) Effect of erroneous ruling. Error may not be predicated upon a 
ruling which admits or excludes evidence unless a substantial right of 
the party is affected, and
    (1) Objection. In case the ruling is one admitting evidence, a 
timely objection or motion to strike appears of record, stating the 
specific ground of objection, if the specific ground was not apparent 
from the context; or
    (2) Offer of proof. In case the ruling is one excluding evidence, 
the substance of the evidence was made known to the judge by offer or 
was apparent from the context within which questions were asked. A 
substantial right of the party is affected unless it is more probably 
true than not true that the error did not materially contribute to the 
decision or order of the judge. Properly objected to evidence admitted 
in error does not affect a substantial right if explicitly not relied 
upon by the judge in support of the decision or order.
    (b) Record of offer and ruling. The judge may add any other or 
further statement which shows the character of the evidence, the form in 
which it was offered, the objection made, and the ruling thereon. The 
judge may direct the making of an offer in question and answer form.
    (c) Plain error. Nothing in this rule precludes taking notice of 
plain errors affecting substantial rights although they were not brought 
to the attention of the judge.



Sec. 18.104  Preliminary questions.

    (a) Questions of admissibility generally. Preliminary questions 
concerning the qualification of a person to be a witness, the existence 
of a privilege, or the admissibility of evidence shall be determined by 
the judge, subject to the provisions of paragraph (b) of this section. 
In making such determination the judge is not bound by the rules of 
evidence except those with respect to privileges.
    (b) Relevance conditioned on fact. When the relevancy of evidence 
depends upon the fulfillment of a condition of fact, the judge shall 
admit it upon, or subject to, the introduction of evidence sufficient to 
support a finding of the fulfillment of the condition.
    (c) Weight and credibility. This rule does not limit the right of a 
party to introduce evidence relevant to weight or credibility.



Sec. 18.105  Limited admissibility.

    When evidence which is admissible as to one party or for one purpose 
but not admissible as to another party or for another purpose is 
admitted, the judge, upon request, shall restrict the evidence to its 
proper scope.



Sec. 18.106  Remainder of or related writings or recorded statements.

    When a writing or recorded statement or part thereof is introduced 
by a party, an adverse party may require the introduction at that time 
of any

[[Page 219]]

other part or any other writing or recorded statement which ought in 
fairness to be considered contemporaneously with it.

                             Official Notice



Sec. 18.201  Official notice of adjudicative facts.

    (a) Scope of rule. This rule governs only official notice of 
adjudicative facts.
    (b) Kinds of facts. An officially noticed fact must be one not 
subject to reasonable dispute in that it is either:
    (1) Generally known within the local area,
    (2) Capable of accurate and ready determination by resort to sources 
whose accuracy cannot reasonably be questioned, or
    (3) Derived from a not reasonably questioned scientific, medical or 
other technical process, technique, principle, or explanatory theory 
within the administrative agency's specialized field of knowledge.
    (c) When discretionary. A judge may take official notice, whether 
requested or not.
    (d) When mandatory. A judge shall take official notice if requested 
by a party and supplied with the necessary information.
    (e) Opportunity to be heard. A party is entitled, upon timely 
request, to an opportunity to be heard as to the propriety of taking 
official notice and the tenor of the matter noticed. In the absence of 
prior notification, the request may be made after official notice has 
been taken.
    (f) Time of taking notice. Official notice may be taken at any stage 
of the proceeding.
    (g) Effect of official notice. An officially noticed fact is 
accepted as conclusive.

                              Presumptions



Sec. 18.301  Presumptions in general.

    Except as otherwise provided by Act of Congress, or by rules or 
regulations prescribed by the administrative agency pursuant to 
statutory authority, or pursuant to executive order, a presumption 
imposes on the party against whom it is directed the burden of going 
forward with evidence to rebut or meet the presumption, but does not 
shift to such party the burden of proof in the sense of the risk of 
nonpersuasion, which remains throughout the trial upon the party on whom 
it was originally cast.



Sec. 18.302  Applicability of state law.

    The effect of a presumption respecting a fact which is an element of 
a claim or defense as to which State law supplies the rule of decision 
is determined in accordance with State law.

                        Relevancy and its Limits



Sec. 18.401  Definition of relevant evidence.

    Relevant evidence means evidence having any tendency to make the 
existence of any fact that is of consequence to the determination of the 
action more probable or less probable than it would be without the 
evidence.



Sec. 18.402  Relevant evidence generally admissible; irrelevant evidence inadmissible.

    All relevant evidence is admissible, except as otherwise provided by 
the Constitution of the United States, by Act of Congress, pursuant to 
executive order, by these rules, or by other rules or regulations 
prescribed by the administrative agency pursuant to statutory authority. 
Evidence which is not relevant is not admissible.



Sec. 18.403  Exclusion of relevant evidence on grounds of confusion or waste of time.

    Although relevant, evidence may be excluded if its probative value 
is substantially outweighed by the danger of confusion of issues, or 
misleading the judge as trier of fact, or by considerations of undue 
delay, waste of time, or needless presentation of cumulative evidence.



Sec. 18.404  Character evidence not admissible to prove conduct; exceptions; other crimes.

    (a) Character evidence generally. Evidence of a person's character 
or a trait of character is not admissible for the purpose of proving 
action in conformity therewith on a particular occasion, except evidence 
of the character

[[Page 220]]

of a witness, as provided in Secs. 18.607, 18.608, and 18.609.
    (b) Other crimes, wrongs, or acts. Evidence of other crimes, wrongs, 
or acts is not admissible to prove the character of a person in order to 
show action in conformity therewith. It may, however, be admissible for 
other purposes, such as proof of motive, opportunity, intent, 
preparation, plan, knowledge, identity, or absence of mistake or 
accident.



Sec. 18.405  Methods of proving character.

    (a) Reputation of opinion. In all cases in which evidence of 
character or a trait of character of a person is admissible, proof may 
be made by testimony as to reputation or by testimony in the form of an 
opinion. On cross-examination, inquiry is allowable into relevant 
specific instances of conduct.
    (b) Specific instances of conduct. In cases in which character or a 
trait of character of a person is an essential element of a claim or 
defense, proof may also be made of specific instances of that person's 
conduct.



Sec. 18.406  Habit; routine practice.

    Evidence of the habit of a person or of the routine practice of an 
organization, whether corroborated or not and regardless of the presence 
of eyewitnesses, is relevant to prove that the conduct of the person or 
organization on a particular occasion was in conformity with the habit 
or routine practice.



Sec. 18.407  Subsequent remedial measures.

    When, after an event, measures are taken which, if taken previously, 
would have made the event less likely to occur, evidence of the 
subsequent measures is not admissible to prove negligence or culpable 
conduct in connection with the event. This rule does not require the 
exclusion of evidence of subsequent measures when offered for another 
purpose, such as proving ownership, control, or feasibility of 
precautionary measures, if controverted, or impeachment.



Sec. 18.408  Compromise and offers to compromise.

    Evidence of furnishing or offering or promising to furnish, or of 
accepting or offering or promising to accept, a valuable consideration 
in compromising or attempting to compromise a claim which was disputed 
as to either validity or amount, is not admissible to prove liability 
for or invalidity of the claim or its amount. Evidence of conduct or 
statements made in compromise negotiations is likewise not admissible. 
This rule does not require the exclusion of any evidence otherwise 
discoverable merely because it is presented in the course of compromise 
negotiations. This rule does not require exclusion when the evidence is 
offered for another purpose, such as proving bias or prejudice of a 
witness, or negativing a contention of undue delay.



Sec. 18.409  Payment of medical and similar expenses.

    Evidence of furnishing or offering or promising to pay medical, 
hospital, or similar expenses occasioned by an injury is not admissible 
to prove liability for the injury.



Sec. 18.410  Inadmissibility of pleas, plea discussion, and related statements.

    Except as otherwise provided in this rule, evidence of the following 
is not admissible against the defendant who made the plea or was a 
participant in the plea discussions:
    (a) A plea of guilty which was later withdrawn;
    (b) A plea of nolo contendere;
    (c) Any statement made in the course of any proceedings under Rule 
11 of the Federal Rules of Criminal Procedure or comparable state 
procedure regarding either of the foregoing pleas; or
    (d) Any statement made in the course of plea discussions with an 
attorney for the prosecuting authority which do not result in a plea of 
guilty or which result in a plea of guilty later withdrawn. However, 
such a statement is admissible in any proceeding wherein another 
statement made in the course of the same plea discussions has been 
introduced and the statement ought in

[[Page 221]]

fairness be considered contemporaneously with it.



Sec. 18.411  Liability insurance.

    Evidence that a person was or was not insured against liability is 
not admissible upon the issue whether the person acted negligently or 
otherwise wrongfully. This rule does not require the exclusion of 
evidence of insurance against liability when offered for another 
purpose, such as proof of agency, ownership, or control, or bias or 
prejudice of a witness.

                               Privileges



Sec. 18.501  General rule.

    Except as otherwise required by the Constitution of the United 
States, or provided by Act of Congress, or by rules or regulations 
prescribed by the administrative agency pursuant to statutory authority, 
or pursuant to executive order, the privilege of a witness, person, 
government, State, or political subdivision thereof shall be governed by 
the principles of the common law as they may be interpreted by the 
courts of the United States in the light of reason and experience. 
However with respect to an element of a claim or defense as to which 
State law supplies the rule of decision, the privilege of a witness, 
person, government, State, or political subdivision thereof shall be 
determined in accordance with State law.

                                Witnesses



Sec. 18.601  General rule of competency.

    Every person is competent to be a witness except as otherwise 
provided in these rules. However with respect to an element of a claim 
or defense as to which State law supplies the rule of decision, the 
competency of a witness shall be determined in accordance with State 
law.



Sec. 18.602  Lack of personal knowledge.

    A witness may not testify to a matter unless evidence is introduced 
sufficient to support a finding that the witness has personal knowledge 
of the matter. Evidence to prove personal knowledge may, but need not, 
consist of the witness' own testimony. This rule is subject to the 
provisions of Sec. 18.703, relating to opinion testimony by expert 
witnesses.



Sec. 18.603  Oath or affirmation.

    Before testifying, every witness shall be required to declare that 
the witness will testify truthfully, by oath or affirmation administered 
in a form calculated to awaken the witness' conscience and impress the 
witness' mind with the duty to do so.



Sec. 18.604  Interpreters.

    An interpreter is subject to the provisions of these rules relating 
to qualification as an expert and the administration of an oath or 
affirmation to make a true translation.



Sec. 18.605  Competency of judge as witness.

    The judge presiding at the hearing may not testify in that hearing 
as a witness. No objection need be made in order to preserve the point.



Sec. 18.606  [Reserved]



Sec. 18.607  Who may impeach.

    The credibility of a witness may be attacked by any party, including 
the party calling the witness.



Sec. 18.608  Evidence of character and conduct of witness.

    (a) Opinion and reputation evidence of character. The credibility of 
a witness may be attacked or supported by evidence in the form of 
opinion or reputation, but subject to these limitations:
    (1) The evidence may refer only to character for truthfulness or 
untruthfulness, and
    (2) Evidence of truthful character is admissible only after the 
character of the witness for truthfulness has been attacked by opinion 
or reputation evidence or otherwise.
    (b) Specific instances of conduct. Specific instances of the conduct 
of a witness, for the purpose of attacking or supporting the witness' 
credibility, other than conviction of crime as provided in Sec. 18.609, 
may not be proved by extrinsic evidence. They may, however,

[[Page 222]]

in the discretion of the judge, if probative of truthfulness or 
untruthfulness, be inquired into on cross-examination of the witness, 
concerning the witness' character for truthfulness or untruthfulness, or 
concerning the character for truthfulness or untruthfulness of another 
witness as to which character the witness being cross-examined has 
testified.
    The giving of testimony by any witness does not operate as a waiver 
of the witness' privilege against self-incrimination when examined with 
respect to matters which relate only to credibility.



Sec. 18.609  Impeachment by evidence of conviction of crime.

    (a) General rule. For the purpose of attacking the credibility of a 
witness, evidence that the witness has been convicted of a crime shall 
be admitted if the crime was punishable by death or imprisonment in 
excess of one year under the law under which the witness was convicted, 
or involved dishonesty or false statement, regardless of the punishment.
    (b) Time limit. Evidence of a conviction under this rule is not 
admissible if a period of more than ten years has elapsed since the date 
of the conviction or of the release of the witness from the confinement 
imposed for that conviction, whichever is the later date.
    (c) Effect of pardon, annulment, or certificate of rehabilitation. 
Evidence of a conviction is not admissible under this rule if:
    (1) The conviction has been the subject of a pardon, annulment, 
certificate of rehabilitation, or other equivalent procedure based on a 
finding of the rehabilitation of the person convicted, and that person 
has not been convicted of a subsequent crime which was punishable by 
death or imprisonment in excess of one year, or
    (2) The conviction has been the subject of a pardon, annulment, or 
other equivalent procedure based on a finding of innocence.
    (d) Juvenile adjudications. Evidence of juvenile adjudications is 
not admissible under this rule.
    (e) Pendency of appeal. The pendency of an appeal therefrom does not 
render evidence of a conviction inadmissible. Evidence of the pendency 
of an appeal is admissible.

[55 FR 13219, Apr. 9, 1990; 55 FR 14033, Apr. 13, 1990]



Sec. 18.610  Religious beliefs or opinions.

    Evidence of the beliefs or opinions of a witness on matters of 
religion is not admissible for the purpose of showing that by reason of 
their nature the witness' credibility is impaired or enhanced.



Sec. 18.611  Mode and order of interrogation and presentation.

    (a) Control by judge. The judge shall exercise reasonable control 
over the mode and order of interrogating witnesses and presenting 
evidence so as to:
    (1) Make the interrogation and presentation effective for the 
ascertainment of the truth,
    (2) Avoid needless consumption of time, and
    (3) Protect witnesses from harassment or undue embarrassment.
    (b) Scope of cross-examination. Cross-examination should be limited 
to the subject matter of the direct examination and matters affecting 
the credibility of the witness. The judge may, in the exercise of 
discretion, permit inquiry into additional matters as if on direct 
examination.
    (c) Leading questions. Leading questions should not be used on the 
direct examination of a witness except as may be necessary to develop 
the witness' testimony. Ordinarily leading questions should be permitted 
on cross-examination. When a party calls a hostile witness, an adverse 
party, or a witness identified with an adverse party, interrogation may 
be by leading questions.



Sec. 18.612  Writing used to refresh memory.

    If a witness uses a writing to refresh memory for the purpose of 
testifying, either while testifying, or before testifying if the judge 
in the judge's discretion determines it is necessary in the interest of 
justice, an adverse party is entitled to have the writing produced at 
the hearing, to inspect it, to cross-examine the witness thereon, and to 
introduce in evidence those portions which relate to the testimony of 
the

[[Page 223]]

witness. If it is claimed that the writing contains matters not related 
to the subject matter of the testimony the judge shall examine the 
writing in camera, excise any portion not so related, and order delivery 
of the remainder to the party entitled thereto. Any portion withheld 
over objections shall be preserved and made available in the event of 
review. If a writing is not produced or delivered pursuant to order 
under this rule, the judge shall make any order justice requires.



Sec. 18.613  Prior statements of witnesses.

    (a) Examining witness concerning prior statement. In examining a 
witness concerning a prior statement made by the witness, whether 
written or not, the statement need not be shown nor its contents 
disclosed to the witness at that time, but on request the same shall be 
shown or disclosed to opposing counsel.
    (b) Extrinsic evidence of prior inconsistent statement of witness. 
Extrinsic evidence of a prior inconsistent statement by a witness is not 
admissible unless the witness is afforded an opportunity to explain or 
deny the same and the opposite party is afforded an opportunity to 
interrogate the witness thereon, or the interests of justice otherwise 
require. This provision does not apply to admissions of a party-opponent 
as defined in Sec. 18.801(d)(2).



Sec. 18.614  Calling and interrogation of witnesses by judge.

    (a) Calling by the judge. The judge may, on the judge's own motion 
or at the suggestion of a party, call witnesses, and all parties are 
entitled to cross-examine witnesses thus called.
    (b) Interrogation by the judge. The judge may interrogate witnesses, 
whether called by the judge or by a party.
    (c) Objections. Objections to the calling of witnesses by the judge 
or to interrogation by the judge must be timely.



Sec. 18.615  Exclusion of witnesses.

    At the request of a party the judge shall order witnesses excluded 
so that they cannot hear the testimony of other witnesses, and the judge 
may make the order of the judge's own motion. This rule does not 
authorize exclusion of a party who is a natural person, or an officer or 
employee of a party which is not a natural person designated as its 
representative by its attorney, or a person whose presence is shown by a 
party to be essential to the presentation of the party's cause.

                      Opinions and Expert Testimony



Sec. 18.701  Opinion testimony by lay witnesses.

    If the witness is not testifying as an expert, the witness' 
testimony in the form of opinions or inferences is limited to those 
opinions or inferences which are rationally based on the perception of 
the witness and helpful to a clear understanding of the witness' 
testimony or the determination of a fact in issue.



Sec. 18.702  Testimony by experts.

    If scientific, technical, or other specialized knowledge will assist 
the judge as trier of fact to understand the evidence or to determine a 
fact in issue, a witness qualified as an expert by knowledge, skill, 
experience, training, or education, may testify thereto in the form of 
an opinion or otherwise.



Sec. 18.703  Bases of opinion testimony by experts.

    The facts or data in the particular case upon which an expert bases 
an opinion or inference may be those perceived by or made known to the 
expert at or before the hearing. If of a type reasonably relied upon by 
experts in the particular field in forming opinions or inferences upon 
the subject, the facts or data need not be admissible in evidence.



Sec. 18.704  Opinion on ultimate issue.

    Testimony in the form of an opinion or inference otherwise 
admissible is not objectionable because it embraces an ultimate issue to 
be decided by the judge as trier of fact.



Sec. 18.705  Disclosure of facts or data underlying expert opinion.

    The expert may testify in terms of opinion or inference and give 
reasons therefor without prior disclosure of the underlying facts or 
data, unless the

[[Page 224]]

judge requires otherwise. The expert may in any event be required to 
disclose the underlying facts or data on cross-examination.



Sec. 18.706  Judge appointed experts.

    (a) Appointment. The judge may on the judge's own motion or on the 
motion of any party enter an order to show cause why expert witnesses 
should not be appointed, and may request the parties to submit 
nominations. The judge may appoint any expert witnesses agreed upon by 
the parties, and may appoint expert witnesses of the judge's own 
selection. An expert witness shall not be appointed by the judge unless 
the witness consents to act. A witness so appointed shall be informed of 
the witness' duties by the judge in writing, a copy of which shall be 
filed with the clerk, or at a conference in which the parties shall have 
an opportunity to participate. A witness so appointed shall advise the 
parties of the witness' findings, if any; the witness' deposition may be 
taken by any party; and the witness may be called to testify by the 
judge or any party. The witness shall be subject to cross-examination by 
each party, including a party calling the witness.
    (b) Compensation. Expert witnesses so appointed are entitled to 
reasonable compensation in whatever sum the judge may allow. The 
compensation thus fixed is payable from funds which may be provided by 
law in hearings involving just compensation under the fifth amendment. 
In other hearings the compensation shall be paid by the parties in such 
proportion and at such time as the judge directs, and thereafter charged 
in like manner as other costs.
    (c) Parties' experts of own selection. Nothing in this rule limits 
the parties in calling expert witnesses of their own selection.

                                 Hearsay



Sec. 18.801  Definitions.

    (a) Statement. A statement is (1) an oral or written assertion, or 
(2) nonverbal conduct of a person, if it is intended by the person as an 
assertion.
    (b) Declarant. A declarant is a person who makes a statement.
    (c) Hearsay. Hearsay is a statement, other than one made by the 
declarant while testifying at the hearing, offered in evidence to prove 
the truth of the matter asserted.
    (d) Statements which are not hearsay. A statement is not hearsay if:
    (1) Prior statement by witness. The declarant testifies at the 
hearing and is subject to cross-examination concerning the statement, 
and the statement is--
    (i) Inconsistent with the declarant's testimony, or
    (ii) Consistent with the declarant's testimony and is offered to 
rebut an express or implied charge against the declarant of recent 
fabrication or improper influence or motive, or
    (iii) One of identification of a person made after perceiving the 
person; or
    (2) Admission by party-opponent. The statement is offered against a 
party and is--
    (i) The party's own statement in either an individual or a 
representative capacity, or
    (ii) A statement of which the party has manifested an adoption or 
belief in its truth, or
    (iii) A statement by a person authorized by the party to make a 
statement concerning the subject, or
    (iv) A statement by the party's agent or servant concerning a matter 
within the scope of the agency or employment, made during the existence 
of the relationship, or
    (v) A statement by a co-conspirator of a party during the course and 
in furtherance of the conspiracy.



Sec. 18.802  Hearsay rule.

    Hearsay is not admissible except as provided by these rules, or by 
rules or regulations of the administrative agency prescribed pursuant to 
statutory authority, or pursuant to executive order, or by Act of 
Congress.



Sec. 18.803  Hearsay exceptions; availability of declarant immaterial.

    (a) The following are not excluded by the hearsay rule, even though 
the declarant is available as a witness:
    (1) Present sense impression. A statement describing or explaining 
an event or condition made while the declarant

[[Page 225]]

was perceiving the event or condition, or immediately thereafter.
    (2) Excited utterance. A statement relating to a startling event or 
condition made while the declarant was under the stress of excitement 
caused by the event or condition.
    (3) Then existing mental, emotional, or physical condition. A 
statement of the declarant's then existing state of mind, emotion, 
sensation, or physical condition (such as intent, plan, motive, design, 
mental feeling, pain, and bodily health), but not including a statement 
of memory or belief to prove the fact remembered or believed unless it 
relates to the execution, revocation, identification, or terms of 
declarant's will.
    (4) Statements for purposes of medical diagnosis or treatment. 
Statements made for purposes of medical diagnosis or treatment and 
describing medical history, or past or present symptoms, pain, or 
sensations or the inception or general character of the cause or 
external source thereof insofar as reasonably pertinent to diagnosis or 
treatment.
    (5) Recorded recollection. A memorandum or record concerning a 
matter about which a witness once had knowledge but now has insufficient 
recollection to enable the witness to testify fully and accurately, 
shown to have been made or adopted by the witness when the matter was 
fresh in the witness' memory and to reflect that knowledge correctly.
    (6) Records of regularly conducted activity. A memorandum, report, 
record, or data compilation, in any form, of acts, events, conditions, 
opinions, or diagnoses, made at or near the time by, or from information 
transmitted by, a person with knowledge, if kept in the course of a 
regularly conducted business activity, and if it was the regular 
practice of that business activity to make the memorandum, report, 
record, or data compilation, all as shown by the testimony of the 
custodian or other qualified witness, unless the source of information 
or the method or circumstances of preparation indicate lack of 
trustworthiness. The term business as used in this paragraph includes 
business, institution, association, profession, occupation, and calling 
of every kind, whether or not conducted for profit.
    (7) Absence of entry in records kept in accordance with the 
provisions of paragraph (6). Evidence that a matter is not included in 
the memoranda reports, records, or data compilations, in any form, kept 
in accordance with the provisions of paragraph (6), to prove the 
nonoccurrence or nonexistence of the matter, if the matter was of a kind 
of which a memorandum, report, record, or data compilation was regularly 
made and preserved, unless the sources of information or other 
circumstances indicate lack of trustworthiness.
    (8) Public records and reports. Records, reports, statements, or 
data compilations, in any form, of public offices or agencies, setting 
forth--
    (i) The activities of the office or agency, or
    (ii) Matters observed pursuant to duty imposed by law as to which 
matters there was a duty to report, or
    (iii) Factual findings resulting from an investigation made pursuant 
to authority granted by law, unless the sources of information or other 
circumstances indicate lack of trustworthiness.
    (9) Records of vital statistics. Records or data compilations, in 
any form, of births, fetal deaths, deaths, or marriages, if the report 
thereof was made to a public office pursuant to requirements of law.
    (10) Absence of public record or entry. To prove the absence of a 
record, report, statement, or data compilation, in any form, or the 
nonoccurrence or nonexistence of a matter of which a record, report, 
statement, or data compilation, in any form, was regularly made and 
preserved by a public office or agency, evidence in the form of a 
certification in accordance with Sec. 18.902, or testimony, that 
diligent search failed to disclose the record, report, statement, or 
date compilation, or entry.
    (11) Records of religious organizations. Statements of births, 
marriages, divorces, deaths, legitimacy, ancestry, relationship by blood 
or marriage, or other similar facts of personal or family history, 
contained in a regularly kept record of a religious organization.

[[Page 226]]

    (12) Marriage, baptismal, and similar certificates. Statements of 
fact contained in a certificate that the maker performed a marriage or 
other ceremony or administered a sacrament, made by a clergyman, public 
official, or other person authorized by the rules or practices of a 
religious organization or by law to perform the act certified, and 
purporting to have been issued at the time of the act or within a 
reasonable time thereafter.
    (13) Family records. Statements of fact concerning personal or 
family history contained in family Bibles, genealogies, charts, 
engravings on rings, inscriptions on family portraits, engravings on 
urns, crypts, or tombstones, or the like.
    (14) Records of documents affecting an interest in property. The 
record of a document purporting to establish or affect an interest in 
property, as proof of the content of the original recorded document and 
its execution and delivery by each person by whom it purports to have 
been executed, if the record is a record of a public office and an 
applicable statute authorizes the recording of documents of that kind in 
that office.
    (15) Statements in documents affecting an interest in property. A 
statement contained in a document purporting to establish or affect an 
interest in property if the matter stated was relevant to the purpose of 
the document, unless dealings with the property since the document was 
made have been inconsistent with the truth of the statement or the 
purport of the document.
    (16) Statements in ancient documents. Statements in a document in 
existence twenty years or more the authenticity of which is established.
    (17) Market reports, commercial publications. Market quotations, 
tabulations, lists, directories, or other published compilations, 
generally used and relied upon by the public or by persons in particular 
occupations.
    (18) Learned treatises. To the extent called to the attention of an 
expert witness upon cross-examination or relied upon by the expert 
witness in direct examination, statements contained in published 
treatises, periodicals, or pamphlets on a subject of history, medicine, 
or other science or art, established as a reliable authority by the 
testimony or admission of the witness or by other expert testimony or by 
official notice.
    (19) Reputation concerning personal or family history. Reputation 
among members of a person's family by blood, adoption, or marriage, or 
among a person's associates, or in the community, concerning a person's 
birth, adoption, marriage, divorce, death, legitimacy, relationship by 
blood, adoption, or marriage, ancestry, or other similar fact of 
personal or family history.
    (20) Reputation concerning boundaries or general history. Reputation 
in a community, arising before the controversy, as to boundaries of or 
customs affecting lands in the community, and reputation as to events of 
general history important to the community or State or nation in which 
located.
    (21) Reputation as to character. Reputation of a person's character 
among associates or in the community.
    (22) Judgment of previous conviction. Evidence of a final judgment, 
entered after a trial or upon a plea of guilty (but not upon a plea of 
nolo contendere), adjudging a person guilty of a crime punishable by 
death or imprisonment in excess of one year, to prove any fact essential 
to sustain the judgment. The pendency of an appeal may be shown but does 
not affect admissibility.
    (23) Judgment as to personal, family, or general history, or 
boundaries. Judgments as proof of matters of personal, family or general 
history, or boundaries, essential to the judgment, if the same would be 
provable by evidence of reputation.
    (24) Other exceptions. A statement not specifically covered by any 
of the foregoing exceptions but having equivalent circumstantial 
guarantees of trustworthiness to the aforementioned hearsay exceptions, 
if the judge determines that (i) the statement is offered as evidence of 
a material fact; (ii) the statement is more probative on the point for 
which it is offered than any other evidence which the proponent can 
procure through reasonable efforts; and (iii) the general purposes of 
these rules and the interests of justice will best be served by 
admission of the statement into evidence. However, a statement may not

[[Page 227]]

be admitted under this exception unless the proponent of it makes known 
to the adverse party sufficiently in advance of the hearing to provide 
the adverse party with a fair opportunity to prepare to meet it, the 
proponent's intention to offer the statement and the particulars of it, 
including the name and address of the declarant.
    (25) Self-authentication. The self-authentication of documents and 
other items as provided in Sec. 18.902.
    (26) Bills, estimates and reports. In actions involving injury, 
illness, disease, death, disability, or physical or mental impairment, 
or damage to property, the following bills, estimates, and reports as 
relevant to prove the value and reasonableness of the charges for 
services, labor and materials stated therein and, where applicable, the 
necessity for furnishing the same, unless the sources of information or 
other circumstances indicate lack of trustworthiness, provided that a 
copy of said bill, estimate, or report has been served upon the adverse 
party sufficiently in advance of the hearing to provide the adverse 
party with a fair opportunity to prepare to object or meet it:
    (i) Hospital bills on the official letterhead or billhead of the 
hospital, when dated and itemized.
    (ii) Bills of doctors and dentists, when dated and containing a 
statement showing the date of each visit and the charge therefor.
    (iii) Bills of registered nurses, licensed practical nurses and 
physical therapists, or other licensed health care providers when dated 
and containing an itemized statement of the days and hours of service 
and charges therefor.
    (iv) Bills for medicine, eyeglasses, prosthetic device, medical 
belts or similar items, when dated and itemized.
    (v) Property repair bills or estimates, when dated and itemized, 
setting forth the charges for labor and material. In the case of an 
estimate, the party intending to offer the estimate shall forward with 
his notice to the adverse party, together with a copy of the estimate, a 
statement indicating whether or not the property was repaired, and, if 
so, whether the estimated repairs were made in full or in part and by 
whom, the cost thereof, together with a copy of the bill therefore.
    (vi) Reports of past earnings, or of the rate of earnings and time 
lost from work or lost compensation, prepared by an employer on official 
letterhead, when dated and itemized. The adverse party may not dispute 
the authenticity, the value or reasonableness of such charges, the 
necessity therefore or the accuracy of the report, unless the adverse 
party files and serves written objection thereto sufficiently in advance 
of the hearing stating the objections, and the grounds thereof, that the 
adverse party will make if the bill, estimate, or reports is offered at 
the time of the hearing. An adverse party may call the author of the 
bill, estimate, or report as a witness and examine the witness as if 
under cross-examination.
    (27) Medical reports. In actions involving injury, illness, disease, 
death, disability, or physical or mental impairment, doctor, hospital, 
laboratory and other medical reports, made for purposes of medical 
treatment, unless the sources of information or other circumstances 
indicate lack of trustworthiness, provided that a copy of the report has 
been filed and served upon the adverse party sufficiently in advance of 
the hearing to provide the adverse party with a fair opportunity to 
prepare to object or meet it. The adverse party may not object to the 
admissibility of the report unless the adverse party files and serves 
written objection thereto sufficiently in advance of the hearing stating 
the objections, and the grounds therefor, that the adverse party will 
make if the report is offered at the time of the hearing. An adverse 
party may call the author of the medical report as a witness and examine 
the witness as if under cross-examination.
    (28) Written reports of expert witnesses. Written reports of an 
expert witness prepared with a view toward litigation, including but not 
limited to a diagnostic report of a physician, including inferences and 
opinions, when on official letterhead, when dated, when including a 
statement of the expert's

[[Page 228]]

qualifications, when including a summary of experience as an expert 
witness in litigation, when including the basic facts, data, and 
opinions forming the basis of the inferences or opinions, and when 
including the reasons for or explanation of the inferences and opinions, 
so far as admissible under rules of evidence applied as though the 
witness was then present and testifying, unless the sources of 
information or the method or circumstances of preparation indicate lack 
of trustworthiness, provided that a copy of the report has been filed 
and served upon the adverse party sufficiently in advance of the hearing 
to provide the adverse party with a fair opportunity to prepare to 
object or meet it. The adverse party may not object to the admissibility 
of the report unless the adverse party files and serves written 
objection thereto sufficiently in advance of the hearing stating the 
objections, and the grounds therefor, that the adverse party will make 
if the report is offered at the time of the hearing. An adverse party 
may call the expert as a witness and examine the witness as if under 
cross-examination.
    (29) Written statements of lay witnesses. Written statements of a 
lay witness made under oath or affirmation and subject to the penalty of 
perjury, so far as admissible under the rules of evidence applied as 
though the witness was then present and testifying, unless the sources 
of information or the method or circumstances of preparation indicate 
lack of trustworthiness provided that (i) a copy of the written 
statement has been filed and served upon the adverse party sufficiently 
in advance of the hearing to provide the adverse party with a fair 
opportunity to prepare to object or meet it, and (ii) if the declarant 
is reasonably available as a witness, as determined by the judge, no 
adverse party has sufficiently in advance of the hearing filed and 
served upon the noticing party a written demand that the declarant be 
produced in person to testify at the hearing. An adverse party may call 
the declarant as a witness and examine the witness as if under cross-
examination.
    (30) Deposition testimony. Testimony given as a witness in a 
deposition taken in compliance with law in the course of the same 
proceeding, so far as admissible under the rules of evidence applied as 
though the witness was then present and testifying, if the party against 
whom the testimony is now offered had an opportunity and similar motive 
to develop the testimony by direct, cross, or redirect examination, 
provided that a notice of intention to offer the deposition in evidence, 
together with a copy thereof if not otherwise previously provided, has 
been served upon the adverse party sufficiently in advance of the 
hearing to provide the adverse party with a fair opportunity to prepare 
to object or meet it. An adverse party may call the deponent as a 
witness and examine the witness as if under cross-examination.
    (b) [Reserved]



Sec. 18.804  Hearsay exceptions; declarant unavailable.

    (a) Definition of unavailability. Unavailability as a witness 
includes situations in which the declarant:
    (1) Is exempted by ruling of the judge on the ground of privilege 
from testifying concerning the subject matter of the declarant's 
statement; or
    (2) Persists in refusing to testify concerning the subject matter of 
the declarant's statement despite an order of the judge to do so; or
    (3) Testifies to a lack of memory of the subject matter of the 
declarant's statement; or
    (4) Is unable to be present or to testify at the hearing because of 
death or then existing physical or mental illness or infirmity; or
    (5) Is absent from the hearing and the proponent of a statement has 
been unable to procure the declarant's attendance (or in the case of a 
hearsay exception under paragraph (b) (2), (3), or (4) of this section, 
the declarant's attendance or testimony) by process or other reasonable 
means.

A declarant is not unavailable as a witness if exemption, refusal, claim 
of lack of memory, inability, or absence is due to the procurement or 
wrongdoing of the proponent of a statement for the purpose of preventing 
the witness from attending or testifying.
    (b) Hearsay exceptions. The following are not excluded by the 
hearsay rule if

[[Page 229]]

the declarant is unavailable as a witness:
    (1) Former testimony. Testimony given as a witness at another 
hearing of the same or a different proceeding, or in a deposition taken 
in compliance with law in the course of the same or another proceeding, 
if the party against whom the testimony is now offered, or a predecessor 
in interest, had an opportunity and similar motive to develop the 
testimony by direct, cross, or redirect examination.
    (2) Statement under belief of impending death. A statement made by a 
declarant while believing that the declarant's death was imminent, 
concerning the cause or circumstances of what the declarant believed to 
be impending death.
    (3) Statement against interest. A statement which was at the time of 
its making so far contrary to the declarant's pecuniary or proprietary 
interest, or so far tended to subject the declarant to civil or criminal 
liability, or to render invalid a claim by the declarant against 
another, that a reasonable person in the declarant's position would not 
have made the statement unless believing it to be true.
    (4) Statement of personal or family history. (i) A statement 
concerning the declarant's own birth, adoption, marriage, divorce, 
legitimacy, relationship by blood, adoption, or marriage, ancestry, or 
other similar fact of personal or family history, even though declarant 
had no means of acquiring personal knowledge of the matter stated; or
    (ii) A statement concerning the foregoing matters, and death also, 
of another person, if the declarant was related to the other by blood, 
adoption, or marriage or was so intimately associated with the other's 
family as to be likely to have accurate information concerning the 
matter declared.
    (5) Other exceptions. A statement not specifically covered by any of 
the foregoing exceptions but having equivalent circumstantial guarantees 
of trustworthiness to the aforementioned hearsay exceptions, if the 
judge determines that--
    (i) The statement is offered as evidence of a material fact;
    (ii) The statement is more probative on the point for which it is 
offered than any other evidence which the proponent can procure through 
reasonable efforts; and
    (iii) The general purposes of these rules and the interests of 
justice will best be served by admission of the statement into evidence. 
However, a statement may not be admitted under this exception unless the 
proponent of it makes known to the adverse party sufficiently in advance 
of the hearing to provide the adverse party with a fair opportunity to 
prepare to meet it, the proponent's intention to offer the statement and 
the particulars of it, including the name and address of the declarant.



Sec. 18.805  Hearsay within hearsay.

    Hearsay included within hearsay is not excluded under the hearsay 
rule if each part of the combined statements conforms with an exception 
to the hearsay rule provided in these rules.



Sec. 18.806  Attacking and supporting credibility of declarant.

    When a hearsay statement, or a statement defined in 
Sec. 18.801(d)(2), (iii), (iv), or (v), has been admitted in evidence, 
the credibility of the declarant may be attacked, and if attacked may be 
supported, by any evidence which would be admissible for those purposes 
if declarant had testified as a witness. Evidence of a statement or 
conduct by the declarant at any time, inconsistent with the declarant's 
hearsay statement, is not subject to any requirement that the declarant 
may have been afforded an opportunity to deny or explain. If the party 
against whom a hearsay statement has been admitted calls the declarant 
as a witness, the party is entitled to examine the declarant on the 
statement as if under cross-examination.

                    Authentication and Identification



Sec. 18.901  Requirement of authentication or identification.

    (a) General provision. The requirement of authentication or 
identification as a condition precedent to admissibility is satisfied by 
evidence sufficient to support a finding that the matter in question is 
what its proponent claims.

[[Page 230]]

    (b) Illustrations. By way of illustration only, and not by way of 
limitation, the following are examples of authentication or 
identification conforming with the requirements of this rule:
    (1) Testimony of witness with knowledge. Testimony that a matter is 
what it is claimed to be.
    (2) Nonexpert opinion on handwriting. Nonexpert opinion as to the 
genuineness of handwriting, based upon familiarity not acquired for 
purposes of litigation.
    (3) Comparison by judge or expert witness. Comparison by the judge 
as trier of fact or by expert witnesses with specimens which have been 
authenticated.
    (4) Distinctive characteristics and the like. Appearance, contents, 
substance, internal patterns, or other distinctive characteristics, 
taken in conjunction with circumstances.
    (5) Voice identification. Identification of a voice, whether heard 
firsthand or through mechanical or electronic transmission or recording, 
by opinion based upon hearing the voice at any time under circumstances 
connecting it with the alleged speaker.
    (6) Telephone conversations. Telephone conversations, by evidence 
that a call was made to the number assigned at the time by the telephone 
company to a particular person or business, if--
    (i) In the case of a person, circumstances, including self-
identification, show the person answering to be the one called, or
    (ii) In the case of a business, the call was made to a place of 
business and the conversation related to business reasonably transacted 
over the telephone.
    (7) Public records or reports. Evidence that a writing authorized by 
law to be recorded or filed and in fact recorded or filed in a public 
office, or a purported public record, report, statement, or data 
compilation, in any form, is from the public office where items of this 
nature are kept.
    (8) Ancient documents or data compilation. Evidence that a document 
or data compilation, in any form,
    (i) Is in such condition as to create no suspicion concerning its 
authenticity,
    (ii) Was in a place where it, if authentic, would likely be, and
    (iii) Has been in existence 20 years or more at the time it is 
offered.
    (9) Process or system. Evidence describing a process or system used 
to produce a result and showing that the process or system produces an 
accurate result.
    (10) Methods provided by statute or rule. Any method of 
authentication or identification provided by Act of Congress, or by rule 
or regulation prescribed by the administrative agency pursuant to 
statutory authority, or pursuant to executive order.



Sec. 18.902  Self-authentication.

    (a) Extrinsic evidence of authenticity as a condition precedent to 
admissibility is not required with respect to the following:
    (1) Domestic public documents under seal. A document bearing a seal 
purporting to be that of the United States, or of any State, district, 
Commonwealth, territory, or insular possession thereof, or the Panama 
Canal Zone, or the Trust Territory of the Pacific Islands, or of a 
political subdivision, department, officer, or agency thereof, and a 
signature purporting to be an attestation or execution.
    (2) Domestic public documents not under seal. A document purporting 
to bear the signature in the official capacity of an officer or employee 
of any entity included in paragraph (a)(1) of this section, having no 
seal, if a public officer having a seal and having official duties in 
the district or political subdivision of the officer or employee 
certifies under seal that the signer has the official capacity and that 
the signature is genuine.
    (3) Foreign public documents. A document purporting to be executed 
or attested in an official capacity by a person authorized by the laws 
of a foreign country to make the execution or attestation, and 
accompanied by a final certification as to the genuineness of the 
signature and official position--
    (i) Of the executing or attesting person, or
    (ii) Of any foreign official whose certificate of genuineness of 
signature and official position relates to the execution or attestation 
or is in a chain of

[[Page 231]]

certificates of genuineness of signature and official position relating 
to the execution or attestation. A final certification may be made by a 
secretary of embassy or legation, consul, vice consul, or consular agent 
of the United States, or a diplomatic or consular official of the 
foreign country assigned or accredited to the United States. If 
reasonable opportunity has been given to all parties to investigate the 
authenticity and accuracy of official documents, the judge may, for good 
cause shown, order that they be treated as presumptively authentic 
without final certification or permit them to be evidenced by an 
attested summary with or without final certification.
    (4) Certified copies of public records. A copy of an official record 
or report or entry therein, or of a document authorized by law to be 
recorded or filed and actually recorded or filed in a public office, 
including data compilations in any form, certified as correct by the 
custodian or other person authorized to make the certification, by 
certificate complying with paragraph (a) (1), (2), or (3) of this 
section, with any Act of Congress, or with any rule or regulation 
prescribed by the administrative agency pursuant to statutory authority, 
or pursuant to executive order.
    (5) Official publications. Books, pamphlets, or other publications 
purporting to be issued by public authority.
    (6) Newspapers and periodicals. Printed materials purporting to be 
newspapers or periodicals.
    (7) Trade inscriptions and the like. Inscriptions, signs, tags, or 
labels purporting to have been affixed in the course of business and 
indicating ownership, control, or origin.
    (8) Acknowledged documents. Documents accompanied by a certificate 
of acknowledgment executed in the manner provided by law by a notary 
public or other officer authorized by law to take acknowledgments.
    (9) Commercial paper and related documents. Commercial paper, 
signatures thereon, and documents relating thereto to the extent 
provided by general commercial law.
    (10) Presumptions under Acts of Congress or administrative agency 
rules or regulations. Any signature, document, or other matter declared 
by Act of Congress or by rule or regulation prescribed by the 
administrative agency pursuant to statutory authority or pursuant to 
executive order to be presumptively or prima facie genuine or authentic.
    (11) Certified records of regularly conducted activity. The original 
or a duplicate of a record of regularly conducted activity, within the 
scope of Sec. 18.803(6), which the custodian thereof or another 
qualified individual certifies
    (i) Was made, at or near the time of the occurrence of the matters 
set forth, by, or from information transmitted by, a person with 
knowledge of those matters,
    (ii) Is kept in the course of the regularly conducted activity, and
    (iii) Was made by the regularly conducted activity as a regular 
practice, unless the sources of information or the method or 
circumstances of preparation indicate lack of trustworthiness. A record 
so certified is not self-authenticating under this paragraph unless the 
proponent makes an intention to offer it known to the adverse party and 
makes it available for inspection sufficiently in advance of its offer 
in evidence to provide the adverse party with a fair opportunity to 
object or meet it. As used in this subsection, certifies means, with 
respect to a domestic record, a written declaration under oath subject 
to the penalty of perjury and, with respect to a foreign record, a 
written declaration signed in a foreign country which, if falsely made, 
would subject the maker to criminal penalty under the laws of that 
country.
    (12) Bills, estimates, and reports. In actions involving injury, 
illness, disease, death, disability, or physical or mental impairment, 
or damage to property, the following bills, estimates, and reports 
provided that a copy of said bill, estimate, or report has been served 
upon the adverse party sufficiently in advance of the hearing to provide 
the adverse party with a fair opportunity to prepare to object or meet 
it:
    (i) Hospital bills on the official letterhead or billhead of the 
hospital, when dated and itemized.
    (ii) Bills of doctors and dentists, when dated and containing a 
statement

[[Page 232]]

showing the date of each visit and the charge therefor.
    (iii) Bills of registered nurses, licensed practical nurses and 
physical therapists or other licensed health care providers, when dated 
and containing an itemized statement of the days and hours of service 
and the charges therefor.
    (iv) Bills for medicine, eyeglasses, prosthetic devices, medical 
belts or similar items, when dated and itemized.
    (v) Property repair bills or estimates, when dated and itemized, 
setting forth the charges for labor and material. In the case of an 
estimate, the party intending to offer the estimate shall forward with 
his notice to the adverse party, together with a copy of the estimate, a 
statement indicating whether or not the property was repaired, and, if 
so, whether the estimated repairs were made in full or in part and by 
whom, the cost thereof, together with a copy of the bill therefor.
    (vi) Reports of past earnings, or of the rate of earnings and time 
lost from work or lost compensation, prepared by an employer on official 
letterhead, when dated and itemized. The adverse party may not dispute 
the authenticity, therefor, unless the adverse party files and serves 
written objection thereto sufficiently in advance of the hearing stating 
the objections, and the grounds therefor, the adverse party will make if 
the bill, estimate, or report is offered at the time of the hearing. An 
adverse party may call the authors of the bill, estimate, or report as a 
witness and examine the witness as if under cross-examination.
    (13) Medical reports. In actions involving injury, illness, disease, 
death, disability or physical or mental impairment, doctor, hospital, 
laboratory and other medical reports made for purposes of medical 
treatment, provided that a copy of the report has been filed and served 
upon the adverse party sufficiently in advance of the hearing to provide 
the adverse party with a fair opportunity to prepare to object or meet 
it. The adverse party may not object to the authenticity of the report 
unless the adverse party files and serves written objection thereto 
sufficiently in advance of the hearing stating the objections, and the 
grounds therefor, that the adverse party will make if the report is 
offered at the time of the hearing. An adverse party may call the author 
of the medical report as a witness and examine the witness as if under 
cross-examination.
    (14) Written reports of expert witnesses. Written reports of an 
expert witness prepared with a view toward litigation including but not 
limited to a diagnostic report of a physician, including inferences and 
opinions, when on official letterhead, when dated, when including a 
statement of the experts qualifications, when including a summary of 
experience as an expert witness in litigation, when including the basic 
facts, data, and opinions forming the basis of the inferences or 
opinions, and when including the reasons for or explanation of the 
inferences or opinions, so far as admissible under the rules of evidence 
applied as though the witness was then present and testifying, provided 
that a copy of the report has been filed and served upon the adverse 
party sufficiently in advance of the hearing to provide the adverse 
party with a fair opportunity to prepare to object or meet it. The 
adverse party may not object to the authenticity of the report unless 
the adverse party files and serves written objection thereto 
sufficiently in advance of the hearing stating the objections, and the 
grounds therefor, that the adverse party will make if the report is 
offered at the time of the hearing. An adverse party may call the expert 
as a witness and examine the witness as if under cross-examination.
    (15) Written statements of lay witnesses. Written statements of a 
lay witness made under oath or affirmation and subject to the penalty of 
perjury, so far as admissible under the rules of evidence applied as 
though the witness was then present and testifying, provided that:
    (i) A copy of the written statement has been filed and served upon 
the adverse party sufficiently in advance of the hearing to provide the 
adverse party with a fair opportunity to prepare to object or meet it, 
and
    (ii) If the declarant is reasonably available as a witness, as 
determined

[[Page 233]]

by the judge, no adverse party has sufficiently in advance of the 
hearing filed and served upon the noticing party a written demand that 
the declarant be produced in person to testify at the hearing. An 
adverse party may call the declarant as a witness and examine the 
witness as if under cross-examination.
    (16) Deposition testimony. Testimony given as a witness in a 
deposition taken in compliance with law in the course of the same 
proceeding, so far as admissible under the rules of evidence applied as 
though the witness was then present and testifying, if the party against 
whom the testimony is now offered had an opportunity and similar motive 
to develop the testimony by direct, cross, or redirect examination, 
provided that a notice of intention to offer the deposition in evidence, 
together with a copy thereof if not otherwise previously provided, has 
been served upon the adverse party sufficiently in advance of the 
hearing to provide the adverse party with a fair opportunity to prepare 
to object or meet it. An adverse party may call the deponent as a 
witness and examine the witness as if under cross-examination.
    (b) [Reserved]



Sec. 18.903  Subscribing witness' testimony unnecessary.

    The testimony of a subscribing witness is not necessary to 
authenticate a writing unless required by the laws of the jurisdiction 
whose laws govern the validity of the writing.

            Contents of Writings, Recordings, and Photographs



Sec. 18.1001  Definitions.

    (a) For purposes of this article the following definitions are 
applicable:
    (1) Writings and recordings. Writings and recordings consist of 
letters, words, or numbers, or their equivalent, set down by 
handwriting, typewriting, printing, photostating, photographing, 
magnetic impulse, mechanical or electronic recording, or other form of 
data compilation.
    (2) Photographs. Photographs include still photographs, X-ray films, 
video tapes, and motion pictures.
    (3) Original. An original of a writing or recording is the writing 
or recording itself or any counterpart intended to have the same effect 
by a person executing or issuing it. An original of a photograph 
includes the negative or, other than with respect of X-ray films, any 
print therefrom. If data are stored in a computer or similar device, any 
printout or other output readable by sight, shown to reflect the data 
accurately, is an original.
    (4) Duplicate. A duplicate is a counterpart produced by the same 
impression as the original, or from the same matrix, or by means of 
photography, including enlargements and miniatures, or by mechanical or 
electronic rerecording, or by chemical reproduction, or by other 
equivalent techniques which accurately reproduces the original.
    (b) [Reserved]



Sec. 18.1002  Requirement of original.

    To prove the content of a writing, recording, or photograph, the 
original writing, recording, or photograph is required, except as 
otherwise provided in these rules, or by rule or regulation prescribed 
by the administrative agency pursuant to statutory authority, or 
pursuant to executive order, or by Act of Congress.



Sec. 18.1003  Admissibility of duplicates.

    A duplicate is admissible to the same extent as an original unless a 
genuine question is raised as to the authenticity of the original, or in 
the circumstances it would be unfair to admit the duplicate in lieu of 
the original.



Sec. 18.1004  Admissibility of other evidence of contents.

    (a) The original is not required, and other evidence of the contents 
of a writing, recording, or photograph is admissible if:
    (1) Originals lost or destroyed. All originals are lost or have been 
destroyed, unless the proponent lost or destroyed them in bad faith; or
    (2) Original not obtainable. No original can be obtained by any 
available judicial process or procedure; or
    (3) Original in possession of opponent. At a time when an original 
was under the control of the party against whom offered, that party was 
put on notice, by the pleading or otherwise, that the

[[Page 234]]

contents would be a subject of proof at the hearing, and that party does 
not produce the original at the hearing; or
    (4) Collateral matters. The writing, recording, or photograph is not 
closely related to a controlling issue.
    (b) [Reserved]



Sec. 18.1005  Public records.

    The contents of an official record, or of a document authorized to 
be recorded or filed and actually recorded or filed, including data 
compilations in any form, if otherwise admissible, may be proved by 
copy, certified as correct in accordance with Sec. 18.902 or testified 
to be correct by a witness who has compared it with the original. If a 
copy which complies with the foregoing cannot be obtained by the 
exercise of reasonable diligence, then other evidence of the contents 
may be given.



Sec. 18.1006  Summaries.

    The contents of voluminous writings, recordings, or photographs 
which cannot conveniently be examined at the hearing may be presented in 
the form of a chart, summary, or calculation. The originals, or 
duplicates, shall be made available for examination or copying, or both, 
by other parties at reasonable time and place. The judge may order that 
they be produced at the hearing.



Sec. 18.1007  Testimony or written admission of party.

    Contents of writings, recordings, or photographs may be proved by 
the testimony or deposition of the party against whom offered or by that 
party's written admission, without accounting for the nonproduction of 
the original.



Sec. 18.1008  Functions of the judge.

    When the admissibility of other evidence of contents of writings, 
recordings, or photographs under these rules depends upon the 
fulfillment of a condition of fact, the question whether the condition 
has been fulfilled is ordinarily for the judge to determine in 
accordance with the provisions of Sec. 18.104(a). However, when an issue 
is raised whether the asserted writing ever existed; or whether another 
writing, recording, or photograph produced at the hearing is the 
original; or whether other evidence of contents correctly reflects the 
contents, the issue is for the judge as trier of fact to determine as in 
the case of other issues of fact.

                              Applicability



Sec. 18.1101  Applicability of rules.

    (a) General provision. These rules govern formal adversarial 
adjudications conducted by the United States Department of Labor before 
a presiding officer.
    (1) Which are required by Act of Congress to be determined on the 
record after opportunity for an administrative agency hearing in 
accordance with the Administrative Procedure Act, 5 U.S.C. 554, 556 and 
557, or
    (2) Which by United States Department of Labor regulation are 
conducted in conformance with the foregoing provisions. Presiding 
officer, referred to in these rules as the judge, means an 
Administrative Law Judge, an agency head, or other officer who presides 
at the reception of evidence at a hearing in such an adjudication.
    (b) Rules inapplicable. The rules (other than with respect to 
privileges) do not apply in the following situations:
    (1) Preliminary questions of fact. The determination of questions of 
fact preliminary to admissibility of evidence when the issue is to be 
determined by the judge under Sec. 18.104.
    (2) Longshore, black lung, and related acts. Other than with respect 
to Secs. 18.403, 18.611(a), 18.614 and without prejudice to current 
practice, hearings held pursuant to the Longshore and Harbor Workers' 
Compensation Act, 33 U.S.C. 901; the Federal Mine Safety and Health Act 
(formerly the Federal Coal Mine Health and Safety Act) as amended by the 
Black Lung Benefits Act, 30 U.S.C. 901; and acts such as the Defense 
Base Act, 42 U.S.C. 1651; the District of Columbia Workmen's 
Compensation Act, 36 DC Code 501; the Outer Continental Shelf Lands Act, 
43 U.S.C. 1331; and the Nonappropriated Fund Instrumentalities Act, 5 
U.S.C. 8171, which incorporate section 23(a) of the Longshore and Harbor 
Workers' Compensation Act by reference.

[[Page 235]]

    (c) Rules inapplicable in part. These rules do not apply to the 
extent inconsistent with, in conflict with, or to the extent a matter is 
otherwise specifically provided by an Act of Congress, or by a rule or 
regulation of specific application prescribed by the United States 
Department of Labor pursuant to statutory authority, or pursuant to 
executive order.



Sec. 18.1102  [Reserved]



Sec. 18.1103  Title.

    These rules may be known as the United States Department of Labor 
Rules of Evidence and cited as 29 CFR 18.---- (1989).



Sec. 18.1104  Effective date.

    These rules are effective thirty days after date of publication with 
respect to formal adversarial adjudications as specified in Sec. 18.1101 
except that with respect to hearings held following an investigation 
conducted by the United States Department of Labor, these rules shall be 
effective only where the investigation commenced thirty days after 
publication.

                 Appendix to Subpart B--Reporter's Notes

                      Reporter's Introductory Note

    The Rules of Evidence for the United States Department of Labor 
modify the Federal Rules of Evidence for application in formal 
adversarial adjudications conducted by the United States Department of 
Labor. The civil nonjury nature of the hearings and the broad underlying 
values and goals of the administrative process are given recognition in 
these rules.

                     Reporter's Note to Sec. 18.102

    In all formal adversarial adjudications of the United States 
Department of Labor governed by these rules, and in particular such 
adjudications in which a party appears without the benefit of counsel, 
the judge is required to construe these rules and to exercise discretion 
as provided in the rules, see, e.g., Sec. 18.403, to secure fairness in 
administration and elimination of unjustifiable expense and delay to the 
end that the truth may be ascertained and the proceedings justly 
determined, Sec. 18.102. The judge shall also exercise reasonable 
control over the mode and order of interrogating witnesses and 
presenting evidence so as to (1) make the interrogation and presentation 
effective for the ascertainment of the truth, (2) avoid needless 
consumption of time, and (3) protect witnesses from harassment or undue 
embarrassment, Sec. 18.611(a).

                     Reporter's Note to Sec. 18.103

    Section 18.103(a) provides that error is not harmless, i.e., a 
substantial right is affected, unless on review it is determined that it 
is more probably true than not true that the error did not materially 
contribute to the decision or order of the court. The more probably true 
than not true test is the most liberal harmless error standard. See 
Haddad v. Lockheed California Corp., 720 F.2d 1454, 1458-59 (9th Cir. 
1983):
    The purpose of a harmless error standard is to enable an appellate 
court to gauge the probability that the trier of fact was affected by 
the error. See R. Traynor, [The Riddle of Harmless Error] at 29-30. 
Perhaps the most important factor to consider in fashioning such a 
standard is the nature of the particular fact-finding process to which 
the standard is to be applied. Accordingly, a crucial first step in 
determining how we should gauge the probability that an error was 
harmless is recognizing the distinction between civil and criminal 
trials. See Kotteakos v. United States, 328 U.S. 750, 763, 66 S.Ct. 
1239, 1247, 90 L.Ed. 1557 (1946); Valle-Valdez, 544 F.2d at 914-15. This 
distinction has two facets, each of which reflects the differing burdens 
of proof in civil and criminal cases. First, the lower burden of proof 
in civil cases implies a larger margin of error. The danger of the 
harmless error doctrine is that an appellate court may usurp the jury's 
function, by merely deleting improper evidence from the record and 
assessing the sufficiency of the evidence to support the verdict below. 
See Kotteakos, 328 U.S. at 764-65, 66 S.Ct. at 1247-48; R. Traynor, 
supra, at 18-22. This danger has less practical importance where, as in 
most civil cases, the jury verdict merely rests on a more probable than 
not standard of proof.
    The second facet of the distinction between errors in civil and 
criminal trials involves the differing degrees of certainty owed to 
civil and criminal litigants. Whereas a criminal defendant must be found 
guilty beyond a reasonable doubt, a civil litigant merely has a right to 
a jury verdict that more probably than not corresponds to the truth.
The term materially contribute was chosen as the most appropriate in 
preference to substantially swayed, Kotteakos v. United States, 328 U.S. 
750, 66 S.Ct. 1239, 90 L.Ed 1557 (1946) or material effect. Holloway v. 
Arkansas, 435 U.S. 475, 98 S.Ct. 1173, 55 L.Ed.2d 426 (1978). The word 
contribute was employed in Schneble v. Florida, 405 U.S. 427, 92 S.Ct. 
1056, 31 L.Ed.2d 340 (1972) and United States v. Hastings, 461 U.S. 499, 
103 S.Ct. 1974, 76 L.Ed.2d 96 (1983).

[[Page 236]]

    Error will not be considered in determining whether a substantial 
right of a party was affected if the evidence was admitted in error 
following a properly made objection, Sec. 18.103(a)(1), and the judge 
explicitly states that he or she does not rely on such evidence in 
support of the decision or order. The judge must explicitly decline to 
rely upon the improperly admitted evidence. The alternative of simply 
assuming nonreliance unless the judge explicitly states reliance, goes 
too far toward emasculating the benefits flowing from rules of evidence.
    The question addressed in Richardson v. Perales, 402 U.S. 389, 91 
S.Ct. 1420, 28 L.Ed.2d 842 (1971) of whether substantial evidence as 
specified in Sec. 556(d) of the Administrative Procedure Act requires 
that there be a residuum of legally admissible evidence to support an 
agency determination is of no concern with respect to these rules; only 
properly admitted evidence is to be considered in determining whether 
the substantial evidence requirement has been satisfied.

                     Reporter's Note to Sec. 18.104

    As to the standard on review with respect to questions of 
admissibility generally, section 18.104(a), see In re Japanese 
Electronic Products Antitrust Litigation, 723 F.2d 238, 265-66 (3d Cir. 
1983) (``The scope of review of the trial court's trustworthiness 
determination depends on the basis for the ruling. When the trial court 
makes Sec. 18.104(a) findings of historical fact about the manner in 
which a report containing findings was compiled we review by the clearly 
erroneous standard of Fed.R.Civ.P. 52. But a determination of 
untrustworthiness, if predicated on factors properly extraneous to such 
a determination, would be an error of law * * * * There is no discretion 
to rely on improper factors. Such an error of law might, of course, in a 
given instance be harmless within the meaning of Fed.R.Civ.P. 61. In 
weighing factors which we consider proper, the trial court exercises 
discretion and we review for abuse of discretion. Giving undue weight to 
trustworthiness factors of slight relevance while disregarding factors 
more significant, for example, might be an abuse of discretion.''). 
Accord, United States v. Wilson, 798 F.2d 509 (lst Cir. 1986).
    As to the standard on review with respect to relevancy, conditional 
relevancy and the exercise of discretion, see, e.g., United States v. 
Abel, 469 U.S. 45, 54, 105 S.Ct. 465, 470, 83 L.Ed.2d 450 (1984) (``A 
district court is accorded a wide discretion in determining the 
admissibility of evidence under the Federal Rules. Assessing the 
probative value of common membership in any particular group, and 
weighing any factors counselling against admissibility is a matter first 
for the district court's sound judgment under Rules 401 and 403 and 
ultimately, if the evidence is admitted, for the trier of fact.''); 
Alford v. United States, 282 U.S. 687, 694, 51 S.Ct. 218, 220, 75 L.Ed 
624 (1931) (``The extent of cross-examination with respect to an 
appropriate subject of inquiry is within the sound discretion of the 
trial court. It may exercise a reasonable judgment in determining when 
the subject is exhausted.''); Hill v. Bache Halsey Stuart Shields Inc., 
790 F.2d 817, 825 (10th Cir. 1986) (``We recognize that a trial court 
has broad discretion to determine whether evidence is relevant, and its 
decision will not be reversed on appeal absent a showing of clear abuse 
of that discretion. Beacham v. Lee-Norse, 714 F.2d 1010, 1014 (10th Cir. 
1983). The same standard of review applies to a trial court's 
determination, under Fed.R.Evid. 403, that the probative value of the 
evidence is outweighed by its potential to prejudice or confuse the 
jury, or to lead to undue delay. Id.'').

                     Reporter's Note to Sec. 18.201

    A.P.A. section 556(e) provides that ``when an agency decision rests 
on official notice of a material fact not appearing in the evidence in 
the record, a party is entitled, on timely request, to an opportunity to 
show the contrary.'' No definition of ``official notice'' is provided. 
An administrative agency may take official notice of any adjudicative 
fact that could be judicially noticed by a court. In addition ``the rule 
is now clearly emerging that an administrative agency may take official 
notice of any generally recognized technical or scientific facts within 
the agency's specialized knowledge, subject always to the proviso that 
the parties must be given adequate advance notice of the facts which the 
agency proposes to note, and given adequate opportunity to show the 
inaccuracy of the facts or the fallacy of the conclusions which the 
agency proposes tentatively to accept without proof. To satisfy this 
requirement, it is necessary that a statement of the facts noticed must 
be incorporated into the record. The source material on which the agency 
relies should, on request, be made available to the parties for their 
examination.'' 1 Cooper, State Administrative Law 412-13 (1965). Accord, 
Uniform Law Commissioners' Model State Administrative Procedure Act 
section 10(4) (1961) (``Notice may be taken of judicially cognizable 
facts. In addition, notice may be taken of generally recognized 
technical or scientific facts within the agency's specialized knowledge. 
Parties shall be notified either before or during the hearing, or by 
reference in preliminary reports or otherwise, of the material noticed, 
including any staff memoranda or data, and they shall be afforded an 
opportunity to contest the material so noticed. The agency's experience, 
technical competence, and specialized knowledge may be utilized in the 
evaluation of the evidence.''); Schwartz, Administrative Law Sec. 7.16 
at 375 (2d ed. 1984) (``Clearly an

[[Page 237]]

agency may take notice of the same kinds of fact of which a court takes 
judicial notice. It has, however, been recognized that the differences 
between agencies and courts * * * may justify a broader approach. Under 
it, an agency may be permitted to take `official notice' not only of 
facts that are obvious and notorious to the average man but also of 
those that are obvious and notorious to an expert in the given field.'' 
``A commission that regulates gas companies may take notice of the fact 
that a well-managed gas company loses no more than 7 percent of its gas 
through leakage, condensation, expansion, or contraction, where its 
regulation of gas companies, over the years has made the amount of 
`unaccounted for gas' without negligence obvious and notorious to it as 
the expert in gas regulation. A workers' compensation commission may 
similarly reject a claim that an inguinal hernia was traumatic in origin 
where the employee gave no indication of pain and continued work for a 
month after the alleged accident. The agency had dealt with numerous 
hernia cases and was as expert in diagnosing them as any doctor would 
be. Its experience taught it that where a hernia was traumatic in 
origin, there was immediate discomfort, outward evidences of pain 
observable to fellow employees, and at least temporary suspension from 
work. The agency could notice this fact based upon its knowledge as an 
expert and reject uncontradicted opinion testimony that its own 
expertise renders unpersuasive.''). Compare Uniform Law Commissioners' 
Model State Administrative Procedure Act section 4-212(f) (1981) 
(``Official notice may be taken of (i) any fact that could be judicially 
noticed in the courts of this State, (ii) the record of other 
proceedings before the agency, (iii) technical or scientific matters 
within the agency's specialized knowledge, and (iv) codes or standards 
that have been adopted by an agency of the United States, of this State 
or of another state, or by a nationally recognized organization or 
association. Parties must be notified before or during the hearing, or 
before the issuance of any initial or final order that is based in whole 
or in part on facts or materials noticed, of the specific facts or 
material noticed and the source thereof, including any staff memoranda 
and data, and be afforded an opportunity to contest and rebut the facts 
or materials so noticed.''). Contra Davis, Official Notice, 62 Harv. L. 
Rev. 537, 539 (1949) (``To limit official notice to facts which are 
beyond the realm of dispute would virtually emasculate the 
administrative process. The problem of official notice should not be one 
of drawing lines between disputable and indisputable facts. Nor should 
it even be one of weighing the importance of basing decisions upon all 
available information against the importance of providing full and fair 
hearings in the sense of permitting parties to meet all materials that 
influence decision. The problem is the intensely practical one of 
devising a procedure which will provide both informed decisions and fair 
hearings without undue inconvenience or expense.'').
    Section 18.201 adopts the philosophy of Federal Rule of Evidence 
201. The Advisory Committee's Note to Fed.R.Evid. 201 (b) states:
    With respect to judicial notice of adjudicative facts, the tradition 
has been one of caution in requiring that the matter be beyond 
reasonable controversy. This tradition of circumspection appears to be 
soundly based, and no reason to depart from it is apparent. As Professor 
Davis says: 
    ``The reason we use trial-type procedure, I think, is that we make 
the practical judgment, on the basis of experience, that taking 
evidence, subject to cross-examination and rebuttal, is the best way to 
resolve controversies involving disputes of adjudicative facts, that is, 
facts pertaining to the parties. The reason we require a determination 
on the record is that we think fair procedure in resolving disputes of 
adjudicative facts calls for giving each party a chance to meet in the 
appropriate fashion the facts that come to the tribunal's attention, and 
the appropriate fashion for meeting disputed adjudicative facts includes 
rebuttal evidence, cross-examination, usually confrontation, and 
argument (either written or oral or both). The key to a fair trial is 
opportunity to use the appropriate weapons (rebuttal evidence, cross-
examination, and argument) to meet adverse materials that come to the 
tribunal's attention.'' A System of Judicial Notice Based on Fairness 
and Convenience, in Perspectives of Law 69, 93 (1964).
    The rule proceeds upon the theory that these considerations call for 
dispensing with traditional methods of proof only in clear cases. 
Compare Professor Davis' conclusion that judicial notice should be a 
matter of convenience, subject to requirements of procedural fairness. 
Id., 94. Section 18.201 of the Federal Rules of Evidence incorporated 
the Morgan position on judicial notice. The contrary position, expressed 
by Wigmore and Thayer, and advocated by Davis, was rejected. See 
McNaughton, Judicial Notice-Excerpts Relating to the Morgan-Wigmore 
Controversy, 14 Vand. L. Rev. 779 (1961) (``They do not differ with 
respect to the application of the doctrine to `law'. Nor do they reveal 
a difference with respect to so-called `jury notice.' Their difference 
relates to judicial notice of `facts.' Here Wigmore, following Thayer, 
insists that judicial notice is solely to save time where dispute is 
unlikely and that a matter judicially noticed is therefore only `prima 
facie,' or rebuttable, if the opponent elects to dispute it. It is 
expressed in

[[Page 238]]

Thayer and implicit in Wigmore that (perhaps because the matter is 
rebuttable) judicial notice may be applied not only to indisputable 
matters but also to matters of lesser certainty. Morgan on the other 
hand defines judicial notice more narrowly, and his consequences follow 
from his definition. He limits judicial notice of fact to matters 
patently indisputable. And his position is that matters judicially 
noticed are not rebuttable. He asserts that it is wasteful to permit 
patently indisputable matters to be litigated by way of formal proof and 
furthermore that it would be absurd to permit a party to woo a jury to 
an obviously erroneous finding contrary to the noticed fact. Also, he 
objects to the Wigmorean conception on the ground that it is really a 
`presumption' of sorts attempting to pass under a misleading name. It 
is, according to Morgan, a presumption with no recognized rules as to 
how the presumption works, what activates it, and who has the burden of 
doing how much to rebut it.'').
    Accordingly, notice that items (ii) and (iv) of the Uniform Law 
Commissioners' Model State Administrative Procedure Act quoted above are 
not included as separate items in Sec. 18.201. However codes and 
standards, (iv), to the extent not subject to reasonable question fall 
within Sec. 18.201(b)(2). To the extent such codes and standards do not 
so fall, proof should be required. Official notice of records of other 
proceedings before the agency would ``permit an agency to notice facts 
contained in its files, such as the revenue statistics contained in the 
reports submitted to it by a regulated company.'' Schwartz, supra at 
377. Once again, to the extent such information is not capable of 
accurate and ready determination by resort to sources whose accuracy 
cannot reasonably be questioned, Sec. 18.201(b)(2), proof should be 
required.

                     Reporter's Note to Sec. 18.301

    Section 18.301 does not prevent an administrative agency by either 
rule, regulation, or common law development from allocating burdens of 
production and burdens of persuasion in an otherwise permissible manner. 
See N.L.R.B. v. Transportation Management Corp., 462 U.S. 400, 403 n.7, 
103 S.Ct. 2469, 2475 n.7, 76 L.Ed.2d 667 (1983) (``Respondent contends 
that Federal Rule of Evidence 301 requires that the burden of persuasion 
rest on the General Counsel. Rule 301 provides:
    In all civil actions and proceedings not otherwise provided for by 
Act of Congress or by these rules, a presumption imposes on the party 
against whom it is directed the burden of going forward with evidence to 
rebut or meet the presumption, but does not shift to such party the 
burden of proof in the sense of the risk of nonpersuasion, which remains 
throughout the trial upon the party on whom it was originally cast.'
    The Rule merely defines the term `presumption.' It in no way 
restricts the authority of a court or an agency to change the customary 
burdens of persuasion in a manner that otherwise would be permissible. 
Indeed, were respondent correct, we could not have assigned to the 
defendant the burden of persuasion on one issue in Mt. Healthy City 
Board of Education v. Doyle, 429 U.S. 274, 97 S.Ct. 568, 50 L.Ed.2d 471 
(1977).'').

                     Reporter's Note to Sec. 18.302

    The Advisory Committee's Note to Federal Rule of Evidence 302, 56 
F.R.D. 118, 211 states:
    A series of Supreme Court decisions in diversity cases leaves no 
doubt of the relevance of Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 
S.Ct. 817, 82 L.Ed. 1188 (1938), to questions of burden of proof. These 
decisions are Cities Service Oil Co. v. Dunlap, 308 U.S. 208, 60 S.Ct. 
201, 84 L.Ed. 196 (1939), Palmer v. Hoffman, 318 U.S. 477, 87 L.Ed. 645 
(1943), and Dick v. New York Life Ins. Co., 359 U.S. 437, 79 S.Ct. 921, 
3 L.Ed.2d 935 (1959). They involved burden of proof, respectively, as to 
status as bona fide purchaser, contributory negligence, and 
nonaccidental death (suicide) of an insured. In each instance the state 
rule was held to be applicable. It does not follow, however, that all 
presumptions in diversity cases are governed by state law. In each case 
cited, the burden of proof question had to do with a substantive element 
of the claim or defense. Application of the state law is called for only 
when the presumption operates upon such an element. Accordingly the rule 
does not apply state law when the presumption operates upon a lesser 
aspect of the case, i.e. ``tactical'' presumptions.
    The situations in which the state law is applied have been tagged 
for convenience in the preceding discussion as ``diversity cases.'' The 
designation is not a completely accurate one since Erie applies to any 
claim or issue having its source in state law, regardless of the basis 
of federal jurisdiction, and does not apply to a federal claim or issue, 
even though jurisdiction is based on diversity.
    Vestal, Erie R. R. v. Tompkins: A Projection, 48 Iowa L.Rev. 248, 
257 (1963); Hart and Wechsler, The Federal Courts and the Federal 
System, 697 (1953); 1A Moore Federal Practice p. 0.305[3] (2d ed. 1965); 
Wright, Federal Courts, 217-218 (1963). Hence the rule employs, as 
appropriately descriptive, the phrase ``as to which state law supplies 
the rule of decision.'' See A.L.I. Study of the Division of Jurisdiction 
Between State and Federal Courts, 2344(c), p. 40, P.F.D. No. 1 (1965).
    It is anticipated that Sec. 18.302 will very rarely come into play.

[[Page 239]]

                     Reporter's Note to Sec. 18.403

    Rule 403 of the Federal Rules of Evidence provides for the exclusion 
of relevant evidence on the grounds of unfair prejudice. Since all 
effective evidence is prejudicial in the sense of being damaging to the 
party against whom it is offered, prejudice which calls for exclusion is 
given a more specialized meaning: An undue tendency to suggest decision 
on an improper basis, commonly but not necessarily an emotional one, 
such as bias, sympathy, hatred, contempt, retribution or horror. Unfair 
prejudice is not, however, a proper ground for the exclusive of relevant 
evidence under these rules. Judges have shown over the years the ability 
to resist deciding matters on such an improper basis. Accord Gulf States 
Utilities Co. v. Ecodyne Corp., 635 F.2d 517, 519 (5th Cir. 1981). 
(``The exclusion of this evidence under Rule 403's weighing of probative 
value against prejudice was improper. This portion of Rule 403 has no 
logical application to bench trials. Excluding relevant evidence in a 
bench trial because it is cumulative or a waste of time is clearly a 
proper exercise of the judge's power, but excluding relevant evidence on 
the basis of `unfair prejudice' is a useless procedure. Rule 403 assumes 
a trial judge is able to discern and weigh the improper inferences that 
a jury might draw from certain evidence, and then balance those 
improprieties against probative value and necessity. Certainly, in a 
bench trial, the same judge can also exclude those improper inferences 
from his mind in reaching a decision.'')
    While Sec. 18.403, like Rule 403 of the Federal Rules of Evidence, 
does speak in terms of both confusion of the issues and misleading of 
the trier of fact, the distinction between such terms is unclear in the 
literature and in the cases. McCormick, Evidence section 185 at 546 (3d 
ed. 1984), refers to the probability that certain proof and the 
answering evidence that it provokes might unduly distract the trier of 
fact from the main issues. 2 Wigmore, Evidence section 443 at 528-29 
(Chadbourn rev. 1979), describes the concept as follows:
    In attempting to dispute or explain away the evidence thus offered, 
new issues will arise as to the occurrence of the instances and the 
similarity of conditions, new witnesses will be needed whose cross-
examination and impeachment may lead to further issues; and that thus 
the trial will be unduly prolonged, and the multiplicity of minor issues 
will be such that the jury will lose sight of the main issue, and the 
whole evidence will be only a mass of confused data from which it will 
be difficult to extract the kernel of controversy.
    Both commentators are clearly describing the notion of confusion of 
the issues. The notion of confusion of the issues of course applies as 
well to a reviewing body considering a record in such condition. While a 
trier of fact or reviewing body confused in the foregoing manner can 
also be said to have been misled, it is suggested that the concept of 
misleading refers primarily to the possibility of the trier of fact 
overvaluing the probative value of a particular item of evidence for any 
reason other than the emotional reaction associated with unfair 
prejudice. To illustrate, evidence of the results of a lie detector, 
even where an attempt is made to explain fully the significance of the 
results, is likely to be overvalued by the trier of fact. Similarly, the 
test of Frye v. United States, 293 F.1013, 1014 (D.C. Cir. 1923), 
imposing the requirement with respect to the admissibility of scientific 
evidence that the particular technique be shown to have gained ``general 
acceptance in the particular field in which it belongs,'' is an attempt 
to prevent decision makers from being unduly swayed by unreliable 
scientific evidence. Demonstrative evidence in the form of a photograph, 
map, model, drawing or chart which varies substantially from the fact of 
consequence sought to be illustrated similarly may mislead. Finally, any 
trier of fact may be misled by the sheer amount of time spent upon a 
question into believing the issue to be of major importance and 
accordingly into attaching too much significance to it in its 
determination of the factual issues involved. While clearly of less 
import where the judge is the trier of fact and with respect to the 
state of the record on review, the danger of confusion of the issues or 
misleading the judge as trier of fact, together with such risks on 
review, are each of sufficient moment especially when considered in 
connection with needless consumption of time to warrant inclusion in 
Sec. 18.403.
    Occasionally evidence is excluded not because distracting side 
issues will be created but rather because an unsuitable amount of time 
would be consumed in clarifying the situation. Concerns associated with 
the proper use of trial time also arise where the evidence being offered 
is relevant to a fact as to which substantial other evidence has already 
been introduced, including evidence bearing on the question of 
credibility, where the evidence itself possesses only minimal probative 
value, such as evidence admitted as background, or where evidence is 
thought by the court to be collateral. In recognition of the legitimate 
concern of the court with expenditures of time, Sec. 18.403 provides for 
exclusion of evidence where its incremental probative value is 
substantially outweighed by considerations of undue delay, waste of 
time, or needless presentation of cumulative evidence. Roughly speaking 
undue delay can be argued to refer to delay caused by the failure of the 
party to be able to produce the given evidence at the appropriate time 
at trial but only at some later time. Waste of time may

[[Page 240]]

be taken to refer to the fact that the evidence possesses inadequate 
incremental probative value in light of the time its total exploration 
will consume. Cumulative refers to multiple sources of different 
evidence establishing the same fact of consequence as well as multiple 
same sources, such as ten witnesses all testifying to the same speed of 
the car or the same character of a witness.

                     Reporter's Note to Sec. 18.501

    The Conference Report to Federal Rule of Evidence 501, 1975 U.S. 
Code Cong. & Ad. News 7098, 7100 states:
    Rule 501 deals with the privilege of a witness not to testify. Both 
the House and Senate bills provide that federal privilege law applies in 
criminal cases. In civil actions and proceedings, the House bill 
provides that state privilege law applies ``to an element of a claim or 
defense as to which State law supplies the rule of decision.'' The 
Senate bill provides that ``in civil actions and proceedings arising 
under 28 U.S.C. 1332 or 28 U.S.C. 1335, or between citizens of different 
States and removed under 28 U.S.C. 1441(b) the privilege of a witness, 
person, government, State or political subdivision thereof is determined 
in accordance with State law unless with respect to the particular claim 
or defense, Federal law supplies the rule of decision.''
    The wording of the House and Senate bills differs in the treatment 
of civil actions and proceedings. The rule in the House bill applies to 
evidence that relates to ``an element of a claim or defense.'' If an 
item of proof tends to support or defeat a claim or defense, or an 
element of a claim or defense, and if state law supplies the rule of 
decision for that claim or defense, then state privilege law applies to 
that item of proof.
    Under the provision in the House bill, therefore, state privilege 
law will usually apply in diversity cases. There may be diversity cases, 
however, where a claim or defense is based upon federal law. In such 
instances, federal privilege law will apply to evidence relevant to the 
federal claim or defense. See Sola Electric Co. v. Jefferson Electric 
Co., 317 U.S. 173 (1942).
    In nondiversity jurisdiction civil cases, federal privilege law will 
generally apply. In those situations where a federal court adopts or 
incorporates state law to fill interstices or gaps in federal statutory 
phrases, the court generally will apply federal privilege law.

    As Justice Jackson has said:
    A federal court sitting in a nondiversity case such as this does not 
sit as a local tribunal. In some cases it may see fit for special 
reasons to give the law of a particular state highly persuasive or even 
controlling effect, but in the last analysis its decision turns upon the 
law of the United States, not that of any state.
    D'Oench, Duhme & Co. v. Federal Deposit Insurance Corp., 315 U.S. 
447, 471 (1942) (Jackson, J., concurring). When a federal court chooses 
to absorb state law, it is applying the state law as a matter of federal 
common law. Thus, state law does not supply the rule of decision (even 
though the federal court may apply a rule derived from state decisions), 
and state privilege law would not apply. See C.A. Wright, Federal Courts 
251-252 (2d ed. 1970); Holmberg v. Armbrecht, 327 U.S. 392 (1946); 
DeSylva v. Ballentine, 351 U.S. 570, 581 (1956); 9 Wright & Miller, 
Federal Rules and Procedures Sec. 2408.
    In civil actions and proceedings, where the rule of decision as to a 
claim or defense or as to an element of a claim or defense is supplied 
by state law, the House provision requires that state privilege law 
apply.
    The Conference adopts the House provision.
    It is anticipated that the proviso in Sec. 18.501 will very rarely 
come into play.

                     Reporter's Note to Sec. 18.601

    The Conference Report to Federal Rule of Evidence 601, 1975 U.S. 
Code Cong. & Ad. News 7051, 7059 states:
    Rule 601 deals with competency of witnesses. Both the House and 
Senate bills provide that federal competency law applies in criminal 
cases. In civil actions and proceedings, the House bill provides that 
state competency law applies ``to an element of a claim or defense as to 
which State law supplies the rule of decision.'' The Senate bill 
provides that ``in civil actions and proceedings arising under 28 U.S.C. 
1332 or 28 U.S.C. 1335, or between citizens of different States and 
removed under 28 U.S.C. 1441(b) the competency of a witness, person, 
government, State or political subdivision thereof is determined in 
accordance with State law, unless with respect to the particular claim 
or defense, Federal law supplies the rule of decision.''
    The wording of the House and Senate bills differs in the treatment 
of civil actions and proceedings. The rule in the House bill applies to 
evidence that relates to ``an element of a claim or defense.'' If an 
item of proof tends to support or defeat a claim or defense, or an 
element of a claim or defense, and if state law supplies the rule of 
decision for that claim or defense, then state competency law applies to 
that item of proof.
    For reasons similar to those underlying its action on Rule 501, the 
Conference adopts the House provision.
    It is anticipated that the proviso to Sec. 18.601 will very rarely 
come into play.

[[Page 241]]

                     Reporter's Note to Sec. 18.609

    Consistent with the position taken in Sec. 18.403, unfair prejudice 
is not felt to be a proper reason of the exclusion of relevant evidence 
in a hearing where the judge is the trier of fact. Sections 18.609 (a) 
and (b) provide for the use of every prior conviction punishable by 
death or imprisonment in excess of one year under the law under which 
the witness was convicted and every prior conviction involving 
dishonesty or false statement, regardless of punishment, provided not 
more than ten years has elapsed since the date of the conviction or the 
release of the witness from the confinement imposed for that conviction, 
whichever is the later date. Convictions more than ten years old are 
felt to be too stale to be admitted to impeach the credibility of a 
witness testifying in any hearing to which these rules apply.

                     Reporter's Note to Sec. 18.801

    Rule 801(d)(1)(A) of the Federal Rules of Evidence has been revised 
in Sec. 18.801(d)(1)(A) to permit the substantive admissibility of all 
prior inconsistent statements. The added protection of certainty of 
making and circumstances conducive to trustworthiness provided by the 
restriction that the prior inconsistent statement be ``given under oath 
subject to the penalty of perjury at a trial, hearing, in other 
proceeding, or in a deposition'' were added by Congress to Federal Rule 
of Evidence 801(d)(1)(A) for the benefit of the criminal defendant. See 
Graham, Employing Inconsistent Statements for Impeachment and as 
Substantive Evidence: A Critical Review and Proposed Amendments of 
Federal Rules of Evidence 801(d)(1)(A), 613 and 607, 75 Mich L. Rev. 565 
(1977).

                     Reporter's Note to Sec. 18.802

    An ``administrative file'' is admissible as such to the extent so 
provided by rule or regulation of the administrative agency prescribed 
pursuant to statutory authority, or pursuant to executive order, or by 
Act of Congress. If a program provides for the creation of an 
``administrative file'' and for the submission of an ``administrative 
file'' to the judge presiding at a formal adversarial adjudication 
governed by these rules, see section 18.1101, the ``administrative 
file'' would fall outside the bar of the hearsay rule. Similarly, such 
``administrative file'' is self-authenticating, section 18.902(10).

                     Reporter's Note to Sec. 18.803

    Section 18.803(24) provides that the ``equivalent circumstantial 
guarantees of trustworthiness'' required to satisfy the ``other 
[reliable] hearsay'' exception is that possessed solely by the 
``aforementioned hearsay exceptions,'' i.e., Secs. 18.803(1)-18.803(24). 
The hearsay exceptions which follow, i.e., Secs. 18.803(25)-18.803(30), 
rely too greatly upon necessity and convenience to serve as a basis to 
judge ``equivalent circumstantial guarantees of trustworthiness.''
    Section 18.803(25) provides a hearsay exception for the self-
authenticating aspect of documents and other items as provided in 
Sec. 18.902. Out of court statements admitted under Sec. 18.902 for the 
purpose of establishing that the document or other item offered into 
evidence is as purported to be are received in evidence to establish the 
truth of the matter stated, Secs. 18.801(a)-(c). Section 18.802 provides 
that ``hearsay is not admissible except as provided by these rules * * 
*'' Section 18.902 thus operates as a hearsay exception on the limited 
question of authenticity. Section 18.902 does not, however, purport to 
create a hearsay exception for matters asserted to be true in the self-
authenticated exhibit itself. As a matter of drafting consistency, it is 
preferable to have a specific hearsay exception in Sec. 18.803 for 
statements of self-authentication under Sec. 18.902 than to have a 
hearsay exception exist in these rules not bearing an 18.800 number.
    Sections 18.803(26) and 18.803(27) are derived from Rules 4(e) and 
(f) of the Arizona Uniform Rules of Procedure for Arbitration. Section 
18.803(26)(f) is derived from Illinois Supreme Court Rule 90(c)(4).
    Sections 18.803(27) and 18.803(28) maintain the common law 
distinction between a treating physician, i.e., medical treatment, and 
an examining or nontreating physician, i.e., medical diagnosis. A 
treating physician provides or acts with a view toward providing medical 
treatment. An examining physician is one hired with a view toward 
testifying on behalf of a party and not toward treating a patient. As 
such, written reports of the examining physician are not felt to be 
sufficiently trustworthy to be given the preferred treatment of 
Sec. 18.803(27). Thus a report of a physician made for the purpose of 
medical treatment, i.e., treating physician, is admissible if the 
requirements of Sec. 18.803(27) are satisfied. A report of physician 
prepared with a view toward litigation, i.e., examining physician, 
satisfying the requirements of Sec. 18.802(28) is also admissible. The 
reports of a given physician may, of course, fall within either or both 
categories. Reports of any medical surveillance test the purpose of 
which is to detect actual or potential impairment of health or 
functional capacity and autopsy reports fall within Sec. 18.803(28).
    Section 18.803(28) is derived from Rule 1613(b)(1) of the California 
Rules of Court. A summary of litigation experience of the expert is 
required to assist the evaluation of credibility.
    Section 18.803(29) is derived from Rule 1613(b)(2) of the California 
Rules of Court.
    Section 18.803(30) is derived from Rule 1613(b)(3) of the California 
Rules of Court.

[[Page 242]]

    Sections 18.803(26)-18.803(30) each provide that the adverse party 
may call the declarant of the hearsay statement, if available, as a 
witness and examine the witness as if under cross-examination. The 
proviso relating to the calling of witnesses is derived from Rule 
1305(b) of the Pennsylvania Rules of Court Procedure Governing 
Compulsory Arbitration. See also Secs. 18.902(12)-18.902(16) infra.
    These rules take no position with respect to which party must 
initially bear the cost of lay witness and expert witness fees nor as to 
the ultimate disposition of such fees. Ordinarily, however, it is 
anticipated that the adverse party calling the witness should initially 
pay statutory witness fees, mileage, etc., and reasonable compensation 
to an expert witness in whatever sum and at such time as the judge may 
allow. Such witness fees, mileage, etc., and reasonable expert witness 
compensation should thereafter be charged to the same extent and in like 
manner as other such costs.

                     Reporter's Note to Sec. 18.902

    Section 18.902(11) is modeled upon Uniform Rule of Evidence 902(11). 
The requirement of a final certification with respect to a foreign 
record has been deleted as unnecessary in accordance with the position 
adopted in 18 U.S.C. 3505 which governs the self-authentication of a 
foreign record offered in a federal criminal proceeding. The ``Comment'' 
to Uniform Rule of Evidence 902(11) states:
    Subsection 11 is new and embodies a revised version of the recently 
enacted federal statute dealing with foreign records of regularly 
conducted activity, 18 U.S.C. 3505. Under the federal statute, 
authentication by certification is limited to foreign business records 
and to use in criminal proceedings. This subsection broadens the federal 
provision so that it includes domestic as well as foreign records and is 
applicable in civil as well as criminal cases. Domestic records are 
presumably no less trustworthy and the certification of such records can 
more easily be challenged if the opponent of the evidence chooses to do 
so. As to the federal statute's limitation to criminal matters, 
ordinarily the rules are more strictly applied in such cases, and the 
rationale of trustworthiness is equally applicable in civil matters. 
Moreover, the absence of confrontation concerns in civil actions 
militates in favor of extending the rule to the civil side as well.
    The rule requires that the certified record be made available for 
inspection by the adverse party sufficiently in advance of the offer to 
permit the opponent a fair opportunity to challenge it. A fair 
opportunity to challenge the offer may require that the proponent 
furnish the opponent with a copy of the record in advance of its 
introduction and that the opponent have an opportunity to examine, not 
only the record offered, but any other records or documents from which 
the offered record was procured or to which the offered record relates. 
That is a matter not addressed by the rule but left to the discretion of 
the trial judge.
    Sections 18.902 (12) and (13) are derived from Rule 4 (e) and (f) of 
the Arizona Uniform Rules of Procedure for Arbitration. Section 
18.902(12)(f) is derived from Illinois Supreme Court Rule 90(c)(4).
    Section 18.902(14) is derived from Rule 1613(b)(1) of the California 
Rules of Court. A summary of litigation experience of the expert is 
required to assist the evaluation of credibility.
    With respect to Secs. 18.902(13) and 18.902(14) as applied to a 
treating or examining physician, see Reporter's Note to Secs. 18.803(27) 
and 18.803(28) supra.
    Section 18.902(15) is derived from Rule 1613(b)(2) of the California 
Rules of Court.
    Section 18.902(16) is derived from Rule 1613(b)(3) of the California 
Rules of Court.
    Sections 18.902 (12)-(16) each provide that the adverse party may 
call the declarant of the hearsay statement, if available, as a witness 
and examine the witness as if under cross-examination. The proviso 
relating to the calling of witnesses is derived from Rule 1305(b) of the 
Pennsylvania Rules of Civil Procedure Governing Compulsory Arbitration.
    These rules take no position with respect to which party must 
initially bear the cost of lay witness and expert witness fees nor as to 
the ultimate disposition of such fees. Ordinarily, however, it is 
anticipated that the adverse party calling the witness should initially 
pay statutory witness fees, mileage, etc., and reasonable compensation 
to an expert witness in whatever sum and at such time as the judge may 
allow. Such witness fees, mileage, etc., and reasonable expert witness 
compensation should thereafter be charged to the same extent and in like 
manner as other such costs. See also Secs. 18.803 (25)-(30) supra.

                     Reporter's Note to Sec. 18.1001

    Section 18.1001(3) excludes prints made from X-ray film from the 
definition of an original. A print made from X-ray film is not felt to 
be equivalent to the X-ray film itself when employed for purposes of 
medical treatment or diagnosis.

                     Reporter's Note to Sec. 18.1101

    Section 23(a) of the Longshore and Harbor Workers' Compensation Act, 
33 U.S.C. 922, provides as follows:
    In making an investigation or inquiry or conducting a hearing the 
deputy commissioner or Board shall not be bound by common law or 
statutory rules of evidence or by technical or formal rules of 
procedure, except as provided by this chapter; but may

[[Page 243]]

make such investigation or inquiry or conduct such hearing in such 
manner as to best ascertain the rights of the parties. Declarations of a 
deceased employee concerning the injury in respect of which the 
investigation or inquiry is being made or the hearing conducted shall be 
received in evidence and shall, if corroborated by other evidence, be 
sufficient to establish the injury.

Other acts such as the Defense Base Act, 42 U.S.C. 1651, adopt section 
23(a) of the Longshore and Harbor Workers' Compensation Act by 
reference. In addition 20 CFR 725.455(b) provides as follows with 
respect to the Black Lung Benefits Act, 30 U.S.C. 901:
    Evidence. The administrative law judge shall at the hearing inquire 
fully into all matters at issue, and shall not be bound by common law or 
statutory rules of evidence, or by technical or formal rules of 
procedure, except as provided by 5 U.S.C. 554 and this subpart. The 
administrative law judge shall receive into evidence the testimony of 
the witnesses and parties, the evidence submitted to the Office of 
Administrative Law Judges by the deputy commissioner under Sec. 725.421, 
and such additional evidence as may be submitted in accordance with the 
provisions of this subpart. The administrative law judge may entertain 
the objections of any party to the evidence submitted under this 
section.
    Section 18.1101(c) provides that these rules do not apply to the 
extent inconsistent with, in conflict with, or to the extent a matter is 
otherwise specifically provided for by an Act of Congress or by a rule 
or regulation of specific application prescribed by the United States 
Department of Labor pursuant to statutory authority. Whether section 
23(a) and Sec. 725.455(b) are in fact incompatible with these rules, 
while unlikely for various reasons including their lack of specificity, 
is nevertheless arguable.
    Without regard to section 23(a) and Sec. 725.455(b), various other 
considerations support the conclusion to exclude hearings under 
Longshore, Black Lung, and related acts from coverage of these rules at 
this time. Longshore, Black Lung, and related acts involve entitlements. 
Claimants in such hearings benefit from proceeding pursuant to the most 
liberal evidence rules that are consistent with the orderly 
administration of justice and the ascertainment of truth. Claimants in 
such hearings on occasion appear pro se. While the modifications made by 
these rules are clearly designed to further liberalize the already 
liberal Federal Rules of Evidence, it is nevertheless unclear at this 
time whether even conformity with minimal requirements with respect to 
the introduction of evidence would present a significant barrier to the 
successful prosecution of meritorious claims. Rather than speculate as 
to the impact adoption of these rules would have upon such entitlement 
programs, it was decided to exclude hearings involving such entitlement 
programs from coverage of these rules. It is anticipated that 
application of these rules to hearings involving such entitlement 
programs will be reconsidered in the future following careful study. 
Notice that the inapplicability of these rules in such hearings at this 
time is specifically stated in Sec. 18.1101(b)(2) to be without 
prejudice to the continuation of current practice with respect to 
application of rules of evidence in such hearings.

[55 FR 13229, Apr. 9, 1990; 55 FR 24227, June 15, 1990]



PART 19--RIGHT TO FINANCIAL PRIVACY ACT--Table of Contents




Sec.
19.1  Definitions.
19.2  Purpose.
19.3  Authorization.
19.4  Contents of request.
19.5  Certification.

    Authority: Sec. 1108, Right to Financial Privacy Act of 1978, 92 
Stat. 3697 et seq., 12 U.S.C. 3401 et seq., (5 U.S.C. 301); and 
Reorganization Plan No. 6 of 1950.

    Source: 52 FR 48420, Dec. 22, 1987, unless otherwise noted.



Sec. 19.1  Definitions.

    For purposes of this regulation, the term:
    (a) Financial institution means any office of a bank, savings bank, 
card issuer as defined in section 103 of the Consumer Credit Protection 
Act (15 U.S.C. 1602(n)), industrial loan company, trust company, savings 
and loan, building and loan, or homestead association (including 
cooperative banks), credit union, consumer financial institution, 
located in any State or territory of the United States, the District of 
Columbia, Puerto Rico, Guam, American Samoa, or the Virgin Islands.
    (b) Financial record means an original of, a copy of, or information 
known to have been derived from, any record held by a financial 
institution pertaining to a customer's relationship with the financial 
institution.
    (c) Person means an individual or a partnership of five or fewer 
individuals.
    (d) Customer means any persons or authorized representative of that 
person who utilized or is utilizing any service of a financial 
institution, or for

[[Page 244]]

whom a financial institution is acting or has acted as a fiduciary, in 
relation to an account maintained in the person's name.
    (e) Law enforcement inquiry means a lawful investigation or official 
proceeding inquiring into a violation of or failure to comply with any 
criminal or civil statute or any regulation, rule, or order issued 
pursuant thereto.
    (f) Departmental unit means those offices, divisions bureaus, or 
other components of the Department of Labor authorized to conduct law 
enforcement inquiries.
    (g) Act means the Right to Financial Privacy Act of 1978.



Sec. 19.2  Purpose.

    The purpose of these regulations is to authorize Departmental units 
to request financial records from a financial institution pursuant to 
the formal written request procedure authorized by section 1108 of the 
Act, and to set forth the conditions under which such requests may be 
made.



Sec. 19.3  Authorization.

    Departmental units are hereby authorized to request financial 
records of any customer from a financial institution pursuant to a 
formal written request under the Act only if:
    (a) No administrative summons or subpoena authority reasonably 
appears to be available to the Departmental unit to obtain financial 
records for the purpose for which the records are sought;
    (b) There is reason to believe that the records sought are relevant 
to a legitimate law enforcement inquiry and will further that inquiry;
    (c) The request is issued by the Assistant Secretary or Deputy Under 
Secretary heading the Departmental unit requesting the records, or by a 
senior agency official designated by the head of the Departmental unit. 
Officials so designated shall not delegate this authority to others;
    (d) The request adheres to the requirements set forth in Sec. 19.4; 
and
    (e) The notice requirements set forth in section 1108(4) of the Act, 
or the requirements pertaining to delay of notice in section 1109 of the 
Act are satisfied, except in situations where no notice is required 
(e.g., section 1113(g)).



Sec. 19.4  Contents of request.

    The formal written request shall be in the form of a letter or 
memorandum to an appropriate official of the financial institution from 
which financial records are requested. The request shall be signed by an 
issuing official of the requesting Departmental unit, as specified in 
Sec. 19.3(c). It shall set forth that official's name, title, business 
address and business phone number. The request shall also contain the 
following:
    (a) The identity of the customer or customers to whom the records 
pertain;
    (b) A reasonable description of the records sought;
    (c) Any other information that the issuing official deems 
appropriate, e.g., the date on which the requesting Departmental unit 
expects to present a certificate of compliance with the applicable 
provisions of the Act, the name and title of the individual to whom 
disclosure is to be made, etc.
    (d) In cases where customer notice is delayed by a court order, a 
copy of the court order shall be attached to the formal written request.



Sec. 19.5  Certification.

    Prior to obtaining the requested records pursuant to a formal 
written request, a senior official designated by the head of the 
requesting Departmental unit shall certify in writing to the financial 
institution that the Departmental unit has complied with the applicable 
provisions of the Act.



PART 20--FEDERAL CLAIMS COLLECTION--Table of Contents




    Subpart A--Disclosure of Information to Credit Reporting Agencies

Sec.
20.1  Purpose and scope.
20.2  Definitions.
20.3  Agency responsibilities.
20.4  Determination of delinquency; notice.
20.5  Examination of records relating to the claim; opportunity for full 
          explanation of the claim.
20.6  Opportunity for repayment.
20.7  Review of the obligation.

[[Page 245]]

20.8  Disclosure to credit reporting agencies.
20.9  Waiver of credit reporting.
20.10  Responsibilities of the Chief Financial Officer.

                    Subpart B--Administrative Offset

20.19  Purpose and scope.
20.20  Definitions.
20.21  Agency responsibilities.
20.22  Notifications.
20.23  Examination of records relating to the claim; opportunity for 
          full explanation of the claim.
20.24  Opportunity for repayment.
20.25  Review of the obligation.
20.26  Request for waiver or administrative review.
20.27  Cooperation with other DOL agencies and Federal agencies.
20.28  DOL agency as organization holding funds of the debtor.
20.29  Notice of offset.
20.30  Multiple debts.
20.31  Administrative offset against amounts payable from civil service 
          retirement and disability fund.
20.32  Liquidation of collateral.
20.33  Collection in installments.
20.34  Exclusions.
20.35  Additional administrative collection action.
20.36  Prior provision of rights with request to debt.
20.37  Responsibilities of the Chief Financial Officer.

         Subpart C--Interest, Penalties and Administrative Costs

20.50  Purpose and scope.
20.51  Exemptions.
20.52  Definitions.
20.53  Agency responsibilities.
20.54  Notification of charges.
20.55  Second and subsequent notifications.
20.56  Delivery of notices.
20.57  Accrual of interest.
20.58  Rate of interest.
20.59  Assessment of administrative costs.
20.60  Application of partial payments to amounts owed.
20.61  Waiver.
20.62  Responsibilities of the Chief Financial Officer.

                        Subpart D--Salary Offset

20.74  Purpose.
20.75  Scope.
20.76  Definitions.
20.77  Agency responsibilities.
20.78  Notifications.
20.79  Examination of records relating to the claim; opportunity for 
          full explanation of the claim.
20.80  Opportunity for repayment.
20.81  Review of the obligation.
20.82  Cooperation with other DOL agencies and Federal agencies.
20.83  DOL agency as paying agency of the debtor.
20.84  Collections.
20.85  Notice of offset.
20.86  Non-waiver of rights by payments.
20.87  Refunds.
20.88  Additional administrative collection action.
20.89  Prior provision of rights with respect to debt.
20.90  Responsibilities of the Chief Financial Officer.

               Subpart E--Federal Income Tax Refund Offset

Sec.
20.101  Purpose and scope.
20.102  Redelegation of authority.
20.103  Definitions.
20.104  Agency responsibilities.
20.105  Minimum referral amount.
20.106  Relation to other collection efforts.
20.107  Debtor notification.
20.108  Agency review of the obligation.
20.109  Prior provision of rights with respect to debt.
20.110  Referral to IRS for tax refund offset.
20.111  Administrative cost charges.

    Authority: 31 U.S.C. 3711 et seq.; Subpart D is also issued under 5 
U.S.C. 5514; Subpart E is also issued under 31 U.S.C. 3720A.

    Source: 50 FR 5202, Feb. 6, 1985, unless otherwise noted.

    Editorial Note: Nomenclature changes affecting this part appear at 
57 FR 31451, July 16, 1992.



    Subpart A--Disclosure of Information to Credit Reporting Agencies



Sec. 20.1  Purpose and scope.

    The regulations in this subpart establish procedures to implement 
section 3 of the Debt Collection Act of 1982 (Pub. L. 97-365), 31 U.S.C. 
3711(f). This statute, and other applicable authority, authorizes 
Department heads to disclose to credit reporting agencies information 
concerning claims owed the United States under programs administered by 
the Department head. This disclosure is limited to certain information 
and must be in accordance with procedures set forth in the Debt 
Collection Act and other applicable laws. This subpart specifies the 
agency procedures and debtor rights that will be

[[Page 246]]

followed in making a disclosure to a credit reporting agency.



Sec. 20.2  Definitions.

    For purposes of this subpart--
    (a) The term commercial debt means any non-tax business debt in 
excess of $100, arising from loans, loan guarantees, overpayments, 
fines, penalties or other causes.
    (b) The term consumer debt means any non-tax debt of an individual 
in excess of $100, arising from loans--loan guarantees, overpayments, 
fines, penalties, or other causes.
    (c) A debt is considered delinquent if it has not been paid by the 
date specified in the agency's initial demand letter (Sec. 20.4), unless 
satisfactory payment arrangements have been made by that date, or if, at 
any time thereafter, the debtor fails to satisfy his obligations under a 
payment agreement with the Department of Labor, or any agency thereof.
    (d) The term claim and debt are deemed synonymous and 
interchangeable. They refer to an amount of money or property which has 
been determined by an appropriate agency official to be owed to the 
United States from any person, organization, or entity, except another 
federal agency.



Sec. 20.3  Agency responsibilities.

    (a) As authorized by law, each Department of Labor agency may report 
all delinquent consumer debts to consumer credit reporting agencies and 
may also report all commercial debts to appropriate commercial credit 
reporting agencies.
    (b) Information provided to a consumer credit reporting agency on 
delinquent consumer debts from a system of records subject to the 
Privacy Act of 1974, 5 U.S.C. 552a, must be maintained by the Department 
of Labor in accordance with that Act, except as otherwise modified by 
law. Furthermore, no disclosure may be made until the appropriate notice 
of system of records has been amended in accordance with 5 U.S.C. 
552a(e)(11).
    (c) The Chief Financial Officer, or his or her designee, shall have 
the responsibility for obtaining satisfactory assurances from each 
credit reporting agency to which information will be provided, 
concerning compliance by the credit reporting agency with the Fair 
Credit Reporting Act (15 U.S.C. 1681 et seq.) and any other Federal law 
governing the provision of credit information.
    (d) The information disclosed to the credit reporting agency is 
limited to: (1) The name, address, taxpayer identification number, and 
other information necessary to establish the identity of the individual, 
(2) the amount, status, and history of the claim, and (3) the Department 
of Labor agency or program under which the claim arose.
    (e) The agency official providing information to a credit reporting 
agency: (1) Shall promptly disclose to each credit reporting agency to 
which the original disclosure was made, any substantial change in the 
status or amount of the claim; and (2) shall within 30 days whenever 
feasible, or otherwise promptly verify or correct, as appropriate, 
information concerning the claim upon the request of any such credit 
reporting agency for verification of any or all information so 
disclosed.
    (f) Each Department of Labor agency is responsible for ensuring the 
continued accuracy of calculations and records relating to its claims, 
and for the prompt notification to the credit reporting agency of any 
substantial change in the status or amount of the claim. The agencies 
shall promptly follow-up on any allegation made by a debtor that the 
records of the agency concerning a claim are in error. Agencies should 
respond promptly to communications from the debtor, within 30 days 
whenever feasible.
    (g) The agency official responsible for providing information to a 
consumer credit reporting agency shall take reasonable action to locate 
the individual owing the debt prior to disclosing any information to a 
consumer credit reporting agency.



Sec. 20.4  Determination of delinquency; notice.

    (a) The agency head (or designee) responsible for carrying out the 
provisions of this subpart with respect to the debt shall send to the 
debtor appropriate written demands for payment in terms which inform the 
debtor of the consequences of failure to cooperate. In

[[Page 247]]

accordance with guidelines established by the Chief Financial Officer, a 
total of three progressively stronger written demands at not more than 
30-day intervals will normally be made unless a response to the first or 
second demand indicates that a further demand would be futile and the 
debtor's response does not require rebuttal. In determining the timing 
of the demand letters, agencies should give due regard to the need to 
act promptly so that, as a general rule, if necessary to refer the debt 
to the Department of Justice for litigation, such referral can be made 
within one year of the final determination of the fact and the amount of 
the debt. When the agency head (or designee) deems it appropriate to 
protect the government's interests (for example, to prevent the statute 
of limitations, 28 U.S.C. 2415, from expiring), written demand may be 
preceded by other appropriate actions, including immediate referral for 
litigation.
    (b) Prior to disclosing information to a consumer credit reporting 
agency in accordance with this subpart, the agency head (or designee) 
responsible for administering the program under which the debt arose 
shall review the claim and determine that the claim is valid and 
overdue. In cases where the debt arises under programs of two or more 
Department of Labor agencies, or in such other instances as the Chief 
Financial Officer or his or her designee may deem appropriate, the Chief 
Financial Officer, or his or her designee, may determine which agency, 
or official, shall have responsibility for carrying out the provisions 
of this subpart.
    (c) In accordance with guidelines established by the Chief Financial 
Officer, the agency official responsible for disclosure of the debt to a 
consumer credit reporting agency shall send written notice to the 
individual debtor informing such debtor:
    (1) Of the basis for the indebtedness;
    (2) That the payment of the claim is overdue;
    (3) That the agency intends to disclose to a consumer credit 
reporting agency, within not less than sixty days after sending such 
notice, that the individual is responsible for such claim;
    (4) Of the specific information intended to be disclosed to the 
credit reporting agency;
    (5) Of the rights of such debtor to a full explanation of the claim, 
to dispute any information in the records of the agency concerning the 
claim, and of the name of an agency employee who can provide a full 
explanation of the claim;
    (6) Of the debtor's right to administrative appeal or review with 
respect to the claim and how such review shall be obtained; and,
    (7) Of the date on which or after which the information will be 
reported to the consumer credit reporting agency.
    (d) Where the disclosure concerns a commercial debt, the responsible 
agency head (or designee) shall send written notice to the commercial 
debtor informing such debtor of the information discussed in paragraphs 
(c)(1), (4), (5), and (6) of this section.
    (e) Agencies shall also include in their demand letters the notice 
provisions to debtors required by other regulations of the Labor 
Department, pertaining to waiver, assessment of interest, penalties and 
administrative costs, administrative offset, and salary offset to the 
extent that such inclusion is appropriate and practicable.
    (f) The responsible agency head (or designee) shall exercise due 
care to insure that demand letters are mailed or hand-delivered on the 
same day that they are actually dated. If evidence suggests that the 
debtor is no longer located at the address of record, reasonable action 
shall be taken to obtain a current address.
    (g) To the extent that the requirements under this section have been 
provided to the debtor in relation to the same debt under some other 
statutory or regulatory authority, the agency is not required to 
duplicate such efforts.

[50 FR 5202, Feb. 5, 1985; 50 FR 8608, Mar. 4, 1985]



Sec. 20.5  Examination of records relating to the claim; opportunity for full explanation of the claim.

    Following receipt of the notice specified in Sec. 20.4, the debtor 
may request to examine and copy the information to

[[Page 248]]

be disclosed to the consumer credit reporting agency, in accordance with 
5 U.S.C. 552a.



Sec. 20.6  Opportunity for repayment.

    The Department of Labor agency responsible for collecting the claim 
shall afford the debtor the opportunity to repay the debt or enter into 
a repayment plan which is agreeable to the head of the agency and is in 
a written form signed by such debtor. The head of the agency (or 
designee) may deem a repayment plan to be abrogated if the debtor 
should, after the repayment plan is signed, fail to comply with the 
terms of the plan.



Sec. 20.7  Review of the obligation.

    (a) The debtor shall have the opportunity to obtain review by the 
responsible agency of the initial decision concerning the existence or 
amount of the debt.
    (b) The debtor seeking review shall make the request in writing to 
the reviewing official or employee, not more than 15 days from the date 
the initial demand letter was received by the debtor. The request for 
review shall state the basis for challenging the initial determination. 
If the debtor alleges that specific information to be disclosed to a 
credit reporting agency is not accurate, timely, relevant or complete, 
such debtor shall provide information or documentation to support this 
allegation.
    (c) The review shall ordinarily be based on written submissions and 
documentation by the debtor. However a reasonable opportunity for an 
oral hearing shall be provided an individual debtor when the responsible 
agency determines that:
    (1) An applicable statute authorizes or requires the agency to 
consider waiver of the indebtedness involved, the debtor requests waiver 
of the indebtedness, and the waiver determination turns on an issue of 
credibility or veracity; or
    (2) An individual debtor requests reconsideration of the debt and 
the agency determines that the question of the indebtedness cannot be 
resolved by review of the documentary evidence, for example, when the 
validity of the debt turns on an issue of credibility or veracity; or
    (3) In other situations in which the agency deems an oral hearing 
appropriate. Unless otherwise required by law an oral hearing under this 
section is not required to be a formal evidentiary-type hearing, 
although the reviewing official should carefully document all 
significant matters discussed at the hearing.
    (d) Upon receipt of a timely request for review, the agency shall 
suspend its schedule for disclosure of a delinquent consumer debt to a 
consumer credit reporting agency until such time as a final decision is 
made on the request.
    (e) Upon completion of the review, the reviewing official shall 
transmit to the debtor a written notification of the decision. If 
appropriate, this notification shall inform the debtor of the scheduled 
date on or after which information concerning the debt will be provided 
to credit reporting agencies. The notification shall, also if 
appropriate, indicate any changes in the information to be disclosed to 
the extent such information differs from that provided in the initial 
notification.
    (f) Nothing in this subpart shall preclude an agency, upon request 
of the debtor alleged by the agency to be responsible for a debt, or on 
its own initiative, from reviewing the obligation of such debtor, 
including an opportunity for reconsideration of the initial decision 
concerning the debt, and including the accuracy, timeliness, relevance, 
and completeness of the information to be disclosed to a credit 
reporting agency.
    (g) To the extent that the requirements under this section have been 
provided to the debtor in relation to the same debt under some other 
statutory or regulatory authority, the agency is not required to 
duplicate such efforts.

(Approved by the Office of Management and Budget under control number 
1225-0030)



Sec. 20.8  Disclosure to credit reporting agencies.

    (a) In accordance with guidelines established by the Chief Financial 
Officer, the responsible Department of Labor agency shall make the 
disclosure of information on the debtor to the

[[Page 249]]

credit reporting agency. Such disclosure to consumer credit reporting 
agencies shall be made on or after the date specified in the Sec. 20.4 
notification to the individual owing the claim, and shall be comprised 
of the information set forth in the initial determination, or any 
modification thereof.
    (b) This section shall not apply to individual debtors when--
    (1) Such debtor has repaid or agreed to repay his or her obligation, 
and such agreement is still valid, as provided in Sec. 20.6; or
    (2) Such debtor has filed for review of the claim under 
Sec. 20.7(b), and the reviewing official or employee has not issued a 
decision on the review.
    (c) In addition, the agency may determine not to make a disclosure 
of information to a credit reporting agency when the agency, on its own 
initiative, is reviewing and has not concluded such review of its 
initial determination of the claim under Sec. 20.7(f).



Sec. 20.9  Waiver of credit reporting.

    The agency head (or designee) may waive reporting a commercial debt 
or delinquent consumer debt to a credit reporting agency, if otherwise 
appropriate and if reporting the debt would not be in the best interests 
of the United States.



Sec. 20.10  Responsibilities of the Chief Financial Officer.

    The Chief Financial Officer, or his or her designee, shall provide 
appropriate and binding, written or other guidance to Department of 
Labor agencies and officials in carrying out this subpart, including the 
issuance of guidelines and instructions, which he or she may deem 
appropriate. The Chief Financial Officer shall also take such 
administrative steps as may be appropriate to carry out the purposes and 
ensure the effective implementation of this regulation, including the 
designation of credit reporting agencies authorized to receive and 
disseminate information under this subpart.



                    Subpart B--Administrative Offset



Sec. 20.19  Purpose and scope.

    The regulations in this subpart establish procedures to implement 
section 10 of the Debt Collection Act of 1982 (Pub. L. 97-365), 31 
U.S.C. 3716(d). Among other things, this statute authorizes the head of 
each agency to collect a claim arising under an agency program by means 
of administrative offset, except that no claim may be collected by such 
means if outstanding for more than 10 years after the agency's right to 
collect the debt first accrued, unless facts material to the 
Government's right to collect the debt were not known and could not 
reasonably have been known by the official or officials of the 
government who were charged with the responsibility to discover and 
collect such debts. This subpart specifies the agency procedures that 
will be followed by the Department of Labor for an administrative 
offset.



Sec. 20.20  Definitions.

    For purposes of this subpart--
    (a) The term administrative offset means the withholding of money 
payable by the United States to or held by the United States on behalf 
of a person to satisfy a debt owned the United States by that person; 
and
    (b) The term person does not include any agency of the United 
States, or any state or local government.
    (c) The terms claim and debt are deemed synonymous and 
interchangeable. They refer to an amount of money or property which has 
been determined by an appropriate agency official to be owed to the 
United States from any person, organization, or entity, except another 
federal agency.
    (d) A debt is considered delinquent if it has not been paid by the 
date specified in the agency's initial demand letter (Sec. 20.22), 
unless satisfactory payment arrangements have been made by that date, or 
if, at any time thereafter, the debtor fails to satisfy his obligations 
under a payment agreement with the Department of Labor, or any agency 
thereof.



Sec. 20.21  Agency responsibilities.

    (a) Each Department of Labor agency which has delinquent debts owed 
under its program is responsible for collecting its claims by means of 
administrative offset, in accordance with

[[Page 250]]

guidelines established by the Chief Financial Officer.
    (b) Before collecting a claim by means of administrative offset, the 
responsible agency must ensure that administrative offset is feasible, 
allowable and appropriate, and must notify the debtor of the 
Department's policies for collecting a claim by means of administrative 
offset.
    (c) Whether collection by administrative offset is feasible is a 
determination to be made by the creditor agency on a case-by-case basis, 
in the exercise of sound discretion. Agencies shall consider not only 
whether administrative offset can be accomplished, both practically and 
legally, but also whether offset is best suited to further and protect 
all of the Government's interests. In appropriate circumstances, 
agencies may give due consideration to the debtor's financial condition, 
and are not required to use offset in every instance in which there is 
an available source of funds. Agencies may also consider whether offset 
would substantially interfere with or defeat the purposes of the program 
authorizing the payments against which offset is contemplated.
    (d) Before advising the debtor that the delinquent debt will be 
subject to administrative offset, the agency head (or designee) 
responsible for administering the program under which the debt arose 
shall review the claim and determine that the debt is valid and overdue. 
In the case where a debt arises under the programs of two or more 
Department of Labor agencies, or in such other instances as the Chief 
Financial Officer, or his or her designee, may deem appropriate, the 
Chief Financial Officer, or his or her designee, may determine which 
agency (or agencies), or official (or officials), shall have 
responsibility for carrying out the provisions of this subpart.
    (e) Administrative offset shall be considered by agencies only after 
attempting to collect a claim under Section 3(a) of the Federal Claims 
Collection Act, except that no claim under this Act that has been 
outstanding for more than 10 years after the Government's right to 
collect the debt first accrued may be collected by means of 
administrative offset, unless facts material to the right to collect the 
debt were not known and could not reasonably have been known by the 
official of the Agency who was charged with the responsibility to 
discover and collect such debts. When the debt first accrued should be 
determined according to existing laws regarding the accrual of debts, 
such as under 28 U.S.C. 2415.



Sec. 20.22  Notifications.

    (a) The agency head (or designee) responsible for carrying out the 
provisions of this subpart with respect to the debt shall send 
appropriate written demands to the debtor in terms which inform the 
debtor of the consequences of failure to cooperate. In accordance with 
guidelines established by the Chief Financial Officer, a total of three 
progressively stronger written demands at not more than 30-day intervals 
will normally be made unless a response to the first or second demand 
indicates that a further demand would be futile and the debtor's 
response does not require rebuttal. In determining the timing of the 
demand letters, agencies should give due regard to the need to act 
promptly so that, as a general rule, if necessary to refer the debt to 
the Department of Justice for litigation, such referral can be made 
within one year of the final determination of the fact and the amount of 
the debt. When the agency head (or designee) deems it appropriate to 
protect the government's interests (for example, to prevent the statute 
of limitations, 28 U.S.C. 2415, from expiring), written demand may be 
preceded by other appropriate actions, including immediate referral for 
litigation.
    (b) In accordance with guidelines established by the Chief Financial 
Officer, the agency official responsible for collection of the debt 
shall send written notice to the debtor, informing such debtor as 
appropriate:
    (1) Of the nature and amount of the indebtedness;
    (2) That the agency intends to collect, as appropriate, interest, 
penalties and administrative costs; and, in accordance with guidelines 
of the Chief Financial Officer, of the applicable standards for 
collecting such payments;

[[Page 251]]

    (3) Of the date by which payment is to be made (which normally 
should be not more than 30 days from the date that the initial 
notification was mailed or hand-delivered);
    (4) Of the agency's intention to collect by administrative offset 
and of the debtor's rights in conjunction with such an offset;
    (5) Of the debtor's entitlement to waiver, where applicable, and of 
the debtor's rights in conjunction with waiver;
    (6) Of the debtor's opportunity to enter into a written agreement 
with the agency to repay the debt;
    (7) Of the rights of such debtor to a full explanation of the claim, 
of the opportunity to inspect and copy the agency records with respect 
to the claim and to dispute any information in the records of the agency 
concerning the claim;
    (8) Of the debtor's right to administrative appeal or review with 
respect to the claim and how such review shall be obtained; and
    (9) Of the date on which or after which an administrative offset 
will begin.
    (c) Agencies shall also include in their demand letters the notice 
provisions to debtors required by other regulations of the Labor 
Department, pertaining to disclosures to credit reporting agencies, 
salary offset, and assessment of interest, penalties and administrative 
costs, to the extent inclusion of such is appropriate and practicable.
    (d) The responsible agency head (or designee) shall exercise due 
care to insure that demand letters are mailed or hand-delivered on the 
same day that they are actually dated. If evidence suggests that the 
debtor is no longer located at the address of record, reasonable action 
shall be taken to obtain a current address.
    (e) The agency responsible for collecting the claim shall, in the 
initial demand letter to the debtor, provide the name of an agency 
employee who can provide a full explanation of the claim.



Sec. 20.23  Examination of records relating to the claim; opportunity for full explanation of the claim.

    Following receipt of the initial demand letter specified in 
Sec. 20.22, the debtor may request to examine and copy agency records 
pertaining to the debt.



Sec. 20.24  Opportunity for repayment.

    (a) The Department of Labor agency responsible for collecting the 
claim shall afford the debtor the opportunity to repay the debt or enter 
into a repayment plan which is agreeable to the agency head (or 
designee) and is in a written form signed by such debtor. The head of 
the agency (or designee) may deem a repayment plan to be abrogated if 
the debtor should, after the repayment plan is signed, fail to comply 
with the terms of the plan.
    (b) Agencies have discretion and should exercise sound judgment in 
determining whether to accept a repayment agreement in lieu of offset. 
The determination should balance the Government's interest in collecting 
the debt against fairness to the debtor. If the debt is delinquent and 
the debtor has not disputed its existence or amount, an agency should 
effect an offset unless the debtor is able to establish that offset 
would result in undue financial hardship or would be against equity and 
good conscience.



Sec. 20.25  Review of the obligation.

    (a) The debtor shall have the opportunity to obtain review by the 
responsible agency of the determination concerning the existence or 
amount of the debt.
    (b) The debtor seeking review shall make the request in writing to 
the reviewing official or employee, not more than 15 days from the date 
the initial demand letter was received by the debtor. The request for 
review shall state the basis for challenging the determination. If the 
debtor alleges that the agency's information relating to the debt is not 
accurate, timely, relevant or complete, such debtor shall provide 
information or documentation to support this allegation.

[[Page 252]]

    (c) The review shall ordinarily be based on written submissions and 
documentation by the debtor. However a reasonable opportunity for an 
oral hearing shall be provided an individual debtor when the responsible 
agency determines that:
    (1) An applicable statute authorizes or requires the agency to 
consider waiver of the indebtedness involved, the debtor requests waiver 
of the indebtedness, and the waiver determination turns on an issue of 
credibility or veracity; or
    (2) An individual debtor requests reconsideration of the debt and 
the agency determines that the question of the indebtedness cannot be 
resolved by review of the documentary evidence, for example, when the 
validity of the debt turns on an issue of credibility or veracity; or
    (3) In other situations in which the agency deems an oral hearing 
appropriate. Unless otherwise required by law, an oral hearing under 
this section is not required to be a formal evidentiary-type hearing, 
although the reviewing official should carefully document all 
significant matters discussed at the hearing.
    (d) Agencies may effect an administrative offset against a payment 
to be made to a debtor prior to the completion of the due process 
procedures required by this subpart, if failure to take the offset would 
substantially prejudice the agency's ability to collect the debt; for 
example, if the time before the payment is to be made would not 
reasonably permit the completion of due process procedures. Offset prior 
to completion of due process procedures must be promptly followed by the 
completion of those procedures. Amounts recovered by offset but later 
found not owed to the agency should be promptly refunded.
    (e) Upon completion of the review, the reviewing official shall 
transmit to the debtor a written notification of the decision. If 
appropriate, this notification shall inform the debtor of the scheduled 
date on or after which administrative offset will begin. The 
notification shall also, if appropriate, indicate any changes in the 
information to the extent such information differs from that provided in 
the initial notification under Sec. 20.22.
    (f) Nothing in this subpart shall preclude an agency, upon request 
of the debtor alleged by the agency to be responsible for a debt, or on 
its own initiative, from reviewing the obligation of such debtor, 
including an opportunity for reconsideration of the determination 
concerning the debt, and including the accuracy, timeliness, relevance, 
and completeness of the information on which the debt is based.

(Approved by the Office of Management and Budget under control number 
1225-0030)



Sec. 20.26  Request for waiver or administrative review.

    (a) If the statute under which waiver or administrative review is 
sought is mandatory, that is, if it prohibits the agency from collecting 
the debt prior to the agency's consideration of the request for waiver 
or review (see Califano v. Yamasaki, 442 U.S. 682 (1979)), then 
collection action must be suspended until either
    (1) The agency has considered the request for waiver/review, or
    (2) The applicable time limit for making the waiver/review request, 
as prescribed in the agency's regulations, has expired and the debtor, 
upon proper notice, has not made such a request.
    (b) If the applicable waiver/review statute is permissive, that is, 
if it does not require all requests for waiver/review to be considered, 
and if it does not prohibit collection action pending consideration of a 
waiver/review request (for example, 5 U.S.C. 5584), collection action 
may be suspended pending agency action on a waiver/review request based 
upon appropriate consideration, on a case-by-case basis, as to whether:
    (1) There is a reasonable possibility that waiver will be granted, 
or that the debt (in whole or in part) will be found not owing from the 
debtor;
    (2) The Government's interests would be protected, if suspension 
were granted, by reasonable assurance that the debt could be recovered 
if the debtor does not prevail; and
    (3) Collection of the debt will cause undue hardship.
    (c) If the applicable statutes and regulations would not authorize 
refund by the agency to the debtor of amounts

[[Page 253]]

collected prior to agency consideration of the debtor's waiver/review 
request in the event the agency acts favorably on it, collection action 
should ordinarily be suspended, without regard to the factors specified 
in paragraph (b) of this section, unless it appears clear, based on the 
request and the surrounding circumstances, that the request is frivolous 
and was made primarily to delay collection.



Sec. 20.27  Cooperation with other DOL agencies and Federal agencies.

    (a) Appropriate use should be made of the cooperative efforts of 
other DOL agencies and Federal agencies in effecting collection by 
administrative offset. Generally, agencies should comply with requests 
from other agencies to initiate administrative offset to collect debts 
owed to the United States, unless the requesting agency has not complied 
with the applicable regulations or the request would otherwise be 
contrary to law or the best interests of the United States.
    (b) Unless otherwise prohibited by law, a DOL agency may request 
that monies due and payable to a debtor by another DOL agency or a 
Federal agency outside the Department be administratively offset in 
order to collect debts owed the creditor DOL agency by the debtor. In 
requesting an administrative offset, the creditor DOL agency must 
provide the DOL agency or other Federal agency holding funds of the 
debtor with written certification stating
    (1) That the debtor owes the creditor agency a debt (including the 
amount of debt); and
    (2) That the creditor agency has complied with the applicable 
Federal Claims Collection Standards, including any hearing or review.



Sec. 20.28  DOL agency as organization holding funds of the debtor.

    (a) Whenever a DOL agency is holding funds of a debtor from which 
administrative offset is sought by another DOL agency or other Federal 
agency, the DOL agency holding funds should not initiate the requested 
offset until it has been provided by the creditor organization with an 
appropriate written certification that the debtor owes a debt (including 
the amount) and that applicable provisions of the Federal Claims 
Collection Standards have been fully complied with.
    (b) Moreover, the DOL agency holding funds of the debtor should 
determine whether collection by offset would be in the best interests of 
the United States; for example, if the debtor is a contractor for the 
DOL agency holding funds, whether administrative offset would impair the 
contractor's ability to perform under the terms of the contract. The 
creditor organization should be notified promptly of the determination.



Sec. 20.29  Notice of offset.

    Prior to effecting an administrative offset, the agency holding 
funds of a debtor should advise the debtor of the impending offset. This 
notice should state that the debtor has been provided his/her rights 
under the Federal Claims Collection Standards, that a determination has 
been made that collection by administrative offset would be in the best 
interests of the United States, the amount of the offset, and the source 
of funds from which the offset will be made.



Sec. 20.30  Multiple debts.

    When collecting multiple debts by administrative offset, agencies 
should apply the recovered amounts to those debts, in accordace with the 
best interests of the United States, as determined by the facts and 
circumstances of the particular case, paying special attention to 
applicable statutes of limitations.



Sec. 20.31  Administrative offset against amounts payable from Civil Service Retirement and Disability fund.

    (a) Unless otherwise prohibited by law, agencies may request that 
moneys which are due and payable to a debtor from the Civil Service 
Retirement and Disability Fund be administratively offset in reasonable 
amounts in order to collect debts owed to the United States by the 
debtor. Such requests shall be made to the appropriate officials of the 
Office of Personnel Management in accordance with such regulations as 
may be prescribed by the Director of that Office.

[[Page 254]]

    (b) When making a request for administrative offset under paragraph 
(a) of this section, an agency shall include a written certification 
that:
    (1) The debtor owes the United States a debt, including the amount 
of the debt;
    (2) The requesting agency has complied with all applicable statutes, 
regulations, and procedures of the Office of Personnel Management; and
    (3) The requesting agency has complied with the requirements of the 
applicable provisions of the Federal Claims Collection Standards, 
including any required hearing or review.
    (c) Once an agency decides to request administrative offset under 
paragraph (a) of this section, it should make the request as soon as 
practical after completion of the applicable due process procedures in 
order that the Office of Personnel Management may identify and ``flag'' 
the debtor's account in anticipation of the time when the debtor becomes 
eligible and requests to receive payments from the Fund. This will 
satisfy any requirement that offset be initiated prior to expiration of 
the applicable statute of limitations. At such time as the debtor makes 
a claim for payments from the Fund, if at least a year has elapsed since 
the offset request was originally made, the debtor should be permitted 
to offer a satisfactory repayment plan in lieu of offset upon 
establishing that changed financial circumstances would render the 
offset unjust.
    (d) In accordance with procedures established by the Office of 
Personnel Management, agencies may request an offset from the Civil 
Service Retirement and Disability Fund prior to completion of due 
process procedures.
    (e) If the requesting agency collects part or all of the debt by 
other means before deductions are made or completed pursuant to 
paragraph (a) of this section, the agency shall act promptly to modify 
or terminate its request for offset under paragraph (a).



Sec. 20.32  Liquidation of collateral.

    An agency holding security or collateral which may be liquidated and 
the proceeds applied on debts due it through the exercise of a power of 
sale in the security instrument or a nonjudicial foreclosure should do 
so by such procedures if the debtor fails to pay the debt within a 
reasonable time after demand, unless the cost of disposing of the 
collateral will be disproportionate to its value or special 
circumstances require judicial foreclosure. The agency should provide 
the debtor with reasonable notice of the sale, an accounting of any 
surplus proceeds, and any other procedures required by contract or law. 
Collection from other sources, including liquidation of security or 
collateral, is not a prerequisite to requiring payment by a surety or 
insurance concern unless such action is expressly required by statute or 
contract.



Sec. 20.33  Collection in installments.

    (a) Whenever feasible, and except as otherwise provided by law, 
debts owed to the United States, together with interest, penalties, and 
administrative costs should be collected in full in one lump sum. This 
is true whether the debt is being collected by administrative offset or 
by another method, including voluntary payment. However, if the debtor 
is financially unable to pay the indebtedness in one lump sum, payment 
may be accepted in regular installments. Agencies should obtain and may 
require financial statements from debtors who represent that they are 
unable to pay the debt in one lump sum. Agencies which agree to accept 
payment in regular installments should obtain a legally enforceable 
written agreement from the debtor which specifies all of the terms of 
the arrangement and which contains a provision accelerating the debt in 
the event the debtor defaults. The size and frequency of installment 
payments should bear a reasonable relation to the size of the debt and 
the debtor's ability to pay. If possible, the installment payments 
should be sufficient in size and frequency to liquidate the Government's 
claim in not more than 3 years. Installment payment of less than $50 per 
month should be accepted only if justifiable on the grounds of financial 
hardship or for some other reasonable cause. An agency holding an

[[Page 255]]

unsecured claim for administrative collection should attempt to obtain 
an executed confess-judgment note, comparable to the Department of 
Justice Form USA-70a, from a debtor when the total amount of the 
deferred installments will exceed $750. Such notes may be sought when an 
unsecured obligation of a lesser amount is involved. When attempting to 
obtain confess-judgment notes, agencies should provide their debtors 
with written explanation of the consequences of signing the note, and 
should maintain documentation sufficient to demonstrate that the debtor 
has signed the note knowingly and voluntarily. Security for deferred 
payments other than a confess-judgment note may be accepted in 
appropriate cases. An agency may accept installment payments 
notwithstanding the refusal of a debtor to execute a confess-judgment 
note or to give other security, at the agency's option.
    (b) If the debtor owes more than one debt and designates how a 
voluntary installment payment is to be applied as among those debts, 
that designation must be followed. If the debtor does not designate the 
application of the payment, agencies should apply payments to the 
various debts in accordance with the best interests of the United 
States, as determined by the facts and circumstances of the particular 
case, paying special attention to applicable statutes of limitations.



Sec. 20.34  Exclusions.

    (a) Agencies are not authorized by section 10 of the Debt Collection 
Act of 1982 (31 U.S.C. 3716) to use administrative offset with respect 
to: (1) Debts owed by any State or local Government; (2) debts arising 
under or payments made under the Social Security Act, the Internal 
Revenue Code of 1954, or the tariff laws of the United States; or (3) 
any case in which collection of the type of debt involved by 
administrative offset is explicitly provided for or prohibited by 
another statute. However, unless otherwise provided by contract or law, 
debts or payments which are not subject to administrative offset under 
31 U.S.C. 3716 may be collected by administrative offset under the 
common law or other applicable statutory authority, pursuant to this 
paragraph or agency regulations established pursuant to such other 
statutory authority.
    (b) This section should not be construed as prohibiting use of these 
authorities or requirements when collecting debts owed by persons 
employed by agencies administering the laws cited in the preceding 
paragraph unless the debt ``arose under'' those laws.
    (c) Collection by offset against a judgment obtained by a debtor 
against the United States shall be accomplished in accordance with 31 
U.S.C. 3728.



Sec. 20.35  Additional administrative collection action.

    Nothing contained in this subpart is intended to preclude the 
utilization of any other administrative remedy which may be available.



Sec. 20.36  Prior provision of rights with respect to debt.

    To the extent that the rights of the debtor in relation to the same 
debt have been previously provided under some other statutory or 
regulatory authority, the agency is not required to duplicate those 
efforts before taking administrative offset.



Sec. 20.37  Responsibilities of the Chief Financial Officer.

    The Chief Financial Officer, or his or her designee, shall provide 
appropriate and binding written or other guidance to Department of Labor 
agencies and officials in carrying out this subpart, including the 
issuance of guidelines and instructions, which he or she may deem 
appropriate. The Chief Financial Officer shall also take such 
administrative steps as may be appropriate to carry out the purposes and 
ensure the effective implementation of this regulation.



         Subpart C--Interest, Penalties and Administrative Costs



Sec. 20.50  Purpose and scope.

    The regulations in this subpart establish the policies and 
procedures to implement section 11 of the Debt Collection Act of 1982 
(Pub. L. 97-365), 31 U.S.C. 3717. Among other things, this

[[Page 256]]

statute authorizes the head of each agency to assess interest, penalties 
and administrative costs against debtors with respect to delinquent 
debts arising under the agency's program. This subpart establishes the 
standards and procedures that will be followed by the Department of 
Labor in assessing such charges.



Sec. 20.51  Exemptions.

    (a) The provisions of 31 U.S.C. 3717 do not apply:
    (1) To debts owed by any State or local government;
    (2) To debts arising under contracts which were executed prior to, 
and were in effect on (i.e., were not completed as of), October 25, 
1982;
    (3) To debts where an applicable statute, regulation required by 
statute, loan agreement, or contract either prohibits such charges or 
explicitly fixes the charges that apply to the debts involved; or
    (4) To debts arising under the Social Security Act, the Internal 
Revenue Code of 1954, or the tariff laws of the United States.
    (b) Agencies are authorized to assess interest and related charges 
on debts which are not subject to 31 U.S.C. 3717 to the extent 
authorized under the common law or other applicable statutory authority.



Sec. 20.52  Definitions.

    For purposes of this subpart--
    (a) The terms claim and debt are deemed synonymous and 
interchangeable. They refer to an amount of money or property which has 
been determined by an appropriate agency official to be owed to the 
United States from any person, organization or entity, except another 
federal agency.
    (b) A debt is considered delinquent if it has not been paid by the 
date specified in the agency's initial demand letter (Sec. 20.54), 
unless satisfactory payment arrangements have been made by that date, or 
if, at any time thereafter, the debtor fails to satisfy his obligations 
under payment agreement with the Department of Labor, or any agency 
thereof.



Sec. 20.53  Agency responsibilities.

    (a) The Department of Labor agency responsible for administering the 
program under which a delinquent debt arose shall assess interest and 
related charges on the debt, in accordance with guidelines established 
by the Chief Financial Officer. In the case where a debt arises under 
the program of two or more Department of Labor agencies, or in such 
other instances as the Chief Financial Officer, or his or her designee, 
may deem appropriate, the Chief Financial Officer, or his or her 
designee, may determine which agency, or official, shall have 
responsibility for carrying out the provisions of this subpart.
    (b) Before assessing any charges on a delinquent debt, the 
responsible agency must notify the debtor of the Department's policies 
for assessing interest, penalties and administrative costs and must 
ensure that the debt is overdue for the respective periods specified in 
these regulations.
    (c) Each Department of Labor agency is responsible for ensuring the 
continued accuracy of calculations and records relating to its 
assessment of charges, and for the prompt notification of the debtor of 
any substantial change in the status or amount of the claim. As 
appropriate, the Agencies should promptly follow up on any allegation 
made by a debtor that principal or charges is in error. Agencies should 
respond promptly to communication from the debtor, within 30 days 
whenever feasible.



Sec. 20.54  Notification of charges.

    The agency head (or designee) responsible for carrying out the 
provisions of this subpart shall mail or hand-deliver an initial demand 
for payment to the debtor. In the initial demand, the debtor shall be 
notified that interest on the debt will start to accrue from the date on 
which the notice is mailed or hand-delivered, but that payment of 
interest will be waived if the debt is paid by the due date, or within 
30 days of the date of notice, if no due date is specified. The initial 
demand shall also state that administrative costs of recovering the 
delinquent debt will be assessed if payment is not received by the due 
date.

[[Page 257]]



Sec. 20.55  Second and subsequent notifications.

    (a) In accordance with guidelines established by the Chief Financial 
Officer, the responsible agency head (or designee) shall send 
progressively stronger second and subsequent demands for payment, if 
payment or other appropriate response is not received within the time 
specified by the initial demand. Unless a response to the first or 
second demand indicates that a further demand would be futile or the 
debtor's response does not require rebuttal, the second and subsequent 
demands shall generally be made at 30 day intervals from the first, and 
shall state that a 6 percent per annum penalty will be assessed after 
the debt has been delinquent 90 days, accruing from the date it became 
delinquent. The second and subsequent demands shall also identify the 
amount of interest then accrued on the debt, as well as administrative 
costs thus far assessed. In determining the timing of the demand 
letters, agencies should give due regard to the need to act promptly so 
that, as a general rule, if necessary to refer the debt to the 
Department of Justice for litigation, such referral can be made within 
one year of the final determination of the fact and the amount of the 
debt. When the agency head (or designee) deems it appropriate to protect 
the government's interests (for example, to prevent the statute of 
limitations 28 U.S.C. 2415, from expiring), written demand may be 
preceded by other appropriate actions, including immediate referral for 
litigation.
    (b) Agencies shall also include in their demand letters the notice 
provisions to debtors required by other regulations of the Labor 
Department, pertaining to waiver of the indebtedness, administrative 
offset, salary offset and disclosure of information to credit reporting 
agencies, to the extent that such inclusion is appropriate and 
practicable.



Sec. 20.56  Delivery of notices.

    The responsible agency head (or designee) shall exercise due care to 
ensure that demand letters are dated and mailed or hand-delivered on the 
same day that they are actually dated. If evidence suggests that the 
debtor is no longer located at the address of record, reasonable action 
shall be taken to obtain a current address.



Sec. 20.57  Accrual of interest.

    Interest shall accrue from the date on which notice of the debt and 
the interest requirements is first mailed or hand-delivered to the 
debtor, using the most current address that is available to the agency.



Sec. 20.58  Rate of interest.

    (a) The rate of interest assessed shall be the rate of the current 
value of funds to the United States Treasury as published in the Federal 
Register (as of the date the notice is sent), unless another rate is 
specified by statute, regulations or preexisting contract condition. The 
Office of the Chief Financial Officer will notify agencies promptly of 
the current Treasury rate. The responsible agency may assess a higher 
rate of interest if it reasonably determines that a higher rate is 
necessary to protect the interests of the United States, and such rate 
is agreed to by the Chief Financial Officer (or his designee). The rate 
of interest prescribed in section 6621 of the Internal Revenue Code 
shall be sought for backwages recovered in litigation by the Department.
    (b) The rate of interest as initially assessed shall remain fixed 
for the duration of the indebtedness, except that where a debtor has 
defaulted on a repayment agreement and seeks to enter into a new 
agreement, the agency may set a new interest rate which reflects the 
current value of funds to the Treasury at the time the new agreement is 
executed.
    (c) Interest shall not be assessed on interest, penalties or 
administrative costs required by this subpart. However, if the debtor 
defaults on a previous repayment agreement, charges which accrued but 
were not collected under the defaulted agreement shall be added to the 
principal to be paid under a new repayment agreement.



Sec. 20.59  Assessment of administrative costs.

    (a) The Department of Labor agency responsible for collecting the 
claim shall assess against debtors charges to

[[Page 258]]

cover administrative costs incurred as a result of the delinquent debt; 
that is, the additional costs incurred in processing and handling the 
debt because it became delinquent. Calculation of administrative costs 
shall be based on cost analyses establishing an average of actual 
additional costs incurred by the agency in processing and handling 
claims against other debtors in similar stages of delinquency.
    (b) In addition to assessing the costs listed in the administrative 
cost fee schedule, the responsible agency may include the costs incurred 
in obtaining a credit report or in using a private debt collector, to 
the extent they are attributable to delinquency.
    (c) The Chief Financial Officer shall issue each year a schedule 
providing the costs associated with various common activities required 
to collect delinquent debts.



Sec. 20.60  Application of partial payments to amounts owed.

    When a debt is paid in partial or installment payments, amounts 
received by the responsible agency should be applied first to 
outstanding penalty and administrative cost charges, second to accrued 
interest, and third to outstanding principal.



Sec. 20.61  Waiver.

    (a) The Department of Labor agency responsible for collecting the 
claim shall waive the collection of interest on the debt or any portion 
of the debt which is paid within 30 days after the date on which 
interest began to accrue. This 30-day period may be extended for another 
30 days on a case-by-case basis, if the agency reasonably determines 
that such action is appropriate, and is in accordance with these 
regulations. Also, the responsible agency may waive charges assessed 
under this subpart, based on criteria specified in the Federal Claims 
Collection Standards relating to the compromise of claims (without 
regard to the amount of the debt), or if the agency determines that 
collection of these charges would be against equity and good conscience 
or not be in the best interests of the United States. Waiver under the 
first sentence of this paragraph is mandatory. Under the second and 
third sentences waiver is permissive and may be exercised only in 
accordance with the standards set by these regulations.
    (b) Agencies may waive interest and other charges under appropriate 
circumstances, including, for example:
    (1) Pending consideration of a request for reconsideration, 
administrative review, or waiver under a permissive statute,
    (2) If the agency has accepted an installment plan, there is no 
fault or lack of good faith on the part of the debtor, and the amount of 
interest is large enough in relation to the size of the debt and the 
amount of the installments that the debtor can reasonably afford to pay 
so that the debt can never be repaid, or
    (3) If repayment of the full amount of the debt is made after the 
date upon which interest and other charges became payable and the 
estimated costs of recovering the residual interest balance exceed the 
amount owed the Agency.
    (c) Where a mandatory waiver or review statute applies, interest and 
related charges may not be assessed for those periods during which 
collection action must be suspended.



Sec. 20.62  Responsibilities of the Chief Financial Officer.

    The Chief Financial Officer, or his or her designee, shall provide 
appropriate and binding written or other guidance to Department of Labor 
agencies and officials in carrying out this subpart, including the 
issuance of guidelines and instructions, which he or she may deem 
appropriate. The Chief Financial Officer shall also take such 
administrative steps as may be appropriate to carry out the purposes and 
ensure the effective implementation of this regulation.



                        Subpart D--Salary Offset

    Source: 52 FR 3772, Feb. 5, 1987, unless otherwise noted.



Sec. 20.74  Purpose.

    (a) The regulations in this subpart establish procedures to 
implement section 5 of the Debt Collection Act of 1982 (Pub. L. 97-365), 
5 U.S.C. 5514. This statute authorizes the head of each agency

[[Page 259]]

to deduct from the current pay account of an employee (salary offset) 
when the employee owes money to the United States. This subpart 
specifies the agency procedures that will be available in a salary 
offset by the Department of Labor of an employee's current pay account.
    (b) Administrative offset is defined in 31 U.S.C. 3701(a)(1) as 
``withholding money payable by the United States Government, to or held 
by the Government for a person to satisfy a debt the person owes the 
Government.''

A salary offset is a form of administrative offset and is separately 
authorized and governed by 5 U.S.C. 5514. This authority is consistent 
with and supplemented by administrative offset regulations of subpart B 
of 29 CFR part 20.



Sec. 20.75  Scope.

    (a) This subpart applies to debts owed to the United States (arising 
under Labor Department programs) by Labor Department employees, debts 
owed to the United States (arising under Labor Department programs) by 
employees of other Federal agencies, and debts owed the United States 
(arising under programs of other Federal agencies) by Labor Department 
employees. Other agency means:
    (1) An executive agency as defined in section 105 of title 5 U.S.C. 
(but not including the Labor Department), including the U.S. Postal 
Service and the U.S. Postal Rate Commission;
    (2) A military Department as defined in section 102 of title U.S.C.;
    (3) An agency or court in the judicial branch, including a court as 
defined in section 610 of title 28 U.S.C., the District Court for the 
Northern Mariana Islands, and the Judicial Panel on Multidistrict 
Litigation;
    (4) An agency of the legislative branch, including the U.S. Senate 
and the U.S. House of Representatives; and
    (5) Other independent establishments that are entities of the 
Federal Government.
    (b) The procedures contained in this subpart do not apply to debts 
or claims arising under the Internal Revenue Code of 1954 as amended (26 
U.S.C. 1 et seq), the Social Security Act (42 U.S.C. 301 et seq), or the 
tariff laws of the United States; or to any case where collection of a 
debt by salary offset is explicitly provided for or prohibited by 
another statute (e.g.) travel advances in 5 U.S.C. 5705 and employee 
training expenses in 5 U.S.C. 4108.
    (c) This subpart does not preclude an employee from requesting 
waiver of a salary overpayment under 5 U.S.C. 5584, 10 U.S.C. 2774, or 
32 U.S.C. 716, or in any way questioning the amount or validity of a 
debt by submitting a subsequent claim to the General Accounting Office 
in accordance with procedures prescribed by the General Accounting 
Office. Similarly, in the case of other types of debts, this subpart 
does not preclude an employee from requesting waiver, if waiver is 
available under any statutory provisions pertaining to the particular 
debt being collected.



Sec. 20.76  Definitions.

    (a) Disposable pay means that part of current basic pay, special 
pay, incentive pay, retired pay, retainer pay, or in the case of an 
employee not entitled to basic pay, other authorized pay remaining after 
the deduction of any amount required by law to be withheld. Agencies 
must exclude deductions described in 5 CFR 581.105 paragraphs (b) 
through (f) to determine disposal pay subject to salary offset.
    (b) As used in this subpart, the terms claim and debt are deemed 
synonymous and interchangeable. A debt means an amount owed to the 
United States from sources which include loans insured or guaranteed by 
the United States and all other amounts due the United States from fees, 
leases, rents, royalties, services, sales of real or personal property, 
overpayments, penalties, damages, interest, fines and forfeitures 
(except those arising under the Uniform Code of Military Justice), and 
all other similar sources.
    (c) Employee means a current employee of an agency, including a 
current member of the Armed Forces or a Reserve of the Armed Forces 
(Reserves).
    (d) Paying agency means the agency employing the individual and 
authorizing the payment of his or her current account.
    (e) Credit agency means the agency to which the debt is owed.

[[Page 260]]

    (f) Salary offset means an administrative offset to collect a debt 
under 5 U.S.C. 5514 by deduction(s) at one or more officially 
established pay intervals from the current pay account of an employee 
without his or her consent.
    (g) FCCS means the Federal Claims Collection Standards jointly 
published by the Justice Department and the General Accounting Office at 
4 CFR 101.1 et seq.
    (h) Waiver means the cancellation, remission, forgiveness, or non-
recovery of a debt allegedly owed by an employee to an agency as 
permitted or required by 5 U.S.C. 5584, 10 U.S.C. 2774, or 32 U.S.C. 
716, 5 U.S.C. 8346(b), or any other law.



Sec. 20.77  Agency responsibilities.

    (a) Each Department of Labor agency which has delinquent debts owed 
under its program and administrative activities is responsible for 
collecting its claims by means of salary offset, in accordance with 
guidelines established by the Chief Financial Officer.
    (b) Before collecting a claim by means of salary offset, the 
responsibile agency should be satisfied that salary offset is feasible, 
allowable and appropriate, and, as otherwise provided in these 
regulations, must notify the debtor of the Department's policies for 
collecting a claim by means of salary offset.
    (c) Whether collection by salary offset is feasible is a 
determination to be made by the creditor agency on a case-by-case basis, 
in the exercise of sound discretion. Agencies shall consider not only 
whether salary offset can be accomplished, both practically and legally, 
but also whether offset is best suited to further and protect all of the 
Government's interests. In appropriate circumstances, agencies may give 
due consideration to the debtor's financial condition, and are not 
required to use offset of the full or partial amount of the claim in 
every instance in which there is an available source of funds.
    (d) Before advising the debtor that the delinquent debt will be 
subject to salary offset, the agency head (or designee) responsible for 
administering the program under which the debt arose shall review the 
claim and determine that the debt is valid and overdue. In the case 
where a debt arises under the programs of two or more Department of 
Labor agencies, or in such other instances as the Chief Financial 
Officer, or his or her designee, may deem appropriate, the Chief 
Financial Officer, or his or her designee, may determine which agency 
(or agencies), or official (or officials), shall have responsibility for 
carrying out the provisions of this subpart.
    (e) Agencies may not initiate offset to collect a debt more than 10 
years after the Government's right to collect the debt first accrued, 
unless facts material to the right to collect the debt were not known 
and could not reasonably have been known by the official of the Agency 
who was charged with the responsibility to discover and collect such 
debts. When the debt first accrued should be determined according to 
existing laws regarding the accrual of debts, such as under 28 U.S.C. 
2415.



Sec. 20.78  Notifications.

    (a) The agency head (or designee) of the creditor Labor Department 
agency shall send appropriate written demands to the debtor in terms 
which inform the debtor of the consequences of failure to repay claims. 
In accordance with guidelines as may be established by the Chief 
Financial Officer, a total of three progressively stronger written 
demands at not more than 30-day intervals will normally be made unless a 
response to the first or second demand indicates that a further demand 
would be futile and the debtor's response does not require rebuttal. In 
determining the timing of the demand letters, agencies should give due 
regard to the need to act promptly so that a debt to be collected by 
salary offset will be recovered during the employee's anticipated period 
of employment with the Government.
    (b) In accordance with guidelines as may be established by the Chief 
Financial Officer, the creditor Labor Department agency shall send (at 
least 30 days prior to any deduction) written notice to the debtor, 
informing such debtor as appropriate:
    (1) Of the origin, nature and amount of the indebtedness determined 
by the agency to be due;

[[Page 261]]

    (2) Of the intention of the agency to initiate proceedings to 
collect the debt by means of deduction from the employee's current 
disposable pay account;
    (3) Of the amount, frequency, proposed beginning date, and duration 
of the intended deductions;
    (4) Unless such payments are excused in accordance with the FCCS, of 
the creditor agency's policy concerning assessment of interest, 
penalties, and administrative costs;
    (5) Of the employee's right to inspect and copy Government records 
relating to the debt or, if the employee or his or her representative 
cannot personally inspect the records, to request and receive a copy of 
such records;
    (6) If not previously provided, of the opportunity (under terms 
agreeable to the creditor agency) to establish a schedule for the 
voluntary repayment of the debt or to enter into a written agreement to 
establish a schedule for repayment of the debt in lieu of offset. The 
agreement must be in writing, be signed by both the employee and the 
creditor agency, and be documented in the creditor agency's files (4 CFR 
102.2(e));
    (7) Of the employee's right to a hearing conducted by an 
administrative law judge of the Department of Labor, if a petition is 
filed as prescribed by the Department of Labor. In the event the debtor 
is an employee working in the Office of Administrative Law Judges, the 
notification shall inform such debtor of the right to elect to have the 
review of the agency's determination heard and decided by a person who 
is not in the Office of Administrative Law Judges, and not under the 
supervision and control of the Secretary of Labor; in such a case, all 
provisions in this subpart will otherwise apply, unless stated otherwise 
in the notification;
    (8) Of the method and time period for petitioning for hearing;
    (9) That the timely filing of a petition for hearing will stay the 
commencement of collection proceedings, unless the creditor agency 
determines that Sec. 20.81(d) applies and further informs the debtor of 
the basis for its determination;
    (10) That a final decision on the hearing (if one is requested) will 
be issued at the earliest practical date, but not later than 60 days 
after the filing of the petition requesting the hearing unless the 
employee requests and the administrative law judge grants a delay in the 
proceedings;
    (11) That any knowingly false or frivolous statements, 
representations, or evidence may subject the employee to:
    (i) Disciplinary procedures appropriate under chapter 75 of title 5 
U.S.C., part 752 of title 5, Code of Federal Regulations, or any other 
applicable statutes or regulations;
    (ii) Penalties under the False Claims Act, sections 3729-3731 of 
title 31 U.S.C., or any other applicable statutory authority; or
    (iii) Criminal penalties under sections 286, 287, 1001 and 1002 of 
title 18 U.S.C., or any other applicable statutory authority;
    (12) Of any other rights and remedies available to the employee 
under statutes or regulations governing the program for which the 
collection is being made; and
    (13) That unless there are applicable contractual or statutory 
provisions to the contrary, amounts paid on or deducted for the debt 
which are later waived or found not owed to the United States will be 
promptly refunded to the employee.
    (c) Creditor Labor Department agencies shall also include in their 
demand letters the notice provisions to debtors required by other 
regulations of the Labor Department, pertaining to disclosures to credit 
reporting agencies, administrative offset from other sources of funds, 
and the assessment of interest, penalties and administrative costs, to 
the extent inclusion of such is appropriate and practicable.
    (d) The responsible agency head (or designee) shall exercise due 
care to ensure that demand letters are mailed or hand-delivered on the 
same day that they are actually dated. If evidence suggests that the 
debtor is no longer located at the address of record, reasonable action 
shall be taken to obtain a current address.
    (e) The creditor Labor Department agency shall, in the initial 
demand letter to the debtor, provide the name of an agency employee who 
can provide a full explanation of the claim.

[[Page 262]]

    (f) In any internal Labor Department collection, the provisions of 
Sec. 20.78 paragraphs (a) through (e) need not be applied to any 
adjustment to pay which is not considered to be the result of collection 
of a debt, such as excess pay or allowances caused by:
    (1) An employee's election of coverage or a change of coverage under 
a Federal benefits program requiring periodic deductions from pay, if 
the amount to be recovered was accumulated in four pay periods or less; 
or
    (2) Ministerial adjustments in pay rates or allowances which cannot 
be placed into effect immediately because of normal processing delays, 
if the amount to be recovered was accumulated in four pay periods or 
less.



Sec. 20.79  Examination of records relating to the claim; opportunity for full explanation of the claim.

    Following receipt of the notice specified in Sec. 20.78(b), the 
debtor may request to examine and copy agency records pertaining to the 
debt.



Sec. 20.80  Opportunity for repayment.

    (a) The creditor Labor Department agency shall afford the debtor the 
opportunity to (1) repay the debt or (2) enter into a repayment plan 
which is agreeable to the agency head (or designee) and is in a written 
form signed by such debtor and the creditor agency. The head of the 
agency (or designee) may deem a repayment plan to be abrogated if the 
debtor should, after the repayment plan is signed, fail to comply with 
the terms of the plan.
    (b) Agencies have discretion and should exercise sound judgment in 
determining whether to accept a repayment agreement in lieu of offset. 
The determination should balance the Government's interest in collecting 
the debt against fairness to the debtor. If the debt is delinquent and 
the debtor has not disputed its existence or amount, an agency should 
effect an offset unless the debtor is able to establish that offset 
would result in undue financial hardship or would be against equity and 
good conscience, or the agency otherwise determines that offset would be 
contrary to sound judgment.



Sec. 20.81  Review of the obligation.

    (a) The debtor shall have the opportunity to obtain a hearing by an 
administrative law judge of the agency's determination concerning the 
existence or amount of the debt, or the repayment schedule proposed by 
the agency, and except as provided in Sec. 20.75(c), review by an 
administrative law judge is to be the exclusive administrative review 
remedy on the agency's determination under these regulations.
    (b) The debtor seeking a hearing shall make the request in writing 
to the Chief Administrative Law Judge, pursuant to 29 CFR part 18, not 
more than 15 days from the date the notice of proposed salary offset was 
received by the debtor. The request for hearing shall be signed by the 
employee and state the basis for challenging the determination. If the 
debtor alleges that the agency's information relating to the debt is not 
accurate, timely, relevant or complete, such debtor shall fully identify 
and explain with reasonable specificity all the facts, evidence and 
witnesses, if any, which the employee believes supports his or her 
position.
    (c) The hearing ordinarily shall be based on written submissions and 
documentation by the debtor. However, an opportunity for an oral hearing 
shall be provided an individual debtor when the administrative law judge 
determines that:
    (1) An applicable statute authorizes or requires the agency to 
consider waiver of the indebtedness involved, the debtor requests waiver 
of the indebtedness, and the waiver determination turns on an issue of 
credibility or veracity; or
    (2) An individual debtor requests reconsideration of the debt and 
the administrative law judge determines that the question of the 
indebtedness cannot be resolved by review of the documentary evidence, 
for example, when the validity of the debt turns on an issue of 
credibility or veracity; or
    (3) In other situations in which the administrative law judge deems 
an oral hearing appropriate.

Unless otherwise required by law or these regulations, any oral hearing 
under this section shall be conducted

[[Page 263]]

under the procedures in 29 CFR part 18. Except as provided under 
Sec. 20.79, the provisions for discovery shall not be applicable unless 
otherwise ordered by the administrative law judge. Procedural and 
evidentiary rules shall be relaxed by the administrative law judge to 
provide informality and to facilitate the hearing.
    (d) Agencies may effect a salary offset against the current pay 
account of a debtor prior to the completion of the hearing procedures 
required by this subpart, if failure to initiate the offset would 
substantially prejudice the agency's ability to collect the debt; for 
example, if the employee's anticipated period of employment with the 
Government would not reasonably permit the completion of the hearing and 
recovery of the debt prior to termination of employment. Offset prior to 
completion of the hearing must be promptly followed by the completion of 
that hearing.
    (e) If the debtor seeking a hearing under this section makes the 
request for review of the obligation after the expiration of the period 
for filing as described in paragraph (b) of this section, the 
administrative law judge may accept the request for hearing if the 
debtor can show that the delay was because of circumstances beyond his 
or her control or because of failure to receive notice of the time limit 
(unless otherwise aware of it).
    (f) Upon completion of the hearing, the administrative law judge 
shall transmit to the debtor a written decision. This decision shall 
state, at a minimum: The facts purported to evidence the nature and 
origin of the alleged debt; the administrative law judge's findings and 
conclusions, as to the employee's and/or creditor agency's grounds; the 
amount and validity of the alleged debt; and, where applicable, the 
repayment schedule. If appropriate, the notification shall also indicate 
any changes in the information to the extent such information differs 
from that provided in the notification under Sec. 20.78(b).

(Approved by the Office of Management and Budget under control number 
1225-0038)

[52 FR 3772, Feb. 5, 1987; 52 FR 13563, Apr. 23, 1987]



Sec. 20.82  Cooperation with other DOL agencies and Federal agencies.

    (a) Appropriate use should be made of the cooperative efforts of 
other DOL and Federal agencies in effecting collection by salary offset. 
Generally, paying agencies should comply with requests from other 
agencies to initiate salary offset to collect debts owed to the United 
States, unless the creditor agency has not complied with applicable 
regulations or the request would otherwise be contrary to law.
    (b) Unless otherwise prohibited by law, a DOL agency may request 
that the current pay account of a debtor in another DOL or Federal 
agency be administratively offset in order to collect debts owed the 
creditor DOL agency by the debtor. In requesting a salary offset, the 
creditor DOL agency must provide the paying DOL agency or other paying 
Federal agency with written certification stating:
    (1) That the debtor owes the creditor agency a debt (including the 
basis and amount of the debt);
    (2) The date on which payment was due;
    (3) The date on which the Government's right to collect the debt 
first accrued; and
    (4) Where the paying agency is another federal agency, that the 
creditor agency's regulations under 5 U.S.C. 5514 have been approved by 
the Office of Personnel Management, and that the creditor agency has 
followed such regulations to the best of its information and belief.



Sec. 20.83  DOL agency as paying agency of the debtor.

    Whenever a salary offset is sought by another DOL or Federal agency 
from a paying DOL agency, the paying DOL agency should not initiate the 
requested offset until it has been provided by the creditor organization 
with an appropriate written certification as described in Sec. 20.82(b). 
Where the creditor agency is not another DOL agency, the creditor agency 
must certify that its regulations under 5 U.S.C. 5514 have been approved 
by the Office of Personnel Management and that it, the creditor agency, 
has followed such regulations to the best of its information and belief. 
When the creditor agency is

[[Page 264]]

not also the paying DOL agency, the creditor agency should also be 
required to certify that if an administrative or judicial order is 
issued directing the paying DOL agency to pay a debtor an amount 
previously paid to the creditor agency, the creditor agency will 
reimburse the paying DOL agency or pay the debtor directly within 15 
days of the date of the order.



Sec. 20.84  Collections.

    (a) Whenever feasible, and except as otherwise provided by law, 
debts owed to the United States, together with interest, penalties, and 
administrative costs should be collected in full in one lump sum. This 
is true whether the debt is being collected by salary offset or by 
another method, including voluntary payment. However, if the debtor is 
financially unable to pay the indebtedness in one lump sum, or the 
amount of the debt exceeds 15 percent of disposable pay for an 
officially established pay interval, collection must be made in 
installments. Ordinarily, the size of installment deductions must bear a 
reasonable relationship to the size of the debt and the employee's 
ability to pay. However, the amount deducted for any period must not 
exceed 15 percent of the disposable pay from which the deduction is 
made, unless the employee has agreed in writing to the deduction of a 
greater amount. Installment deductions must be made over a period not 
greater than the anticipated period of active duty or employment, as the 
case may be except as provided in Sec. 20.84 paragraphs (c) and (d). 
Where a DOL agency is the paying agency, salary offset will ordinarily 
begin with the salary payment made to the employee for the first full 
pay period following expiration of the 30 day notice period described in 
Sec. 20.78(b), or if a hearing is pending under Sec. 20.81, the first 
full pay period following the date of the administrative law judge's 
written decision.
    (b) If the debtor owes more than one debt and designates how a 
voluntary installment payment is to be applied as among those debts, 
that designation must be followed. If the debtor does not designate the 
application of the payment, agencies should apply payments to the 
various debts in accordance with the best interests of the United 
States, as determined by the facts and circumstances of the particular 
case, paying special attention to applicable statutes of limitations.
    (c) If the employee retires or resigns or if his or her employment 
or period of active duty ends before collection of the debt is 
completed, under 5 U.S.C. 5514, salary offset shall be from subsequent 
payments of any nature (e.g., final salary payment, lump-sum leave, 
etc.) due the employee from the paying agency as of the date of 
separation to the extent necessary to liquidate the debt.
    (d) If the debt cannot be liquidated by salary offset from any final 
payment due the former employee as of the date of separation, under 5 
U.S.C. 5514, administrative offset shall be from later payments of any 
kind due the former employee from the United States.



Sec. 20.85  Notice of offset.

    Prior to effecting a salary offset, the paying DOL agency should 
advise the debtor of the impending offset. This notice should state that 
the debtor has been provided his/her rights under 5 U.S.C. 5514, that a 
determination has been made that collection by salary offset would be in 
the best interests of the United States, the amount of the offset, the 
date the salary offset will begin, and that the source of funds shall be 
from current disposable pay, except as provided by (c) and (d) of 
Sec. 20.84. If evidence suggests that the debtor is no longer located at 
the address of record, reasonable action shall be taken to obtain a 
current address.



Sec. 20.86  Non-waiver of rights by payments.

    An employee's involuntary payment, of all or any portion of a debt 
being collected under 5 U.S.C. 5514, shall not be construed as a waiver 
of any rights which the employee may have under 5 U.S.C. 5514 or any 
other provision of contract or law, unless there are statutory or 
contractual provisions to the contrary.

[[Page 265]]



Sec. 20.87  Refunds.

    (a) Agencies shall promptly refund to the appropriate party amounts 
paid or deducted under this subpart when--
    (1) A debt is waived or is otherwise not owing to the United States 
(unless refund is expressly prohibited by statute or regulation); or
    (2) The employee's paying agency is directed by an administrative or 
judicial order to refund amounts deducted from his or her current pay.
    (b) Refunds do not bear interest unless required or permitted by law 
or contract.



Sec. 20.88  Additional administrative collection action.

    Nothing contained in this subpart is intended to preclude the 
utilization of any other administrative remedy which may be available.



Sec. 20.89  Prior provision of rights with respect to debt.

    To the extent that the rights of the debtor in relation to the same 
debt have been previously provided by the creditor agency under some 
other statutory or regulatory authority, the creditor agency is not 
required to duplicate those efforts before taking salary offset.



Sec. 20.90  Responsibilities of the Chief Financial Officer.

    The Chief Financial Officer, or his or her designee, shall provide 
appropriate and binding written or other guidance to Department of Labor 
agencies and officials in carrying out this subpart, including the 
issuance of guidelines and instructions, which he or she may deem 
appropriate. The Chief Financial Officer shall also take such 
administrative steps as may be appropriate to carry out the purposes and 
ensure the effective implementation of this subpart.



               Subpart E--Federal Income Tax Refund Offset

    Source: 59 FR 47250, Sept. 15, 1994, unless otherwise noted.



Sec. 20.101  Purpose and scope.

    The regulations in this subpart establish procedures to implement 31 
U.S.C. 3720A. This statute together with implementing regulations of the 
Internal Revenue Service (IRS) at 26 CFR 301.6402-6, authorizes the IRS 
to reduce a tax refund by the amount of a past-due legally enforceable 
debt owed to the United States. The regulations apply to past-due 
legally enforceable debts owed to the Department by individuals and 
business entities. The regulations are not intended to limit or restrict 
debtor access to any judicial remedies to which he/she may otherwise be 
entitled.



Sec. 20.102  Redelegation of authority.

    Authority delegated by statute or IRS regulation to the Secretary or 
Department is redelegated to the heads of the Department's constituent 
agencies. This authority may be further redelegated as necessary to 
ensure the efficient implementation of these regulations.



Sec. 20.103  Definitions.

    For purposes of this subpart:
    (a) Tax refund offset refers to the IRS income tax refund offset 
program operated under authority of 31 U.S.C. 3720A.
    (b) Past-due legally enforceable debt is a delinquent debt 
administratively determined to be valid, whereon no more than 10 years 
have lapsed since the date of delinquency, and which is not discharged 
under a bankruptcy proceeding or subject to an automatic stay under 11 
U.S.C. 362.
    (c) Agency refers to the constituent offices, administrations and 
bureaus of the Department of Labor.
    (d) Individual refers to a taxpayer identified by a social security 
number (SSN).
    (e) Business entity refers to an entity identified by an employer 
identification number (EIN).
    (f) Taxpayer mailing address refers to the debtor's current mailing 
address as obtained from IRS.
    (g) Memorandum of understanding refers to the agreement between the 
Department and IRS outlining the duties and responsibilities of the 
respective parties for participation in the tax refund offset program.

[[Page 266]]



Sec. 20.104  Agency responsibilities.

    (a) As authorized and required by law, each Department of Labor 
agency may refer past-due legally enforceable debts to IRS for 
collection by offset from any overpayment of income tax that may 
otherwise be due to be refunded to the taxpayer.
    (b) Prior to actual referral of a past-due legally enforceable debt 
for tax refund offset, the DOL agency heads (or their designees) must 
take the actions specified in Sec. 20.107 and, as appropriate, 
Sec. 20.106 and Sec. 20.108.
    (c) DOL agency heads must ensure the confidentiality of taxpayer 
information as required by IRS in its Tax Information Security 
Guidelines.



Sec. 20.105  Minimum referral amount.

    The IRS annually establishes the minimum amount for debts otherwise 
eligible for referral. Minimum referral amounts are established 
separately for individual debts and business debts, as set forth in the 
memorandum of understanding. The amount referred may include the 
principal portion of the debt, as well as any accrued interest, 
penalties and/or administrative cost charges.

[60 FR 41017, Aug. 11, 1995]



Sec. 20.106  Relation to other collection efforts.

    (a) Tax refund offset is intended to be an administrative collection 
remedy of last resort, consistent with IRS requirements for 
participation in the program, and the costs and benefits of pursuing 
alternative remedies when the tax refund offset program is readily 
available. To the extent practical, the requirements of the program will 
be met by merging IRS requirements into the Department's overall 
requirements for delinquent debt collection.
    (b) The debts of individuals of $100 or more will be reported to a 
consumer credit reporting agency before referral for tax refund offset.
    (c) Debts owed by individuals will be screened for salary and 
administrative offset potential using the most current information 
reasonably available to the Department, and will not be referred for tax 
refund offset where such other offset potential is found to exist.

[59 FR 47250, Sept. 15, 1994, as amended at 60 FR 41017, Aug. 11, 1995]



Sec. 20.107  Debtor notification.

    (a) The agency head (or designee) of the creditor Labor Department 
agency shall send appropriate written demands to the debtor in terms 
which inform the debtor of the consequences of failure to repay claims. 
In accordance with guidelines as may be established by the Department's 
Chief Financial Officer, a total of three progressively stronger written 
demands at not more than 30-day intervals will normally be made unless a 
response to the first or second demand indicates that a further demand 
would be futile and the debtor's response does not require rebuttal. In 
determining the timing of demand letters, agencies should give due 
regard to the need to act promptly so the ability to refer a debt for 
tax refund offset will not be unduly delayed.
    (b) Before the Department refers a debt to IRS for tax refund 
offset, it will make a reasonable attempt to notify the debtor that:
    (1) The debt is past-due;
    (2) Unless the debt is repaid or a satisfactory repayment agreement 
established within 60 days thereafter, it will be referred to IRS for 
offset from any overpayment of tax remaining after taxpayer liabilities 
of greater priority have been satisfied; and
    (3) The debtor will have a minimum of 60 days from the date of 
notification to present evidence that all or part of the debt is not 
past-due or legally enforceable, and the Department will consider this 
evidence in a review of its determination that the debt is past-due and 
legally enforceable. The debtor will be advised where and to whom 
evidence is to be submitted.
    (c) The Department will make a reasonable attempt to notify the 
debtor by using the most recent address information obtained from the 
IRS, unless written notification is received from the debtor that 
notices from the Department are to be sent to a different address.
    (d) The notification required by paragraph (b) of this section and 
sent to the address specified in paragraph (c) of

[[Page 267]]

this section may, at the option of the Department, be incorporated into 
demand letters required by paragraph (a) of this section.



Sec. 20.108  Agency review of the obligation.

    (a) The individual responsible for collection of the debt will 
consider any evidence submitted by the debtor as a result of the 
notification required by Sec. 20.107(b) and notify the debtor of the 
result. If appropriate, the debtor will also be advised where and to 
whom to request a review of any unresolved dispute.
    (b) The debtor will be granted at least 30 days from the date of the 
notification required by paragraph (a) of this section to request a 
review of the determination of the individual responsible for collection 
of the debt on any unresolved dispute. The debtor will be advised of the 
result.
    (c) The review required by paragraph (b) of this section will 
ordinarily be based on written submissions and documentation provided by 
the debtor. However, a reasonable opportunity for an oral hearing will 
be provided the debtor when the reviewing official determines that any 
remaining dispute cannot be resolved by review of the documentary 
evidence alone. Unless otherwise required by law, an oral hearing under 
this section is not required to be a formal evidentiary-type hearing, 
although the reviewing official should carefully document all 
significant matters discussed at the hearing.



Sec. 20.109  Prior provision of rights with respect to debt.

    To the extent that the rights of the debtor in relation to the same 
debt have been previously provided under some other statutory or 
regulatory authority, the Department is not required to duplicate those 
efforts before referring a debt for tax refund offset.



Sec. 20.110  Referral to IRS for tax refund offset.

    (a) By the date and in the manner prescribed by the IRS the 
Department will refer for tax refund offset the following information on 
past-due legally enforceable debts:
    (1) Whether the debtor is an individual or a business entity;
    (2) Name and taxpayer identification number (SSN or EIN) of the 
debtor who is responsible for the debt;
    (3) The amount of the debt;
    (4) The date on which the debt became past-due;
    (5) Department-level, sub-Department-level and (as appropriate) 
account identifiers.
    (b) As necessary to reflect changes in the status of debts/debtors 
referred for tax refund offset, the Department will submit updated 
information at the times and in the manner prescribed by IRS. The 
original submission described in paragraph (a) of this section will not 
be changed to increase the amount of the debt or to refer additional 
debtors.
    (c) Amounts erroneously offset will be refunded by the Department or 
IRS in accordance with the Memorandum of Understanding.



Sec. 20.111  Administrative cost charges.

    Costs incurred by the Department in connection with referral of 
debts for tax refund offset will be added to the debt and thus increase 
the amount of the offset.



PART 22--PROGRAM FRAUD CIVIL REMEDIES ACT OF 1986--Table of Contents




Sec.
22.1  Basis and purpose.
22.2  Definitions.
22.3  Basis for civil penalties and assessments.
22.4  Investigation.
22.5  Review by the reviewing official.
22.6  Prerequisites for issuing a complaint.
22.7  Complaint.
22.8  Service of complaint.
22.9  Answer.
22.10  Default upon failure to file an answer.
22.11  Referral of complaint and answer to the ALJ.
22.12  Notice of hearing.
22.13  Parties to the hearing.
22.14  Separation of functions.
22.15  Ex parte contacts.
22.16  Disqualification of reviewing official or ALJ.
22.17  Rights of parties.
22.18  Authority of the ALJ.
22.19  Prehearing conferences.
22.20  Disclosure of documents.
22.21  Discovery.
22.22  Exchange of witness lists, statements, and exhibits.

[[Page 268]]

22.23  Subpoenas for attendance at hearing.
22.24  Protective order.
22.25  Fees.
22.26  Form, filing, and service of papers.
22.27  Computation of time.
22.28  Motions.
22.29  Sanctions.
22.30  The hearing and burden of proof.
22.31  Determining the amount of penalties and assessments.
22.32  Location of hearing.
22.33  Witnesses.
22.34  Evidence.
22.35  The record.
22.36  Post-hearing briefs.
22.37  Initial decision.
22.38  Reconsideration of initial decision.
22.39  Appeal to authority head.
22.40  Stays ordered by the Department of Justice.
22.41  Stay pending appeal.
22.42  Judicial review.
22.43  Collection of civil penalties and assessments.
22.44  Right to administrative offset.
22.45  Deposit in Treasury of United States.
22.46  Compromise or settlement.
22.47  Limitations.

    Authority: Pub. L. 99-509, Secs. 6101-6104, 100 Stat. 1874, 31 
U.S.C. 3801-3812.

    Source: 52 FR 48492, Dec. 22, 1987, unless otherwise noted.



Sec. 22.1  Basis and purpose.

    (a) Basis. This part implements the Program Fraud Civil Remedies Act 
of 1986, Public Law No. 99-509, sections 6101-6104, 100 Stat. 1874 
(October 21, 1986), to be codified at 31 U.S.C. 3801-3812. 31 U.S.C. 
3809 of the statute requires each authority head to promulgate 
regulations necessary to implement the provisions of the statute.
    (b) Purpose. This part (1) establishes administrative procedures for 
imposing civil penalties and assessments against persons who make, 
submit, or present, or cause to be made, submitted, or presented, false, 
fictitious, or fraudulent claims or written statements to authorities or 
to their agents, and (2) specifies the hearing and appeal rights of 
persons subject to allegations of liability for such penalties and 
assessments.



Sec. 22.2  Definitions.

    (a) ALJ means an Administrative Law Judge in the authority appointed 
pursuant to 5 U.S.C. 3105 or detailed to the authority pursuant to 5 
U.S.C. 3344.
    (b) Authority means the United States Department of Labor.
    (c) Authority head means the Secretary of Labor or his or her 
designee.
    (d) Benefit means, in the context of statement, anything of value, 
including but not limited to any advantage, preference, privilege, 
license, permit, favorable decision, ruling, status, or loan guarantee.
    (e) Claim means, any request, demand, or submission--
    (1) Made to the authority for property, services, or money 
(including money representing grants, loans, insurance, or benefits);
    (2) Made to a recipient of property, services, or money from the 
authority or to a party to a contract with the authority--
    (i) For property or services if the United States--
    (A) Provided such property or services;
    (B) Provided any portion of the funds for the purchase of such 
property or services; or
    (C) Will reimburse such recipient or party for the purchase of such 
property or services; or
    (ii) For the payment of money (including money representing grants, 
loans, insurance, or benefits) if the United States--
    (A) Provided any portion of the money requested or demanded; or
    (B) Will reimburse such recipient or party for any portion of the 
money paid on such request or demand; or
    (3) Made to the authority which has the effect of decreasing an 
obligation to pay or account for property, services, or money.
    (f) Complaint means the administrative complaint served by the 
reviewing official on the defendant under Sec. 22.7.
    (g) Defendant means any person alleged in a complaint under 
Sec. 22.7 to be liable for a civil penalty or assessment under 
Sec. 22.3.
    (h) Department means the United States Department of Labor.
    (i) Government means the United States Government.
    (j) Individual means a natural person.
    (k) Initial decision means the written decision of the ALJ required 
by Sec. 22.10 or Sec. 22.37, and includes a revised initial

[[Page 269]]

decision issued following a remand or a motion for reconsideration.
    (l) Investigating official means the Inspector General of the 
Department of Labor or an officer or employee of the Office of the 
Inspector General designated by the Inspector General and serving in a 
position for which the rate of basic pay is not less than the minimum 
rate of basic pay for grade GS-16 under the General Schedule.
    (m) Knows or has reason to know, means that a person, with respect 
to a claim or statement--
    (1) Has actual knowledge that the claim or statement is false, 
fictitious, or fraudulent;
    (2) Acts in deliberate ignorance of the truth or falsity of the 
claim or statement; or
    (3) Acts in reckless disregard of the truth or falsity of the claim 
or statement.
    (n) Makes, wherever it appears, shall include the terms presents, 
submits, and causes to be made, presented, or submitted. As the context 
requires, making or made, shall likewise include the corresponding forms 
of such terms.
    (o) Person means any individual, partnership, corporation, 
association, or private organization, and includes the plural of that 
term.
    (p) Representative means an attorney who is in good standing of the 
bar in any state, territory, or possession of the United States or of 
the District of Columbia or the Commonwealth of Puerto Rico, or other 
representative meeting the qualifications of a non-attorney 
representative found at 29 CFR 18.34 and designated by a party in 
writing.
    (q) Reviewing official means the Solicitor of the Department of 
Labor or his designee who is--
    (1) Not subject to supervision by, or required to report to, the 
investigating official; and
    (2) Not employed in the organizational unit of the authority in 
which the investigating official is employed;
    (3) Serving in a position for which the rate of basic pay is not 
less than the minimum rate of basic pay for Grade GS-16 under the 
General Schedule.
    (r) Statement means any representation, certification, affirmation, 
document, record, or accounting or bookkeeping entry made--
    (1) With respect to a claim or to obtain the approval or payment of 
a claim (including relating to eligibility to make a claim); or
    (2) With respect to (including relating to eligibility for)--
    (i) A contract with, or a bid or proposal for a contract with; or
    (ii) A grant, loan, or benefit from,

the authority, or any State, political subdivision of a State, or other 
party, if the United States Government provides any portion of the money 
or property under such contractor for such grant, loan, or benefit, or 
if the Government will reimburse such State, political subdivision, or 
party for any portion of the money or property under such contract or 
for such grant, loan, or benefit.

[52 FR 48492, Dec. 22, 1987, as amended at 61 FR 19985, May 3, 1996]



Sec. 22.3  Basis for civil penalties and assessments.

    (a) Claims. (1) Except as provided in paragraph (c) of this section, 
any person who makes a claim that the person knows or has reason to 
know--
    (i) Is false, fictitious, or fraudulent;
    (ii) Includes or is supported by any written statement which asserts 
a material fact which is false, fictitious, or fraudulent;
    (iii) Includes or is supported by any written statement that--
    (A) Omits a material fact;
    (B) Is false, fictitious, or fraudulent as a result of such 
omission; and
    (C) Is a statement in which the person making such statement has a 
duty to include such material fact; or
    (iv) Is for payment for the provision of property or services which 
the person has not provided as claimed,

shall be subject, in addition to any other remedy that may be prescribed 
by law, to a civil penalty of not more than $5,000 for each such claim.
    (2) Each voucher, invoice, claim form, or other individual request 
or demand for property, services, or money constitutes a separate claim.
    (3) A claim shall be considered made to the authority, recipient, or 
party when such claim is actually made to an

[[Page 270]]

agent, fiscal intermediary, or other entity, including any State or 
political subdivision thereof, acting for or on behalf of the authority, 
recipient, or party.
    (4) Each claim for property, services, or money is subject to a 
civil penalty regardless of whether such property, services, or money is 
actually delivered or paid.
    (5) If the Government has made any payment (including transferred 
property or provided services) on a claim, a person subject to a civil 
penalty under paragraph (a)(1) of this section shall also be subject to 
an assessment of not more than twice the amount of such claim or that 
portion thereof that is determined to be in violation of paragraph 
(a)(1) of this section. Such assessment shall be in lieu of damages 
sustained by the Government because of such claim.
    (b) Statements. (1) Except as provided in paragraph (c) of this 
section, any person who makes a written statement that--
    (i) The person knows or has reason to know--
    (A) Asserts a material fact which is false, fictitious, or 
fraudulent; or
    (B) Is false, fictitious, or fraudulent because it omits a material 
fact that the person making the statement has a duty to include in such 
statement; and
    (ii) Contains or is accompanied by an express certification or 
affirmation of the truthfulness and accuracy of the contents of the 
statement, shall be subject, in addition to any other remedy that may be 
prescribed by law, to a civil penalty of not more than $5,000 for each 
such statement.
    (2) Each written representation, certification, or affirmation 
constitutes a separate statement.
    (3) A statement shall be considered made to the authority when such 
statement is actually made to an agent, fiscal intermediary, or other 
entity, including any State or political subdivision thereof, acting for 
or on behalf of the authority.
    (c) Applications for certain benefits. (1) In the case of any claim 
or statement made by any individual relating to any of the benefits 
listed in paragraph (c)(2) of this section received by such individual, 
such individual may be held liable for penalties and assessments under 
this section only if such claim or statement is made by such individual 
in making application for such benefits with respect to such 
individual's eligibility to receive such benefits.
    (2) For purposes of paragraph (c) of this section, the term benefits 
means benefits under the Black Lung Benefits Act, which are intended for 
the personal use of the individual who receives the benefits or for a 
member of the individual's family.
    (d) No proof of specific intent to defraud is required to establish 
liability under this section.
    (e) In any case in which it is determined that more than one person 
is liable for making a claim or statement under this section, each 
person may be held liable for a civil penalty under this section.
    (f) In any case in which it is determined that more than one person 
is liable for making a claim under this section on which the Government 
has made payment (including transferred property or provided services), 
an assessment may be imposed against any such person or jointly and 
severally against any combination of such persons.



Sec. 22.4  Investigation.

    (a) If an investigating official concludes that a subpoena pursuant 
to the authority conferred by 31 U.S.C. 3804(a) is warranted--
    (1) The subpoena so issued shall notify the person to whom it is 
addressed of the authority under which the subpoena is issued and shall 
identify the records or documents sought;
    (2) The investigating official may designate a person to act on his 
or her behalf to receive the documents sought; and
    (3) The person receiving such subpoena shall be required to tender 
to the investigating official or the person designated to receive the 
documents a certification that the documents sought have been produced, 
or that such documents are not available and the reasons therefor, or 
that such documents, suitably identified, have been withheld based upon 
the assertion of an identified privilege.

[[Page 271]]

    (b) If the investigating official concludes that an action under the 
Program Fraud Civil Remedies Act may be warranted, the investigating 
official shall submit a report containing the findings and conclusions 
of such investigation to the reviewing official.
    (c) Nothing in this section shall preclude or limit an investigating 
official's discretion to refer allegations directly to the Department of 
Justice for suit under the False Claims Act or other civil relief, or to 
defer or postpone a report or referral to the reviewing official to 
avoid interference with a criminal investigation or prosecution.
    (d) Nothing in this section modifies any responsibility of an 
investigating official to report violations of criminal law to the 
Attorney General.



Sec. 22.5  Review by the reviewing official.

    (a) If, based on the report of the investigating official under 
Sec. 22.4(b), the reviewing official determines that there is adequate 
evidence to believe that a person is liable under Sec. 22.3 of this 
part, the reviewing official shall transmit to the Attorney General a 
written notice of the reviewing official's intention to issue a 
complaint under Sec. 22.7.
    (b) Such notice shall include--
    (1) A statement of the reviewing official's reasons for issuing a 
complaint;
    (2) A statement specifying the evidence that supports the 
allegations of liability;
    (3) A description of the claims or statements upon which the 
allegations of liability are based;
    (4) An estimate of the amount of money or the value of property, 
services, or other benefits requested or demanded in violation of 
Sec. 22.3 of this part;
    (5) A statement of any exculpatory or mitigating circumstances that 
may relate to the claims or statements known by the reviewing official 
or the investigating official; and
    (6) A statement that there is a reasonable prospect of collecting an 
appropriate amount of penalties and assessments.



Sec. 22.6  Prerequisites for issuing a complaint.

    (a) The reviewing official may issue a complaint under Sec. 22.7 
only if--
    (1) The Department of Justice approves the issuance of a complaint 
in a written statement described in 31 U.S.C. 3803(b)(1), and
    (2) In the case of allegations of liability under Sec. 22.3(a) with 
respect to a claim, the reviewing official determines that, with respect 
to such claim or a group of related claims submitted at the same time 
such claim is submitted (as defined in paragraph (b) of this section), 
the amount of money or the value of property or services demanded or 
requested in violation of Sec. 22.3(a) does not exceed $150,000.
    (b) For the purposes of this section, a related group of claims 
submitted at the same time shall include only those claims arising from 
the same transaction (e.g., grant, loan, application, or contract) that 
are submitted simultaneously as part of a single request, demand, or 
submission.
    (c) Nothing in this section shall be construed to limit the 
reviewing official's authority to join in a single complaint against a 
person claims that are unrelated or were not submitted simultaneously, 
regardless of the amount of money, or the value of property or services, 
demanded or requested.



Sec. 22.7  Complaint.

    (a) On or after the date the Department of Justice approves the 
issuance of a complaint in accordance with 31 U.S.C. 3803(b)(1), the 
reviewing official may serve a complaint on the defendant, as provided 
in Sec. 22.8.
    (b) The complaint shall state--
    (1) The allegations of liability against the defendant, including 
the statutory basis for liability, an identification of the claims or 
statements that are the basis for the alleged liability, and the reasons 
why liability allegedly arises from such claims or statements;
    (2) The maximum amount of penalties and assessments for which the 
defendant may be held liable;
    (3) Instructions for filing an answer to request a hearing, 
including a specific statement of the defendant's right

[[Page 272]]

to request a hearing by filing an answer and to be represented by a 
representative; and
    (4) That failure to file an answer within 30 days of service of the 
complaint will result in the imposition of the maximum amount of 
penalties and assessments without right to appeal, as provided in 
Sec. 22.10.
    (c) At the same time the reviewing official serves the complaint, he 
or she shall serve the defendant with a copy of these regulations.



Sec. 22.8  Service of complaint.

    (a) Service of a complaint must be made by certified or registered 
mail or by delivery in any manner authorized by Rule 4(d) of the Federal 
Rules of Civil Procedure. Service is complete upon receipt.
    (b) Proof of service, stating the name and address of the person on 
whom the complaint was served, and the manner and date of service, may 
be made by--
    (1) Affidavit of the individual serving the complaint by delivery;
    (2) A United States Postal Service return receipt card acknowledging 
receipt; or
    (3) Written acknowledgment of receipt by the defendant or his 
representative.



Sec. 22.9  Answer.

    (a) The defendant may request a hearing by filing an answer with the 
reviewing official within 30 days of service of the complaint. An answer 
shall be deemed to be a request for hearing.
    (b) In the answer, the defendant--
    (1) Shall admit or deny each of the allegations of liability made in 
the complaint;
    (2) Shall state any defense on which the defendant intends to rely;
    (3) May state any reasons why the defendant contends that the 
penalties and assessments should be less than the statutory maximum; and
    (4) Shall state the name, address, and telephone number of the 
person authorized by the defendant to act as defendant's representative, 
if any.
    (c) If the defendant is unable to file an answer meeting the 
requirements of paragraph (b) of this section within the time provided, 
the defendant may, before the expiration of 30 days from service of the 
complaint, file with the reviewing official a general answer denying 
liability and requesting a hearing, and a request for an extension of 
time within which to file an answer meeting the requirements of 
paragraph (b) of this section. The reviewing official shall file 
promptly with the ALJ the complaint, the general answer denying 
liability, and the request for an extension of time as provided in 
Sec. 22.11. For good cause shown, the ALJ may grant the defendant up to 
30 additional days within which to file an answer meeting the 
requirements of paragraph (b) of this section.



Sec. 22.10  Default upon failure to file an answer.

    (a) If the defendant does not file an answer within the time 
prescribed in Sec. 22.9(a), the reviewing official may refer the 
complaint to the ALJ.
    (b) Upon the referral of the complaint, the ALJ shall promptly serve 
on defendant in the manner prescribed in Sec. 22.8, a notice that an 
initial decision will be issued under this section.
    (c) The ALJ shall assume the facts alleged in the complaint to be 
true, and, if such facts establish liability under Sec. 22.3, the ALJ 
shall issue an initial decision imposing the maximum amount of penalties 
and assessments allowed under the statute.
    (d) Except as otherwise provided in this section, by failing to file 
a timely answer, the defendant waives any right to further review of the 
penalties and assessments imposed under paragraph (c) of this section 
and the initial decision shall become final and binding upon the parties 
30 days after it is issued.
    (e) If, before such an initial decision becomes final, the defendant 
files a motion with the ALJ seeking to reopen on the grounds that 
extraordinary circumstances prevented the defendant from filing an 
answer, the initial decision shall be stayed pending the ALJ's decision 
on the motion.
    (f) If, on such motion, the defendant can demonstrate extraordinary 
circumstances excusing the failure to file a timely answer, the ALJ 
shall withdraw the initial decision in paragraph (c) of this section, if 
such a decision

[[Page 273]]

has been issued, and shall grant the defendant an opportunity to answer 
the complaint.
    (g) A decision of the ALJ denying a defendant's motion under 
paragraph (e) of this section is not subject to reconsideration under 
Sec. 22.38.
    (h) The defendant may appeal to the authority head the decision 
denying a motion to reopen by filing a notice of appeal with the 
authority head within 15 days after the ALJ denies the motion. The 
timely filing of a notice of appeal shall stay the initial decision 
until the authority head decides the issue.
    (i) If the defendant files a timely notice of appeal with the 
authority head, the ALJ shall forward the record of the proceeding to 
the authority head.
    (j) The authority head shall decide expeditiously whether 
extraordinary circumstances excuse the defendant's failure to file a 
timely answer based solely on the record before the ALJ.
    (k) If the authority head decides that extraordinary circumstances 
excused the defendant's failure to file a timely answer, the authority 
head shall remand the case to the ALJ with instructions to grant the 
defendant an opportunity to answer.
    (l) If the authority head decides that the defendant's failure to 
file a timely answer is not excused, the authority head shall reinstate 
the initial decision of the ALJ, which shall become final and binding 
upon the parties 30 days after the authority head issues such decision.



Sec. 22.11  Referral of complaint and answer to the ALJ.

    Upon receipt of an answer, the reviewing official shall file the 
complaint and answer with the ALJ.



Sec. 22.12  Notice of hearing.

    (a) When the ALJ receives the complaint and answer, the ALJ shall 
promptly serve a notice of hearing upon the defendant in the manner 
prescribed by Sec. 22.8. At the same time, the ALJ shall send a copy of 
such notice to the representative for the Government.
    (b) Such notice shall include--
    (1) The tentative time and place, and the nature of the hearing;
    (2) The legal authority and jurisdiction under which the hearing is 
to be held;
    (3) The matters of fact and law to be asserted;
    (4) A description of the procedures for the conduct of the hearing;
    (5) The name, address, and telephone number of the representative of 
the Government and of the defendant, if any; and
    (6) Such other matters as the ALJ deems appropriate.



Sec. 22.13  Parties to the hearing.

    (a) The parties to the hearing shall be the defendant and the 
authority.
    (b) Pursuant to 31 U.S.C. 3730(c)(5), a private plaintiff under the 
False Claims Act may participate in these proceedings to the extent 
authorized by the provisions of that Act.



Sec. 22.14  Separation of functions.

    (a) The investigating official, the reviewing official, and any 
employee or agent of the authority who takes part in investigating, 
preparing, or presenting a particular case may not, in such case or a 
factually related case--
    (1) Participate in the hearing as the ALJ;
    (2) Participate or advise in the initial decision or the review of 
the initial decision by the authority head, except as a witness or a 
representative in public proceedings; or
    (3) Make the collection of penalties and assessments under 31 U.S.C. 
3806.
    (b) The ALJ shall not be responsible to, or subject to the 
supervision or direction of the investigating official or the reviewing 
official.
    (c) Except as provided in paragraph (a) of this section, the 
representative for the Government may be employed anywhere in the 
authority, including in the offices of either the investigating official 
or the reviewing official.



Sec. 22.15  Ex parte contacts.

    No party or person (except employees of the ALJ's office) shall 
communicate in any way with the ALJ on any matter at issue in a case, 
unless on notice and opportunity for all parties to participate. This 
provision does not prohibit a person or party from inquiring

[[Page 274]]

about the status of a case or asking routine questions concerning 
administrative functions or procedures.



Sec. 22.16  Disqualification of reviewing official or ALJ.

    (a) A reviewing official or ALJ in a particular case may disqualify 
himself or herself at any time.
    (b) A party may file with the ALJ a motion for disqualification of a 
reviewing official or an ALJ. Such motion shall be accompanied by an 
affidavit alleging personal bias or other reason for disqualification.
    (c) Such motion and affidavit shall be filed promptly upon the 
party's discovery of reasons requiring disqualification, or such 
objections shall be deemed waived.
    (d) Such affidavit shall state specific facts that support the 
party's belief that personal bias or other reason for disqualification 
exists and the time and circumstances of the party's discovery of such 
facts. It shall be accompanied by a certificate of the representative of 
record that it is made in good faith.
    (e) Upon the filing of such a motion and affidavit, the ALJ shall 
proceed no further in the case until he or she resolves the matter of 
disqualification in accordance with paragraph (f) of this section.
    (f)(1) If the ALJ determines that a reviewing official is 
disqualified, the ALJ shall dismiss the complaint without prejudice.
    (2) If the ALJ disqualifies himself or herself, the case shall be 
reassigned promptly to another ALJ.
    (3) If the ALJ denies a motion to disqualify, the authority head may 
determine the matter only as part of his or her review of the initial 
decision upon appeal, if any.



Sec. 22.17  Rights of parties.

    Except as otherwise limited by this part, all parties may--
    (a) Be accompanied, represented, and advised by a representative;
    (b) Participate in any conference held by the ALJ;
    (c) Conduct discovery;
    (d) Agree to stipulations of fact or law, which shall be made part 
of the record;
    (e) Present evidence relevant to the issues at the hearing;
    (f) Present and cross-examine witnesses;
    (g) Present oral arguments at the hearing as permitted by the ALJ; 
and
    (h) Submit written briefs and proposed findings of fact and 
conclusions of law after the hearing.



Sec. 22.18  Authority of the ALJ.

    (a) The ALJ shall conduct a fair and impartial hearing, avoid delay, 
maintain order, and assure that a record of the proceeding is made.
    (b) The ALJ has the authority to--
    (1) Set and change the date, time, and place of the hearing upon 
reasonable notice to the parties;
    (2) Continue or recess the hearing in whole or in part for a 
reasonable period of time;
    (3) Hold conferences to identify or simplify the issues, or to 
consider other matters that may aid in the expeditious disposition of 
the proceeding;
    (4) Administer oaths and affirmations;
    (5) Issue subpoenas requiring the attendance of witnesses and the 
production of documents at depositions or at hearings;
    (6) Rule on motions and other procedural matters;
    (7) Regulate the scope and timing of discovery;
    (8) Regulate the course of the hearing and the conduct of 
representatives and parties;
    (9) Examine witnesses;
    (10) Receive, rule on, exclude, or limit evidence;
    (11) Upon motion of a party, take official notice of facts;
    (12) Upon motion of a party, decide cases, in whole or in part, by 
summary judgment where there is no disputed issue of material fact;
    (13) Conduct any conference, argument, or hearing on motions in 
person or by telephone; and
    (14) Exercise such other authority as is necessary to carry out the 
responsibilities of the ALJ under this part.
    (c) The ALJ does not have the authority to find Federal statutes or 
regulations invalid.

[[Page 275]]



Sec. 22.19  Prehearing conferences.

    (a) The ALJ may schedule prehearing conferences as appropriate.
    (b) Upon the motion of any party, the ALJ shall schedule at least 
one prehearing conference at a reasonable time in advance of the 
hearing.
    (c) The ALJ may use prehearing conferences to discuss the following:
    (1) Simplification of the issues;
    (2) The necessity or desirability of amendments to the pleadings, 
including the need for a more definite statement;
    (3) Stipulations and admissions of fact or as to the contents and 
authenticity of documents;
    (4) Whether the parties can agree to submission of the case on a 
stipulated record;
    (5) Whether a party chooses to waive appearance at an oral hearing 
and to submit only documentary evidence (subject to the objection of 
other parties) and written argument;
    (6) Limitation of the number of witnesses;
    (7) Scheduling dates for the exchange of witness lists and of 
proposed exhibits;
    (8) Discovery;
    (9) The time and place for the hearing; and
    (10) Such other matters as may tend to expedite the fair and just 
disposition of the proceedings.
    (d) The ALJ may issue an order containing all matters agreed upon by 
the parties or ordered by the ALJ at a prehearing conference.



Sec. 22.20  Disclosure of documents.

    (a) Upon written request to the reviewing official, the defendant 
may review any relevant and material documents, transcripts, records, 
and other materials that relate to the allegations set out in the 
complaint and upon which the findings and conclusions of the 
investigating official under Sec. 22.4(b) are based, unless such 
documents are subject to a privilege under Federal law. Upon payment of 
fees for duplication, the defendant may obtain copies of such documents.
    (b) Upon written request to the reviewing official, the defendant 
also may obtain a copy of all exculpatory information in the possession 
of the reviewing official or investigating official relating to the 
allegations in the complaint, even if it is contained in a document that 
would otherwise be privileged. If the document would otherwise be 
privileged, only that portion containing exculpatory information must be 
disclosed.
    (c) The notice sent to the Attorney General from the reviewing 
official as described in Sec. 22.5 is not discoverable under any 
circumstances.
    (d) The defendant may file a motion to compel disclosure of the 
documents subject to the provisions of this section. Such a motion may 
only be filed with the ALJ following the filing of an answer pursuant to 
Sec. 22.9.



Sec. 22.21  Discovery.

    (a) The following types of discovery are authorized:
    (1) Requests for production of documents for inspection and copying;
    (2) Requests for admissions of the authenticity of any relevant 
document or of the truth of any relevant fact;
    (3) Written interrogatories; and
    (4) Depositions.
    (b) For the purpose of this section and Secs. 22.22 and 22.23, the 
term documents includes information, documents, reports, answers, 
records, accounts, papers, and other data and documentary evidence. 
Nothing contained herein shall be interpreted to require the creation of 
a document.
    (c) Unless mutually agreed to by the parties, discovery is available 
only as ordered by the ALJ. The ALJ shall regulate the timing of 
discovery.
    (d) Motions for discovery. (1) A party seeking discovery may file a 
motion with the ALJ. Such a motion shall be accompanied by a copy of the 
requested discovery, or in the case of depositions, a summary of the 
scope of the proposed deposition.
    (2) Within ten days of service, a party may file an opposition to 
the motion and/or a motion for protective order as provided in 
Sec. 22.24.
    (3) The ALJ may grant a motion for discovery only if he finds that 
the discovery sought--
    (i) Is necessary for the expeditious, fair, and reasonable 
consideration of the issues;

[[Page 276]]

    (ii) Is not unduly costly or burdensome;
    (iii) Will not unduly delay the proceeding; and
    (iv) Does not seek privileged information.
    (4) The burden of showing that discovery should be allowed is on the 
party seeking discovery.
    (5) The ALJ may grant discovery subject to a protective order under 
Sec. 22.24.
    (e) Depositions. (1) If a motion for deposition is granted, the ALJ 
shall issue a subpoena for the deponent, which may require the deponent 
to produce documents. The subpoena shall specify the time and place at 
which the deposition will be held.
    (2) The party seeking to depose shall serve the subpoena in the 
manner prescribed in Sec. 22.8.
    (3) The deponent may file with the ALJ a motion to quash the 
subpoena or a motion for a protective order within ten days of service.
    (4) The party seeking to depose shall provide for the taking of a 
verbatim transcript of the deposition, which it shall make available to 
all other parties for inspection and copying.
    (f) Each party shall bear its own costs of discovery.



Sec. 22.22  Exchange of witness lists, statements, and exhibits.

    (a) At least 15 days before the hearing or at such other time as may 
be ordered by the ALJ, the parties shall exchange witness lists, copies 
of prior statements of proposed witnesses, and copies of proposed 
hearing exhibits, including copies of any written statements that the 
party intends to offer in lieu of live testimony in accordance with 
Sec. 22.33(b). At the time the above documents are exchanged, any party 
that intends to rely on the transcript of deposition testimony in lieu 
of live testimony at the hearing, if permitted by the ALJ, shall provide 
each party with a copy of the specific pages of the transcript it 
intends to introduce into evidence.
    (b) If a party objects, the ALJ shall not admit into evidence the 
testimony of any witness whose name does not appear on the witness list 
or any exhibit not provided to the opposing party as provided above 
unless the ALJ finds good cause for the failure or that there is no 
prejudice to the objecting party.
    (c) Unless another party objects within the time set by the ALJ, 
documents exchanged in accordance with paragraph (a) of this section 
shall be deemed to be authentic for the purpose of admissibility at the 
hearing.



Sec. 22.23  Subpoenas for attendance at hearing.

    (a) A party wishing to procure the appearance and testimony of any 
individual at the hearing may request that the ALJ issue a subpoena.
    (b) A subpoena requiring the attendance and testimony of an 
individual may also require the individual to produce documents at the 
hearing.
    (c) A party seeking a subpoena shall file a written request therefor 
not less than 15 days before the date fixed for the hearing unless 
otherwise allowed by the ALJ for good cause shown. Such request shall 
specify any documents to be produced and shall designate the witnesses 
and describe the address and location thereof with sufficient 
particularity to permit such witnesses to be found.
    (d) The subpoena shall specify the time and place at which the 
witness is to appear and any documents the witness is to produce.
    (e) The party seeking the subpoena shall serve it in the manner 
prescribed in Sec. 22.8. A subpoena on a party or upon an individual 
under the control of a party may be served by first class mail.
    (f) A party or the individual to whom the subpoena is directed may 
file with the ALJ a motion to quash the subpoena within ten days after 
service or on or before the time specified in the subpoena for 
compliance if it is less than ten days after service.



Sec. 22.24  Protective order.

    (a) A party or a prospective witness or deponent may file a motion 
for a protective order with respect to discovery sought by an opposing 
party or with respect to the hearing, seeking to limit the availability 
or disclosure of evidence.
    (b) In issuing a protective order, the ALJ may make any order which 
justice requires to protect a party or person

[[Page 277]]

from annoyance, embarrassment, oppression, or undue burden or expense, 
including one or more of the following:
    (1) That the discovery not be had;
    (2) That the discovery may be had only on specified terms and 
conditions, including a designation of the time or place;
    (3) That the discovery may be had only through a method of discovery 
other than that requested;
    (4) That certain matters not be inquired into, or that the scope of 
discovery be limited to certain matters;
    (5) That discovery be conducted with no one present except persons 
designated by the ALJ;
    (6) That the contents of discovery or evidence be sealed;
    (7) That a deposition after being sealed be opened only by order of 
the ALJ;
    (8) That a trade secret or other confidential research, development, 
commercial information, or facts pertaining to any criminal 
investigation, proceeding, or other administrative investigation not be 
disclosed or be disclosed only in a designated way; or
    (9) That the parties simultaneously file specified documents or 
information enclosed in sealed envelopes to be opened as directed by the 
ALJ.



Sec. 22.25  Fees.

    The party requesting a subpoena shall pay the cost of the fees and 
mileage of any witness subpoenaed in the amounts that would be payable 
to a witness in a proceeding in United States District Court. A check 
for witness fees and mileage shall accompany the subpoena when served, 
except that when a subpoena is issued on behalf of the authority, a 
check for witness fees and mileage need not accompany the subpoena.



Sec. 22.26  Form, filing and service of papers.

    (a) Form. (1) Documents filed with the ALJ shall include an original 
and two copies.
    (2) Every pleading and paper filed in the proceeding shall contain a 
caption setting forth the title of the action, the case number assigned 
by the ALJ, and a designation of the paper (e.g., motion to quash 
subpoena).
    (3) Every pleading and paper shall be signed by, and shall contain 
the address and telephone number of the party or the person on whose 
behalf the paper was filed, or his or her representative.
    (4) Papers are considered filed when they are mailed. Date of 
mailing may be established by a certificate from the party or its 
representative or by proof that the document was sent by certified or 
registered mail.
    (b) Service. A party filing a document with the ALJ shall, at the 
time of filing, serve a copy of such document on every other party. 
Service upon any party of any document other than those required to be 
served as prescribed in Sec. 22.8 shall be made by delivering a copy or 
placing a copy of the document in the United States mail, postage 
prepaid and addressed to the party's last known address. When a party is 
represented by a representative, service shall be made upon such 
representative in lieu of the actual party.
    (c) Proof of service. A certificate of the individual serving the 
document by personal delivery or by mail, setting forth the manner of 
service, shall be proof of service.



Sec. 22.27  Computation of time.

    (a) In computing any period of time under this part or in an order 
issued thereunder, the time begins with the day following the act, 
event, or default, and includes the last day of the period, unless it is 
a Saturday, Sunday, or legal holiday observed by the Federal government, 
in which event it includes the next business day.
    (b) When the period of time allowed is less than seven days, 
intermediate Saturdays, Sundays, and legal holidays observed by the 
Federal government shall be excluded from the computation.
    (c) Where a document has been served or issued by placing it in the 
mail, an additional five days will be added to the time permitted for 
any response.



Sec. 22.28  Motions.

    (a) Any application to the ALJ for an order or ruling shall be by 
motion. Motions shall state the relief sought, the

[[Page 278]]

authority relied upon, and the facts alleged, and shall be filed with 
the ALJ and served on all other parties.
    (b) Except for motions made during a prehearing conference or at the 
hearing, all motions shall be in writing. The ALJ may require that oral 
motions be reduced to writing.
    (c) Within 15 days after a written motion is served, or such other 
time as may be fixed by the ALJ, any party may file a response to such 
motion.
    (d) The ALJ may not grant a written motion before the time for 
filing responses thereto has expired, except upon consent of the parties 
or following a hearing on the motion, but may overrule or deny such 
motion without awaiting a response.
    (e) The ALJ shall make a reasonable effort to dispose of all 
outstanding motions prior to the beginning of the hearing.



Sec. 22.29  Sanctions.

    (a) The ALJ may sanction a person, including any party or 
representative for--
    (1) Failing to comply with an order, rule, or procedure governing 
the proceeding;
    (2) Failing to prosecute or defend an action; or
    (3) Engaging in other misconduct that interferes with the speedy, 
orderly, or fair conduct of the hearing.
    (b) Any such sanction, including but not limited to those listed in 
paragraphs (c), (d), and (e) of this section, shall reasonably relate to 
the severity and nature of the failure or misconduct.
    (c) When a party fails to comply with an order, including an order 
for taking a deposition, the production of evidence within the party's 
control, or a request for admission, the ALJ may--
    (1) Draw an inference in favor of the requesting party with regard 
to the information sought;
    (2) In the case of requests for admission, deem each matter of which 
an admission is requested to be admitted;
    (3) Prohibit the party failing to comply with such order from 
introducing evidence concerning, or otherwise relying, upon testimony 
relating to the information; and
    (4) Strike any part of the pleadings or other submissions of the 
party failing to comply with such request.
    (d) If a party fails to prosecute or defend an action under this 
part commenced by service of a notice of hearing, the ALJ may dismiss 
the action or may issue an initial decision imposing penalties and 
assessments.
    (e) The ALJ may refuse to consider any motion, request, response, 
brief or other document which is not filed in a timely fashion.



Sec. 22.30  The hearing and burden of proof.

    (a) The ALJ shall conduct a hearing on the record in order to 
determine whether the defendant is liable for a civil penalty or 
assessment under Sec. 22.3 and, if so, the appropriate amount of any 
such civil penalty or assessment considering any aggravating or 
mitigating factors.
    (b) The authority shall prove defendant's liability and any 
aggravating factors by a preponderance of the evidence.
    (c) The defendant shall prove any affirmative defenses and any 
mitigating factors by a preponderance of the evidence.
    (d) The hearing shall be open to the public unless otherwise ordered 
by the ALJ for good cause shown.



Sec. 22.31  Determining the amount of penalties and assessments.

    (a) In determining an appropriate amount of civil penalties and 
assessments, the ALJ and the authority head, upon appeal, should 
evaluate any circumstances that mitigate or aggravate the violation and 
should articulate in their opinions the reasons that support the 
penalties and assessments they impose. Because of the intangible costs 
of fraud, the expense of investigating such conduct, and the need to 
deter others who might be similarly tempted, ordinarily double damages 
and a significant civil penalty should be imposed.
    (b) Although not exhaustive, the following factors are among those 
that may influence the ALJ and the authority head in determining the 
amount of penalties and assessments to impose with respect to the 
misconduct (i.e.,

[[Page 279]]

the false, fictitious, or fraudulent claims or statements) charged in 
the complaint:
    (1) The number of false, fictitious, or fraudulent claims or 
statements;
    (2) The time period over which such claims or statements were made;
    (3) The degree of the defendant's culpability with respect to the 
misconduct;
    (4) The amount of money or the value of the property, services, or 
benefit falsely claimed;
    (5) The value of the Government's actual loss as a result of the 
misconduct, including forseeable consequential damages and the costs of 
investigation;
    (6) The relationship of the amount imposed as civil penalties to the 
amount of the Government's loss;
    (7) The potential or actual impact of the misconduct upon national 
defense, public health or safety, or public confidence in the management 
of Government programs and operations, including particularly the impact 
on the intended beneficiaries of such programs;
    (8) Whether the defendant has engaged in a pattern of the same or 
similar misconduct;
    (9) Whether the defendant attempted to conceal the misconduct;
    (10) The degree to which the defendant has involved others in the 
misconduct or in concealing it;
    (11) Where the misconduct of employees or agents is imputed to the 
defendant, the extent to which the defendant's practices fostered or 
attempted to preclude such misconduct;
    (12) Whether the defendant cooperated in or obstructed an 
investigation of the misconduct;
    (13) Whether the defendant assisted in identifying and prosecuting 
other wrongdoers;
    (14) The complexity of the program or transaction, and the degree of 
the defendant's sophistication with respect to it, including the extent 
of the defendant's prior participation in the program or in similar 
transactions;
    (15) Whether the defendant has been found, in any criminal, civil, 
or administrative proceeding to have engaged in similar misconduct or to 
have dealt dishonestly with the Government of the United States or of a 
State, directly or indirectly; and
    (16) The need to deter the defendant and others from engaging in the 
same or similar misconduct.
    (c) Nothing in this section shall be construed to limit the ALJ or 
the authority head from considering any other factors that in any given 
case may mitigate or aggravate the offense for which penalties and 
assessments are imposed.



Sec. 22.32  Location of hearing.

    (a) The hearing may be held--
    (1) In any judicial district of the United States in which the 
defendant resides or transacts business;
    (2) In any judicial district of the United States in which the claim 
or statement in issue was made; or
    (3) In such other place as may be agreed upon by the defendant and 
the ALJ.
    (b) Each party shall have the opportunity to present argument with 
respect to the location of the hearing.
    (c) The hearing shall be held at the place and at the time ordered 
by the ALJ.



Sec. 22.33  Witnesses.

    (a) Except as provided in paragraph (b) of this section, testimony 
at the hearing shall be given orally by witnesses under oath or 
affirmation.
    (b) At the discretion of the ALJ, testimony may be admitted in the 
form of a written statement or deposition. Any such written statement 
must be provided to all other parties along with the last known address 
of such witness, in a manner which allows sufficient time for other 
parties to subpoena such witness for cross-examination at the hearing. 
Prior written statements of witnesses proposed to testify at the hearing 
and deposition transcripts shall be exchanged as provided in 
Sec. 22.22(a).
    (c) The ALJ shall exercise reasonable control over the mode and 
order of interrogating witnesses and presenting evidence so as to (1) 
Make the interrogation and presentation effective for the ascertainment 
of the truth, (2) Avoid needless consumption of time, and (3) Protect 
witnesses from harassment or undue embarrassment.
    (d) The ALJ shall permit the parties to conduct such cross-
examination as

[[Page 280]]

may be required for a full and true disclosure of the facts.
    (e) At the discretion of the ALJ, a witness may be cross-examined on 
matters relevant to the proceeding without regard to the scope of his or 
her direct examination. To the extent permitted by the ALJ, cross-
examination on matters outside the scope of direct examination shall be 
conducted in the manner of direct examination and may proceed by leading 
questions only if the witness is a hostile witness, an adverse party, or 
a witness identified with an adverse party.
    (f) Upon motion of any party, the ALJ shall order witnesses excluded 
so that they cannot hear the testimony of other witnesses. This rule 
does not authorize exclusion of--
    (1) A party who is an individual;
    (2) In the case of a party that is not an individual, an officer or 
employee of the party appearing for the entity pro se or designated by 
the party's representative; or
    (3) An individual whose presence is shown by a party to be essential 
to the presentation of its case, including an individual employed by the 
Government engaged in assisting the representative for the Government.



Sec. 22.34  Evidence.

    (a) The ALJ shall determine the admissibility of evidence.
    (b) Except as provided in this part, the ALJ shall not be bound by 
the Federal Rules of Evidence. However, the ALJ may apply the Federal 
Rules of Evidence where appropriate, e.g., to exclude unreliable 
evidence.
    (c) The ALJ shall exclude irrelevant and immaterial evidence.
    (d) Although relevant, evidence may be excluded if its probative 
value is substantially outweighed by the danger of unfair prejudice, 
confusion of the issues, or by considerations of undue delay or needless 
presentation of cumulative evidence.
    (e) Although relevant, evidence may be excluded if it is privileged 
under Federal law.
    (f) Evidence concerning offers of compromise or settlement shall be 
inadmissible to the extent provided in Rule 408 of the Federal Rules of 
Evidence.
    (g) The ALJ shall permit the parties to introduce rebuttal witnesses 
and evidence.
    (h) All documents and other evidence offered or taken for the record 
shall be open to examination by all parties, unless otherwise ordered by 
the ALJ pursuant to Sec. 22.24.



Sec. 22.35  The record.

    (a) The hearing will be recorded and transcribed. Transcripts may be 
obtained following the hearing from the ALJ at a cost not to exceed the 
actual cost of duplication.
    (b) The transcript of testimony, exhibits and other evidence 
admitted at the hearing, and all papers and requests filed in the 
proceeding constitute the record for the decision by the ALJ and the 
authority head.
    (c) The record may be inspected and copied (upon payment of a 
reasonable fee) by anyone, unless otherwise ordered by the ALJ pursuant 
to Sec. 22.24.



Sec. 22.36  Post-hearing briefs.

    The ALJ may require the parties to file post-hearing briefs. In any 
event, any party may file a post-hearing brief. The ALJ shall fix the 
time for filing such briefs, not to exceed 60 days from the date the 
parties receive the transcript of the hearing or, if applicable, the 
stipulated record. Such briefs may be accompanied by proposed findings 
of fact and conclusions of law. The ALJ may permit the parties to file 
reply briefs.



Sec. 22.37  Initial decision.

    (a) The ALJ shall issue an initial decision based only on the 
record, which shall contain findings of fact, conclusions of law, and 
the amount of any penalties and assessments imposed.
    (b) The findings of fact shall include a finding on each of the 
following issues:
    (1) Whether the claims or statements identified in the complaint, or 
any portions thereof, violate Sec. 22.3;
    (2) If the person is liable for penalties or assessments, the 
appropriate amount of any such penalties or assessments considering any 
mitigating or aggravating factors that he or she finds in the case, such 
as those described in Sec. 22.31.

[[Page 281]]

    (c) The ALJ shall promptly serve the initial decision on all parties 
within 90 days after the time for submission of post-hearing briefs and 
reply briefs (if permitted) has expired. The ALJ shall at the same time 
serve all parties with a statement describing the right of any defendant 
determined to be liable for a civil penalty or assessment to file motion 
for reconsideration with the ALJ or a notice of appeal with the 
authority head. If the ALJ fails to meet the deadline contained in this 
paragraph, he or she shall notify the parties of the reason for the 
delay and shall set a new deadline.
    (d) Unless the initial decision of the ALJ is timely appealed to the 
authority head, or a motion for reconsideration of the initial decision 
is timely filed, the initial decision shall constitute the final 
decision of the authority head and shall be final and binding on the 
parties 30 days after it is issued by the ALJ.



Sec. 22.38  Reconsideration of initial decision.

    (a) Except as provided in paragraph (d) of this section, any party 
may file a motion for reconsideration of the initial decision within 20 
days of receipt of the initial decision. If service was made by mail, 
receipt will be presumed to be five days from the date of mailing in the 
absence of contrary proof.
    (b) Every such motion must set forth the matters claimed to have 
been erroneously decided and the nature of the alleged errors. Such 
motion shall be accompanied by a supporting brief.
    (c) Responses to such motions shall be allowed only upon request of 
the ALJ.
    (d) No party may file motion for reconsideration of an initial 
decision that has been revised in response to a previous motion for 
reconsideration.
    (e) The ALJ may dispose of a motion for reconsideration by denying 
it or by issuing a revised initial decision.
    (f) If the ALJ denies a motion for reconsideration, the initial 
decision shall constitute the final decision of the authority head and 
shall be final and binding on the parties 30 days after the ALJ denies 
the motion, unless the initial decision is timely appealed to the 
authority head in accordance with Sec. 22.39.
    (g) If the ALJ issues a revised initial decision, that decision 
shall constitute the final decision of the authority head and shall be 
final and binding on the parties 30 days after it is issued, unless it 
is timely appealed to the authority head in accordance with Sec. 22.39.



Sec. 22.39  Appeal to authority head.

    (a) Any defendant who has filed a timely answer and who is 
determined in an initial decision to be liable for a civil penalty or 
assessment may appeal such decision to the authority head by filing a 
notice of appeal with the authority head in accordance with this 
section.
    (b)(1) A notice of appeal may be filed at any time within 30 days 
after the ALJ issues an initial decision. However, if another party 
files a motion for reconsideration under Sec. 22.38, consideration of 
the appeal shall be stayed automatically pending resolution of the 
motion for reconsideration.
    (2) If a motion for reconsideration is timely filed, a notice of 
appeal may be filed within 30 days after the ALJ denies the motion or 
issues a revised initial decision, whichever applies.
    (3) The authority head may extend the initial 30 day period for an 
additional 30 days if the defendant files with the authority head a 
request for an extension within the initial 30 day period and shows good 
cause.
    (c) If the defendant files a timely notice of appeal with the 
authority head, and the time for filing motions for reconsideration 
under Sec. 22.38 has expired, the ALJ shall forward the record of the 
proceeding to the authority head.
    (d) A notice of appeal shall be accompanied by a written brief 
specifying exceptions to the initial decision and reasons supporting the 
exceptions.
    (e) The representative for the Government may file a brief in 
opposition to exceptions within 30 days of receiving the notice of 
appeal and accompanying brief.
    (f) There is no right to appear personally before the authority 
head.
    (g) There is no right to appeal any interlocutory ruling by the ALJ.
    (h) In reviewing the initial decision, the authority head shall not 
consider

[[Page 282]]

any objection that was not raised before the ALJ unless a demonstration 
is made of extraordinary circumstances causing the failure to raise the 
objection.
    (i) If any party demonstrates to the satisfaction of the authority 
head that additional evidence not presented at such hearing is material 
and that there were reasonable grounds for the failure to present such 
evidence at such hearing, the authority head shall remand the matter to 
the ALJ for consideration of such additional evidence.
    (j) The authority head may affirm, reduce, reverse, compromise, 
remand, or settle any penalty or assessment, determined by the ALJ in 
any initial decision.
    (k) The authority head shall promptly serve each party to the appeal 
with a copy of the decision of the authority head and a statement 
describing the right of any person determined to be liable for a penalty 
or assessment to seek judicial review.
    (l) Unless a petition for review is filed as provided in 31 U.S.C. 
3805 after a defendant has exhausted all administrative remedies under 
this part and within 60 days after the date on which the authority head 
serves the defendant with a copy of the authority head's decision, a 
determination that a defendant is liable under Sec. 22.3 is final and is 
not subject to judicial review.



Sec. 22.40  Stays ordered by the Department of Justice.

    If at any time the Attorney General or an Assistant Attorney General 
designated by the Attorney General transmits to the authority head a 
written finding that continuation of the administrative process 
described in this part with respect to a claim or statement may 
adversely affect any pending or potential criminal or civil action 
related to such claim or statement, the authority head shall stay the 
process immediately. The authority head may order the process resumed 
only upon receipt of the written authorization of the Attorney General.



Sec. 22.41  Stay pending appeal.

    (a) An initial decision is stayed automatically pending disposition 
of a motion for reconsideration or of an appeal to the authority head.
    (b) No administrative stay is available following a final decision 
of the authority head.



Sec. 22.42  Judicial review.

    Section 3805 of title 31 U.S.C., authorizes judicial review by an 
appropriate United States District Court of a final decision of the 
authority head imposing penalties or assessments under this part and 
specifies the procedures for such review.



Sec. 22.43  Collection of civil penalties and assessments.

    Sections 3806 and 3808(b) of title 31 U.S.C., authorize actions for 
collection of civil penalties and assessments imposed under this part 
and specify the procedures for such actions.



Sec. 22.44  Right to administrative offset.

    The amount of any penalty or assessment which has become final, or 
for which a judgment has been entered under Sec. 22.42 or Sec. 22.43, or 
any amount agreed upon in a compromise or settlement under Sec. 22.46, 
may be collected by administrative offset under 31 U.S.C. 3716, except 
that an administrative offset may not be made under this subsection 
against a refund of an overpayment of Federal taxes, then or later owing 
by the United States to the defendant.



Sec. 22.45  Deposit in Treasury of United States.

    All amounts collected pursuant to this part shall be deposited as 
miscellaneous receipts in the Treasury of the United States, except as 
provided in 31 U.S.C. 3806(g) .



Sec. 22.46  Compromise or settlement.

    (a) Parties may make offers of compromise or settlement at any time.
    (b) The reviewing official has the exclusive authority to compromise 
or settle a case under this part at any time after the date on which the 
reviewing official is permitted to issue a complaint and before the date 
on which the ALJ issues an initial decision.
    (c) The authority head has exclusive authority to compromise or 
settle a case under this part at any time after

[[Page 283]]

the date on which the ALJ issues an initial decision, except during the 
pendency of any review under Sec. 22.42 or during the pendency of any 
action to collect penalties and assessments under Sec. 22.43.
    (d) The Attorney General has exclusive authority to compromise or 
settle a case under this part during the pendency of any review under 
Sec. 22.42 or of any action to recover penalties and assessments under 
31 U.S.C. 3806.
    (e) The investigating official may recommend settlement terms to the 
reviewing official, the authority head, or the Attorney General, as 
appropriate. The reviewing official may recommend settlement terms to 
the authority head, or the Attorney General, as appropriate.
    (f) Any compromise or settlement must be in writing.



Sec. 22.47  Limitations.

    (a) The notice of hearing (under Sec. 22.12) with respect to a claim 
or statement must be served in the manner specified in Sec. 22.8 within 
6 years after the date on which such claim or statement is made.
    (b) If the defendant fails to file a timely answer, service of a 
notice under Sec. 22.10(b) shall be deemed a notice of hearing for 
purposes of this section.
    (c) The statute of limitations may be extended by agreement of the 
parties.



PART 24--PROCEDURES FOR THE HANDLING OF DISCRIMINATION COMPLAINTS UNDER FEDERAL EMPLOYEE PROTECTION STATUTES--Table of Contents




Sec.
24.1  Purpose and scope.
24.2  Obligations and prohibited acts.
24.3  Complaint.
24.4  Investigations.
24.5  Investigations under the Energy Reorganization Act.
24.6  Hearings.
24.7  Recommended decision and order.
24.8  Review by the Administrative Review Board.
24.9  Exception.

Appendix A to Part 24--Your Rights Under the Energy Reorganization Act.

    Authority: 15 U.S.C. 2622; 33 U.S.C. 1367; 42 U.S.C. 300j-9(i), 
5851, 6971, 7622, 9610.

    Source: 63 FR 6621, Feb. 9, 1998, unless otherwise noted.



Sec. 24.1  Purpose and scope.

    (a) This part implements the several employee protection provisions 
for which the Secretary of Labor has been given responsibility pursuant 
to the following Federal statutes: Safe Drinking Water Act, 42 U.S.C. 
300j-9(i); Water Pollution Control Act, 33 U.S.C. 1367; Toxic Substances 
Control Act, 15 U.S.C. 2622; Solid Waste Disposal Act, 42 U.S.C. 6971; 
Clean Air Act, 42 U.S.C. 7622; Energy Reorganization Act of 1974, 42 
U.S.C. 5851; and Comprehensive Environmental Response, Compensation and 
Liability Act of 1980, 42 U.S.C. 9610.
    (b) Procedures are established by this part pursuant to the Federal 
statutory provisions listed in paragraph (a) of this section, for the 
expeditious handling of complaints by employees, or persons acting on 
their behalf, of discriminatory action by employers.
    (c) Throughout this part, ``Secretary'' or ``Secretary of Labor'' 
shall mean the Secretary of Labor, U.S. Department of Labor, or his or 
her designee. ``Assistant Secretary'' shall mean the Assistant Secretary 
for Occupational Safety and Health, U.S. Department of Labor, or his or 
her designee.



Sec. 24.2  Obligations and prohibited acts.

    (a) No employer subject to the provisions of any of the Federal 
statutes listed in Sec. 24.1(a), or to the Atomic Energy Act of 1954 
(AEA), 42 U.S.C. 2011 et seq., may discharge any employee or otherwise 
discriminate against any employee with respect to the employee's 
compensation, terms, conditions, or privileges of employment because the 
employee, or any person acting pursuant to the employee's request, 
engaged in any of the activities specified in this section.
    (b) Any employer is deemed to have violated the particular federal 
law and the regulations in this part if such employer intimidates, 
threatens, restrains, coerces, blacklists, discharges, or in any other 
manner discriminates against any employee because the employee has:

[[Page 284]]

    (1) Commenced or caused to be commenced, or is about to commence or 
cause to be commenced, a proceeding under one of the Federal statutes 
listed in Sec. 24.1(a) or a proceeding for the administration or 
enforcement of any requirement imposed under such Federal statute;
    (2) Testified or is about to testify in any such proceeding; or
    (3) Assisted or participated, or is about to assist or participate, 
in any manner in such a proceeding or in any other action to carry out 
the purposes of such Federal statute.
    (c) Under the Energy Reorganization Act, and by interpretation of 
the Secretary under any of the other statutes listed in Sec. 24.1(a), 
any employer is deemed to have violated the particular federal law and 
these regulations if such employer intimidates, threatens, restrains, 
coerces, blacklists, discharges, or in any other manner discriminates 
against any employee because the employee has:
    (1) Notified the employer of an alleged violation of such Federal 
statute or the AEA of 1954;
    (2) Refused to engage in any practice made unlawful by such Federal 
statute or the AEA of 1954, if the employee has identified the alleged 
illegality to the employer; or
    (3) Testified before Congress or at any Federal or State proceeding 
regarding any provision (or proposed provision) of such Federal statute 
or the AEA of 1954.
    (d)(1) Every employer subject to the Energy Reorganization Act of 
1974, as amended, shall prominently post and keep posted in any place of 
employment to which the employee protection provisions of the Act apply 
a fully legible copy of the notice prepared by the Occupational Safety 
and Health Administration, printed as appendix A to this part, or a 
notice approved by the Assistant Secretary for Occupational Safety and 
Health that contains substantially the same provisions and explains the 
employee protection provisions of the Act and the regulations in this 
part. Copies of the notice prepared by DOL may be obtained from the 
Assistant Secretary for Occupational Safety and Health, Washington, D.C. 
20210, from local offices of the Occupational Safety and Health 
Administration, or from the Department of Labor's Website at http://
www.osha.gov.
    (2) Where the notice required by paragraph (d)(1) of this section 
has not been posted, the requirement in Sec. 24.3(b)(2) that a complaint 
be filed with the Assistant Secretary within 180 days of an alleged 
violation shall be inoperative unless the respondent establishes that 
the complainant had notice of the material provisions of the notice. If 
it is established that the notice was posted at the employee's place of 
employment after the alleged discriminatory action occurred or that the 
complainant later obtained actual notice, the 180 days shall ordinarily 
run from that date.



Sec. 24.3  Complaint.

    (a) Who may file. An employee who believes that he or she has been 
discriminated against by an employer in violation of any of the statutes 
listed in Sec. 24.1(a) may file, or have another person file on his or 
her behalf, a complaint alleging such discrimination.
    (b) Time of filing. (1) Except as provided in paragraph (b)(2) of 
this section, any complaint shall be filed within 30 days after the 
occurrence of the alleged violation. For the purpose of determining 
timeliness of filing, a complaint filed by mail shall be deemed filed as 
of the date of mailing.
    (2) Under the Energy Reorganization Act of 1974, any complaint shall 
be filed within 180 days after the occurrence of the alleged violation.
    (c) Form of complaint. No particular form of complaint is required, 
except that a complaint must be in writing and should include a full 
statement of the acts and omissions, with pertinent dates, which are 
believed to constitute the violation.
    (d) Place of filing. A complaint may be filed in person or by mail 
at the nearest local office of the Occupational Safety and Health 
Administration, listed in most telephone directories under U.S. 
Government, Department of Labor. A complaint may also be filed with the 
Office of the Assistant Secretary, Occupational Safety and Health

[[Page 285]]

Administration, U.S. Department of Labor, Washington, D.C. 20210.

(Approved by the Office of Management and Budget under control number 
1215-0183.)



Sec. 24.4  Investigations.

    (a) Upon receipt of a complaint under this part, the Assistant 
Secretary shall notify the person named in the complaint, and the 
appropriate office of the Federal agency charged with the administration 
of the affected program of its filing.
    (b) The Assistant Secretary shall, on a priority basis, investigate 
and gather data concerning such case, and as part of the investigation 
may enter and inspect such places and records (and make copies thereof), 
may question persons being proceeded against and other employees of the 
charged employer, and may require the production of any documentary or 
other evidence deemed necessary to determine whether a violation of the 
law involved has been committed.
    (c) Investigations under this part shall be conducted in a manner 
which protects the confidentiality of any person other than the 
complainant who provides information on a confidential basis, in 
accordance with part 70 of this title.
    (d)(1) Within 30 days of receipt of a complaint, the Assistant 
Secretary shall complete the investigation, determine whether the 
alleged violation has occurred, and give notice of the determination. 
The notice of determination shall contain a statement of reasons for the 
findings and conclusions therein and, if the Assistant Secretary 
determines that the alleged violation has occurred, shall include an 
appropriate order to abate the violation. Notice of the determination 
shall be given by certified mail to the complainant, the respondent, and 
their representatives (if any). At the same time, the Assistant 
Secretary shall file with the Chief Administrative Law Judge, U.S. 
Department of Labor, the original complaint and a copy of the notice of 
determination.
    (2) The notice of determination shall include or be accompanied by 
notice to the complainant and the respondent that any party who desires 
review of the determination or any part thereof, including judicial 
review, shall file a request for a hearing with the Chief Administrative 
Law Judge within five business days of receipt of the determination. The 
complainant or respondent in turn may request a hearing within five 
business days of the date of a timely request for a hearing by the other 
party. If a request for a hearing is timely filed, the notice of 
determination of the Assistant Secretary shall be inoperative, and shall 
become operative only if the case is later dismissed. If a request for a 
hearing is not timely filed, the notice of determination shall become 
the final order of the Secretary.
    (3) A request for a hearing shall be filed with the Chief 
Administrative Law Judge by facsimile (fax), telegram, hand delivery, or 
next-day delivery service. A copy of the request for a hearing shall be 
sent by the party requesting a hearing to the complainant or the 
respondent (employer), as appropriate, on the same day that the hearing 
is requested, by facsimile (fax), telegram, hand delivery, or next-day 
delivery service. A copy of the request for a hearing shall also be sent 
to the Assistant Secretary for Occupational Safety and Health and to the 
Associate Solicitor, Division of Fair Labor Standards, U.S. Department 
of Labor, Washington, D.C. 20210.



Sec. 24.5  Investigations under the Energy Reorganization Act.

    (a) In addition to the investigation procedures set forth in 
Sec. 24.4, this section sets forth special procedures applicable only to 
investigations under the Energy Reorganization Act.
    (b)(1) A complaint of alleged violation shall be dismissed unless 
the complainant has made a prima facie showing that protected behavior 
or conduct as provided in Sec. 24.2(b) was a contributing factor in the 
unfavorable personnel action alleged in the complaint.
    (2) The complaint, supplemented as appropriate by interviews of the 
complainant, must allege the existence of facts and evidence to meet the 
required elements of a prima facie case, as follows:
    (i) The employee engaged in a protected activity or conduct, as set 
forth in Sec. 24.2;

[[Page 286]]

    (ii) The respondent knew that the employee engaged in the protected 
activity;
    (iii) The employee has suffered an unfavorable personnel action; and
    (iv) The circumstances were sufficient to raise the inference that 
the protected activity was likely a contributing factor in the 
unfavorable action.
    (3) For purposes of determining whether to investigate, the 
complainant will be considered to have met the required burden if the 
complaint on its face, supplemented as appropriate through interviews of 
the complainant, alleges the existence of facts and either direct or 
circumstantial evidence to meet the required elements of a prima facie 
case, i.e., to give rise to an inference that the respondent knew that 
the employee engaged in protected activity, and that the protected 
activity was likely a reason for the personnel action. Normally the 
burden is satisfied, for example, if it is shown that the adverse 
personnel action took place shortly after the protected activity, giving 
rise to the inference that it was a factor in the adverse action. If 
these elements are not substantiated in the investigation, the 
investigation will cease.
    (c)(1) Notwithstanding a finding that a complainant has made a prima 
facie showing required by this section with respect to complaints filed 
under the Energy Reorganization Act, an investigation of the 
complainant's complaint under that Act shall be discontinued if the 
respondent demonstrates by clear and convincing evidence that it would 
have taken the same unfavorable personnel action in the absence of the 
complainant's protected behavior or conduct.
    (2) Upon receipt of a complaint under the Energy Reorganization Act, 
the respondent shall be provided with a copy of the complaint (as 
supplemented by interviews of the complainant, if any) and advised that 
any evidence it may wish to submit to rebut the allegations in the 
complaint must be received within five business days from receipt of 
notification of the complaint. If the respondent fails to make a timely 
response or if the response does not demonstrate by clear and convincing 
evidence that the unfavorable action would have occurred absent the 
protected conduct, the investigation shall proceed. The investigation 
shall proceed whenever it is necessary or appropriate to confirm or 
verify the information provided by respondent.
    (d) Whenever the Assistant Secretary dismisses a complaint pursuant 
to this section without completion of an investigation, the Assistant 
Secretary shall give notice of the dismissal, which shall contain a 
statement of reasons therefor, by certified mail to the complainant, the 
respondent, and their representatives. At the same time the Assistant 
Secretary shall file with the Chief Administrative Law Judge, U.S. 
Department of Labor, a copy of the complaint and a copy of the notice of 
dismissal. The notice of dismissal shall constitute a notice of 
determination within the meaning of Sec. 24.4(d), and any request for a 
hearing shall be filed and served in accordance with the provisions of 
Sec. 24.4(d) (2) and (3).



Sec. 24.6  Hearings.

    (a) Notice of hearing. The administrative law judge to whom the case 
is assigned shall, within seven calendar days following receipt of the 
request for hearing, notify the parties by certified mail, directed to 
the last known address of the parties, of a day, time and place for 
hearing. All parties shall be given at least five days notice of such 
hearing. However, because of the time constraints upon the Secretary by 
the above statutes, no requests for postponement shall be granted except 
for compelling reasons or with the consent of all parties.
    (b) Consolidated hearings. When two or more hearings are to be held, 
and the same or substantially similar evidence is relevant and material 
to the matters at issue at each such hearing, the Chief Administrative 
Law Judge may, upon motion by any party or on his own or her own motion, 
order that a consolidated hearing be conducted. Where consolidated 
hearings are held, a single record of the proceedings shall be made and 
the evidence introduced in one case may be considered as introduced in 
the others, and a separate or joint decision shall be made, as 
appropriate.
    (c) Place of hearing. The hearing shall, where possible, be held at 
a place

[[Page 287]]

within 75 miles of the complainant's residence.
    (d) Right to counsel. In all proceedings under this part, the 
parties shall have the right to be represented by counsel.
    (e) Procedures, evidence and record--(1) Evidence. Formal rules of 
evidence shall not apply, but rules or principles designed to assure 
production of the most probative evidence available shall be applied. 
The administrative law judge may exclude evidence which is immaterial, 
irrelevant, or unduly repetitious.
    (2) Record of hearing. All hearings shall be open to the public and 
shall be mechanically or stenographically reported. All evidence upon 
which the administrative law judge relies for decision shall be 
contained in the transcript of testimony, either directly or by 
appropriate reference. All exhibits and other pertinent documents or 
records, either in whole or in material part, introduced as evidence, 
shall be marked for identification and incorporated into the record.
    (3) Oral argument; briefs. Any party, upon request, may be allowed a 
reasonable time for presentation of oral argument and to file a 
prehearing brief or other written statement of fact or law. A copy of 
any such prehearing brief or other written statement shall be filed with 
the Chief Administrative Law Judge or the administrative law judge 
assigned to the case before or during the proceeding at which evidence 
is submitted to the administrative law judge and shall be served upon 
each party. Post-hearing briefs will not be permitted except at the 
request of the administrative law judge. When permitted, any such brief 
shall be limited to the issue or issues specified by the administrative 
law judge and shall be due within the time prescribed by the 
administrative law judge.
    (4) Dismissal for cause. (i) The administrative law judge may, at 
the request of any party, or on his or her own motion, issue a 
recommended decision and order dismissing a claim:
    (A) Upon the failure of the complainant or his or her representative 
to attend a hearing without good cause; or
    (B) Upon the failure of the complainant to comply with a lawful 
order of the administrative law judge.
    (ii) In any case where a dismissal of a claim, defense, or party is 
sought, the administrative law judge shall issue an order to show cause 
why the dismissal should not be granted and afford all parties a 
reasonable time to respond to such order. After the time for response 
has expired, the administrative law judge shall take such action as is 
appropriate to rule on the dismissal, which may include a recommended 
order dismissing the claim, defense or party.
    (f)(1) At the Assistant Secretary's discretion, the Assistant 
Secretary may participate as a party or participate as amicus curiae at 
any time in the proceedings. This right to participate shall include, 
but is not limited to, the right to petition for review of a recommended 
decision of an administrative law judge, including a decision based on a 
settlement agreement between complainant and respondent, to dismiss a 
complaint or to issue an order encompassing the terms of the settlement.
    (2) Copies of pleadings in all cases, whether or not the Assistant 
Secretary is participating in the proceeding, shall be sent to the 
Assistant Secretary, Occupational Safety and Health Administration, and 
to the Associate Solicitor, Division of Fair Labor Standards, U.S. 
Department of Labor, Washington, D.C. 20210.
    (g)(1) A Federal agency which is interested in a proceeding may 
participate as amicus curiae at any time in the proceedings, at the 
agency's discretion.
    (2) At the request of a Federal agency which is interested in a 
proceeding, copies of all pleadings in a case shall be served on the 
Federal agency, whether or not the agency is participating in the 
proceeding.



Sec. 24.7  Recommended decision and order.

    (a) Unless the parties jointly request or agree to an extension of 
time, the administrative law judge shall issue a recommended decision 
within 20 days after the termination of the proceeding at which evidence 
was submitted. The recommended decision shall contain appropriate 
findings, conclusions, and a recommended order and be served upon all 
parties to the proceeding.

[[Page 288]]

    (b) In cases under the Energy Reorganization Act, a determination 
that a violation has occurred may only be made if the complainant has 
demonstrated that protected behavior or conduct was a contributing 
factor in the unfavorable personnel action alleged in the complaint. 
Relief may not be ordered if the respondent demonstrates by clear and 
convincing evidence that it would have taken the same unfavorable 
personnel action in the absence of such behavior. The proceeding before 
the administrative law judge shall be a proceeding on the merits of the 
complaint. Neither the Assistant Secretary's determination to dismiss a 
complaint pursuant to Sec. 24.5 without completing an investigation nor 
the Assistant Secretary's determination not to dismiss a complaint is 
subject to review by the administrative law judge, and a complaint may 
not be remanded for the completion of an investigation on the basis that 
such a determination to dismiss was made in error.
    (c)(1) Upon the conclusion of the hearing and the issuance of a 
recommended decision that the complaint has merit, and that a violation 
of the Act has occurred, the administrative law judge shall issue a 
recommended order that the respondent take appropriate affirmative 
action to abate the violation, including reinstatement of the 
complainant to his or her former position, if desired, together with the 
compensation (including back pay), terms, conditions, and privileges of 
that employment, and, when appropriate, compensatory damages. In cases 
arising under the Safe Drinking Water Act or the Toxic Substances 
Control Act, exemplary damages may also be awarded when appropriate.
    (2) In cases brought under the Energy Reorganization Act, when an 
administrative law judge issues a recommended order that the complaint 
has merit and containing the relief prescribed in paragraph (c)(1) of 
this section, the administrative law judge shall also issue a 
preliminary order providing all of the relief specified in paragraph 
(c)(1) of this section with the exception of compensatory damages. This 
preliminary order shall constitute the preliminary order of the 
Secretary and shall be effective immediately, whether or not a petition 
for review is filed with the Administrative Review Board. Any award of 
compensatory damages shall not be effective until the final decision is 
issued by the Administrative Review Board.
    (d) The recommended decision of the administrative law judge shall 
become the final order of the Secretary unless, pursuant to Sec. 24.8, a 
petition for review is timely filed with the Administrative Review 
Board.



Sec. 24.8  Review by the Administrative Review Board.

    (a) Any party desiring to seek review, including judicial review, of 
a recommended decision of the administrative law judge shall file a 
petition for review with the Administrative Review Board (``the 
Board''), which has been delegated the authority to act for the 
Secretary and issue final decisions under this part. To be effective, 
such a petition must be received within ten business days of the date of 
the recommended decision of the administrative law judge, and shall be 
served on all parties and on the Chief Administrative Law Judge. If a 
timely petition for review is filed, the recommended decision of the 
administrative law judge shall be inoperative unless and until the Board 
issues an order adopting the recommended decision, except that for cases 
arising under the Energy Reorganization Act of 1974, a preliminary order 
of relief shall be effective while review is conducted by the Board.
    (b) Copies of the petition for review and all briefs shall be served 
on the Assistant Secretary, Occupational Safety and Health 
Administration, and on the Associate Solicitor, Division of Fair Labor 
Standards, U.S. Department of Labor, Washington, D.C. 20210.
    (c) The final decision shall be issued within 90 days of the receipt 
of the complaint and shall be served upon all parties and the Chief 
Administrative Law Judge by mail to the last known address.
    (d)(1) If the Board concludes that the party charged has violated 
the law, the final order shall order the party

[[Page 289]]

charged to take appropriate affirmative action to abate the violation, 
including reinstatement of the complainant to that person's former or 
substantially equivalent position, if desired, together with the 
compensation (including back pay), terms, conditions, and privileges of 
that employment, and, when appropriate, compensatory damages. In cases 
arising under the Safe Drinking Water Act or the Toxic Substances 
Control Act, exemplary damages may also be awarded when appropriate.
    (2) If such a final order is issued, the Board, at the request of 
the complainant, shall assess against the respondent a sum equal to the 
aggregate amount of all costs and expenses (including attorney and 
expert witness fees) reasonably incurred by the complainant, as 
determined by the Board, for, or in connection with, the bringing of the 
complaint upon which the order was issued.
    (e) If the Board determines that the party charged has not violated 
the law, an order shall be issued denying the complaint.



Sec. 24.9  Exception.

    This part shall have no application to any employee alleging 
activity prohibited by this part who, acting without direction from his 
or her employer (or the employer's agent), deliberately causes a 
violation of any requirement of a Federal statute listed in 
Sec. 24.1(a).

[[Page 290]]

          Appendix A to Part 24--Your Rights Under the Energy 
                          Reorganization Act
    [GRAPHIC] [TIFF OMITTED] TR09FE98.000
    


PART 25--RULES FOR THE NOMINATION OF ARBITRATORS UNDER SECTION 11 OF EXECUTIVE ORDER 10988--Table of Contents




Sec.
25.1  Purpose and scope.
25.2  Definitions.
25.3  Requests for nomination of arbitrators: Filing, disputes, parties, 
          time.
25.4  Contents of requests; service on other parties; answer; 
          intervention.
25.5  Action to be taken by the Secretary; nomination and selection.
25.6  Time; additional time after service by mail.
25.7  Fees; cost; expenses; decisions.
25.8  Construction of rules.


[[Page 291]]


    Authority: Sec. 11, E.O. 10988, 3 CFR 1959-1963 Comp. p. 521.

    Source: 25 FR 9441, Sept. 13, 1966, unless otherwise noted.



Sec. 25.1  Purpose and scope.

    These procedures govern the nomination of arbitrators by the 
Secretary to perform the advisory functions specified under section 11 
of Executive Order 10988. Any arbitrators so nominated will be available 
for either or both of the following purposes:
    (a) To investigate the facts and issue an advisory decision with 
respect to the appropriateness of a unit of Federal employees for the 
purpose of exclusive recognition and as to related issues submitted for 
consideration; or
    (b) To determine and advise whether an employee organization 
represents a majority of employees in an appropriate unit by conducting 
or supervising an election (wherein a majority of those voting, provided 
there is a representative vote, cast their ballots for or against 
representation), or by other appropriate means. A request for a 
nomination will be considered as contemplating the performance of 
functions within the above categories if it specifies as a purpose 
obtaining an advisory decision on one or more questions involved in a 
unit determination or determination of majority status, such as an 
advisory decision on the eligibility of voters or the right to appear on 
the ballot, arising in connection with an election to be held, or on a 
question relating to matters affecting the results of an election which 
took place after the agreement to conduct the election had been entered 
into, provided such conduct materially affected the results of the 
election. Subject to compliance with these procedures, the Secretary 
will nominate an arbitrator whenever he is so requested by an agency or 
by an employee organization which is seeking recognition as the 
exclusive representative of Federal employees in a prima facie 
appropriate unit and which meets all the prerequisites for seeking such 
recognition.



Sec. 25.2  Definitions.

    When used in these procedures:
    (a) Order means Executive Order No. 10988;
    (b) Agency, employee organization, and employee have the same 
meaning as in the Order;
    (c) Recognition means recognition which is or may be accorded to an 
employee organization pursuant to the provisions of the Order;
    (d) Secretary means the Secretary of Labor.



Sec. 25.3  Requests for nomination of arbitrators: Filing, disputes, parties, time.

    (a) Requests for nominations should be filed only where there exists 
a dispute or problem which cannot more appropriately be resolved through 
regular agency procedures. Parties, therefore, are expected to eliminate 
from their requests matters not necessary to the resolution of such 
dispute or problem and to use their best efforts to secure agreement on 
as many issues as possible before making the request.
    (b) Requests for nominations may be filed either by an agency, or by 
an employee organization as described in Sec. 25.1, or jointly by an 
agency and one or more employee organizations. Joint requests are 
encouraged.
    (c) Subject to the provisions of paragraph (a) of this section, the 
Secretary will entertain on its merits a request by an employee 
organization for nomination of an arbitrator on a question of unit 
determination which is made within 30 days after receipt of an agency's 
final unit determination or 75 days after an appropriate request for 
exclusive recognition and no final unit determination has been received 
from the agency, provided the organization has observed any reasonable 
time limits established by the agency for the processing of such 
requests within the agency. The Secretary will entertain on its merits a 
request by an employee organization for nomination of an arbitrator on a 
question of majority representation which is made within 15 days after 
an agency's decision with respect to a determination of majority 
representation. Any request by an employee organization for the 
nomination of an arbitrator will be considered untimely if:
    (1) A written request for exclusive recognition was not made prior 
to the grant of such recognition to another

[[Page 292]]

organization provided such grant was preceded by posted notice to all 
employees in the unit and written notice to all organizations known to 
represent such employees that a request for exclusive recognition was 
under consideration.
    (2) A written request for exclusive recognition was not made within 
5 days after the agency posted appropriate notice of its intention to 
conduct an election to determine majority status, or more than 10 days 
before the date of the election.
    (3) It was made less than 12 months after an agency's final unit 
determination with respect to such unit or subdivision thereof in a 
proceeding in which the organization sought exclusive recognition but 
failed to file a timely request for arbitration under these rules.
    (4) It was made less than 12 months after a unit determination 
following a section 11 proceeding covering such unit or any subdivision 
thereof.
    (5) The time limits set forth in this paragraph will be applied to 
all requests filed on or after October 15, 1963.
    (d) No request contemplating an advisory determination as to whether 
an employee organization should become or continue to be recognized as 
the exclusive representative of employees in any unit will be 
entertained if the request is filed within 12 months after a prior 
determination of exclusive status has been made pursuant to the Order 
with respect to such unit unless the agency has withdrawn exclusive 
recognition from an employee organization by reason of its failure to 
maintain its compliance with sections 2 and 3(a) of the Order or with 
the Standards of Conduct for Employee Organizations and Code of Fair 
Labor Practices and the agency advises the Secretary that it has no 
objection to a new determination of exclusive representation being made 
within the 12-month period.
    (e) No request contemplating an advisory determination as to whether 
an employee organization should become or continue to be recognized as 
the exclusive representative of employees in any unit will be 
entertained during the period within which a signed agreement between an 
agency and an employee organization is in force or awaiting approval at 
a higher management level, but not to exceed an agreement period of two 
years, unless (1) a request for redetermination is filed with the agency 
between the 90th and 60th day prior to the terminal date of such 
agreement or two years, whichever is earlier, or (2) unusual 
circumstances exist which will substantially affect the unit or the 
majority representation. When an agreement has been extended more than 
60 days before its terminal date, such extension shall not serve as a 
basis for the denial of a request under this section submitted in 
accordance with the time limitations provided above.

[28 FR 9941, Sept. 13, 1963, as amended at 29 FR 11972, Aug. 21, 1964]



Sec. 25.4  Contents of requests; service on other parties; answer; intervention.

    (a) Requests for nominations 1 shall be in triplicate and 
contain the following information:
---------------------------------------------------------------------------

     1 Requests should be on forms which will be supplied by 
the Secretary upon request.
---------------------------------------------------------------------------

    (1) The name of the agency and the name and address of any office or 
branch of the agency below the national level that may be involved;
    (2) A description of the unit appropriate for exclusive 
representation or claimed to be appropriate for such representation;
    (3) The number of employees in the appropriate unit or any alleged 
appropriate unit;
    (4) If the request is by an employee organization, the name, 
affiliation, if any, and address of the organization and the names, if 
known, of all other employee organizations claiming exclusive 
recognition, or having requested or attained formal or informal 
recognition with respect to any of the employees in the unit involved;
    (5) If the request is by an agency, the names, affiliation, if any, 
and addresses of the employee organization or organizations claiming 
exclusive recognition and of any employee organization which has 
requested or attained formal or informal recognition with respect to any 
of the employees in the unit involved;

[[Page 293]]

    (6) A brief statement indicating specifically the matter or matters 
with respect to which an advisory decision or determination is sought;
    (7) A brief statement of procedures followed by and before the 
agency prior to the request, two copies of any appropriate agency 
determination and two copies of all correspondence relating to the 
dispute or problem;
    (8) If the request is made by an employee organization, an 
indication of the interest of such organization, including information 
or data such as membership lists, employee petitions or dues records 
showing prima facie that the organization has sufficient membership to 
qualify for formal recognition, and that it represents no less than 30 
percent of the employees, in the appropriate unit or alleged appropriate 
unit; and
    (9) Any other relevant facts.
    (b) A party making a request shall furnish copies to all other 
parties or organizations listed in the request in compliance with 
paragraph (a) of this section; except that membership lists, employee 
petitions or dues records need not be furnished by the requesting 
employee organization to the other parties or organizations.
    (c) Any employee organization claiming to have an interest in the 
matter or matters to be considered by an arbitrator as to the 
appropriateness of a unit or majority representation must have advised 
the agency of its position, in the manner prescribed by the agency's 
rules, and must have satisfied all of the requirements of section 5 of 
the Order and paragraph (a)(8) of this section; except that, in any 
employee organization which has satisfied all of the requirements of 
section 5 of the Order except for the 10 percent membership requirement 
shall be entitled to receive notice of the proceeding and to participate 
therein if it represents at least two members and/or is designated by at 
least two employees as their representative in the unit alleged to be 
appropriate by the employee organization seeking exclusive recognition 
or the unit alleged to be appropriate by the agency, provided, however, 
that such intervening employee organization may not request a unit 
different than that sought by the employee organization seeking 
exclusive recognition or the unit claimed to be appropriate by the 
agency.
    (d) Within fifteen (15) days following the receipt of a copy of any 
request for a nomination filed with the Secretary, the agency or any 
employee organization may file a response thereto with the Secretary, 
raising any matter which is relevant to the request including the 
adequacy of the showing of interest and the appropriateness of the unit 
under terms of the Order or these procedures. A copy of any response 
shall be furnished to other parties and organizations listed in the 
request, in the manner provided in paragraph (b) of this section.



Sec. 25.5  Action to be taken by the Secretary; nomination and selection.

    (a) Upon receipt of a request and the responses, if any, the 
Secretary shall make such further inquiries as may be necessary to 
determine his authority under the Order and these procedures; whether a 
timely request for nomination has been made; whether a valid question 
concerning representation exists in a prima facie appropriate unit; or 
for the purpose of obtaining a further specification of the issues or 
matters to be submitted for an advisory decision or determination, or 
assisting or advising the persons nominated or considered for nomination 
or otherwise facilitating submission of the matter to such person or 
persons in a manner that will permit an expeditious decision or 
determination.
    (b) The Secretary will determine the adequacy of the showing of 
interest administratively, and such determination shall not be subject 
to collateral attack at a hearing before an arbitrator.
    (c) The Secretary shall nominate not less than three arbitrators. 
Within 5 days the parties may indicate their order of preference from 
among those nominated. The Secretary will thereafter make a selection 
from among the nominees listed.



Sec. 25.6  Time; additional time after service by mail.

    (a) In computing any period of time prescribed or allowed by the 
rules of this part, the date of the act, event, or

[[Page 294]]

default after which the designated period of time begins to run, is not 
to be included. The last day of the period so computed is to be 
included, unless it is a Saturday, Sunday or a Federal legal holiday, in 
which event the period runs until the end of the next day which is 
neither a Saturday, Sunday nor a Federal legal holiday. When the period 
of time prescribed, or allowed, is less than 7 days, intermediate 
Saturdays, Sundays and holidays shall be excluded from the computations. 
Whenever a party has the right or is required to do some act or take 
some other proceedings within a prescribed period after service of a 
notice or other paper upon the Secretary or a party and the notice is 
served upon him by mail, 3 days shall be added to the prescribed period: 
Provided, however, That 3 days shall not be added if any extension of 
such time may have been granted.
    (b) When these rules require the filing of any paper, such document 
must be received by the Secretary or a party before the close of 
business of the last day of the time limit, if any, for such filing or 
extension of time that may have been granted.



Sec. 25.7  Fees; cost; expenses; decisions.

    (a) Arbitrator's fees, per diem and travel expenses, and election 
expenses for notices, ballots, postage, rentals, assistance, etc., shall 
be borne entirely by the agency.
    (b) The standard fee for the services of an arbitrator should be 
$100 per day. Travel and per diem should be paid at the maximum rate 
payable to Government employees under the Standardized Government Travel 
Regulations.
    (c) The agency should provide the arbitrator with a copy of the 
transcript of testimony taken at the hearing, such transcript to be 
returned to the agency upon the issuance of the arbitrator's advisory 
decision.
    (d) Costs involving assistance rendered by the Secretary's Office in 
connection with advisory decisions or determinations under section 11 of 
the order shall be limited to per diem, travel expenses and services on 
a time-worked basis.
    (e) Upon request, the Secretary will make available copies of 
advisory decisions of arbitrators.



Sec. 25.8  Construction of rules.

    The rules shall be liberally construed to effectuate the purposes 
and provisions of the order.



PART 29--LABOR STANDARDS FOR THE REGISTRATION OF APPRENTICESHIP PROGRAMS--Table of Contents




Sec.
29.1  Purpose and scope.
29.2  Definitions.
29.3  Eligibility and procedure for Bureau registration of a program.
29.4  Criteria for apprenticeable occupations.
29.5  Standards of apprenticeship.
29.6  Apprenticeship agreement.
29.7  Deregistration of Bureau-registered program.
29.8  Reinstatement of program registration.
29.9  Hearings.
29.10  Limitations.
29.11  Complaints.
29.12  Recognition of State agencies.
29.13  Derecognition of State agencies.

    Authority: Sec. 1, 50 Stat. 664, as amended (29 U.S.C. 50; 40 U.S.C. 
276c; 5 U.S.C. 301); Reorganization Plan No. 14 of 1950, 64 Stat. 1267 
(5 U.S.C. App., p. 534).

    Source: 42 FR 10139, Feb. 18, 1977, unless otherwise noted.



Sec. 29.1  Purpose and scope.

    (a) The National Apprenticeship Act of 1937, section 1 (29 U.S.C. 
50), authorizes and directs the Secretary of Labor ``to formulate and 
promote the furtherance of labor standards necessary to safeguard the 
welfare of apprentices, to extend the application of such standards by 
encouraging the inclusion thereof in contracts of apprenticeship, to 
bring together employers and labor for the formulation of programs of 
apprenticeship, to cooperate with State agencies engaged in the 
formulation and promotion of standards of apprenticeship, and to 
cooperate with the Office of Education under the Department of Health, 
Education, and Welfare * * *.'' Section 2 of the Act authorizes the 
Secretary of Labor to ``publish information relating to existing and 
proposed labor standards of apprenticeship,'' and to ``appoint national 
advisory committees * * *.'' (29 U.S.C. 50a).
    (b) The purpose of this part is to set forth labor standards to 
safeguard the welfare of apprentices, and to extend

[[Page 295]]

the application of such standards by prescribing policies and procedures 
concerning the registration, for certain Federal purposes, or acceptable 
apprenticeship programs with the U.S. Department of Labor, Employment 
and Training Administration, Bureau of Apprenticeship and Training. 
These labor standards, policies and procedures cover the registration, 
cancellation and deregistration or apprenticeship programs and of 
apprenticeship agreements; the recognition of a State agency as the 
appropriate agency for registering local apprenticeship programs for 
certain Federal purposes; and matters relating thereto.
    (c) For further information about this part 29, contact: Deputy 
Administrator, Bureau of Apprenticeship and Training, Employment and 
Training Administration, Room 5000, Patrick Henry Building, Washington, 
DC 20213, Telephone number (202) 376-6585.



Sec. 29.2  Definitions.

    As used in ths part:
    (a) Department shall mean the U.S. Department of Labor.
    (b) Secretary shall mean the Secretary of Labor or any person 
specifically designated by him.
    (c) Bureau shall mean the Bureau of Apprenticeship and Training, 
Employment and Training Administration.
    (d) Administrator shall mean the Administrator of the Bureau of 
Apprenticeship and Training, or any person specifically designated by 
him.
    (e) Apprentice shall mean a worker at least 16 years of age, except 
where a higher minimum age standard is otherwise fixed by law, who is 
employed to learn a skilled trade as defined in Sec. 29.4 under 
standards of apprenticeship fulfilling the requirements of Sec. 29.5.
    (f) Apprenticeship program shall mean a plan containing all terms 
and conditions for the qualification, recruitment, selection, employment 
and training of apprentices, including such matters as the requirement 
for a written apprenticeship agreement.
    (g) Sponsor shall mean any person, association, committee, or 
organization operating an apprenticeship program and in whose name the 
program is (or is to be) registered or approved.
    (h) Employer shall mean any person or organization employing an 
apprentice whether or not such person or organization is a party to an 
apprenticeship agreement with the apprentice.
    (i) Apprenticeship committee shall mean those persons designated by 
the sponsor to act for it in the administration of the program. A 
committee may be joint, i.e., it is composed of an equal number of 
representatives of the employer(s) and of the employees represented by a 
bona fide collective bargaining agent(s) and has been established to 
conduct, operate, or administer an apprenticeship program and enter into 
apprenticeship agreements with apprentices. A committee may be 
unilateral or non-joint and shall mean a program sponsor in which a bona 
fide collective bargaining agent is not a participant.
    (j) Apprenticeship agreement shall mean a written agreement between 
an apprentice and either his employer, or an apprenticeship committee 
acting as agent for employer(s), which agreement contains the terms and 
conditions of the employment and training of the apprentice.
    (k) Federal purposes includes any Federal contract, grant, agreement 
or arrangement dealing with apprenticeship; and any Federal financial or 
other assistance, benefit, privilege, contribution, allowance, 
exemption, preference or right pertaining to apprenticeship.
    (l) Registration of an apprenticeship program shall mean the 
acceptance and recording of such program by the Bureau of Apprenticeship 
and Training, or registration and/or approval by a recognized State 
Apprenticeship Agency, as meeting the basic standards and requirements 
of the Department for approval of such program for Federal purposes. 
Approval is evidenced by a Certificate of Registration or other written 
indicia.
    (m) Registration of an apprenticeship agreement shall mean the 
acceptance and recording thereof by the Bureau or a recognized State 
Apprenticeship Agency as evidence of the participation of the apprentice 
in a particular registered apprenticeship program.
    (n) Certification shall mean written approval by the Bureau of:

[[Page 296]]

    (1) A set of apprenticeship standards developed by a national 
committee or organization, joint or unilateral, for policy or guideline 
use by local affiliates, as substantially conforming to the standards of 
apprenticeship set forth in Sec. 29.5; or
    (2) An individual as eligible for probationary employment as an 
apprentice under a registered apprenticeship program.
    (o) Recognized State Apprenticeship Agency or recognized State 
Apprenticeship Council shall mean an organization approved by the Bureau 
as an agency or council which has been properly constituted under an 
acceptable law or Executive order, and has been approved by the Bureau 
as the appropriate body for State registration and/or approval of local 
apprenticeship programs and agreements for Federal purposes.
    (p) State shall mean any of the 50 States of the United States, the 
District of Columbia, or any territory or possession of the United 
States.
    (q) Related instruction shall mean an organized and systematic form 
of instruction designed to provide the apprenticeship with knowledge of 
the theoretical and technical subjects related to his/her trade.
    (r) Cancellation shall mean the termination of the registration or 
approval status of a program at the request of the sponsor or 
termination of an apprenticeship agreement at the request of the 
apprentice.
    (s) Registration agency shall mean the Bureau or a recognized State 
Apprenticeship Agency.



Sec. 29.3  Eligibility and procedure for Bureau registration of a program.

    (a) Eligibility for various Federal purposes is conditioned upon a 
program's conformity with apprenticeship program standards published by 
the Secretary of Labor in this part. For a program to be determined by 
the Secretary of Labor as being in conformity with these published 
standards the program must be registered with the Bureau or registered 
with and/or approved by a State Apprenticeship Agency or Council 
recognized by the Bureau. Such determination by the Secretary is made 
only by such registration.
    (b) No apprenticeship program or agreement shall be eligible for 
Bureau registration unless (1) it is in conformity with the requirements 
of this part and the training is in an apprenticeable occupation having 
the characteristics set forth in Sec. 29.4 herein, and (2) it is in 
conformity with the requirements of the Department's regulation on 
``Equal Employment Opportunity in Apprenticeship and Training'' set 
forth in 29 CFR part 30, as amended.
    (c) Except as provided under paragraph (d) of this section, 
apprentices must be individually registered under a registered program. 
Such registration may be effected:
    (1) By filing copies of each apprenticeship agreement; or
    (2) Subject to prior Bureau approval, by filing a master copy of 
such agreement followed by a listing of the name, and other required 
data, of each individual when apprenticed.
    (d) The names of persons in their first 90 days of probationary 
employment as an apprentice under an apprenticeship program registered 
by the Bureau or a recognized State Apprenticeship Agency, if not 
individually registered under such program, shall be submitted 
immediately after employment to the Bureau or State Apprenticeship 
Agency for certification to establish the apprentice as eligible for 
such probationary employment.
    (e) The appropriate registration office must be promptly notified of 
the cancellation, suspension, or termination of any apprenticeship 
agreement, with cause for same, and of apprenticeship completions.
    (f) Operating apprenticeship programs when approved by the Bureau 
shall be accorded registration evidenced by a Certificate of 
Registration. Programs approved by recognized State Apprenticeship 
Agencies shall be accorded registration and/or approval evidenced by a 
similar certificate or other written indicia. When approved by the 
Bureau, national apprenticeship standards for policy or guideline use 
shall be accorded certification, evidenced by a certificate attesting to 
the Bureau's approval.
    (g) Any modification(s) or change(s) to registered or certified 
programs

[[Page 297]]

shall be promptly submitted to the registration office and, if approved, 
shall be recorded and acknowledged as an amendment to such program.
    (h) Under a program proposed for registration by an employer or 
employers' association, where the standards, collective bargaining 
agreement or other instrument, provides for participation by a union in 
any manner in the operation of the substantive matters of the 
apprenticeship program, and such participation is exercised, written 
acknowledgement of union agreement or no objection to the registration 
is required. Where no such participation is evidenced and practiced, the 
employer or employers' association shall simultaneously furnish to the 
union, if any, which is the collective bargaining agent of the employees 
to be trained, a copy of its appplication for registration and of the 
apprenticeship program. The registration agency shall provide a 
reasonable time period of not less than 30 days nor more than 60 days 
for receipt of union comments, if any, before final action on the 
application for registration and/or approval.
    (i) Where the employees to be trained have no collective bargaining 
agent, an apprenticeship program may be proposed for registration by an 
employer or group of employers.

(Approved by the Office of Management and Budget under control number 
1205-0223)

[42 FR 10139, Feb. 18, 1977; 42 FR 30836, June 17, 1977, as amended at 
49 FR 18295, Apr. 30, 1984]



Sec. 29.4  Criteria for apprenticeable occupations.

    An apprenticeable occupation is a skilled trade which possesses all 
of the following characteristics:
    (a) It is customarily learned in a practical way through a 
structured, systematic program of on-the-job supervised training.
    (b) It is clearly identified and commonly recognized throughout an 
industry.
    (c) It involves manual, mechanical or technical skills and knowledge 
which require a minimum of 2,000 hours of on-the-job work experience.
    (d) It requires related instruction to supplement the on-the-job 
training.



Sec. 29.5  Standards of apprenticeship.

    An apprenticeship program, to be eligible for registration/approval 
by a registration/approval agency, shall conform to the following 
standards:
    (a) The program is an organized, written plan embodying the terms 
and conditions of employment, training, and supervision of one or more 
apprentices in the apprenticeable occupation, as defined in this part, 
and subscribed to by a sponsor who has undertaken to carry out the 
apprentice training program.
    (b) The program standards contain the equal opportunity pledge 
prescribed in 29 CFR 30.3(b) and, when applicable, an affirmative action 
plan in accordance with 29 CFR 30.4, a selection method authorized in 29 
CFR 30.5, or similar requirements expressed in a State Plan for Equal 
Employment Opportunity in Apprenticeship adopted pursuant to 29 CFR part 
30 and approved by the Department, and provisions concerning the 
following:
    (1) The employment and training of the apprentice in a skilled 
trade;
    (2) A term of apprenticeship, not less than 2,000 hours of work 
experience, consistent with training requirements as established by 
industry practice;
    (3) An outline of the work processes in which the apprentice will 
receive supervised work experience and training on the job, and the 
allocation of the approximate time to be spent in each major process;
    (4) Provision for organized, related and supplemental instruction in 
technical subjects related to the trade. A minimum of 144 hours for each 
year of apprenticeship is recommended. Such instruction may be given in 
a classroom through trade or industrial courses, or by correspondence 
courses of equivalent value, or other forms of self-study approved by 
the registration/approval agency.
    (5) A progressively increasing schedule of wages to be paid the 
apprentice consistent with the skill acquired. The entry wage shall be 
not less than the minimum wage prescribed by the Fair Labor Standards 
Act, where applicable, unless a higher wage is required by other 
applicable Federal law, State law, respective regulations, or by 
collective bargaining agreement;

[[Page 298]]

    (6) Periodic review and evaluation of the apprentice's progress in 
job performance and related instruction; and the maintenance of 
appropriate progress records;
    (7) The numeric ratio of apprentices to journeymen consistent with 
proper supervision, training, safety, and continuity of employment, and 
applicable provisions in collective bargaining agreements, except where 
such ratios are expressly prohibited by the collective bargaining 
agreements. The ratio language shall be specific and clear as to 
application in terms of jobsite, work force, department or plant;
    (8) A probationary period reasonable in relation to the full 
apprenticeship term, with full credit given for such period toward 
completion of apprenticeship;
    (9) Adequate and safe equipment and facilities for training and 
supervision, and safety training for apprentices on the job and in 
related instruction;
    (10) The minimum qualifications required by a sponsor for persons 
entering the apprenticeship program, with an eligible starting age not 
less than 16 years;
    (11) The placement of an apprentice under a written apprenticeship 
agreement as required by the State apprenticeship law and regulation, or 
the Bureau where no such State law or regulation exists. The agreement 
shall directly, or by reference, incorporate the standards of the 
program as part of the agreement;
    (12) The granting of advanced standing or credit for previously 
acquired experience, training, or skills for all applicants equally, 
with commensurate wages for any progression step so granted;
    (13) Transfer of employer's training obligation when the employer is 
unable to fulfill his obligation under the apprenticeship agreement to 
another employer under the same program with consent of the apprentice 
and apprenticeship committee or program sponsor;
    (14) Assurance of qualified training personnel and adequate 
supervision on the job;
    (15) Recognition for successful completion of apprenticeship 
evidenced by an appropriate certificate;
    (16) Identification of the registration agency;
    (17) Provision for the registration, cancellation and deregistration 
of the program; and requirement for the prompt submission of any 
modification or amendment thereto;
    (18) Provision for registration of apprenticeship agreements, 
modifications, and amendments; notice to the registration office of 
persons who have successfully completed apprenticeship programs; and 
notice of cancellations, suspensions and terminations of apprenticeship 
agreements and causes therefor;
    (19) Authority for the termination of an apprenticeship agreement 
during the probationary period by either party without stated cause;
    (20) A statement that the program will be conducted, operated and 
administered in conformity with applicable provisions of 29 CFR part 30, 
as amended, or a State EEO in apprenticeship plan adopted pursuant to 29 
CFR part 30 and approved by the Department;
    (21) Name and address of the appropriate authority under the program 
to receive, process and make disposition of complaints;
    (22) Recording and maintenance of all records concerning 
apprenticeship as may be required by the Bureau or recognized State 
Apprenticeship Agency and other applicable law.

(Approved by the Office of Management and Budget under control number 
1205-0223)

[42 FR 10139, Feb. 18, 1977; 42 FR 30836, June 17, 1977, as amended at 
49 FR 18295, Apr. 30, 1984]



Sec. 29.6  Apprenticeship agreement.

    The apprenticeship agreement shall contain explicitly or by 
reference:
    (a) Names and signatures of the contracting parties (apprentice, and 
the program sponsor or employer), and the signature of a parent or 
guardian if the apprentice is a minor.
    (b) The date of birth of apprentice.
    (c) Name and address of the program sponsor and registration agency.
    (d) A statement of the trade or craft in which the apprentice is to 
be trained, and the beginning date and term (duration) of 
apprenticeship.

[[Page 299]]

    (e) A statement showing (1) the number of hours to be spent by the 
apprentice in work on the job, and (2) the number of hours to be spent 
in related and supplemental instruction which is recommended to be not 
less than 144 hours per year.
    (f) A statement setting forth a schedule of the work processes in 
the trade or industry divisions in which the apprentice is to be trained 
and the approximate time to be spent at each process.
    (g) A statement of the graduated scale of wages to be paid the 
apprentice and whether or not the required school time shall be 
compensated.
    (h) Statements providing:
    (1) For a specific period of probation during which the 
apprenticeship agreement may be terminated by either party to the 
agreement upon written notice to the registration agency;
    (2) That, after the probationary period, the agreement may be 
cancelled at the request of the apprentice, or may be suspended, 
cancelled, or terminated by the sponsor, for good cause, with due notice 
to the apprentice and a reasonable opportunity for corrective action, 
and with written notice to the apprentice and to the registration agency 
of the final action taken.
    (i) A reference incorporating as part of the agreement the standards 
of the apprenticeship program as it exists on the date of the agreement 
and as it may be amended during the period of the agreement.
    (j) A statement that the apprentice will be accorded equal 
opportunity in all phases of apprenticeship employment and training, 
without discrimination because of race, color, religion, national 
origin, or sex.
    (k) Name and address of the appropriate authority, if any, 
designated under the program to receive, process and make disposition of 
controversies or differences arising out of the apprenticeship agreement 
when the controversies or differences cannot be adjusted locally or 
resolved in accordance with the established trade procedure or 
applicable collective bargaining provisions.

(Approved by the Office of Management and Budget under control number 
1205-0223)

[42 FR 10139, Feb. 18, 1977, as amended at 49 FR 18295, Apr. 30, 1984]



Sec. 29.7  Deregistration of Bureau-registered program.

    Deregistration of a program may be effected upon the voluntary 
action of the sponsor by a request for cancellation of the registration, 
or upon reasonable cause, by the Bureau instituting formal 
deregistration proceedings in accordance with the provisions of this 
part.
    (a) Request by sponsor. The registration officer may cancel the 
registration of an apprenticeship program by written acknowledgment of 
such request stating, but not limited to, the following matters:
    (1) The registration is canceled at sponsor's request, and effective 
date thereof;
    (2) That, within 15 days of the date of the acknowledgment, the 
sponsor shall notify all apprentices of such cancellation and the 
effective date; that such cancellation automatically deprives the 
apprentice of his/her individual registration; and that the de- 
registration of the program removes the apprentice from coverage for 
Federal purposes which require the Secretary of Labor's approval of an 
apprenticeship program.
    (b) Formal deregistration--(1) Reasonable cause. Deregistration 
proceedings may be undertaken when the apprenticeship program is not 
conducted, operated, and administered in accordance with the registered 
provisions or the requirements of this part, except that deregistration 
proceedings for violation of equal opportunity requirements shall be 
processed in accordance with the provisions under 29 CFR part 30, as 
amended;
    (2) Where it appears the program is not being operated in accordance 
with the registered standards or with requirements of this part, the 
registration officer shall so notify the program sponsor in writing;

[[Page 300]]

    (3) The notice shall:
    (i) Be sent by registered or certified mail, with return receipt 
requested;
    (ii) State the shortcoming(s) and the remedy required; and
    (iii) State that a determination of reasonable cause for 
deregistration will be made unless corrective action is effected within 
30 days;
    (4) Upon request by the sponsor for good cause, the 30-day term may 
be extended for another 30 days. During the period for correction, the 
sponsor shall be assisted in every reasonable way to achieve conformity;
    (5) If the required correction is not effected within the allotted 
time, the registration officer shall send a notice to the sponsor, by 
registered or certified mail, return receipt requested, stating the 
following:
    (i) The notice is sent pursuant to this subsection;
    (ii) Certain deficiencies (stating them) were called to sponsor's 
attention and remedial measures requested, with dates of such occasions 
and letters; and that the sponsor has failed or refused to effect 
correction;
    (iii) Based upon the stated deficiencies and failure of remedy, a 
determination of reasonable cause has been made and the program may be 
deregistered unless, within 15 days of the receipt of this notice, the 
sponsor requests a hearing;
    (iv) If a request for a hearing is not made, the entire matter will 
be submitted to the Administrator, BAT, for a decision on the record 
with respect to deregistration.
    (6) If the sponsor has not requested a hearing, the registration 
officer shall transmit to the Administrator, BAT, a report containing 
all pertinent facts and circumstances concerning the nonconformity, 
including the findings and recommendation for deregistration, and copies 
of all relevant documents and records. Statements concerning interviews, 
meetings and conferences shall include the time, date, place, and 
persons present. The Administrator shall make a final order on the basis 
of the record before him.
    (7) If the sponsor requests a hearing, the registration officer 
shall transmit to the Secretary, through the Administrator, a report 
containing all the data listed in paragraph (b)(6) of this section. The 
Secretary shall convene a hearing in accordance with Sec. 29.9; and 
shall make a final decision on the basis of the record before him 
including the proposed findings and recommended decision of the hearing 
officer.
    (8) At his discretion, the Secretary may allow the sponsor a 
reasonable time to achieve voluntary corrective action. If the 
Secretary's decision is that the apprenticeship program is not operating 
in accordance with the registered provisions or requirements of this 
part, the apprenticeship program shall be deregistered. In each case in 
which reregistration is ordered, the Secretary shall make public notice 
of the order and shall notify the sponsor.
    (9) Every order of deregistration shall contain a provision that the 
sponsor shall, within 15 days of the effective date of the order, notify 
all registered apprentices of the deregistration of the program; the 
effective date thereof; that such cancellation automatically deprives 
the apprentice or his/her individual registration; and that the 
deregistration removes the apprentice from coverage for Federal purposes 
which require the Secretary of Labor's approval of an apprenticeship 
program.

(Approved by the Office of Management and Budget under control number 
1205-0223)

[42 FR 10319, Feb. 18, 1977, as amended at 49 FR 18295, Apr. 30, 1984]



Sec. 29.8  Reinstatement of program registration.

    Any apprenticeship program deregistered pursuant to this part may be 
reinstated upon presentation of adequate evidence that the 
apprenticeship program is operating in accordance with this part. Such 
evidence shall be presented to the Administrator, BAT, if the sponsor 
had not requested a hearing, or to the Secretary, if an order of 
deregistration was entered pursuant to a hearing.



Sec. 29.9  Hearings.

    (a) Within 10 days of his receipt of a request for a hearing, the 
Secretary shall designate a hearing officer. The hearing officer shall 
give reasonable notice of such hearing by registered mail, return 
receipt requested, to the

[[Page 301]]

appropriate sponsor. Such notice shall include:
    (1) A reasonable time and place of hearing,
    (2) A statement of the provisions of this part pursuant to which the 
hearing is to be held, and
    (3) A concise statement of the matters pursuant to which the action 
forming the basis of the hearing is proposed to be taken.
    (b) The hearing officer shall regulate the course of the hearing. 
Hearings shall be informally conducted. Every party shall have the right 
to counsel, and a fair opportunity to present his/her case, including 
such cross-examination as may be appropriate in the circumstances. 
Hearings officers shall make their proposed findings and recommended 
decisions to the Secretary upon the basis of the record before them.



Sec. 29.10  Limitations.

    Nothing in this part or in any apprenticeship agreement shall 
operate to invalidate:
    (a) Any apprenticeship provision in any collective bargaining 
agreement between employers and employees establishing higher 
apprenticeship standards; or
    (b) Any special provision for veterans, minority persons or females 
in the standards, apprentice qualifications or operation of the program, 
or in the apprenticeship agreement, which is not otherwise prohibited by 
law, Executive order, or authorized regulation.



Sec. 29.11  Complaints.

    (a) This section is not applicable to any complaint concerning 
discrimination or other equal opportunity matters; all such complaints 
shall be submitted, processed and resolved in accordance with applicable 
provisions in 29 CFR part 30, as amended, or applicable provisions of a 
State Plan for Equal Employment Opportunity in Apprenticeship adopted 
pursuant to 29 CFR part 30 and approved by the Department.
    (b) Except for matters described in paragraph (a) of this section, 
any controversy or difference arising under an apprenticeship agreement 
which cannot be adjusted locally and which is not covered by a 
collective bargaining agreement, may be submitted by an apprentice, or 
his/her authorized representative, to the appropriate registration 
authority, either Federal or State, which has registered and/or approved 
the program in which the apprentice is enrolled, for review. Matters 
covered by a collective bargaining agreement are not subject to such 
review.
    (c) The complaint, in writing and signed by the complainant, or 
authorized representative, shall be submitted within 60 days of the 
final local decision. It shall set forth the specific matter(s) 
complained of, together with all relevant facts and circumstances. 
Copies of all pertinent documents and correspondence shall accompany the 
complaint.
    (d) The Bureau or recognized State Apprenticeship Agency, as 
appropriate, shall render an opinion within 90 days after receipt of the 
complaint, based upon such investigation of the matters submitted as may 
be found necessary, and the record before it. During the 90-day period, 
the Bureau or State agency shall make reasonable efforts to effect a 
satisfactory resolution between the parties involved. If so resolved, 
the parties shall be notified that the case is closed. Where an opinion 
is rendered, copies of same shall be sent to all interested parties.
    (e) Nothing in this section shall be construed to require an 
apprentice to use the review procedure set forth in this section.
    (f) A State Apprenticeship Agency may adopt a complaint review 
procedure differing in detail from that given in this section provided 
it is proposed and has been approved in the recognition of the State 
Apprenticeship Agency accorded by the Bureau.



Sec. 29.12  Recognition of State agencies.

    (a) The Secretary's recognition of a State Apprenticeship Agency or 
Council (SAC) gives the SAC the authority to determine whether an 
apprenticeship program conforms with the Secretary's published standards 
and the program is, therefore, eligible for those Federal purposes which 
require such a determination by the Secretary. Such recognition of a SAC 
shall be accorded

[[Page 302]]

by the Secretary upon submission and approval of the following:
    (1) An acceptable State apprenticeship law (or Executive order), and 
regulations adopted pursuant thereto;
    (2) Acceptable composition of the State Apprenticeship Council 
(SAC);
    (3) An acceptable State Plan for Equal Employment Opportunity in 
Apprenticeship;
    (4) A description of the basic standards, criteria, and requirements 
for program registration and/or approval; and
    (5) A description of policies and operating procedures which depart 
from or impose requirements in addition to those prescribed in this 
part.
    (b) Basic requirements. Generally the basic requirements under the 
matters covered in paragraph (a) of this section shall be in conformity 
with applicable requirements as set forth in this part. Acceptable State 
provisions shall:
    (1) Establish the apprenticeship agency in: (i) The State Department 
of Labor, or (ii) in that agency of State government having jurisdiction 
of laws and regulations governing wages, hours, and working conditions, 
or (iii) that State agency presently recognized by the Bureau, with a 
State official empowered to direct the apprenticeship operation;
    (2) Require that the State Apprenticeship Council be composed of 
persons familiar with apprenticeable occupations and an equal number of 
representatives of employer and of employee organizations and may 
include public members who shall not number in excess of the number 
named to represent either employer or employee organizations. Each 
representative so named shall have one vote. Ex officio members may be 
added to the council but they shall have no vote except where such 
members have a vote according to the established practice of a presently 
recognized council. If the State official who directs the apprenticeship 
operation is a member of the council, provision may be made for the 
official to have a tie-breaking vote;
    (3) Clearly delineate the respective powers and duties of the State 
official and of the council;
    (4) Clearly designate the officer or body authorized to register and 
deregister apprenticeship programs and agreements;
    (5) Establish policies and procedures to promote equality of 
opportunity in apprenticeship programs pursuant to a State Plan for 
Equal Employment Opportunity in Apprenticeship which adopts and 
implements the requirements of 29 CFR part 30, as amended, and to 
require apprenticeship programs to operate in conformity with such State 
Plan and 29 CFR part 30, as amended;
    (6) Prescribe the contents of apprenticeship agreements;
    (7) Limit the registration of apprenticeship programs to those 
providing training in apprenticeable occupations as defined in 
Sec. 29.4;
    (8) Provide that apprenticeship programs and standards of employers 
and unions in other than the building and construction industry, which 
jointly form a sponsoring entity on a multistate basis and are 
registered pursuant to all requirements of this part by any recognized 
State Apprenticeship Agency/Council or by the Bureau, shall be accorded 
registration or approval reciprocity by any other State Apprenticeship 
Agency/Council or office of the Bureau if such reciprocity is requested 
by the sponsoring entity;
    (9) Provide for the cancellation, de- registration and/or 
termination of approval of programs, and for temporary suspension, 
cancellation, deregistration and/or termination of approval of 
apprenticeship agreements; and
    (10) Provide that under a program proposed for registration by an 
employer or employers' association, and where the standards, collective 
bargaining agreement or other instrument provides for participation by a 
union in any manner in the operation of the substantive matters of the 
apprenticeship program, and such participation is exercised, written 
acknowledgment of union agreement or no objection to the registration is 
required. Where no such participation is evidenced and practiced, the 
employer or employers' association shall simultaneously furnish to the 
union, if any, which is the collective bargaining agent of the employees 
to be trained, a copy of its application

[[Page 303]]

for registration and of the apprenticeship program. The State agency 
shall provide a reasonable time period of not less than 30 days nor more 
than 60 days for receipt of union comments, if any, before final action 
on the application for registration and/or approval.
    (c) Application for recognition. A State Apprenticeship Agency/
Council desiring recognition shall submit to the Administrator, BAT, the 
documentation specified in Sec. 29.12(a) of this part. A currently 
recognized Agency/Council desiring continued recognition by the Bureau 
shall submit to the Administrator the documentation specified in 
Sec. 29.12(a) of this part on or before July 18, 1977. An extension of 
time within which to comply with the requirements of this part may be 
granted by the Administrator for good cause upon written request by the 
State agency but the Administrator shall not extend the time for 
submission of the documentation required by Sec. 29.12(a). The 
recognition of currently recognized Agencies/Councils shall continue 
until July 18, 1977 and during any extension period granted by the 
Administrator.
    (d) Appeal from denial of recognition. The denial by the 
Administrator of a State agency's application for recognition under this 
part shall be in writing and shall set forth the reasons for the denial. 
The notice of denial shall be sent to the applicant by certified mail, 
return receipt requested. The applicant may appeal such a denial to the 
Secretary by mailing or otherwise furnishing to the Administrator, 
within 30 days of receipt of the denial, a notice of appeal addressed to 
the Secretary and setting forth the following items:
    (1) A statement that the applicant appeals to the Secretary to 
reverse the Administrator's decision to deny its application;
    (2) The date of the Administrator's decision and the date the 
applicant received the decision;
    (3) A summary of the reasons why the applicant believes that the 
Administrator's decision was incorrect;
    (4) A copy of the application for recognition and subsequent 
modifications, if any;
    (5) A copy of the Administrator's decision of denial. Within 10 days 
of receipt of a notice of appeal, the Secretary shall assign an 
Administrative Law Judge to conduct hearings and to recommend findings 
of fact and conclusions of law. The proceedings shall be informal, 
witnesses shall be sworn, and the parties shall have the right to 
counsel and of cross-examination.

The Administrative Law Judge shall submit the recommendations and 
conclusions, together with the entire record to the Secretary for final 
decision. The Secretary shall make his final decision in writing within 
30 days of the Administrative Law Judge's submission. The Secretary may 
make a decision granting recognition conditional upon the performance of 
one or more actions by the applicant. In the event of such a conditional 
decision, recognition shall not be effective until the applicant has 
submitted to the Secretary evidence that the required actions have been 
performed and the Secretary has communicated to the applicant in writing 
that he is satisfied with the evidence submitted.
    (e) State apprenticeship programs. (1) An apprenticeship program 
submitted for registration with a State Apprenticeship Agency recognized 
by the Bureau shall, for Federal purposes, be in conformity with the 
State apprenticeship law, regulations, and with the State Plan for Equal 
Employment Opportunity in Apprenticeship as submitted to and approved by 
the Bureau pursuant to 29 CFR 30.15, as amended;
    (2) In the event that a State Apprenticeship Agency is not 
recognized by the Bureau for Federal purposes, or that such recognition 
has been withdrawn, or if no State Apprenticeship Agency exists, 
registration with the Bureau may be requested. Such registration shall 
be granted if the program is conducted, administered and operated in 
accordance with the requirements of this part and the equal opportunity 
regulation in 29 CFR part 30, as amended.

(Approved by the Office of Management and Budget under control number 
1205-0223)

[42 FR 10319, Feb. 18, 1977, as amended at 49 FR 18295, Apr. 30, 1984]

[[Page 304]]



Sec. 29.13  Derecognition of State agencies.

    The recognition for Federal purposes of a State Apprenticeship 
Agency or State Apprenticeship Council (hereinafter designated 
respondent), may be withdrawn for the failure to fulfill, or operate in 
conformity with, the requirements of this part. Derecognition 
proceedings for reasonable cause shall be instituted in accordance with 
the following:
    (a) Derecognition proceedings for failure to adopt or properly 
enforce a State Plan for Equal Employment Opportunity in Apprenticeship 
shall be processed in accordance with the procedures prescribed in 29 
CFR 30.15.
    (b) For causes other than those under paragraph (a) above, the 
Bureau shall notify the respondent and appropriate State sponsors in 
writing, by certified mail, with return receipt requested. The notice 
shall set forth the following:
    (1) That reasonable cause exists to believe that the respondent has 
failed to fulfill or operate in conformity with the requirements of this 
part;
    (2) The specific areas of nonconformity;
    (3) The needed remedial measures; and
    (4) That the Bureau proposes to withdraw recognition for Federal 
purposes unless corrective action is taken, or a hearing request mailed, 
within 30 days of the receipt of the notice.
    (c) If, within the 30-day period, respondent:
    (1) Complies with the requirements, the Bureau shall so notify the 
respondent and State sponsors, and the case shall be closed;
    (2) Fails to comply or to request a hearing, the Bureau shall decide 
whether recognition should be withdrawn. If the decision is in the 
affirmative, the Administrator shall forward all pertinent data to the 
Secretary, together with the findings and recommendation. The Secretary 
shall make the final decision, based upon the record before him.
    (3) Requests a hearing, the Administrator shall forward the request 
to the Secretary, and the procedures under Sec. 29.9 shall be followed, 
with notice thereof to the State apprenticeship sponsors.
    (d) If the Secretary determines to withdraw recognition for Federal 
purposes, he shall notify the respondent and the State sponsors of such 
withdrawal and effect public notice of such withdrawal. The notice to 
the sponsors shall state that, 30 days after the date of the Secretary's 
order withdrawing recognition of the State agency, the Department shall 
cease to recognize, for Federal purposes, each apprenticeship program 
registered with the State agency unless, within that time, the State 
sponsor requests registration with the Bureau. The Bureau may grant the 
request for registration contingent upon its finding that the State 
apprenticeship program is operating in accordance with the requirements 
of this part and of 29 CFR part 30, as amended. The Bureau shall make a 
finding on this issue within 30 days of receipt of the request. If the 
finding is in the negative, the State sponsor shall be notified in 
writing that the contingent Bureau registration has been revoked. If the 
finding is in the affirmative, the State sponsor shall be notified in 
writing that the contingent Bureau registration is made permanent.
    (e) If the sponsor fails to request Bureau registration, or upon a 
finding of noncompliance pursuant to a contingent Bureau registration, 
the written notice to such State sponsor shall further advise the 
recipient that any actions or benefits applicable to recognition for 
Federal purposes are no longer available to participants in its 
apprenticeship program.
    (f) Such notice shall also direct the State sponsor to notify, 
within 15 days, all its registered apprentices of the withdrawal of 
recognition for Federal purposes; the effective date thereof; and that 
such withdrawal removes the apprentice from coverage under any Federal 
provision applicable to his/her individual registration under a program 
recognized or registered by the Secretary of Labor for Federal purposes.
    (g) A State Apprenticeship Agency or Council whose recognition has 
been withdrawn pursuant to this part may have its recognition reinstated 
upon presentation of adequate evidence that

[[Page 305]]

it has fulfilled, and is operating in accordance with, the requirements 
of this part.

(Approved by the Office of Management and Budget under control number 
1205-0223)

[42 FR 10139, Feb. 18, 1977, as amended at 49 FR 18295, Apr. 30, 1984]



PART 30--EQUAL EMPLOYMENT OPPORTUNITY IN APPRENTICESHIP AND TRAINING--Table of Contents




Sec.
30.1  Scope and purpose.
30.2  Definitions.
30.3  Equal opportunity standards.
30.4  Affirmative action plans.
30.5  Selection of apprentices.
30.6  Existing lists of eligibles and public notice.
30.7  [Reserved]
30.8  Records.
30.9  Compliance reviews.
30.10  Noncompliance with Federal and state equal opportunity 
          requirements.
30.11  Complaint procedure.
30.12  Adjustments in schedule for compliance review or complaint 
          processing.
30.13  Sanctions.
30.14  Reinstatement of program registration.
30.15  State Apprenticeship Councils.
30.16  Hearings.
30.17  Intimidatory or retaliatory acts.
30.18  Nondiscrimination.
30.19  Exemptions.

    Authority: Sec. 1, 50 Stat. 664, as amended; 29 U.S.C. 50; 40 U.S.C. 
276c; 5 U.S.C. 301; Reorganization Plan No. 14 of 1950, 64 Stat. 1267, 3 
CFR 1949-53 Comp. p. 1007.

    Source: 43 FR 20760, May 12, 1978, unless otherwise noted.



Sec. 30.1  Scope and purpose.

    This part sets forth policies and procedures to promote equality of 
opportunity in apprenticeship programs registered with the U.S. 
Department of Labor and in state apprenticeship programs registered with 
recognized state apprenticeship agencies. These policies and procedures 
apply to the recruitment and selection of apprentices, and to all 
conditions of employment and training during apprenticeship. The 
procedures established provide for review of apprenticeship programs, 
for registering apprenticeship programs, for processing complaints, and 
for deregistering noncomplying apprenticeship programs. This part also 
provides policies and procedures for continuation or withdrawal of 
recognition of state agencies for registering of apprenticeship programs 
for Federal purposes. The purpose of this part is to promote equality of 
opportunity in apprenticeship by prohibiting discrimination based on 
race, color, religion, national origin, or sex in apprenticeship 
programs, by requiring affirmative action to provide equal opportunity 
in such apprenticeship programs, and by coordinating this part with 
other equal opportunity programs.



Sec. 30.2  Definitions.

    (a) Department means the U.S. Department of Labor.
    (b) Employer means any person or organization employing an 
apprentice whether or not the apprentice is enrolled with such person or 
organization or with some other person or organization.
    (c) Apprenticeship program means a program registered by the 
Department and evidenced by a Certificate of Registration as meeting the 
standards of the Department for apprenticeship, but does not include a 
state apprenticeship program.
    (d) Sponsor means any person or organization operating an 
apprenticeship program, irrespective of whether such person or 
organization is an employer.
    (e) Secretary means the Secretary of Labor, the Assistant Secretary 
of Labor for Employment and Training, or any person specifically 
designated by either of them.
    (f) State Apprenticeship Council means a state apprenticeship 
council or other state agency in any of the 50 states, the District of 
Columbia, or any territory or possession of the United States, which is 
recognized by the Department as the appropriate agency for registering 
programs for Federal purposes.
    (g) State apprenticeship program means a program registered with a 
State Apprenticeship Council and evidenced by a Certificate of 
Registration or other appropriate document as meeting the standards of 
the State Apprenticeship Council for apprenticeship.
    (h) State program sponsor means any person or organization operating 
a

[[Page 306]]

State apprenticeship program, irrespective of whether such person or 
organization is an employer.



Sec. 30.3  Equal opportunity standards.

    (a) Obligations of sponsors. Each sponsor of an apprenticeship 
program shall:
    (1) Recruit, select, employ, and train apprentices during their 
apprenticeship, without discrimination because of race, color, religion, 
national origin, or sex; and
    (2) Uniformly apply rules and regulations concerning apprentices, 
including but not limited to, equality of wages, periodic advancement, 
promotion, assignment of work, job performance, rotation among all work 
processes of the trade, imposition of penalties or other disciplinary 
action, and all other aspects of the apprenticeship program 
administration by the program sponsor; and
    (3) Take affirmative action to provide equal opportunity in 
apprenticeship, including adoption of an affirmative action plan as 
required by this part.
    (b) Equal opportunity pledge. Each sponsor of an apprenticeship 
program shall include in its standards the following equal opportunity 
pledge:

The recruitment, selection, employment, and training of apprentices 
during their apprenticeship, shall be without discrimination because of 
race, color, religion, national origin, or sex. The sponsor will take 
affirmative action to provide equal opportunity in apprenticeship and 
will operate the apprenticeship program as required under title 29 of 
the Code of Federal Regulations, part 30.
    (c) Programs presently registered. Each sponsor of a program 
registered with the Department as of the effective date of this part 
shall within 90 days of that effective date take the following action:
    (1) Include in the standards of its apprenticeship program the equal 
opportunity pledge prescribed by paragraph (b) of this section;
    (2) Adopt an affirmative action plan required by Sec. 30.4; and
    (3) Adopt a selection procedure required by Sec. 30.5. A sponsor 
adopting a selection method under Sec. 30.5(b) (1), (2), or (3) shall 
prepare, and have available for submission upon request, copies of its 
amended standards, affirmative action plans, and selection procedure. A 
sponsor adopting a selection method under Sec. 30.5(b)(4) shall submit 
to the Department copies of its standards, affirmative action plan and 
selection procedure in accordance with the requirements of 
Sec. 30.5(b)(4)(i)(a).
    (d) Sponsors seeking new registration. A sponsor of a program 
seeking new registration with the Department shall submit copies of its 
proposed standards, affirmative action plan, selection procedures, and 
such other information as may be required. The program shall be 
registered if such standards, affirmative action plan, and selection 
procedure meet the requirements of this part.
    (e) Programs subject to approved equal employment opportunity 
programs. A sponsor shall not be required to adopt an affirmative action 
plan under Sec. 30.4 or a selection procedure under Sec. 30.5 if it 
submits to the Department satisfactory evidence that it is in compliance 
with an equal employment opportunity program providing for the selection 
of apprentices and for affirmative action in apprenticeship including 
goals and timetables for women and minorities which has been approved as 
meeting the requirements of title VII of the Civil Rights Act of 1964, 
as amended (42 U.S.C. 2000e et seq.) and its implementing regulations 
published in title 29 of the Code of Federal Regulations, Chapter XIV or 
Executive Order 11246, as amended, and its implementing regulations at 
title 41 of the Code of Federal Regulations, Chapter 60: Provided, That 
programs approved, modified or renewed subsequent to the effective date 
of this amendment will qualify for this exception only if the goals and 
timetables for minorities and women for the selection of apprentices 
provided for in such programs are equal to or greater than the goals 
required under this part.
    (f) Program with fewer than five apprentices. A sponsor of a program 
in which fewer than five apprentices are indentured shall not be 
required to adopt an affirmative action plan under Sec. 30.4 or a 
selection procedure under Sec. 30.5: Provided, That such program was

[[Page 307]]

not adopted to circumvent the requirements of this part.

(Approved by the Office of Management and Budget under control number 
1205-0224)

[43 FR 20760, May 12, 1978, as amended at 49 FR 18295, Apr. 30, 1984]



Sec. 30.4  Affirmative action plans.

    (a) Adoption of affirmative action plans. A sponsor's commitment to 
equal opportunity in recruitment, selection, employment, and training of 
apprentices shall include the adoption of a written affirmative action 
plan.
    (b) Definition of affirmative action. Affirmative action is not mere 
passive nondiscrimination. It includes procedures, methods, and programs 
for the identification, positive recruitment, training, and motivation 
of present and potential minority and female (minority and nonminority) 
apprentices including the establishment of goals and timetables. It is 
action which will equalize opportunity in apprenticeship so as to allow 
full utilization of the work potential of minorities and women. The 
overall result to be sought is equal opportunity in apprenticeship for 
all individuals participating in or seeking entrance to the Nation's 
labor force.
    (c) Outreach and positive recruitment. An acceptable affirmative 
action plan must also include adequate provision for outreach and 
positive recruitment that would reasonably be expected to increase 
minority and female participation in apprenticeship by expanding the 
opportunity of minorities and women to become eligible for 
apprenticeship selection. In order to achieve these objectives, sponsors 
shall undertake activities such as those listed below. It is not 
contemplated that each sponsor necessarily will include all the listed 
activities in its affirmative action program. The scope of the 
affirmative action program will depend on all the circumstances 
including the size and type of the program and its resources. However, 
the sponsor will be required to undertake a significant number of 
appropriate activities in order to enable it to meet its obligations 
under this part. The affirmative action plan shall set forth the 
specific steps the sponsor intends to take in the areas listed below. 
Whenever special circumstances warrant, the Department may provide such 
financial or other assistance as it deems necessary to implement the 
requirements of this paragraph.
    (1) Dissemination of information concerning the nature of the 
apprenticeship, requirements for admission to apprenticeship, 
availability of apprenticeship opportunities, sources of apprenticeship 
applications, and the equal opportunity policy of the sponsor. For 
programs accepting applications only at specified intervals, such 
information shall be disseminated at least 30 days in advance of the 
earliest date for application at each interval. For programs customarily 
receiving applications throughout the year, such information shall be 
regularly disseminated but not less than semi- annually. Such 
information shall be given to the Department, local schools, employment 
service offices, women's centers, outreach programs and community 
organizations which can effectively reach minorities and women, and 
shall be published in newspapers which are circulated in the minority 
community and among women, as well as in the general areas in which the 
program sponsor operates.
    (2) Participation in annual workshops conducted by employment 
service agencies for the purpose of familarizing school, employment 
service and other appropriate personnel with the apprenticeship system 
and current opportunities therein.
    (3) Cooperation with local school boards and vocational education 
systems to develop programs for preparing students to meet the standards 
and criteria required to qualify for entry into apprenticeship programs.
    (4) Internal communication of the sponsor's equal opportunity policy 
in such a manner as to foster understanding, acceptance, and support 
among the sponsor's various officers, supervisors, employees, and 
members and to encourage such persons to take the necessary action to 
aid the sponsor in meeting its obligations under this part.
    (5) Engaging in programs such as outreach for the positive 
recruitment and preparation of potential applicants for apprenticeships; 
where appropriate and

[[Page 308]]

feasible, such programs shall provide for pretesting experience and 
training. If no such programs are in existence the sponsor shall seek to 
initiate these programs, or, when available, to obtain financial 
assistance from the Department. In initiating and conducting these 
programs, the sponsor may be required to work with other sponsors and 
appropriate community organizations. The sponsor shall also initiate 
programs to prepare women and encourage women to enter traditionally 
male programs.
    (6) To encourage the establishment and utilization of programs of 
preapprenticeship, preparatory trade training, or others designed to 
afford related work experience or to prepare candidates for 
apprenticeship, a sponsor shall make appropriate provision in its 
affirmative action plan to assure that those who complete such programs 
are afforded full and equal opportunity for admission into the 
apprenticeship program.
    (7) Utilization of journeypersons to assist in the implementation of 
the sponsor's affirmative action program.
    (8) Granting advance standing or credit on the basis of previously 
acquired experience, training, skills, or aptitude for all applicants 
equally.
    (9) Admitting to apprenticeship, persons whose age exceeds the 
maximum age for admission to the program, where such action assists the 
sponsor in achieving its affirmative action obligations.
    (10) Other appropriate action to ensure that the recruitment, 
selection, employment, and training of apprentices during apprenticeship 
shall be without discrimination because of race, color, religion, 
national origin, or sex (e.g., general publication of apprenticeship 
opportunities and advantages in advertisements, industry reports, 
articles, etc.; use of present minority and female apprentices and 
journeypersons as recruiters; career counseling; periodic auditing of 
affirmative action programs and activities; and development of 
reasonable procedures between the sponsor and employers of apprentices 
to ensure that employment opportunity is being granted, including 
reporting systems, on-site reviews, briefing sessions, etc.). The 
affirmative action program shall set forth the specific steps the 
sponsor intends to take, in the above areas, under this paragraph (c). 
Whenever special circumstances warrant, the Department may provide such 
financial or other assistance as it deems necessary to implement the 
above requirements.
    (d) Goals and timetables. (1) A sponsor adopting a selection method 
under Sec. 30.5(b) (1) or (2) which determines on the basis of the 
analysis described in paragraph (e) of this section that it has 
deficiencies in terms of underutilization of minorities and/or women 
(minority and nonminority) in the craft or crafts represented by the 
program shall include in its affirmative action plan percentage goals 
and timetables for the admission of minority and/or female (minority and 
nonminority) applicants into the eligibility pool.
    (2) A sponsor adopting a selection method under Sec. 30.5(b) (3) or 
(4) which determines on the basis of the analysis described in paragraph 
(e) of this section that it has deficiencies in terms of the 
underutilization of minorities and/or women in the craft or crafts 
represented by the program shall include in its affirmative action plan 
percentage goals and timetables for the selection of minority and female 
(minority and nonminority) applicants for the apprenticeship program.
    (3) Underutilization as used in this paragraph refers to the 
situation where there are fewer minorities and/or women (minority and 
nonminority) in the particular craft or crafts represented by the 
program than would reasonably be expected in view of an analysis of the 
specific factors in paragraphs (e) (1) through (5) of this section. 
Where, on the basis of the analysis, the sponsor determines that it has 
no deficiencies, no goals and timetables need be established. However, 
where no goals and timetables are established, the affirmative action 
plan shall include a detailed explanation why no goals and timetables 
have been established.
    (4) Where the sponsor fails to submit goals and timetables as part 
of its affirmative action plan or submits goals and timetables which are 
unacceptable, and the Department determines that the sponsor has 
deficiencies in terms of

[[Page 309]]

underutilization of minorities or women (minority and nonminority) 
within the meaning of this section, the Department shall establish goals 
and timetables applicable to the sponsor for the admission of minority 
and female (minority and nonminority) applicants into the eligibility 
pool or selection of apprentices, as appropriate. The sponsor shall make 
good faith efforts to attain these goals and timetables in accordance 
with the requirements of this section.
    (e) Analysis to determine if deficiencies exist. The sponsor's 
determination as to whether goals and timetables shall be established, 
shall be based on an analysis of at least the following factors, which 
analysis shall be set forth in writing as part of the affirmative action 
plan.
    (1) The size of the working age minority and female (minority and 
nonminority) population in the program sponsor's labor market area;
    (2) The size of the minority and female (minority and nonminority) 
labor force in the program sponsor's labor market area;
    (3) The percentage of minority and female (minority and nonminority) 
participation as apprentices in the particular craft as compared with 
the percentage of minorities and women (minority and nonminority) in the 
labor force in the program sponsor's labor market area;
    (4) The percentage of minority and female (minority and nonminority) 
participation as journeypersons employed by the employer or employers 
participating in the program as compared with the percentage of 
minorities and women (minority and nonminority) in the sponsor's labor 
market area and the extent to which the sponsor should be expected to 
correct any deficiencies through the achievement of goals and timetables 
for the selection of apprentices; and
    (5) The general availability of minorities and women (minority and 
nonminority) with present or potential capacity for apprenticeship in 
the program sponsor's labor market area.
    (f) Establishment and attainment of goals and timetables. The goals 
and timetables shall be established on the basis of the sponsor's 
analyses of its underutilization of minorities and women and its entire 
affirmative action program. A single goal for minorities and a separate 
single goal for women is acceptable unless a particular group is 
employed in a substantially disparate manner in which case separate 
goals shall be established for such group. Such separate goals would be 
required, for example, if a specific minority group of women were 
underutilized even though the sponsor had achieved its standards for 
women generally. In establishing the goals, the sponsor should consider 
the results which could be reasonably expected from its good faith 
efforts to make its overall affirmative action program work. Compliance 
with these requirements shall be determined by whether the sponsor has 
met its goals within its timetables, or failing that, whether it has 
made good faith efforts to meet its goals and timetables. Its good faith 
efforts shall be judged by whether it is following its affirmative 
action program and attempting to make it work, including evaluation and 
changes in its program where necessary to obtain the maximum 
effectiveness toward the attainment of its goals. However, in order to 
deal fairly with program sponsors, and with women who are entitled to 
protection under the goals and timetables requirements, during the first 
12 months after the effective date of these regulations, the program 
sponsor would generally be expected to set a goal for women for the 
entering year class at a rate which is not less than 50 percent of the 
proportion women are of the workforce in the program sponsor's labor 
market area and set a percentage goal for women in each class beyond the 
entering class which is not less than the participation rate of women 
currently in the preceding class. At the end of the first 12 months 
after the effective date of these regulations, sponsors are expected to 
make appropriate adjustments in goal levels. See 29 CFR 30.8(b).
    (g) Data and information. The Secretary of Labor, or a person or 
agency designated by the Secretary, shall make available to program 
sponsors data and information on minority and female (minority and 
nonminority) labor force characteristics for each

[[Page 310]]

Standard Metropolitan Statistical Area and for other special areas as 
appropriate.

(Approved by the Office of Management and Budget under control number 
1205-0224)

[43 FR 20760, May 12, 1978, as amended at 49 FR 18295, Apr. 30, 1984]



Sec. 30.5  Selection of apprentices.

    (a) Obligations of sponsors. In addition to the development of a 
written affirmative action plan to ensure that minorities and women have 
an equal opportunity for selection as apprentices and otherwise ensure 
the prompt achievement of full and equal opportunity in apprenticeship, 
each sponsor shall further provide in its affirmative action program 
that the selection of apprentices shall be made under one of the methods 
specified in the following subparagraphs (1) through (4) of paragraph 
(b) of this section.
    (b) Selection methods. The sponsor shall adopt one of the following 
methods for selecting apprentices:
    (1) Selection on basis of rank from pool of eligible applicants--(i) 
Selection. A sponsor may select apprentices from a pool of eligible 
applicants created in accordance with the requirements of paragraph 
(b)(1)(iii) of this section on the basis of the rank order of scores of 
applicants on one or more qualification standards where there is a 
significant statistical relationship between rank order of scores and 
performance in the apprenticeship program. In demonstrating such 
relationship, the sponsor shall follow the procedures set forth in 
Guidelines on Employee Selection Procedures published at 41 CFR part 60-
3.
    (ii) Requirements. The sponsor adopting this method of selecting 
apprentices shall meet the requirements of paragraphs (b)(1)(iii) 
through (vii) of this section.
    (iii) Creation of pool of eligibles. A pool of eligibles shall be 
created from applicants who meet the qualifications of minimum legal 
working age; or from applicants who meet qualification standards in 
addition to minimum legal working age: Provided, That any additional 
qualification standards conform with the following requirements:
    (A) Qualification standards. The qualification standards, and the 
procedures for determining such qualification standards, shall be stated 
in detail and shall provide criteria for the specific factors and 
attributes to be considered in evaluating applicants for admission to 
the pool. The score required under each qualification standard for 
admission to the pool shall also be specified. All qualification 
standards, and the score required on any standard for admission to the 
pool, shall be directly related to job performance, as shown by a 
significant statistical relationship between the score required for 
admission to the pool, and performance in the apprenticeship program. In 
demonstrating such relationship, the sponsor shall follow the procedures 
set forth in 41 CFR part 60-3. Qualifications shall be considered as 
separately required so that the failure of an applicant to attain the 
specified score under a single qualification standard shall disqualify 
the applicant from admission to the pool.
    (B) Aptitude tests. Any qualification standard for admission to the 
pool consisting of aptitude test scores shall be directly related to job 
performance, as shown by significant statistical relationships between 
the score on the aptitude tests required for admission to the pool, and 
performance in the apprenticeship program. In determining such 
relationship, the sponsor shall follow the procedures set forth in 41 
CFR part 60-3. The requirements of this paragraph (b)(1)(iii)(B) shall 
also be applicable to aptitude tests utilized by a program sponsor which 
are administered by a state employment agency, or any other person, 
agency, or organization engaged in the selection or evaluation of 
personnel. A national test developed and administered by a national 
joint apprenticeship committee will not by approved by the Department 
unless such test meets the requirements of this subsection.
    (C) Educational attainments. All educational attainments or 
achievements as qualifications for admission to the pool shall be 
directly related to job performance as shown by a significant 
statistical relationship between the score required for admission to the 
pool and performance in the apprenticeship program. In demonstrating 
such relationship, the sponsor shall

[[Page 311]]

meet the requirements of 41 CFR part 60-3. School records or a passing 
grade on the general education development tests recognized by the State 
or local public instruction authority shall be evidence of educational 
achievement. Education requirements shall be applied uniformly to all 
applicants.
    (iv) Oral interviews. Oral interviews shall not be used as a 
qualification standard for admission into an eligibility pool. However, 
once an applicant is placed in the eligibility pool, and prior to 
selection for apprenticeship from the pool, he or she may be required to 
submit to an oral interview. Oral interviews shall be limited to such 
objective questions as may be required to determine the fitness of 
applicants to enter the apprenticeship program, but shall not include 
questions relating to qualifications previously determined in gaining 
entrance to the eligibility pool. When an oral interview is used, each 
interviewer shall record the questions and the general nature of the 
applicant's answers, and shall prepare a summary of any conclusions. 
Each applicant rejected from the pool of eligibles on the basis of an 
oral interview shall be given a written statement of such rejection, the 
reasons therefor, and the appeal rights available to the applicant.
    (v) Notification of applicants. All applicants who meet the 
requirements for admission shall be notified and placed in the 
eligibility pool. The program sponsor shall give each rejected applicant 
who is not selected for the pool or the program notice of his or her 
rejection, including the reasons for the rejection, the requirements for 
admission to the pool of eligibles, and the appeal rights available to 
the applicant.
    (vi) Goals and timetables. The sponsor shall establish where 
required by Sec. 30.4(d), percentage goals and timetables for the 
admission of minorities and women (minority and nonminority) into the 
pool of eligibles, in accordance with the provisions of Sec. 30.4 (d), 
(e), and (f).
    (vii) Compliance. A sponsor shall be deemed to be in compliance with 
its commitments under paragraph (b)(1)(vi) of this section if it meets 
its goals or timetables or if it makes a good faith effort to meet these 
goals and timetables. In the event of the failure of the sponsor to meet 
its goals and timetables, it shall be given an opportunity to 
demonstrate that it has made every good faith effort to meet its 
commitments (see Sec. 30.4(f)). All the actions of the sponsor shall be 
reviewed and evaluated in determining whether such good faith efforts 
have been made.
    (2) Random selection from pool of eligible applicants--(i) 
Selection. A sponsor may select apprentices from a pool of eligible 
applicants on a random basis. The method of random selection is subject 
to approval by the Department. Supervision of the random selection 
process shall be by an impartial person or persons selected by the 
sponsor, but not associated with the administration of the 
apprenticeship program. The time and place of the selection, and the 
number of apprentices to be selected, shall be announced. The place of 
the selection shall be open to all applicants and the public. The names 
of apprentices drawn by this method shall be posted immediately 
following the selection at the program sponsor's place of business.
    (ii) Requirements. The sponsor adopting this method of selecting 
apprentices shall meet the requirements of paragraphs (b)(1)(iii) 
through (v) of this section relating to the creation of pool of 
eligibles, oral interviews, and notification of applicants.
    (iii) Goals and timetables. The sponsor shall establish, where 
required by Sec. 30.4(d), percentage goals and time- tables for 
admission of minorities and women (minority and nonminority) into the 
pool of eligibles in accordance with the provisions of Sec. 30.4 (d), 
(e), and (f).
    (iv) Compliance. Determinations as to the sponsor's compliance with 
its obligations under these regulations shall be in accordance with the 
provisions of paragraph (b)(1)(vii) of this section.
    (3) Selection from pool of current employees--(i) Selection. A 
sponsor may select apprentices from an eligibility pool of the workers 
already employed by the program sponsor in a manner prescribed by a 
collective bargaining agreement where such exists, or by the sponsor's 
established promotion policy. The sponsor adopting this method of 
selecting apprentices shall establish

[[Page 312]]

goals and timetables for the selection of minority and female 
apprentices, unless the sponsor concludes, in accordance with the 
provisions of Sec. 30.4 (d), (e), and (f) that it does not have 
deficiencies in terms of underutilization of minorities and/or women 
(minority and nonminority) in the apprenticeship of journeyperson crafts 
represented by the program.
    (ii) Compliance. Determinations as to the sponsor's compliance with 
its obligations under these regulations shall be in accordance with 
provisions of paragraph (b)(1)(vii) of this section.
    (4) Alternative selection methods--(i) Selection. A sponsor may 
select apprentices by means of any other method including its present 
selection method: Provided, That the sponsor meets the following 
requirements:
    (A) Selection method and goals and timetables. Within 90 days of the 
effective date of this amendment, the sponsor shall complete development 
of the revised selection method it proposes to use along with the rest 
of its written affirmative action program including, where required by 
Sec. 30.4(d), its percentage goals and timetables for the selection of 
minority and/or female (minority and nonminority) applicants for 
apprenticeship and its written analysis, upon which such goals and 
timetables, or lack thereof, are based. The establishment of goals and 
timetables shall be in accordance with the provisions of Sec. 30.4 (d), 
(e), and (f). The sponsor may not implement any such selection method 
until the Department has approved the selection method as meeting the 
requirements of item (B) of this subdivision and has approved the 
remainder of its affirmative action program including its goals and 
timetables. If the Department fails to act upon the selection method and 
the affirmative action program within 30 days of its submission, the 
sponsor then may implement the selection method.
    (B) Qualification standards. Apprentices shall be selected on the 
basis of objective and specific qualification standards. Examples of 
such standards are fair aptitude tests, school diplomas or equivalent, 
occupationally essential health requirements, fair interviews, school 
grades, and previous work experience. Where interviews are used, 
adequate records shall be kept including a brief summary of each 
interview and the conclusions on each of the specific factors, e.g., 
motivation, ambition, and willingness to accept direction which are part 
of the total judgement. In applying any such standards, the sponsor 
shall meet the requirements of 41 CFR part 60-3.
    (ii) Compliance. Determinations as to the sponsor's compliance with 
its obligations under these regulations shall be in accordance with the 
provisions of paragraph (b)(1)(vii) of this section. Where a sponsor, 
despite its good faith efforts, fails to meet its goals and timetables 
within a reasonable period of time, the sponsor may be required to make 
appropriate changes in its affirmative action program to the extent 
necessary to obtain maximum effectiveness toward the attainment of its 
goals. The sponsor may also be required to develop and adopt an 
alternative selection method, including a method prescribed by the 
Department, where it is determined that the failure of the sponsor to 
meet its goals is attributable in substantial part to the selection 
method. Where the sponsor's failure to meet its goals is attributable in 
substantial part to its use of a qualification standard which has 
adversely affected the opportunities of minorities and/or women 
(minority and nonminority) for apprenticeship, the sponsor may be 
required to demonstrate that such qualification standard is directly 
related to job performance, in accordance with the provisions of 
paragraph (b)(1)(iii)(A) of this section.

(Approved by the Office of Management and Budget under control number 
1205-0224)

[43 FR 20760, May 12, 1978, as amended at 49 FR 18295, Apr. 30, 1984]



Sec. 30.6  Existing lists of eligibles and public notice.

    A sponsor adopting a selection method under Sec. 30.5(b) (1) or (2) 
and a sponsor adopting a selection method under Sec. 30.5(b)(4) who 
determines that there are fewer minorities and/or women (minority and 
nonminority) on its existing lists of eligibles than would reasonably be 
expected in view of the analysis described in Sec. 30.4(e) shall discard 
all existing eligibility lists upon adoption of

[[Page 313]]

the selection methods required by this part. New eligibility pools shall 
be established and lists of eligibility pools shall be posted at the 
sponsor's place of business. Sponsors shall establish a reasonable 
period of not less than 2 weeks for accepting applications for admission 
to an apprenticeship program. There shall be at least 30 days of public 
notice in advance of the earliest date for application for admission to 
the apprenticeship program (see Sec. 30.4(c) on affirmative action with 
respect to dissemination of information). Applicants who have been 
placed in a pool of eligibles shall be retained on lists of eligibles 
subject to selection for a period of 2 years. Applicants may be removed 
from the list at an earlier date by their request or following their 
failure to respond to an apprentice job opportunity given by certified 
mail, return receipt requested. Applicants who have been accepted in the 
program shall be afforded a reasonable period of time in light of the 
customs and practices of the industry for reporting for work. All 
applicants shall be treated equally in determining such period of time. 
It shall be the responsibility of the applicant to keep the sponsor 
informed of his or her current mailing address. Upon request, a sponsor 
may restore to the list of eligibles applicants who have been removed 
from the list or who have failed to respond to an apprenticeship job 
opportunity.

(Approved by the Office of Management and Budget under control number 
1205-0224)

[43 FR 20760, May 12, 1978, as amended at 49 FR 18295, Apr. 30, 1984]



Sec. 30.7  [Reserved]



Sec. 30.8  Records.

    (a) Obligations of sponsors. Each sponsor shall keep adequate 
records including a summary of the qualifications of each applicant, the 
basis for evaluation and for selection or rejection of each applicant, 
the records pertaining to interviews of applicants, the original 
application for each applicant, information relative to the operation of 
the apprenticeship program, including but not limited to job assignment, 
promotion, demotion, layoff, or termination, rates of pay, or other 
forms of compensation or conditions of work, hours including hours of 
work and, separately, hours of training provided, and any other records 
pertinent to a determination of compliance with these regulations, as 
may be required by the Department. The records pertaining to individual 
applicants, selected or rejected, shall be maintained in such manner as 
to permit identification of minority and female (minority and 
nonminority) participants.
    (b) Affirmative action plans. Each sponsor must retain a statement 
of its affirmative action plan required by Sec. 30.4 for the prompt 
achievement of full and equal opportunity in apprenticeship, including 
all data and analyses made pursuant to the requirements of Sec. 30.4. 
Sponsors shall review their affirmative action plans annually and update 
them where necessary, including the goals and timetables.
    (c) Qualification standards. Each sponsor must maintain evidence 
that its qualification standards have been validated in accordance with 
the requirements set forth in Sec. 30.5(b).
    (d) Records of State Apprenticeship Councils. State Apprenticeship 
Councils shall keep adequate records, including registration 
requirements, individual program standards and registration records, 
program compliance reviews and investigations, and any other records 
pertinent to a determination of compliance with this part, as may be 
required by the Department, and shall report to the Department as may be 
required by the Department.
    (e) Maintenance of records. The records required by this part and 
any other information relevant to compliance with these regulations 
shall be maintained for 5 years and made available upon request to the 
Department or other authorized representative.

(Approved by the Office of Management and Budget under control number 
1205-0224)

[43 FR 20760, May 12, 1978, as amended at 49 FR 18295, Apr. 30, 1984]



Sec. 30.9  Compliance reviews.

    (a) Conduct of compliance reviews. The Department will regularly 
conduct systematic reviews of apprenticeship programs in order to 
determine the extent to which sponsors are complying with these 
regulations and will also conduct

[[Page 314]]

compliance reviews when circumstances, including receipt of complaints 
not referred to a private review body pursuant to Sec. 30.11(b)(1)(i), 
so warrant, and take appropriate action regarding programs which are not 
in compliance with the requirements of this part. Compliance reviews 
will consist of comprehensive analyses and evaluations of each aspect of 
the apprenticeship program, including on-site investigations and audits.
    (b) Reregistration. Sponsors seeking reregistration shall be subject 
to a compliance review as described in paragraph (a) of this section by 
the Department as part of the reregistration process.
    (c) New registrations. Sponsors seeking new registration shall be 
subject to a compliance review as described in paragraph (a) of this 
section by the Department as part of the registration process.
    (d) Voluntary compliance. Where the compliance review indicates that 
the sponsor is not operating in accordance with this part, the 
Department shall notify the sponsor in writing of the results of the 
review and make a reasonable effort to secure voluntary compliance on 
the part of the program sponsor within a reasonable time before 
undertaking sanctions under Sec. 30.13. In the case of sponsors seeking 
new registration, the Department will provide appropriate 
recommendations to the sponsor to enable it to achieve compliance for 
registration purposes.



Sec. 30.10  Noncompliance with Federal and state equal opportunity requirements.

    A pattern or practice of noncompliance by a sponsor (or where the 
sponsor is a joint apprenticeship committee, by one of the parties 
represented on such committee) with Federal or state laws or regulations 
requiring equal opportunity may be grounds for the imposition of 
sanctions in accordance with Sec. 30.13 if such noncompliance is related 
to the equal employment opportunity of apprentices and/or graduates of 
such an apprenticeship program under this part. The sponsor shall take 
affirmative steps to assist and cooperate with employers and unions in 
fulfilling their equal employment opportunity obligations.



Sec. 30.11  Complaint procedure.

    (a) Filing. (1) Any apprentice or applicant for apprenticeship who 
believes that he or she has been discriminated against on the basis of 
race, color, religion, national origin, or sex with regard to 
apprenticeship or that the equal opportunity standards with respect to 
his or her selection have not been followed in the operation of an 
apprenticeship program may, personally or through an authorized 
representative, file a complaint with the Department, or, at the 
apprentice's or applicant's election, with a private review body 
established pursuant to paragraph (a)(3) of this section. The complaint 
shall be in writing and shall be signed by the complainant. It must 
include the name, address and telephone number of the person allegedly 
discriminated against, the program sponsor involved, and a brief 
description of the circumstances of the failure to apply the equal 
opportunity standards provided for in this part.
    (2) The complaint must be filed not later than 180 days from the 
date of the alleged discrimination or specified failure to follow the 
equal opportunity standards; and, in the case of complaints filed 
directly with review bodies designated by program sponsors to review 
such complaints, any referral of such complaint by the complainant to 
the Department must occur within the time limitation stated above or 30 
days from the final decision of such review body, whichever is later. 
The time may be extended by the Department for good cause shown.
    (3) Sponsors are encouraged to establish fair, speedy, and effective 
procedures for a review body to consider complaints of failure to follow 
the equal opportunity standards. A private review body established by 
the program sponsor for this purpose should number three or more 
responsible persons from the community serving in this capacity without 
compensation. Members of the review body should not be directly 
associated with the administration of an apprenticeship program. 
Sponsors may join together in establishing a review body to serve the

[[Page 315]]

needs of programs within the community.
    (b) Processing of complaints. (1)(i) When the sponsor has designated 
a review body for reviewing complaints, the Department, unless the 
complainant has indicated otherwise or unless the Department has 
determined that the review body will not effectively enforce the equal 
opportunity standards, shall upon receiving a complaint refer it to the 
review body.
    (ii) The Department shall, within 30 days following the referral of 
a complaint to the review body, obtain reports from the complainant and 
the review body as to the disposition of the complaint. If the complaint 
has been satisfactorily adjusted and there is no other indication of 
failure to apply equal opportunity standards, the case shall be closed 
and the parties appropriately informed.
    (iii) When a complaint has not been resolved by the review body 
within 90 days or where, despite satisfactory resolution of the 
particular complaint by the review body, there is evidence that equal 
opportunity practices of the apprenticeship program are not in 
accordance with this part, the Department may conduct such compliance 
review as found necessary, and will take all necessary steps to resolve 
the complaint.
    (2) Where no review body exists, the Department may conduct such 
compliance review as found necessary in order to determine the facts of 
the complaint, and obtain such other information relating to compliance 
with these regulations as the circumstances warrant.
    (3) Sponsors shall provide written notice of the above complaint 
procedure to all applicants for apprenticeship and all apprentices.

(Approved by the Office of Management and Budget under control number 
1205-0224)

[43 FR 20760, May 12, 1978, as amended at 49 FR 18295, Apr. 30, 1984]



Sec. 30.12  Adjustments in schedule for compliance review or complaint processing.

    If, in the judgment of the Department, a particular situation 
warrants and requires special processing and either expedited or 
extended determination, it shall take the steps necessary to permit such 
determination if it finds that no person or party affected by such 
determination will be prejudiced by such special processing.



Sec. 30.13  Sanctions.

    (a) Where the Department, as a result of a compliance review or 
other reason, determines that there is reasonable cause to believe that 
an apprenticeship program is not operating in accordance with this part 
and voluntary corrective action has not been taken by the program 
sponsor, the Department shall institute proceedings to deregister the 
program or it shall refer the matter to the Equal Employment Opportunity 
Commission or to the Attorney General with recommendations for the 
institution of a court action under title VII of the Civil Rights Act of 
1964, as amended, or to the Attorney General for other court action as 
authorized by law.
    (b) Deregistration proceedings shall be conducted in accordance with 
the following procedures:
    (1) The Department shall notify the sponsor, in writing, that a 
determination of reasonable cause has been made under paragraph (a) of 
this section and that the apprenticeship program may be deregistered 
unless, within 15 days of the receipt of the notice, the sponsor 
requests a hearing. The notification shall specify the facts on which 
the determination is based.
    (2) If within 15 days of the receipt of the notice provided for in 
paragraph (b)(1) of this section the sponsor mails a request for a 
hearing, the Secretary shall convene a hearing in accordance with 
Sec. 30.16.
    (3) The Secretary shall make a final decision on the basis of the 
record, which shall consist of the compliance review file and other 
evidence presented and, if a hearing was conducted pursuant to 
Sec. 30.16, the proposed findings and recommended decision of the 
hearing officer. The Secretary may allow the sponsor a reasonable time 
to achieve voluntary corrective action. If the Secretary's decision is 
that the apprenticeship program is not operating in accordance with this 
part, the apprenticeship program shall be deregistered. In each case in 
which

[[Page 316]]

deregistration is ordered, the Secretary shall make public notice of the 
order and shall notify the sponsor and the complainant, if any.



Sec. 30.14  Reinstatement of program registration.

    Any apprenticeship program deregistered pursuant to this part may be 
reinstated upon presentation of adequate evidence to the Secretary that 
the apprenticeship program is operating in accordance with this part.



Sec. 30.15  State Apprenticeship Councils.

    (a) Adoption of consistent state plans. (1) The Department shall 
encourage State Apprenticeship Councils to adopt and implement the 
requirements of this part.
    (2) Within 60 days of the effective date of these regulations, each 
State Apprenticeship Council shall complete development of a revised 
equal opportunity plan which shall be consistent with this part. The 
revised State plan shall require all state apprenticeship programs 
registered with the State Apprenticeship Council to comply with the 
requirements of the revised State plan within 90 days of the effective 
date of these regulations. No State Apprenticeship Council shall 
continue to be recognized by the Department if it has not adopted within 
60 days of the effective date of these regulations a plan implementing 
the requirements of this part.
    (3) The Department retains authority to conduct compliance reviews 
and complaint investigations to determine whether the state plan or any 
state apprenticeship program registered with a State Apprenticeship 
Council is being administered or operated in accordance with this part.
    (4) It shall be the responsibility of the State Apprenticeship 
Council to take the necesssary action to bring a noncomplying program 
into compliance with the state plan. In the event the State 
Apprenticeship Council fails to fulfill this responsibility, the 
Secretary may withdraw the recognition for Federal purposes of any or 
all state apprenticeship programs, in accordance with the procedures of 
deregistration of programs registered by the Department, or refer the 
matter to the Equal Employment Opportunity Commission or to the Attorney 
General with a recommendation for the institution of a court action 
under title VII of the Civil Rights Act of 1964, as amended, or to the 
Attorney General for other court actions as authorized by law.
    (5) Each State Apprenticeship Council shall notify the Department of 
any state apprenticeship program deregistered by it.
    (6) Any state apprenticeship program deregistered by a State 
Apprenticeship Council for noncompliance with requirements of this part 
may, within 15 days of the receipt of a notice of deregistration, appeal 
to the Department to set aside the determination of the State 
Apprenticeship Council. The Department shall make its determination on 
the basis of the record. The Department may grant the state program 
sponsor, the State Apprenticeship Council and the complainant(s), if 
any, the opportunity to present oral or written argument.
    (b) Withdrawal of recognition. (1) Whenever the Department 
determines that reasonable cause exists to believe that State 
Apprenticeship Council has not adopted or implemented a plan in 
accordance with the equal opportunity requirements of this part, it 
shall give notice to such State Apprenticeship Council and to 
appropriate state sponsors of this determination, stating specifically 
wherein the state's plan fails to meet such requirements and that the 
Department proposes to withdraw recognition for Federal purposes, from 
the State Apprenticeship Council unless within 15 days of the receipt of 
the notice, the State Apprenticeship Council complies with the 
provisions of this part or mails a request for a hearing to the 
Secretary.
    (2) If within 15 days of the receipt of the notice provided for in 
subparagraph (b)(1) of this section the State Apprenticeship Council 
neither complies with the provisions of this part, nor mails a request 
for a hearing, the Secretary shall notify the State Apprenticeship 
Council of the withdrawal of recognition.
    (3) If within 15 days of the receipt of the notice provided for in 
subparagraph

[[Page 317]]

(b)(1) of this section the State Apprenticeship Council mails a request 
for a hearing, the Secretary shall proceed in accordance with 
Sec. 30.16.
    (4) If a hearing is conducted in accordance with Sec. 30.16, the 
Secretary upon receipt of the proposed findings and recommended decision 
of the hearing officer shall make a final decision whether the State 
Apprenticeship Council has adopted or implemented a plan in accordance 
with the equal opportunity requirements of this part.
    (5) If the Secretary determines to withdraw recognition, for Federal 
purposes, from the State Apprenticeship Council, the Secretary shall 
notify the State Apprenticeship Council of this determination. The 
Secretary shall also notify the State sponsors that within 30 days of 
the receipt of the notice the Department shall cease to recognize, for 
Federal purposes, each State apprenticeship program unless the State 
program sponsor requests registration with the Department. Such 
registration may be granted contingent upon finding that the State 
apprenticeship program is operating in accordance with the requirements 
of this part.
    (6) A State Apprenticeship Council whose recognition has been 
withdrawn pursuant to this part may have its recognition reinstated upon 
presentation of adequate evidence to the Secretary that it has adopted 
and implemented a plan carrying out the equal opportunity requirements 
of this part.

(Approved by the Office of Management and Budget under control number 
1205-0224)

[43 FR 20760, May 12, 1978, as amended at 49 FR 18295, Apr. 30, 1984]



Sec. 30.16  Hearings.

    (a) Within 10 days after receiving a request for a hearing, the 
Secretary shall designate a hearing officer. The hearing officer shall 
give reasonable notice of such hearing by certified mail, return receipt 
requested, to the appropriate sponsor (Federal or state registered), the 
State Apprenticeship Council, or both, as the case may be. Such notice 
shall include: (1) A reasonable time and place of hearing, (2) a 
statement of the provisions of this part, pursuant to which the hearing 
is to be held, and (3) a concise statement of the matters pursuant to 
which the action forming the basis of the hearing is proposed to be 
taken.
    (b) The hearing officer shall regulate the course of the hearing. 
Hearings shall be informally conducted. Every party shall have the right 
to counsel, and a fair opportunity to present his or her case including 
such cross-examination as may be appropriate in the circumstances. 
Hearing officers shall make their proposed findings and recommended 
decisions to the Secretary upon the basis of the record before them.



Sec. 30.17  Intimidatory or retaliatory acts.

    Any intimidation, threat, coercion, or retaliation by or with the 
approval of any sponsor against any person for the purpose of 
interfering with any right or privilege secured by title VII of the 
Civil Rights Act of 1964, as amended, Executive Order 11246, as amended, 
or because he or she has made a complaint, testified, assisted, or 
participated in any manner in any investigation proceeding, or hearing 
under this part shall be considered noncompliance with the equal 
opportunity standards of this part. The identity of complainants shall 
be kept confidential except to the extent necessary to carry out the 
purposes of this part, including the conduct of any investigation, 
hearing or judicial proceeding arising therefrom.



Sec. 30.18  Nondiscrimination.

    The commitments contained in the sponsor's affirmative action 
program are not intended and shall not be used to discriminate against 
any qualified applicant or apprentice on the basis of race, color, 
religion, national origin, or sex.



Sec. 30.19  Exemptions.

    Request for exemption from these regulations, or any part thereof, 
shall be made in writing to the Secretary and shall contain a statement 
of reasons supporting the request. Exemptions may be granted for good 
cause.

[[Page 318]]

State Apprenticeship Councils shall notify the Department of any such 
exemptions granted affecting a substantial number of employers and the 
reasons therefor.

(Approved by the Office of Management and Budget under control number 
1205-0224)

[43 FR 20760, May 12, 1978, as amended at 49 FR 18295, Apr. 30, 1984]



PART 31--NONDISCRIMINATION IN FEDERALLY ASSISTED PROGRAMS OF THE DEPARTMENT OF LABOR-- EFFECTUATION OF TITLE VI OF THE CIVIL RIGHTS ACT OF 1964--Table of Contents




Sec.
31.1  Purpose.
31.2  Definitions.
31.3  General standards.
31.4  [Reserved]
31.5  Compliance information.
31.6  Assurances required.
31.7  Conduct of investigations.
31.8  Procedure for effecting compliance.
31.9  Hearings.
31.10  Decisions and notices.
31.11  Judicial review.
31.12  Effect on other regulations; supervision and coordination.

    Authority: Sec. 602, 78 Stat. 252; 42 U.S.C. 501, 29 U.S.C. 49k, 5 
U.S.C. 301.

    Source: 29 FR 16284, Dec. 4, 1964, unless otherwise noted.



Sec. 31.1  Purpose.

    The purpose of this part is to effectuate the provisions of title VI 
of the Civil Rights Act of 1964 to the end that no person in the United 
States shall, on the ground of race, color, or national origin, be 
excluded from participation in, be denied the benefits of, or be 
otherwise subjected to discrimination under any program or activity 
receiving Federal financial assistance from the Department of Labor.



Sec. 31.2  Definitions.

    For purposes of this part:
    (a) The term Act means the Civil Rights Act of 1964 (78 Stat. 241).
    (b) The term applicant means one who submits an application, 
request, or plan required to be approved by the Secretary, or by a 
primary recipient, as a condition to eligibility for Federal financial 
assistance, and the term application means such application, request, or 
plan.
    (c) The term Department means the Department of Labor and includes 
each of its operating agencies and other organizational units.
    (d) The term facility includes all or any portion of structures, 
equipment, or other real or personal property or interests therein, and 
the provision of facilities includes the construction, expansion, 
renovation, remodeling, alteration or acquisition of facilities.
    (e) The term Federal financial assistance includes:
    (1) Grants and loans of Federal funds,
    (2) The grant or donation of Federal property and interests in 
property,
    (3) The detail of Federal personnel,
    (4) The sale and lease of, and the permission to use (on other than 
a casual or transient basis), Federal property or any interest in such 
property without consideration or at a nominal consideration, or at a 
consideration which is reduced for the purpose of assisting the 
recipient, or in recognition of the public interest to be served by such 
sale or lease to the recipient, and
    (5) Any Federal agreement, arrangement, or other contract which has 
as one of its purposes the provision of assistance.
    (f) The term primary recipient means any recipient which is 
authorized or required to extend Federal financial assistance to another 
recipient for the purpose of carrying out a program.
    (g) The term program includes any program, project or activity for 
the provision of services, financial aid, or other benefits to 
individuals (including education or training, health, welfare, 
rehabilitation, or other services, whether provided through employees of 
the recipient of Federal financial assistance or provided by others 
through contracts or other arrangements with the recipient, and 
including work opportunities and cash or loan or other assistance to 
individuals), or for the provision of facilities for furnishing 
services, financial aid or other benefits to individuals. The services, 
financial aid, or other benefits provided under a program receiving 
Federal financial assistance shall be deemed to include any

[[Page 319]]

services, financial aid, or other benefits provided with the aid of 
Federal financial assistance or with the aid of any non-Federal funds, 
property, or other resources required to be expended or made available 
for the program to meet matching requirements or other conditions which 
must be met in order to receive the Federal financial assistance, and to 
include any services, financial aid, or other benefits provided in or 
through a facility provided with the aid of Federal financial assistance 
or such non-Federal resources.
    (h) The term recipient means any State, political subdivision of any 
State, or instrumentality of any State or political subdivision, any 
public or private agency, institution, or organization, or any other 
entity, or any individual in any State, to whom Federal financial 
assistance is extended, directly or through another recipient, for any 
program, including any successor, assign, or transferee thereof, but 
such term does not include any ultimate beneficiary under any such 
program.
    (i) The term Secretary means the Secretary of Labor or any person 
specifically designated by him to perform any function provided for 
under this part, except that only the Secretary personally or a hearing 
examiner shall conduct hearings under Sec. 31.10.
    (j) The term United States means the States of the United States, 
the District of Columbia, Puerto Rico, the Virgin Islands, American 
Samoa, Guam, Wake Island, the Canal Zone, and the territories and 
possessions of the United States, and the term State means any one of 
the foregoing.



Sec. 31.3  General standards.

    (a) General. No person in the United States shall, on the grounds of 
race, color, or national origin, be excluded from participation in, be 
denied the benefits of, or be subjected to discrimination under, any 
program or activity receiving Federal financial assistance from the 
Department of Labor.
    (b) Specific discriminatory actions prohibited. (1) A recipient 
under any program to which this regulation applies may not, directly or 
through contractual or other arrangements, on the ground of race, color, 
or national origin:
    (i) Deny an individual any service, financial aid, or other benefit 
provided under the program;
    (ii) Provide any service, financial aid, or other benefit to an 
individual which is different, or is provided in a different manner, 
from that provided to others under the program;
    (iii) Subject an individual to segregation or separate treatment in 
any matter related to his receipt of any service, financial aid, or 
other benefit under the program;
    (iv) Restrict an individual in any way in the enjoyment of any 
advantage or privilege enjoyed by others receiving any service, 
financial aid, or other benefit under the program;
    (v) Treat an individual differently from others in determining 
whether he satisfies any admission, enrollment, quota, eligibility, 
membership or other requirement or condition which individuals must meet 
in order to be provided any service, financial aid, or other benefit 
provided under the program;
    (vi) Deny an individual an opportunity to participate in the program 
through the provision of services or otherwise or afford him an 
opportunity to do so which is different from that afforded others under 
the program, or
    (vii) Deny an individual an opportunity to participate in a program 
as an employee where a primary objective of the Federal financial 
assistance is to provide employment.
    (viii) Deny a person the opportunity to participate as a member of a 
planning or advisory body which is an integral part of the program.
    (2) A recipient, in determining the types of services, financial 
aid, or other benefits, or facilities which will be provided under any 
such program, or the class of individuals to whom, or the situations in 
which, such services, financial aid, other benefits, or facilities will 
be provided under any such program or the class of individuals to be 
afforded an opportunity to participate in any such program, may not, 
directly or through contractual or other arrangements, utilize criteria 
or methods of administration which have the effect of subjecting 
individuals to discrimination because of race, color or national origin, 
or have the effect of defeating

[[Page 320]]

or substantially impairing accomplishment of the objectives of the 
program as respects individuals of a particular race, color, or national 
origin.
    (3) In determining the site or location of facilities, a recipient 
or applicant may not make selections with the purpose or effect of 
excluding individuals from, denying them the benefits of, or subjecting 
them to discrimination under any program to which this regulation 
applies, on the ground of race, color or national origin; or with the 
purpose or effect of defeating or substantially impairing the 
accomplishment of the objectives of the Act or this regulation.
    (4) As used in this section the services, financial aid, or other 
benefit provided under a program receiving Federal financial assistance 
shall be deemed to include any service, financial aid, or other benefit 
provided in or through a facility provided with the aid of Federal 
financial assistance.
    (5) The enumeration of specific forms of prohibited discrimination 
in this paragraph does not limit the generality of the prohibition in 
paragraph (a).
    (6)(i) In administering a program regarding which the recipient has 
previously discriminated against persons on the ground of race, color, 
or national origin, the recipient must take affirmative action to 
overcome the effects of prior discrimination.
    (ii) Even in the absence of such prior discrimination, a recipient 
in administering a program shall take affirmative action to overcome the 
effects of conditions which resulted in limiting participation by 
persons of a particular race, color or national origin.
    (7) The following will illustrate the application of the provisions 
of the foregoing paragraph to programs for which Federal financial 
assistance is furnished by this Department:
    (i) In some situations even though past discriminatory practices 
have been abandoned, the consequences of such practices continue to 
impede the full availability of a benefit. If the efforts required of 
the applicant or recipient under Sec. 31.5(d) to provide information as 
to the availability of the program or activity, and the rights of 
beneficiaries under this regulation, have failed to overcome these 
consequences, it will become necessary for such applicant or recipient 
to take additional steps to make the benefits fully available to racial 
and nationality groups previously subjected to discrimination. This 
action might take the form, for example, of special arrangements for 
obtaining referrals or making selections which will insure that groups 
previously subjected to discrimination are adequately served.
    (ii) Even though an applicant or recipient has never used 
discriminatory policies, the services and benefits of the program or 
activity it administers may not in fact be equally available to some 
racial or nationality groups. In some circumstances an applicant or 
recipient may properly give special consideration to race, color, or 
national origin to make the benefits of its program more widely 
available to such groups not then being adequately served. For example, 
where an employment service office is not adequately serving members of 
a particular racial or nationality group, it may establish special 
recruitment policies to make its program better known and more readily 
available to such group, and take other steps to provide that group with 
more adequate service.
    (c) Employment practices. (1) Where a primary objective of the 
Federal financial assistance to a program to which this regulation 
applies is to provide employment, a recipient may not (directly or 
through contractual or other arrangements) subject an individual to 
discrimination on the ground of race, color, or national origin in its 
employment practices under such program including recruitment, 
examination, appointment, training, promotion, retention or any other 
personnel action.
    (2) Where a primary objective of the Federal financial assistance is 
not to provide employment, but discrimination on the ground of race, 
color, or national origin in the employment practices of the recipient 
or other persons subject to the regulation tends, on the ground of race, 
color or national origin, to exclude individuals from participation in, 
to deny them the benefits of, or to subject them to discrimination under 
any program to which this regulation applies, the provision of the 
foregoing paragraph shall apply to the

[[Page 321]]

employment practices of the recipient to the extent necessary to assure 
equality of opportunity to, and nondiscriminatory treatment of, 
beneficiaries. Accordingly, the employment practices of recipients under 
programs enumerated in Secs. 31.3(d)(2) and 31.3(d)(3) are subject to 
the provisions of this paragraph (c) to the extent necessary to assure 
equality of opportunity to, and nondiscriminatory treatment of, the 
beneficiaries of the Federal financial assistance. Any action taken by 
the Department pursuant to this provision with respect to a State or 
local agency subject to the Standards for a Merit System of Personnel 
Administration, 45 CFR part 70, shall be consistent with those standards 
and shall be coordinated with the United States Civil Service 
Commission.
    (3) The requirements applicable to construction employment under any 
program for which Federal financial assistance is furnished by this 
Department shall be those specified in or pursuant to part III of 
Executive Order 11246 or any Executive order which supersedes it.
    (d) In order that all parties may have a clear understanding of the 
applicability of the regulations in this part to their activities, there 
are listed in this section programs and activities together with 
illustrations by way of example only, of types of activity covered by 
the regulations in this part. These illustrations and examples, however, 
are not intended to be all inclusive. The fact that a particular program 
is not listed does not, of course, indicate that it is not covered by 
the regulations in this part. Moreover, the examples set forth with 
respect to any particular listed program are not limited to that program 
alone and the prohibited actions described may also be prohibited in 
other programs or activities whether or not listed below.
    (1) Employment service programs. (i) The registration, counseling, 
testing, recruitment, selection and referral of individuals for job 
openings or training opportunities and all other activities performed by 
or through employment service offices financed in whole or in part from 
Federal funds, including the establishment and maintenance of physical 
facilities, shall be conducted without regard to race, color, or 
national origin.
    (ii) No selection or referral of any individual for employment or 
training shall be made on the basis of any job order or request 
containing discriminatory specifications with regard to race, color, or 
national origin.
    (2) Manpower Development and Training Act, work-incentive under 
Social Security Act, Area Redevelopment Act, work-training under 
Economic Opportunity Act and other Government-sponsored training. (i) 
The registration, counseling, testing, guidance, selection, referral or 
training of any individual including employment as an enrollee under 
title I-B of the Economic Opportunity Act shall be furnished without 
discrimination because of race, color, or national origin.
    (ii) The recruitment, examination, appointment, training, promotion, 
retention, or any other personnel action with respect to any trainee or 
enrollee under the Manpower Development and Training Act, Area 
Redevelopment Act, or the Economic Opportunity Act while the individual 
is receiving training or employment shall be without regard to race, 
color or national origin.
    (3) State and Federal Unemployment Insurance Programs; allowances 
under Trade Readjustment Assistance Programs, Manpower Development and 
Training Act, and Area Redevelopment Act. (i) The filing for, 
adjudication and payment of benefits, establishment and maintenance of 
physical facilities and other application of the laws shall be without 
regard to race, color or national origin.

[29 FR 16284, Dec. 4, 1964, as amended at 38 FR 17957, July 5, 1973]



Sec. 31.4  [Reserved]



Sec. 31.5  Compliance information.

    (a) Cooperation and assistance. The Secretary shall to the fullest 
extent practicable seek the cooperation of recipients in obtaining 
compliance with this part and shall provide assistance and guidance to 
recipients to help them comply voluntarily with this part.
    (b) Compliance reports. Each recipient shall keep such records and 
submit to the Secretary timely, complete and accurate compliance reports 
at such

[[Page 322]]

times, and in such form and containing such information, as the 
Secretary may determine to be necessary to enable him to ascertain 
whether the recipient has complied or is complying with this part. In 
general, recipients should have available for the department racial and 
ethnic data showing the extent to which members of minority groups are 
beneficiaries of federally assisted programs. In the case of any program 
under which a primary recipient extends Federal financial assistance to 
any other recipient, such other recipient shall also submit such 
compliance reports to the primary recipient as may be necessary to 
enable the primary recipient to carry out its obligations under this 
part.
    (c) Access to sources of information. Each recipient shall permit 
access by the Secretary during normal business hours to such of its 
books, records, accounts, and other sources of information, and its 
facilities as may be pertinent to ascertain compliance with this part. 
Where any information required of a recipient is in the exclusive 
possession of any other agency, institution or person and this agency, 
institution or person shall fail or refuse to furnish this information, 
the recipient shall so certify in its report and shall set forth what 
efforts it has made to obtain the information.
    (d) Information to beneficiaries and participants. Each recipient 
shall make available to participants, beneficiaries, and other 
interested persons such information regarding the provisions of this 
part and its applicability to the program under which the recipient 
receives Federal financial assistance, and make such information 
available to them in such manner, as the Secretary finds necessary to 
apprise such persons of the protections against discrimination assured 
them by the Act and this part.

[29 FR 16284, Dec. 4, 1964. Redesignated and amended at 38 FR 17956, 
July 5, 1973]



Sec. 31.6  Assurances required.

    (a) General. (1) Every application for Federal financial assistance 
to carry out a program to which this part applies, and every contract, 
subcontact, agreement or arrangement to carry out such program except a 
program to which paragraph (b) of this section applies, and every 
application for Federal financial assistance to provide a facility, and 
every contract, subcontract, agreement or arrangement to provide such a 
facility shall as a condition to its approval and the extension of any 
Federal financial assistance pursuant to the application, contract, 
subcontract, agreement or arrangement contain or be accompanied by an 
assurance that the program will be conducted or the facility operated in 
compliance with all requirements imposed by or pursuant to this part. 
Every program of Federal financial assistance shall require the 
submission of such an assurance. In the case where the Federal financial 
assistance is to provide or is in the form of personal property, or real 
property or interest therein or structures thereon, the assurance shall 
obligate the recipient, or, in the case of a subsequent transfer, the 
transferee, for the period during which the property is used for a 
purpose for which the Federal financial assistance is extended or for 
another purpose involving the provision of similar services or benefits, 
or for as long as the recipient retains ownership or possession of the 
property, whichever is longer. In all cases the assurance shall obligate 
the recipient for the period during which Federal financial assistance 
is extended to the program. In the case where the assistance is sought 
for the construction of a facility or part of a facility, the assurance 
shall in any event extend to the entire facility and to facilities 
operated in connection therewith. The Secretary shall specify the form 
of the foregoing assurances for each program, and the extent to which 
like assurances will be required of subgrantees, contractors and 
subcontractors, transferees, successors in interest, and other 
participants in this program. Any such assurance shall include 
provisions which give the United States a right to seek its judicial 
enforcement.
    (2) In the case where Federal assistance is provided in the form of 
a transfer of real property, structures, or improvements thereon, or 
interest therein, from the Federal Government, the instrument effecting 
or recording the

[[Page 323]]

transfer shall contain a covenant running with the land assuring 
nondiscrimination for the period during which the real property is used 
for a purpose for which the Federal financial assistance is extended or 
for another purpose involving the provision of similar services or 
benefits. Where no transfer of property or interest therein from the 
Federal Government is involved, but property is acquired under a program 
of Federal financial assistance, the recipient shall agree to include 
such covenant in any subsequent transfer of such property. When the 
property is obtained from the Federal Government, such covenant may also 
include a condition coupled with a right to be reserved by the 
Department to revert title to the property in the event of a breach of 
the covenant where, in the discretion of the Secretary, such a condition 
and right of reverter is appropriate to the program under which the real 
property is obtained and to the nature of the grant and the grantee. In 
such event if a transferee of real property proposes to mortgage or 
otherwise encumber the real property as security for financing 
construction of new, or improvement of existing facilities on such 
property for the purpose for which the property was transferred, the 
Secretary may agree, upon request of the transferee and if necessary to 
accomplish such financing and upon such conditions as he deems 
appropriate, to subordinate such rights of reversion to the sum of such 
mortgage or other encumbrance.
    (b) Continuing State programs. Every application by a State or a 
State agency to carry out a program involving continuing federal 
financial assistance to which this part applies shall as a condition to 
its approval and the extension of any Federal financial assistance 
pursuant to the application
    (1) Contain or be accompanied by a statement that the program is 
(or, in the case of a new program, will be) conducted in compliance with 
all requirements imposed by or pursuant to this part, and
    (2) Provide or be accompanied by provision for such methods of 
administration for the program as are found by the Secretary to give 
reasonable guarantee that the applicant and all recipients of Federal 
financial assistance under such program will comply with all 
requirements imposed by or pursuant to this part.

[38 FR 17957, July 5, 1973]



Sec. 31.7  Conduct of investigations.

    (a) Periodic compliance reviews. The Secretary shall from time to 
time review the practices of recipients to determine whether they are 
complying with this part.
    (b) Complaints. Any person who believes himself or any specific 
class of individuals to be subjected to discrmination prohibited by this 
part may by himself or by a representative file with the Secretary a 
written complaint. A complaint must be filed not later than 180 days 
from the date of the alleged discrimination, unless the time for filing 
is extended by the Secretary.
    (c) Investigations. The Secretary will make a prompt investigation 
whenever a compliance review, report, complaint, or any other 
information indicates a possible failure to comply with this part. The 
investigation should include, where appropriate, a review of the 
pertinent practices and policies of the recipient, the circumstances 
under which the possible noncompliance with this part occurred, and 
other factors relevant to a determination as to whether the recipient 
has failed to comply with this part.
    (d) Resolution of matters. (1) If an investigation pursuant to 
paragraph (c) indicates a failure to comply with this part, the 
Secretary will so inform the recipient and the matter will be resolved 
by informal means whenever possible. If it has been determined that the 
matter cannot be resolved by informal means, action will be taken as 
provided for in Sec. 31.8.
    (2) If an investigation does not warrant action pursuant to 
paragraph (d)(1) the Secretary will so inform the recipient and the 
complainant, if any, in writing.
    (e) Intimidatory or retaliatory acts prohibited. No recipient or 
other person shall intimidate, threaten, coerce or discriminate against 
any individual for the purpose of interfering with any right or 
privilege secured by section 601 of the Act or this part, or because he

[[Page 324]]

has made a complaint, testified, assisted, or participated in any manner 
in an investigation, proceeding, or hearing under this part. The 
identity of complainant shall be kept confidential except to the extent 
necessary to carry out the purposes of this part, including the conduct 
of any investigation, hearing, or judicial proceeding arising 
thereunder.

[29 FR 16284, Dec. 4, 1964. Redesignated and amended at 38 FR 17958, 
July 5, 1973]



Sec. 31.8  Procedure for effecting compliance.

    (a) General. If there appears to be a failure or threatened failure 
to comply with this part, and if the noncompliance or threatened 
noncompliance cannot be corrected by informal means, compliance with 
this part may be effected by the suspension or termination of or refusal 
to grant or to continue Federal financial assistance, or by any other 
means authorized by law. Such other means may include, but are not 
limited to,
    (1) A reference to the Department of Justice with a recommendation 
that appropriate proceedings be brought to enforce any rights of the 
United States under any law of the United States (including other titles 
of the Act), or any assurance or other contractual undertaking, and
    (2) Any applicable proceeding under State or local law.
    (b) Termination of or refusal to grant or to continue Federal 
financial assistance. No order suspending, terminating, or refusing to 
grant or continue Federal financial assistance shall become effective 
until:
    (1) The Secretary has advised the applicant or recipient of his 
failure to comply and has determined that compliance cannot be secured 
by voluntary means,
    (2) There has been an express finding on the record, after 
opportunity for hearing, of a failure by the applicant or recipient to 
comply with a requirement imposed by or pursuant to this part,
    (3) The action has been approved by the Secretary, and
    (4) The expiration of 30 days after the Secretary has filed with the 
committee of the House and the committee of the Senate having 
legislative jurisdiction over the program involved, a full written 
report of the circumstances and the grounds for such action. Any action 
to suspend or terminate or to refuse to grant or to continue Federal 
financial assistance shall be limited to the particular political 
entity, or part thereof, or other applicant or recipient as to whom such 
a finding has been made and shall be limited in its effect to the 
particular program, or part thereof, in which such noncompliance has 
been so found.
    (c) Other means authorized by law. No action to effect compliance by 
any other means authorized by law shall be taken until:
    (1) The Secretary has determined that compliance cannot be secured 
by voluntary means,
    (2) The action has been approved by the Secretary,
    (3) The recipient or other person has been notified of its failure 
to comply and of the action to be taken to effect compliance, and
    (4) The expiration of at least 10 days from the mailing of such 
notice to the recipient or other person. During this period of at least 
10 days additional efforts shall be made to persuade the recipient or 
other person to comply with this part and to take such corrective action 
as may be appropriate.

[29 FR 16284, Dec. 4, 1964. Redesignated at 38 FR 17958, July 5, 1973]



Sec. 31.9  Hearings.

    (a) Opportunity for hearing. Whenever an opportunity for a hearing 
is required by Sec. 31.8(b), reasonable notice shall be given by 
registered or certified mail, return receipt requested, to the affected 
applicant or recipient. This notice shall advise the applicant or 
recipient of the action proposed to be taken, the specific provision 
under which the proposed action against it is to be taken, and the 
matters of fact or law asserted as the basis for this action, and either
    (1) Fix a date not less than 20 days after the date of such notice 
within which the applicant or recipient may request of the Secretary 
that the matter be scheduled for hearing, or
    (2) Advise the applicant or recipient that the matter in question 
has been set down for hearing at a stated place

[[Page 325]]

and time. The time and place so fixed shall be reasonable and shall be 
subject to change for cause. The complainant, if any, shall be advised 
of the time and place of the hearing. An applicant or recipient may 
waive a hearing and submit written information and argument for the 
record. The failure of an applicant or recipient to request a hearing 
under this section or to appear at a hearing under this section or to 
appear at a hearing for which a date has been set shall be deemed to be 
a waiver of the right to a hearing under section 602 of the Act and 
Sec. 31.8(b) of this part and consent to the making of a decision on the 
basis of such information as is available.
    (b) Time and place of hearing. Hearings shall be held at the offices 
of the Department in Washington, DC, at a time fixed by the Secretary 
unless he determines that the convenience of the applicant or recipient 
or of the Department requires that another place be selected. Hearings 
shall be held before the Secretary or before a hearing examiner 
designated in accordance with 5 U.S.C. 3105 and 3344 (section 11 of the 
Administrative Procedure Act).
    (c) Right to counsel. In all proceedings under this section, the 
applicant or recipient, and the Department shall have the right to be 
represented by counsel.
    (d) Procedures, evidence, and record. (1) The hearing, decision, and 
any administrative review thereof shall be conducted in conformity with 
5 U.S.C. 554-557 (sections 5-8 of the Administrative Procedure Act), and 
in accordance with such rules of procedure as are proper (and not 
inconsistent with this section) relating to the conduct of the hearing, 
giving of notices subsequent to those provided for in paragraph (a) of 
this section, taking of testimony, exhibits, arguments and briefs, 
requests for findings, and other related matters. Both the Department 
and the applicant or recipient shall be entitled to introduce all 
relevant evidence on the issues as stated in the notice for hearing or 
as determined by the officer conducting the hearing at the outset of or 
during the hearing.
    (2) Technical rules of evidence shall not apply to hearings 
conducted pursuant to this part, but rules or principles designed to 
assure production of the most credible evidence available and to subject 
testimony to test by cross-examination shall be applied where reasonably 
necessary by the officer conducting the hearing. The hearing officer may 
exclude irrelevant, immaterial, or unduly repetitious evidence. All 
documents and other evidence offered or taken for the record shall be 
open to examination by the parties and opportunity shall be given to 
refute facts and arguments advanced on either side of the issues. A 
transcript shall be made of the oral evidence except to the extent the 
substance thereof is stipulated for the record. All decisions shall be 
based upon the hearing record and written findings shall be made.
    (e) Consolidated or Joint hearings. In cases in which the same or 
related facts are asserted to constitute noncompliance with this part 
with respect to two or more programs to which this part applies or 
noncompliance with this part and the regulations of one or more other 
Federal departments or agencies issued under title VI of the Act, the 
Secretary may, by agreement with such other departments or agencies, 
where applicable, provide for the conduct of consolidated or joint 
hearings, and for the application to such hearings or rules of procedure 
not inconsistent with this part. Final decisions in such cases, insofar 
as this part is concerned, shall be made in accordance with Sec. 31.10.

[29 FR 16284, Dec. 4, 1964. Redesignated and amended at 38 FR 17958, 
July 5, 1973]



Sec. 31.10  Decisions and notices.

    (a) Decision by a hearing examiner. If the hearing is held by a 
hearing examiner such hearing examiner shall either make an initial 
decision, if so authorized, or certify the entire record including his 
recommended findings and proposed decision to the Secretary for a final 
decision, and a copy of such initial decision or certification shall be 
mailed to the applicant or recipient and the complainant. Where the 
initial decision is made by the hearing examiner the applicant or 
recipient may within 30 days of the mailing of such notice of initial 
decision file with the Secretary his exceptions to the initial decision, 
with his reasons therefor. In

[[Page 326]]

the absence of exceptions, the Secretary may on his own motion within 45 
days after the initial decision serve on the applicant or recipient a 
notice that he will review the decision. Upon the filing of such 
exceptions or of such notice of review the Secretary shall review the 
initial decision and issue his own decision thereon including the 
reasons therefor. The decision of the Secretary shall be mailed promptly 
to the applicant or recipient and the complainant, if any. In the 
absence of either exceptions or a notice of review the initial decision 
shall constitute the final decision of the Secretary.
    (b) Decisions on record or review by the Secretary. Whenever a 
record is certified to the Secretary for decision or he reviews the 
decision of a hearing examiner pursuant to paragraph (a), or whenever 
the Secretary conducts the hearing, the applicant or recipient shall be 
given reasonable opportunity to file with him briefs or other written 
statements of its contentions, and a copy of the final decision of the 
Secretary shall be given in writing to the applicant or recipient and 
the complainant, if any.
    (c) Decisions on record where a hearing is waived. Whenever a 
hearing is waived pursuant to Sec. 31.9(a) a decision shall be made by 
the Secretary on the record and a copy of such decision shall be given 
in writing to the applicant or recipient and to the complainant, if any.
    (d) Rulings required. Each decision of a hearing officer or the 
Secretary shall set forth his ruling on each finding, conclusion, or 
exception presented, and shall identify the requirement or requirements 
imposed by or pursuant to this part with which it is found that the 
applicant or recipient has failed to comply.
    (e) Content of orders. The final decision may provide for suspension 
or termination of, or refusal to grant or continue Federal financial 
assistance, in whole or in part, under the program involved, and may 
contain such terms, conditions, and other provisions as are consistent 
with and will effectuate the purposes of the Act and this part, 
including provisions designed to assure that no Federal financial 
assistance will thereafter be extended under such program to the 
applicant or recipient determined by such decision to be in default in 
its performance of an assurance given by it pursuant to this part, or to 
have otherwise failed to comply with this part, unless and until it 
corrects its noncompliance and satisfies the Secretary that it will 
fully comply with this part.
    (f) Post-termination proceedings. (1) An applicant or recipient 
adversely affected by an order issued under paragraph (c) of this 
section shall be restored to full eligibility to receive Federal 
financial assistance if it satisfies the terms and conditions of that 
order for such eligibility or if it brings itself into compliance with 
this regulation and provides reasonable assurance that it will fully 
comply with this regulation.
    (2) Any applicant or recipient adversely affected by an order 
entered pursuant to paragraph (c) of this section may at any time 
request the Secretary to restore fully its eligibility to receive 
Federal financial assistance. Any such request shall be supported by 
information showing that the applicant or recipient has met the 
requirements of paragraph (f)(1) of this section. If the Secretary 
determines that those requirements have been satisfied, he shall restore 
such eligibility.
    (3) If the Secretary denies any such request, the applicant or 
recipient may submit a request for a hearing in writing, specifying why 
it believes the Secretary to have been in error. It shall thereupon be 
given an expeditious hearing, with a decision on the record, in 
accordance with rules of procedure issued by the Secretary. The 
applicant or recipient will be restored to such eligibility if it proves 
at such a hearing that it satisfied the requirements of paragraph (f)(1) 
of this section. While proceedings under this paragraph are pending, the 
sanctions imposed by the order issued under paragraph (e) of this 
section shall remain in effect.

[29 FR 16284, Dec. 4, 1964. Redesignated and amended at 38 FR 17958, 
July 5, 1973]

[[Page 327]]



Sec. 31.11  Judicial review.

    Action taken pursuant to section 602 of the Act is subject to 
judicial review as provided in section 603 of the Act.

[29 FR 16284, Dec. 4, 1964. Redesignated at 38 FR 17958, July 5, 1973]



Sec. 31.12  Effect on other regulations; supervision and coordination.

    (a) Effect on other regulations. All regulations, orders or like 
directions heretofore issued by any officer of the Department which 
impose requirements designed to prohibit any discrimination against 
individuals on the ground of race, color, or national origin under any 
program to which this part applies, and which authorize the suspension 
or termination of or refusal to grant or to continue Federal financial 
assistance to any applicant for or recipient of such assistance under 
such program for failure to comply with such requirements, are hereby 
superseded to the extent that such discrimination is prohibited by this 
part, except that nothing in this part shall be deemed to relieve any 
person of any obligations assumed or imposed under any such superseded 
regulation, order, instruction, or like direction prior to the effective 
date of this part. Nothing in this part, however, shall be deemed to 
supersede any of the following (including future amendments thereof):
    (1) Executive Orders 10925, 11114 and 11246 and regulations issued 
thereunder,
    (2) The ``Standards for a Merit System of Personnel 
Administration,'' issued jointly by the Secretaries of Defense, of 
Health, Education and Welfare, and of Labor, 23 FR 734, or
    (3) Any other regulation or instruction insofar as it prohibits 
discrimination on the ground of race, color, or national origin in any 
program or situation to which this part is inapplicable, or prohibits 
discrimination on any other ground.
    (b) Supervision and coordination. (1) The Secretary may from time to 
time assign to officials of other departments or agencies of the 
government (with the consent of such department or agency) 
responsibilities in connection with the effectuation of the purposes of 
title VI of the Act and this part (other than responsibility for final 
decision as provided in Sec. 31.11), including the achievement of 
effective coordination and maximum uniformity within the Department and 
within the executive branch of the Government in the application of 
title VI and this part to similar programs and in similar situations.
    (2) Any action taken, determination made, or requirement imposed by 
an official of another Department or agency acting pursuant to an 
assignment of responsibility under this subsection shall have the same 
effect as though such action had been taken by the Secretary.

[38 FR 17958, July 5, 1973]



PART 32--NONDISCRIMINATION ON THE BASIS OF HANDICAP IN PROGRAMS AND ACTIVITIES RECEIVING OR BENEFITING FROM FEDERAL FINANCIAL ASSISTANCE--Table of Contents




                      Subpart A--General Provisions

Sec.
32.1  Purpose.
32.2  Application.
32.3  Definitions.
32.4  Discrimination prohibited.
32.5  Assurances required.
32.6  Remedial action, voluntary action, and self-evaluation.
32.7  Designation of responsible employee.
32.8  Notice.
32.9  Administrative requirements for small recipients.
32.10  Effect of State or local law or other requirements and effect of 
          employment opportunities.

Subpart B--Employment Practices and Employment Related Training Program 
                              Participation

32.12  Discrimination prohibited.
32.13  Reasonable accommodation.
32.14  Job qualifications.
32.15  Preemployment inquiries.
32.16  Listing of employment openings.
32.17  Labor unions and recruiting and training agencies.

                    Subpart C--Program Accessibility

32.26  Discrimination prohibited.
32.27  Access to programs.
32.28  Architectural standards.

                          Subpart D--Procedures

32.44  Compliance information.

[[Page 328]]

32.45  Investigations.
32.46  Procedure for effecting compliance.
32.47  Hearing practice and procedure.

                      Subpart E--Auxiliary Matters

32.48  Post-termination proceedings.
32.49  Recordkeeping.
32.50  Access to records.
32.51  Rulings and interpretations.

Appendix A to Part 32

    Authority: Sec. 504, Rehabilitation Act of 1973, Pub. L. 93-112, 87 
Stat. 394 (29 U.S.C. 794); sec. 111(a), Rehabilitation Act Amendments of 
1974, Pub. L. 93-516, 88 Stat. 1619 (29 U.S.C. 706); secs. 119 and 122 
of the Rehabilitation Comprehensive Services and Developmental 
Disabilities Amendments of 1978, Pub. L. 95-602, 92 Stat. 2955; 
Executive Order 11914, 41 FR 17871.

    Source: 45 FR 66709, Oct. 7, 1980, unless otherwise noted.



                      Subpart A--General Provisions



Sec. 32.1  Purpose.

    Section 504 of the Rehabilitation Act of 1973 prohibits 
discrimination on the basis of handicap in any program or activity 
receiving or benefiting from Federal financial assistance. The purpose 
of this part is to implement section 504 with respect to programs and 
activities receiving or benefiting from Federal financial assistance 
from the Department of Labor.



Sec. 32.2  Application.

    (a) This part applies to each recipient of Federal financial 
assistance from the Department of Labor, and every program or activity 
that receives or benefits from such assistance, but is limited to the 
particular program for which Federal financial assistance is provided.
    (b) A government contractor covered by the provisions of section 503 
of the Act shall be deemed in compliance with the employment provisions 
of these regulations if it is in compliance with 41 CFR part 60-741 (as 
amended after publication of these regulations) with respect to Federal 
financial assistance from the Department of Labor.



Sec. 32.3  Definitions.

    As used in this part, the term:
    The Act means the Rehabilitation Act of 1973, Public Law 93-112, as 
amended by the Rehabilitation Act Amendments of 1974, Public Law 93-516, 
and by the Rehabilitation, Comprehensive Services, and Developmental 
Disabilities Amendments of 1978, Public Law 95-602.
    Assistant Secretary means the Assistant Secretary for Employment and 
Training Administration or his or her designee.
    Applicant for assistance means one who submits an application, 
request, or plan required to be approved by a Department official or by 
a recipient as a condition to becoming a recipient.
    Department means the Department of Labor.
    Facility means all or any portion of the buildings, structures, 
equipment, roads, walks, parking lots or other real or personal property 
or interest in such property which are utilized in the execution of the 
program for which Federal financial assistance is received.
    Federal financial assistance means any grant, loan, contract (other 
than a procurement contract or a contract of insurance or guarantee), or 
any other arrangement by which the Department provides or otherwise 
makes available assistance in the form of:
    (a) Funds;
    (b) Services of Federal personnel; or
    (c) Real and personal property or any interest in or use of such 
property, including:
    (1) Transfers or leases of such property for less than fair market 
value or for reduced consideration; and
    (2) Proceeds from a subsequent transfer or lease of such property if 
the Federal share of its fair market value is not returned to the 
Federal Government.
    Government means the Government of the United States of America.
    Handicap means any condition or characteristic that renders a person 
a handicapped individual as defined in this section.
    Handicapped individual
    (a) Handicapped individual means any person who--
    (1) Has a physical or mental impairment which substantially limits 
one or more major life activities;
    (2) Has a record of such an impairment; or

[[Page 329]]

    (3) Is regarded as having such an impairment.
    (b) As used in the proceeding paragraph of this section, the phrase:
    (1) Physical or mental impairment means--
    (i) Any physiological disorder or condition, cosmetic disfigurement, 
or anatomical loss affecting one or more of the following body systems: 
neurological; musculoskeletal; special sense organs; respiratory, 
including speech organs; cardiovascular; reproductive; digestive; 
genito-urinary; hemic and lymphatic; skin; and endocrine;
    (ii) Any mental or psychological disorder, such as mental 
retardation, organic brain syndrome, emotional or mental illness, and 
specific learning disabilities.
    (iii) The term physical or mental impairment includes but is not 
limited to such diseases and conditions as orthopedic, visual, speech 
and hearing impairments, cerebral palsy, epilepsy, muscular distrophy, 
multiple sclerosis, cancer, heart disease, diabetes, mental retardation, 
emotional illness, and drug addiction and alcoholism.
    (2) Substantially limits means the degree that the impairment 
affects an individual becoming a beneficiary of a program or activity 
receiving Federal financial assistance or affects an individual's 
employability. A handicapped individual who is likely to experience 
difficulty in securing or retaining benefits or in securing, or 
retaining, or advancing in employment would be considered substantially 
limited.
    (3) Major life activities means functions such as caring for one's 
self, performing manual tasks, walking, seeing, hearing, speaking, 
breathing, learning, working, and receiving education or vocational 
training.
    (4) Has a record of such an impairment means that the individual has 
a history of, or has been misclassified as having, a mental or physical 
impairment that substantially limits one or more life activity.
    (5) Is regarded as having such an impairment means that the 
individual--
    (i) Has a physical or mental impairment that does not substantially 
limit major life activities but that is treated by a recipient as 
constituting such a limitation;
    (ii) Has a physical or mental impairment that substantially limits 
major life activities only as a result of the attitudes of others toward 
such impairment; or
    (iii) Has none of the impairments defined in paragraph (b)(1) of 
this section but is treated by a recipient as having such an impairment.
    Qualified handicapped individual means:
    (a) With respect to employment, an individual with a handicap who is 
capable of performing the essential functions of the job or jobs for 
which he or she is being considered with reasonable accommodation to his 
or her handicap;
    (b) With respect to services, a handicapped individual who meets 
eligibility requirements relevant to the receipt of services provided in 
the program;
    (c) With respect to employment and to employment related training 
programs, a handicapped individual who meets both the eligibility 
requirements for participation in the program and valid job or training 
qualifications with reasonable accommodation.
    Reasonable accommodation means the changes and modifications which 
can be made in the structure of a job or employment and training 
program, or in the manner in which a job is performed or an employment 
and training program is conducted, unless it would impose an undue 
hardship on the operation of the recipient's program. Reasonable 
accommodation may include:
    (a) Making the facilities used by the employees or participants in 
the area where the program is conducted, including common areas used by 
all employees or participants such as hallways, restrooms, cafeterias 
and lounges, readily accessible to and usable by handicapped persons, 
and
    (b) Job restructuring, part-time or modified work schedules, 
acquisition or modification of equipment or devices, the provision of 
readers or interpreters, and other similar actions.
    Recipient means any state or its political subdivisions, any 
instrumentality of a State or its political subdivisions, any public or 
private agency, institution, organization, or other entity, or any 
person to which Federal financial assistance is extended directly or 
through another recipient, including

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any successor, assignee, or transferee of a recipient, but excluding the 
ultimate beneficiary of the assistance.
    Secretary means the Secretary of Labor, U.S. Department of Labor, or 
his or her designee.
    Section 504 means section 504 of the Act.
    Small recipient means a recipient who serves fewer than 15 
beneficiaries, and employs fewer than 15 employees at all times during a 
grant year.
    United States means the several states, the District of Columbia, 
the Virgin Islands, the Commonwealth of Puerto Rico, Guam, American 
Samoa and the Trust Territory of the Pacific Islands.

[45 FR 66709, Oct. 7, 1980, as amended at 61 FR 19985, May 3, 1996]



Sec. 32.4  Discrimination prohibited.

    (a) General. No qualified handicapped individual shall, on the basis 
of handicap, be excluded from participation in, be denied the benefits 
of, or otherwise be subjected to discrimination under any program or 
activity which receives or benefits from Federal financial assistance.
    (b) Discriminatory actions prohibited. (1) A recipient, in providing 
any aid, benefit, service or training, may not, directly or through 
contractual, licensing, or other arrangments, on the basis of handicap:
    (i) Deny a qualified handicapped individual the opportunity to 
participate in or benefit from the aid, benefit, service or training;
    (ii) Afford a qualified handicapped individual an opportunity to 
participate in or benefit from the aid, benefit, service or training 
that is not equal to that afforded others;
    (iii) Provide a qualified handicapped individual with any aid, 
benefit, service or training that is not as effective as that provided 
to others;
    (iv) Provide different or separate aid, benefits, or services to 
handicapped individuals or to any class of handicapped individuals 
unless such action is necessary to provide qualified handicapped 
individuals with aid, benefits, services or training that are as 
effective as those provided to others;
    (v) Aid or perpetuate discrimination against a qualified handicapped 
individual by providing significant assistance to an agency, 
organization, or person that discriminates on the basis of handicap in 
providing any aid, benefit, service or training to beneficiaries of the 
recipient's program;
    (vi) Deny a qualified handicapped individual the opportunity to 
participate as a member of planning or advisory boards; or
    (vii) Otherwise limit a qualified handicapped individual in 
enjoyment of any right, privilege, advantage, or opportunity enjoyed by 
others receiving any aid, benefit, service or training.
    (2) For purposes of this part, aid, benefits, services and training, 
to be equally effective, are not required to produce the identical 
result or level of achievement for handicapped and nonhandicapped 
individuals, but must afford handicapped individuals equal opportunity 
to obtain the same result, to gain the same benefit, or to reach the 
same level of achievement, in the most integrated setting appropriate to 
the person's needs.
    (3) A recipient may not deny a qualified handicapped individual the 
opportunity to participate in its regular programs or activities, 
despite the existence of separate or different programs or activities 
for the handicapped which are established in accordance with this part.
    (4) A recipient may not, directly or through contractual or other 
arrangements, utilize criteria or methods of administration:
    (i) That have the effect of subjecting qualified handicapped 
individuals to discrimination on the basis of handicap;
    (ii) That have the purpose or effect of defeating or substantially 
impairing accomplishment of the objectives of the recipient's program 
with respect to handicapped individuals; or
    (iii) That perpetuate the discrimination of another recipient if 
both recipients are subject to common administrative control or are 
agencies of the same state.
    (5) In determining the site or location of a facility, an applicant 
for assistance or a recipient may not make selections.
    (i) That have the effect of excluding handicapped individuals from, 
denying

[[Page 331]]

them the benefits of, or otherwise subjecting them to discrimination 
under any program or activity that receives or benefits from Federal 
financial assistance; or
    (ii) That have the purpose or effect of defeating or substantially 
impairing the accomplishment of the objectives of the program or 
activity with respect to handicapped individuals.
    (6) As used in this section, the aid, benefit, service or training 
provided under a program or activity receiving or benefiting from 
Federal financial assistance includes any aid, benefit, service or 
training provided in or through a facility that has been constructed, 
expanded, altered, leased, rented, or otherwise acquired, in whole or in 
part, with Federal financial assistance.
    (7)(i) In providing services under programs of Federal financial 
assistance, except for employment-related training, a recipient to which 
this subpart applies, except small recipients, shall ensure that no 
handicapped participant is denied the benefits of, excluded from 
participation in, or otherwise subjected to discrimination under the 
program or activity operated by the recipient because of the absence of 
auxiliary aids for participants with impaired sensory, manual or 
speaking skills. In programs of employment and employment-related 
training, this paragraph shall apply only to the intake, assessment and 
referral services. A recipient shall operate each program or activity to 
which this subpart applies so that, when viewed in its entirety, 
auxiliary aids are readily available.
    (ii) Auxiliary aids may include brailled and taped written 
materials, interpreters or other effective methods of making orally 
delivered information available to persons with hearing impairments, 
readers for persons with visual impairments, equipment adapted for use 
by persons with manual impairments, and other similar services and 
actions. Recipients need not provide attendants, individually prescribed 
devices, readers for personal use or study, or other devices or services 
of a personal nature.
    (c) Programs limited by Federal law. The exclusion of nonhandicapped 
persons from the benefits of a program limited by Federal statute on 
Executive order to handicapped individuals or the exclusion of a 
specific class of handicapped individuals from a program limited by 
Federal statute or Executive order to a different class of handicapped 
individuals is not prohibited by this part.
    (d) Integrated setting. Recipients shall administer programs and 
activities in the most integrated setting appropriate to the needs of 
qualified handicapped individuals.
    (e) Communications with individuals with impaired vision and 
hearing. Recipients shall take appropriate steps to ensure that 
communications with their applicants, employees, and beneficiaries are 
available to persons with impaired vision and hearing.



Sec. 32.5  Assurances required.

    (a) Assurances. An applicant for Federal financial assistance for a 
program or activity to which this part applies shall submit an 
assurance, on a form specified by the Assistant Secretary, that the 
program will be operated in compliance with this part. An applicant may 
incorporate these assurances by reference in subsequent applications to 
the Department.
    (b) Duration of obligation. (1) In the case of Federal financial 
assistance extended in the form of real property or structures on the 
property, the assurance will obligate the recipient or, in the case of a 
subsequent transfer, the transferee, for the period during which the 
real property or structures are used for the purpose involving the 
provision of similar services or benefits.
    (2) In the case of Federal financial assistance extended to provide 
personal property, the assurance will obligate the recipient for the 
period during which it retains ownership or possession of the property.
    (3) In all other cases the assurance will obligate the recipient for 
the period during which Federal financial assistance is extended or the 
federally-funded program is operated, whichever is longer.
    (c) Covenants. (1) Where Federal financial assistance is provided in 
the form of real property or interest in the property from the 
Department, the instrument effecting or recording this

[[Page 332]]

transfer shall contain a covenant running with the land to assure 
nondiscrimination for the period during which the real property is used 
for a purpose for which the Federal financial assistance is extended or 
for another purpose involving the provision of similar services or 
benefits.
    (2) Where no Federal transfer of property is involved but property 
is purchased or improved with Federal financial assistance, the 
recipient shall agree to include the covenant described in paragraph 
(c)(1) of this section in the instrument effecting or recording any 
subsequent transfer of the property.
    (3) Where Federal financial assistance is provided in the form of 
real property or interest in the property from the Department, the 
covenant shall also include a condition coupled with a right to be 
reserved by the Department to revert title to the property in the event 
of a breach of the covenant. If a transferee of real property proposes 
to mortgage or otherwise encumber the real property as security to 
finance construction of new, or improvement of existing, facilities on 
the property for the purposes for which the property was transferred, 
the Assistant Secretary may agree to forbear the exercise of such right 
to revert title for so long as the lien of such mortgage or other 
encumbrance remains effective. Such an agreement by the Assistant 
Secretary may be entered into only upon the request of the transferee 
(recipient) if it is necessary to accomplish such financing and upon 
such terms and conditions as the Assistant Secretary deems appropriate.
    (d) Interagency agreements. Where funds are granted by the 
Department to another Federal agency to carry out a program under a law 
administered by the Department, and where the grant obligates the 
recipient agency to comply with the rules and regulations of the 
Department applicable to that grant the provisions of this part shall 
apply to programs and activities operated with such funds.



Sec. 32.6  Remedial action, voluntary action, and self-evaluation.

    (a) Remedial action. (1) If the Assistant Secretary finds that a 
recipient has discriminated against persons on the basis of handicap in 
violation of section 504 of this part, the recipient shall take such 
remedial action as the Assistant Secretary deems necessary to overcome 
the effects of the discrimination.
    (2) Where a recipient is found to have discriminated against persons 
on the basis of handicap in violation of section 504 or this part and 
where another recipient exercises control over the recipient that has 
discriminated, the Assistant Secretary, where appropriate, may require 
either or both recipients to take remedial action.
    (3) The Assistant Secretary may, where necessary to overcome the 
effects of discrimination in violation of section 504 or this part, 
require a recipient to take remedial action:
    (i) With respect to handicapped individuals who would have been 
participants in the program had the discrimination not occurred; and
    (ii) With respect to handicapped persons who are no longer 
participants in the recipient's program but who were participants in the 
program when the discrimination occurred; and
    (iii) With respect to employees and applicants for employment.
    (b) Voluntary action. A recipient may take steps, in addition to any 
action that is required by this part, to overcome the effects of 
conditions that resulted in limited participation in the recipient's 
program or activity by qualified handicapped individuals.
    (c) Self-evaluation. (1) A recipient shall, within one year of the 
effective date of this part:
    (i) Evaluate, with the assistance of interested persons who are 
selected by the recipient, including handicapped individuals or 
organizations representing handicapped individuals, its current policies 
and practices and the effects thereof that do not or may not meet the 
requirements of this part;
    (ii) Modify, after consultation with interested persons who are 
selected by the recipient, including handicapped individuals or 
organizations representing handicapped individuals, any policies and 
practices that do not meet the requirements of this part; and
    (iii) Take, after consultation with interested persons who are 
selected by

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the recipient, including handicapped individuals or organizations 
representing handicapped individuals, appropriate remedial steps to 
eliminate the effects of any discrimination that resulted from adherence 
to these policies and practices.
    (2) A recipient, other than a small recipient, shall for at least 
three years following completion of the evaluation required under 
paragraph (c)(1) of this section, maintain on file, make available for 
public inspection, and provide to the Assistant Secretary upon request:
    (i) A list of the interested persons consulted;
    (ii) A description of areas examined and any problems identified; 
and
    (iii) A description of any modifications made and of any remedial 
steps taken.



Sec. 32.7  Designation of responsible employee.

    A recipient, other than a small recipient shall designate at least 
one person to coordinate its efforts to comply with this part.



Sec. 32.8  Notice.

    (a) A recipient, other than a small recipient, shall take 
appropriate initial and continuing steps to notify participants, 
beneficiaries, referral sources, applicants, and employees, including 
those with impaired vision or hearing, and unions or professional 
organizations which have collective bargaining or professional 
agreements with the recipient, that it does not discriminate on the 
basis of handicap in violation of section 504 and of this part. The 
notification shall state, where appropriate, that the recipient does not 
discriminate in the admission or access to, or treatment or employment 
in, its programs and activities. The notification shall also include an 
identification of the responsible employee designated pursuant to 
Sec. 32.7. A recipient shall make the initial notifications required by 
this paragraph within 90 days of the effective date of this part. 
Methods of initial and continuing notification may include the posting 
of notices, publication in newspapers and magazines, placement of 
notices in recipient's publications, and distribution of memoranda or 
other written communications.
    (b) If a recipient publishes or uses recruitment materials or 
publications containing general information that it makes available to 
participants, beneficiaries, applicants, or employees, it shall include 
in those materials or publications a statement of the policy described 
in paragraph (a) of this section. A recipient may meet the requirement 
of this paragraph either by including appropriate inserts in existing 
materials and publications or by revising and reprinting the materials 
and publications.



Sec. 32.9  Administrative requirements for small recipients.

    The Assistant Secretary may require any recipient that provides 
services to fewer than 15 beneficiaries or with fewer than 15 employees, 
or any class of such recipients, to comply with Secs. 32.7 and 32.8, in 
whole or in part, when the Assistant Secretary finds a violation of this 
part or finds that such compliance will not significantly impair the 
ability of the recipient or class of recipients to provide benefits or 
services.



Sec. 32.10  Effect of State or local law or other requirements and effect of employment opportunities.

    (a) The obligation to comply with this part is not obviated or 
alleviated by the existence of any state or local law or other 
requirement that, on the basis of handicap, imposes prohibitions or 
limits upon the eligibility of qualified handicapped individuals to 
receive services, participate in programs or practice any occupation or 
profession.
    (b) The obligation to comply with this part is not obviated or 
alleviated because employment opportunities in any occupation or 
profession are or may be more limited for handicapped individuals than 
for nonhandicapped persons.



Subpart B--Employment Practices and Employment Related Training Program 
                              Participation



Sec. 32.12  Discrimination prohibited.

    (a) General. (1) No qualified handicapped individual shall, on the 
basis of

[[Page 334]]

handicap, be subjected to discrimination in employment under any program 
or activity to which this part applies. This subpart is applicable to 
employees and applicants for employment with all recipients and to 
participants in employment and training programs financed in whole or in 
part by Federal financial assistance.
    (2) A recipient shall make all decisions concerning employment or 
training under any program or activity to which this subpart applies in 
a manner which ensures that discrimination on the basis of handicap does 
not occur and may not limit, segregate, or classify applicants or 
employees or participants in any way that adversely affects their 
opportunities or status because of handicap.
    (3) A recipient may not participate in a contractual or other 
relationship that has the effect of subjecting qualified handicapped 
applicants, employees or participants to discrimination prohibited by 
this subpart. The relationships referred to in this subparagraph include 
relationships with employment and referral agencies, with labor unions, 
with organizations providing or administering fringe benefits to 
employees of the recipient, and with organizations providing training 
and apprenticeship programs.
    (b) Specific activities. The provisions of this subpart apply to:
    (1) Recruitment advertising, and the processing of applicants for 
employment;
    (2) Hiring, upgrading, promotion, award of tenure, demotion, 
transfer, layoff, termination, right of return from layoff and rehiring;
    (3) Rates of pay or any other form of compensation and changes in 
compensation;
    (4) Job assignments, job classifications, organizational structures, 
position descriptions, lines of progression, and seniority lists;
    (5) Leaves of absence, sick leave, or any other leave;
    (6) Fringe benefits available by virture of employment, whether or 
not administered by the recipient;
    (7) Selection and financial support for training, including 
apprenticeship, professional meetings, conferences, and other related 
activities, and selection for leaves of absence to pursue training;
    (8) Employer-sponsored activities, including social or recreational 
programs; and
    (9) Any other term, condition, or privilege of employment.
    (c) Collective bargaining agreements. Whenever a recipient's 
obligation to comply with this subpart and to correct discriminatory 
practices impacts on and/or necessitates changes in a term of a 
collective bargaining agreement(s) to which the recipient is a party, 
the recipient shall attempt to achieve compliance consistent with the 
provisions of Sec. 32.17(a). However a recipient's obligation to comply 
with this subpart is not relieved by a term of any such collective 
bargaining agreement(s).
    (d) Compensation. In offering employment or promotions to 
handicapped individuals, the recipient shall not reduce the amount of 
compensation offered because of any disability income, pension or other 
benefit the applicant or employee receives from other source.



Sec. 32.13  Reasonable accommodation.

    (a) A recipient shall make reasonable accommodation to the known 
physical or mental limitations of an otherwise qualified handicapped 
applicant, employee or participant unless the recipient can demonstrate 
that the accommodation would impose an undue hardship on the operation 
of its program.
    (b) In determining pursuant to paragraph (a) of this section whether 
an accommodation would impose an undue hardship on the operation of a 
recipient's program, factors to be considered include;
    (1) The overall size of the recipient's program with respect to 
number of employees, number of participants, number and type of 
facilities, and size of budget;
    (2) The type of the recipient's operation, including the composition 
and structure of the recipient's workforce, and duration and type of 
training program; and
    (3) The nature and cost of the accommodation needed.
    (c) A recipient may not deny any employment or training opportunity 
to a

[[Page 335]]

qualified handicapped employee, applicant or participant if the basis 
for the denial is the need to make reasonable accommodation to the 
physical or mental limitations of the employee, applicant or 
participant.
    (d) Nothing in this paragraph shall relieve a recipient of its 
obligation to make its program accessible as required in subpart C of 
this part, or to provide auxiliary aids, as required by Sec. 32.4(b)(7).



Sec. 32.14  Job qualifications.

    (a) The recipient shall provide for, and shall adhere to, a schedule 
for the review of the appropriateness of all job qualifications to 
ensure that to the extent job qualifications tend to exclude handicapped 
individuals because of their handicap, they are related to the 
performance of the job and are consistent with business necessity and 
safe performance.
    (b) Whenever a recipient applies job qualifications in the selection 
of applicants, employees or participants for employment or training or 
other change in employment status such as promotion, demotion or 
training, which would tend to exclude handicapped individuals because of 
their handicap, the qualifications shall be related to the specific job 
or jobs for which the individual is being considered and shall be 
consistent with business necessity and safe performance. The recipient 
shall have the burden to demonstrate that it has complied with the 
requirements of this paragraph.



Sec. 32.15  Preemployment inquiries.

    (a) Except as provided in paragraphs (b) and (c) of this section, a 
recipient may not conduct preemployment medical examinations or make 
preemployment inquiry of an applicant for employment or training as to 
whether the applicant is a handicapped person or as to the nature or the 
severity of a handicap. A recipient may, however, make preemployment 
inquiry into an applicant's ability to perform job-related functions.
    (b) When a recipient is taking remedial action to correct the 
effects of past discrimination, when a recipient is taking voluntary 
action to overcome the effects of conditions that resulted in limited 
paticipation in its federally-assisted program or activity, or when a 
recipient is taking affirmative action pursuant to section 503 of the 
Act, the recipient may invite applicants for employment or training to 
indicate whether and to what extent they are handicapped if:
    (1) The recipient states clearly on any written questionnaire used 
for this purpose or makes clear orally, if no written questionnaire is 
used, that the information requested is intended for use solely in 
connection with its remedial action obligations or its voluntary or 
affirmative action efforts.
    (2) The recipient states clearly that the information is being 
requested on a voluntary basis, that it will be kept confidential as 
provided in paragraph (d) of this section, that refusal to provide it 
will not subject the applicant, employee or participant to any adverse 
treatment, and that it will be used only in accordance with this part.
    (c) An employer who routinely requires medical examinations as part 
of the employment selection process must demonstrate that each of the 
requirements of this subsection are met:
    (1) The medical examination shall be performed by a physician 
qualified to make functional assessments of individuals in a form which 
will express residual capacity for work or training. Such an assessment 
does not require clinical determinations of disease or disability, but 
shall provide selecting or referring officials sufficient information 
regarding any functional limitations relevant to proper job placement or 
referral to appropriate training programs. Factors which may be assessed 
may include, for example, use of limbs and extremities, mobility and 
posture, endurance and energy expenditure, ability to withstand various 
working conditions and environments, use of senses and mental capacity;
    (2) The results of the medical examination shall be specific and 
objective so as to be susceptible to review by independent medical 
evaluators and shall be transmitted to the applicant or employee at the 
same time as the employing official;
    (3) The results of the medical examination shall not be used to 
screen out qualified applicants and employees but

[[Page 336]]

to determine proper placement and reasonable accommodation. The 
employing official using physical or mental information obtained 
pursuant to this section should be familiar with physical or mental 
activities involved in performing the job, and the working conditions 
and environment in which it is carried out. If the applicant is being 
considered for a variety of jobs having different requirements or 
skills, the employing official should make a functional assessment of 
the physical or mental demands of the jobs in order to match the 
applicant with the most suitable vacancy;
    (4) All of potential employees for the jobs are subjected to the 
medical examination;
    (5) The procedures for using medical examinations or the medical 
information shall be constructed in such a manner that:
    (i) A conditional job offer was made or the individual was 
conditionally placed in a job pool or conditionally placed on an 
eligibility list prior to the medical examination being performed; or
    (ii) The results of the medical examination were considered by the 
employing official only after a conditional decision to make a job offer 
or the individual had been placed conditionally in a job pool or 
conditionally placed on an eligibility list; that is the medical results 
were the last factor evaluated by the employing officials before a final 
decision to make an offer of employment was made.
    (6) Unless a conditional job offer is made prior to the medical 
examination, all potential employees for the job shall be informed at 
the time of the medical examination that:
    (i) The results of the medical examination are the last factor 
evaluated by the employing official before a final decision to make an 
offer of employment is made, and
    (ii) The medical examination results shall be transmitted to the 
employing official and the applicant only after a conditional decision 
to make a job offer has been made.
    (d) Information obtained in accordance with this section as to the 
medical condition or history of the applicant shall be collected and 
maintained on separate forms that shall be accorded confidentiality as 
medical records, except that:
    (1) Employing officials may obtain the information after making a 
conditional decision to make a job offer to the applicant or the 
applicant was placed conditionally in a job pool or placed conditionally 
on an eligibility list.
    (2) Supervisors and managers may be informed regarding restricions 
on the work or duties of qualified handicapped persons and regarding 
necessary accommodations;
    (3) First aid and safety personnel may be informed, where 
appropriate, if the condition might require emergency treatment; and
    (4) Government officials investigating compliance with the Act shall 
be provided information upon request.



Sec. 32.16  Listing of employment openings.

    Recipients should request State employment security agencies to 
refer qualified handicapped individuals for consideration for 
employment.



Sec. 32.17  Labor unions and recruiting and training agencies.

    (a) The performance of a recipient's obligations under the 
nondiscrimination provisions of these regulations may necessitate a 
revision in a collective bargaining agreement(s). The policy of the 
Department of Labor is to use its best efforts, directly or through the 
recipients, subgrantees, local officials, vocational rehabilitation 
facilities, and other available instrumentalities, to cause any labor 
union, recruiting and training agency or other representative or workers 
who are or may be engaged in work under programs of Federal financial 
assistance to cooperate with, and to comply in the implementation of 
section 504.
    (b) To effectuate the purposes of paragraph (a) of this section, the 
Assistant Secretary may hold hearings, public or private, with respect 
to the practices and policies of any such labor union or recruiting and 
training agency.

[[Page 337]]

    (c) Whenever compliance with section 504 necessitates a revision of 
a collective bargaining agreement or otherwise significantly affects a 
substantial number of employees represented by the union, the collective 
bargaining representatives shall be given an opportunity to present 
their views to the Assistant Secretary.
    (d) The Assistant Secretary may notify any Federal, State, or local 
agency of his/her conclusions and recommendations with respect to any 
such labor organization or recruiting and training agency which in his/
her judgment has failed to cooperate with the Department of Labor, 
recipients, subgrantees or applicants in carrying out the purposes of 
section 504. The Assistant Secretary also may notify other appropriate 
Federal agencies when there is reason to believe that the practices of 
any such labor organization or agency violates other provisions of 
Federal law.



                    Subpart C--Program Accessibility



Sec. 32.26  Discrimination prohibited.

    No qualified handicapped individual shall, because a recipient's 
facilities are inaccessible to or unusable by handicapped individuals, 
be denied the benefits of, be excluded from participation in, or 
otherwise be subjected to discrimination under any program or activity 
to which this part applies.



Sec. 32.27  Access to programs.

    (a) Purpose. A recipient shall operate each program or activity to 
which this part applies so that the program or activity, when viewed in 
its entirety, is readily accessible to qualified handicapped 
individuals. This paragraph does not require a recipient to make each of 
its existing facilities or every part of a facility accessible to and 
usable by qualified handicapped individuals. However, if a particular 
program is available in only one location, that site must be made 
accessible or the program must be made available at an alternative 
accessible site or sites. Program accessibility requires nonpersonal 
aids to make the program accessible to mobility impaired persons. 
Reasonable accommodations, as defined in Sec. 32.3, are required for 
particular handicapped individuals in response to the specific 
limitations of their handicaps.
    (b) Scope and application. (1) For the purpose of this subpart, 
prime sponsors under the Comprehensive Employment and Training Act and 
any other individual or organization which receives a grant directly 
from the Department to establish or operate any program or activity 
shall assure that the program or activity, including Public Service 
Employment, Work Experience, Classroom Training and On-the-Job-Training, 
when viewed in its entirety, is readily accessible to qualified 
handicapped individuals.
    (2) Job Corps. All agencies, grantees, or contractors which screen 
or recruit applicants for the Job Corps shall comply with the 
nondiscrimination provisions of this part. Each regional office of the 
Department of Labor's Employment and Training Administration which makes 
the decision on the assignment of a Job Corps applicant to a particular 
center may, where it finds, after consultation with the qualified 
handicapped person seeking Job Corps services, that there is no method 
of complying with Sec. 32.27(a) at a particular Job Corps Center, other 
than by making a significant alteration in its existing facilities or in 
its training programs, assign that individual to another Job Corps 
Center which is accessible in accordance with this section and which is 
offering comparable training. The Job Corps, and each regional office of 
the Employment and Training Administration, shall assure that the Job 
Corps Program, when viewed in its entirety, is readily accessible to 
qualified handicapped individuals and that all future construction, 
including improvements to existing Centers, be made accessible to the 
handicapped.
    (3) If a small recipient finds, after consultation with a qualified 
handicapped person seeking its services, that there is no method of 
complying with Sec. 32.27(a) other than making a significant alteration 
in its existing facilities or facility the recipient may, as an 
alternative, refer the qualified handicapped person to other providers 
of those services that are accessible.
    (c) Methods. A recipient may comply with the requirement of 
Sec. 32.27(a)

[[Page 338]]

through such means as redesign of equipment, reassignment of classes or 
other services to accessible buildings, assignment of aides to 
beneficiaries, home visits, delivery of services at alternate accessible 
sites, alteration of existing facilities and construction of new 
facilities in conformance with the requirements of Sec. 32.28, or any 
other method that results in making its program or activity accessible 
to handicapped individuals. A recipient is not required to make 
structural changes in existing facilities where other methods are 
effective in achieving compliance with Sec. 32.27(a). In choosing among 
available methods for meeting the requirement of Sec. 32.27(a), a 
recipient shall give priority to those methods that offer programs and 
activities to handicapped persons in the most integrated setting 
appropriate.
    (d) Time period. A recipient shall comply with the requirements of 
Sec. 32.27(a) within 60 days of the effective date of this part except 
that where structural changes in facilities are necessary, such changes 
shall be made within three years of the effective date of this part, but 
in any even as expeditiously as possible.
    (e) Transition plan. In the event that structural changes to 
facilities are necessary to meet the requirement of Sec. 32.27(a), a 
recipient shall develop, within six months of the effective date of this 
part, a transition plan setting forth the steps necessary to complete 
such changes. The plan shall be developed with the assistance of 
interested persons, including qualified handicapped individuals. A copy 
of the transition plan shall be made available for public inspection. 
The plan shall, at a minimum:
    (1) Identify physical obstacles in the recipient's facilities that 
limit the accessibility of its program or activity to qualified 
handicapped individuals;
    (2) Describe in detail the methods that will be used to make the 
facilities accessible;
    (3) Specify the schedule for taking the steps necessary to achieve 
full program accessibility and, if the time period of the transition 
plan is longer than one year, identify steps that will be taken during 
each year of the transition period; and
    (4) Indicate the person responsible for implementation of the plan.
    (f) Notice. The recipient shall adopt and implement procedures to 
ensure that interested persons, including persons with impaired vision 
or hearing, can obtain information as to the existence and location of 
services, activities, and facilities that are accessible to and usable 
by qualified handicapped individuals.



Sec. 32.28  Architectural standards.

    (a) Design and construction. Each facility or part of a facility 
constructed by, on behalf of, or for the use of a recipient shall be 
designed and constructed in such manner that the facility or part of the 
facility is readily accessible to and usable by qualified handicapped 
individuals, if the construction was commenced after the effective date 
of this part.
    (b) Alteration. Each facility or part of a facility which is altered 
by, on behalf of, or for the use of a recipient after the effective date 
of this part in a manner that affects or could affect the usability of 
the facility or part of the facility shall, to the maximum extent 
feasible, be altered in such manner that the altered portion of the 
facility is readily accessible to and usable by qualified handicapped 
individuals.
    (c) Standards for architectural accessibility. Design, construction, 
or alteration of facilities under this subpart shall meet the most 
current standards for physical accessibility prescribed by the General 
Services Administration under the Architectural Barriers Act at 41 CFR 
101-19.6. Alternative standards may be adopted when it is clearly 
evident that equivalent or greater access to the facility or part of the 
facility is thereby provided.



                          Subpart D--Procedures



Sec. 32.44  Compliance information.

    (a) Cooperation and assistance. The Assistant Secretary shall to the 
fullest extent practicable seek the cooperation of recipients in 
obtaining compliance with this part and shall provide assistance and 
guidance to recipients to help them comply voluntarily with this part.

[[Page 339]]

    (b) Compliance reports. Each recipient shall keep such records and 
submit to the Assistant Secretary timely, complete and accurate 
compliance reports at such times, and in such form and containing such 
information as the Assistant Secretary may determine to be necessary to 
enable him to ascertain whether the recipient had complied or is 
complying with this part. For example, recipients should have available 
for the Department data showing the extent to which known handicapped 
individuals are beneficiaries and participants in federally assisted 
programs. In the case of any program under which a primary recipient 
extends Federal financial assistance to any other recipient, such other 
recipient shall also submit such compliance reports to the primary 
recipient as may be necessary to enable the primary recipient to carry 
out its obligations under this part.
    (c) Access to sources of information. Each recipient shall permit 
access by the Assistant Secretary during normal business hours to such 
of its books, records, accounts, and other sources of information and 
its facilities as may be pertinent to ascertain compliance with this 
part. Where any information required of a recipient is in the exclusive 
possession of any other agency, institution or person and this agency, 
institution or person shall fail or refuse to furnish this information, 
the recipient shall so certify in its report and shall set forth what 
efforts it has made to obtain the information. Asserted considerations 
of privacy or confidentiality may not operate to bar the Department from 
access to or copying of records or information, or from evaluating or 
seeking to enforce compliance with this part.
    (d) Posters and information. The recipient will post in prominent 
locations (bulletin boards, time clock areas, etc.) posters designed and 
furnished by DOL outlining and summarizing the nondiscrimination 
requirements of section 504. The recipient also will make readily 
available information on section 504 requirements with respect to 
compliance procedures, the rights of beneficiaries and employees through 
handbooks, pamphlets and other materials furnished by DOL.



Sec. 32.45  Investigations.

    (a) Periodic compliance reviews. The Assistant Secretary shall from 
time-to-time review the practices of recipients to determine whether 
they are complying with this part.
    (b) Adoption of grievance procedures. A recipient shall adopt an 
internal review procedure incorporating appropriate due process 
standards which provides for the prompt and equitable resolution of 
complaints alleging any action prohibited by this part. The complainant 
or his or her representative shall file the complaint with the recipient 
for processing under those procedures. A complaint must be filed not 
later than 180 days from the date of the alleged discrimination, unless 
the time for filing is extended by the Assistant Secretary for good 
cause shown. The recipient shall maintain records on all complaints 
filed alleging violation of the Act and shall make such records 
available to the Assistant Secretary upon request. The complaint and all 
actions take thereunder shall be kept confidential by the recipient. If 
the complaint has not been resolved under those procedures 
satisfactorily to the complainant within 60 days of the filing or 
referral, the complainant or his or her representative may file a 
complaint with the Assistant Secretary within 30 days of the recipient 
level decision or 90 days from the date of filing the complaint, 
whichever is earlier. Upon such filing, the Assistant Secretary will 
proceed as provided in this section. Exhaustion of recipient level 
procedures shall be required except where:
    (1) The recipient has not acted within the timeframe specified in 
this section; or
    (2) The recipient's procedures are not in compliance with this 
section; or
    (3) An emergency situation is determined to exist by the Assistant 
Secretary.
    (c) Complaints. Where recipient level procedures have been 
exhausted, any person who believes he or she or any specific class of 
individuals has been subjected to discrimination prohibited by this part 
may (or through an authorized representative) file a written complaint 
with the Assistant Secretary.

[[Page 340]]

    (d) Contents of complaints. Complaints must be signed by the 
complainant or his or her authorized representative and must contain the 
following information:
    (1) Name and address (including telephone or TTY number) of the 
complainant;
    (2) Name and address of the recipient or sub-grantee who committed 
the alleged violation;
    (3) A description of the act or acts considered to be a violation;
    (4) A statement that the individual is handicapped or has a history 
of a handicap or other documentation of impairment or was regard by the 
recipient as having an impairment; and
    (5) Other pertinent information available which will assist in the 
investigation and resolution of the complaint.
    (e) Incomplete information. Where a complaint contains incomplete 
information, the Assistant Secretary shall seek the needed information 
or any other information which indicates a possible failure to comply 
with this part from the complainant and shall be responsible for 
developing a complete record. If such information is not provided within 
60 days, the complaint may be closed upon notice to the parties.
    (f) Resolution of matters. Where an investigation indicates that the 
recipient has not complied with the requirements of the Act or this 
part, efforts shall be made to secure compliance through conciliation 
and persuasion within a reasonable time. Before the recipient or 
subgrantee can be found to be in compliance, it must make a specific 
commitment, in writing, to take corrective action to meet the 
requirements of the Act and this part. The commitment must indicate the 
precise action to be taken and dates for completion. The time period 
allowed should be no longer than the minimum period necessary to effect 
such changes. Upon approval of such commitment by the Assistant 
Secretary, the recipient may be considered in compliance on condition 
that the commitments are kept. Where the investigation indicates a 
violation of the Act or regulations in this part (and the matter has not 
been resolved by informal means), the Assistant Secretary shall afford 
the recipient an opportunity for a hearing in accordance with 
Sec. 32.47.
    (g) Intimidatory or retaliatory acts prohibited. The sanctions and 
penalties contained in this regulation may be exercised by the Assistant 
Secretary against any recipient or sub-grantee who fails to take all 
necessary steps to ensure that no person intimidates, threatens, coerces 
or discriminates against any individual for the purpose of interfering 
with the filing of a complaint, furnishing information, or assisting or 
participating in any manner in an investigation, compliance review, 
hearing, or any other activity related to the administration of the Act.



Sec. 32.46  Procedure for effecting compliance.

    (a) General. If there appears to be a failure or threatened failure 
to comply with this regulation and if the noncompliance or threatened 
noncompliance cannot be corrected by informal means, the Department may 
suspend, terminate or refuse to grant or to continue Federal financial 
assistance or take any other means authorized by law. Such other means 
may include, but are not limited to:
    (1) A referral to the Department of Justice with a recommendation 
that appropriate proceedings be brought to enforce any rights of the 
United States under any law of the United States or any assurance; and
    (2) Any applicable proceeding under state or local law.
    (b) Noncompliance with the requirements of this part. If a recipient 
fails or refuses to comply with a requirement imposed by or pursuant to 
this part, the Department may institute an administrative enforcement 
proceeding to compel compliance with the requirement, to seek 
appropriate relief, and or to terminate Federal financial assistance in 
accordance with the procedures of paragraph (c) of this section. The 
Department shall not be required to provide assistance in such a case 
during the pendency of the administrative proceedings under such 
paragraph if grants have not yet been approved or funds not yet 
committed to the recipient. However, the Department shall

[[Page 341]]

continue assistance during the pendency of such proceedings where such 
assistance is due and payable pursuant to an application therefor 
approved prior to the effective date of this part.
    (c) Termination of or refusal to grant or to continue Federal 
financial assistance. No order suspending, terminating or refusing to 
grant or continue Federal financial assistance shall become effective 
until:
    (1) The Assistant Secretary has advised the applicant or recipient 
of its failure to comply and compliance has not been secured by 
voluntary means; and
    (2) There has been an express finding on the record, after 
opportunity for hearing, of a failure by the applicant or recipient to 
comply with a requirement imposed by or pursuant to this part. Any 
action to suspend or terminate or to refuse to grant or to continue 
Federal financial assistance shall be limited to the particular 
political entity, or part thereof, or other applicant or recipient as to 
whom such a finding has been made and shall be limited in its effect to 
the particular program, or part thereof, in which such noncompliance has 
been so found.
    (d) Other means authorized by law. No action to effect compliance by 
any other means authorized by law shall be taken until:
    (1) The Assistant Secretary has determined that compliance cannot be 
secured by voluntary means;
    (2) The recipient or other person has been notified of its failure 
to comply and of the action to be taken to effect compliance; and
    (3) The expiration of at least 10 days from the mailing of such 
notice to the recipient or other person.



Sec. 32.47  Hearing practice and procedure.

    (a) All hearings conducted under section 504 of the Rehabilitation 
Act of 1973, as amended, and the regulations in this part shall be 
governed by the Department of Labor's rules of practice for 
administrative proceedings to enforce title VI of the Civil Rights Act 
of 1964 contained in 29 CFR part 31.
    (b) For the purposes of hearings pursuant to this part 32, 
references in 29 CFR part 31 to title VI of the Civil Rights Act of 1964 
shall mean section 504 of the Rehabilitation Act of 1973, as amended.
    (c) The Assistant Secretary from time-to-time may assign to 
officials of other departments or agencies of the Government or of the 
Department of Labor (with the consent of such department or agency) 
responsibilities in connection with the effectuation of the purposes of 
section 504 of the Act and this part (other than responsibility for 
final decisions as provided in Sec. 32.46), including the achievement of 
effective coordination and maximum uniformity within the Department and 
within the executive branch of the Government in the application of 
section 504 and this part to similar programs and in similar situations.
    (d) Any action taken, determination made, or requirement imposed by 
an official of another Department or agency acting pursuant to an 
assignment of responsibility under this subsection shall have the same 
effect as though such action had been taken by the Secretary.



                      Subpart E--Auxiliary Matters



Sec. 32.48  Post-termination proceedings.

    (a) An applicant or recipient adversely affected by an order 
suspending, terminating or refusing to grant or continue Federal 
financial assistance shall be restored to full eligibility to receive 
Federal financial assistance if it satisfies the terms and conditions of 
that order for such eligibility, brings itself into compliance with this 
part and satisfies the Assistant Secretary that it will fully comply 
with section 504 and this part.
    (b) Any applicant or recipient adversely affected by an order 
suspending, terminating or refusing to grant or continue Federal 
financial assistance may request the Assistant Secretary to restore 
fully its eligibility to receive Federal financial assistance. Any such 
request shall be supported by information showing that the applicant or 
recipient has met the requirements of subparagraph (a) of this 
paragraph. If the Assistant Secretary determines that those requirements 
have been satisfied, the applicant's or recipient's eligibility shall be 
restored.

[[Page 342]]

    (c) If the Assistant Secretary denies any such request, the 
applicant or recipient may submit a written request for a hearing, 
specifying why it believes the Assistant Secretary to have been in 
error. It shall thereupon be given an expeditious hearing, with a 
decision on the record, in accordance with rules of procedure specified 
in this part. The applicant or recipient will be restored to such 
eligibility if it proves at such hearing that it satisfied the 
requirements of paragraph (a) of this section. While proceedings under 
this paragraph are pending, the sanctions imposed by the order 
suspending, terminating or refusing to grant or continue Federal 
financial assistance shall remain in effect.



Sec. 32.49  Recordkeeping.

    (a) Each recipient shall maintain for a period of not less than 
three years records regarding complaints and actions taken thereunder, 
and such employment or other records as required by the Assistant 
Secretary or by this part and shall furnish such information in the form 
required by the Assistant Secretary or as the Assistant Secretary deems 
necessary for the administration of the Act and regulations in this 
part.
    (b) Failure to maintain and furnish complete and accurate records as 
required under this section is a ground for the imposition of 
appropriate sanctions.



Sec. 32.50  Access to records.

    Each recipient shall permit access and copying during normal 
business hours to its places of business, books, records and accounts 
pertinent to compliance with the Act, and all rules and regulations 
promulgated pursuant thereto for the purposes of investigation.



Sec. 32.51  Rulings and interpretations.

    Ruling under or interpretations of the Act and the regulations 
contained in this part 32 shall be made by the Assistant Secretary.

                          Appendix A to Part 32

    Accommodations may take many forms based on the type of handicap and 
the needs of the individual. In developing appropriate accommodations, 
the individual should be consulted as to particular needs.
    The following is a list of possible types of accommodations provided 
for guidance and technical assistance. These suggestions are not 
mandatory, and other forms of accommodation not described herein may be 
required if they are appropriate to meet the needs of particular 
handicapped individuals.

              Accommodations for Participants and Employees

    (a) Job restructuring means the procedure which includes:
    (1) Identifying the separate tasks that comprise a job or group of 
jobs;
    (2) Developing new position descriptions which retain some of the 
tasks of the original job; and
    (3) Developing a career ladder which builds upward from the new 
positions which contain the lesser skilled tasks to regular jobs. A 
restructured job can be clearly different from the original one in terms 
of skills, knowledge, abilities, and work experience needed to perform 
the work. Job restructuring is intended to maximize the abilities of the 
particular handicapped person and is not intended to permit a recipient 
to underemploy or job-stereotype that person. A restructured job, for 
example, could be one in which the more highly skilled but physically 
less demanding duties are retained, e.g. operating controls and switches 
in a steel mill, and less skilled, physically taxing duties, e.g. 
lifting, pulling, are reassigned to non-handicapped employees.
    (b) Modify job or program schedules, for example, by allowing for a 
flexible schedule a few days a week so that a participant or employee 
may undergo medical treatment or therapy. Work-times or participation in 
program activities may also be altered to permit handicapped individuals 
to travel to and from work during non-rush hours. For employees or 
participants who become unable to perform the duties of their positions 
because of a physical or mental condition, recipients may be required to 
grant liberal time off or leave without pay when paid sick leave is 
exhausted and when the disability is of a nature that it is likely to 
respond to treatment of hospitalization. See, e.g., 339 Federal 
Personnel Manual-1-3(b)(1).
    (c) Modify program and work procedures and training time.
    (d) Relocate particular offices or jobs or program activities so 
that they are in facilities accessible to and usable by qualified 
handicapped persons. For example, an employee or participant with a 
respiratory ailment can be placed in a ``nonsmoking'' and/or well-
ventilated office.
    (e) Acquire or modify equipment or devices. For hearing-impaired 
participants or

[[Page 343]]

employees, this may include placing amplifiers on telephone receivers, 
making telephone equipment compatible with hearing aids, providing 
flashing lights to supplement telephone rings or installing 
telecommunications devices (TDD's or TTY's). For blind participants or 
employees, this may include providing tape recorders or dictating 
machines for those who cannot type. For wheelchair-users, this may 
include raising on blocks a desk that is otherwise too low for the 
employee, rather than purchasing a specially-made desk. A recipient is 
not obligated to acquire or modify equipment that enables a participant 
or employee to perform a particular job or participate in a particular 
program until after an employee with a need for these modifications is 
hired for a particular office or admitted to a program.
    (f) Provide readers, interpreters, and similar assistance as needed 
for deaf, blind and other handicapped participants or employees. In most 
instances, this would not require a full-time assistant.
    (g) Decrease reliance solely on one form of communication. For 
example, for deaf participants or employees this may include 
supplementing program or job orientation sessions with written manuals 
and other visual materials. If appropriate, a visual warning system 
should be installed. It may also include providing flashing lights to 
supplement auditory signals such as sirens and alarm bells. For blind 
employees, this may include making some communications available in 
braille, enlarged print, or on cassette recordings. A recipient should 
tailor the accommodations listed above to the needs of the individual 
participants or employees who have been admitted to a particular program 
or hired for a particular office.
    (h) Provide human relations-sensitivity training on issues 
pertaining to handicapped discrimination to all recipient employees.
    (i) Conduct ongoing training and planning sessions with recipient 
supervisors, managers, personnel, technical experts and disability 
rights advocates to implement and evaluate methods of reasonable 
accommodation.

                      Accommodations for Applicants

    (a) Announce program and job vacancies in a form readily 
understandable by mentally handicapped persons and by persons with 
impaired vision or hearing, for example, by making the announcements 
available in braille or on cassette tapes. Sec. 32.4(e) of DOL's 
proposed section 504 regulations requires recipients to insure that 
communications with applicants are available to persons with impaired 
vision or hearing. Recipients shall undertake to explain, as 
appropriate, program and job announcements to mentally handicapped 
participants or employees or applicants. For example, this might entail 
notifying known mentally handicapped participants or employees of 
openings for positions that they might be able to perform and taking 
specific steps to clearly explain the nature of the program or job and 
its benefits to that individual.

                           Handicapped Persons

    (b) Provide readers, interpreters, and other similar assistance 
during the application, testing, and interview process.
    (c) Appropriately adjust or modify examinations so that the test 
results accurately reflect the applicant's skills, aptitude or whatever 
other factor the test purports to measure, rather than reflecting the 
applicant's impaired sensory, manual, or speaking skills (except where 
those skills are the factors that the test purports to measure). This 
may require the extension of traditional time deadlines or allowing, for 
example, a blind person to answer an examination orally.
    (d) If necessary waive traditional tests and permit the applicant to 
demonstrate his or her skills through alternate techniques and 
utilization of adapted tools, aids, and devices.



PART 33--ENFORCEMENT OF NONDISCRIMINATION ON THE BASIS OF HANDICAP IN PROGRAMS OR ACTIVITIES CONDUCTED BY THE DEPARTMENT OF LABOR--Table of Contents




Sec.
33.1  Purpose.
33.2  Application.
33.3  Definitions.
33.4  Self-evaluation.
33.5  Notice.
33.6  General prohibitions against discrimination.
33.7  Employment.
33.8  Program accessibility: Discrimination prohibited.
33.9  Program accessibility: Existing facilities.
33.10  Program accessibility: New construction and alterations.
33.11  Communications.
33.12  Complaint handling procedures.
33.13  Intimidation and retaliation prohibited.

    Authority: 29 U.S.C. 794, as amended by sec. 103, Pub. L. 99-506, 
100 Stat. 1810.

    Source: 52 FR 11606, Apr. 9, 1987, unless otherwise noted.



Sec. 33.1  Purpose.

    The purpose of this part is to effectuate section 119 of the 
Rehabilitation, Comprehensive Services, and Developmental Disabilities 
Amendments of

[[Page 344]]

1978, which amended section 504 of the Rehabilitation Act of 1973 to 
prohibit discrimination on the basis of handicap in programs or 
activities conducted by Executive agencies or the United States Postal 
Service.



Sec. 33.2  Application.

    This part applies to all programs or activities conducted by the 
Department of Labor.



Sec. 33.3  Definitions.

    For purposes of this part, the term--
    Assistant Attorney General means the Assistant Attorney General, 
Civil Rights Division, United States Department of Justice.
    Assistant Secretary for Administration and Management (ASAM) means 
the Assistant Secretary for Administration and Management in the 
Department of Labor.
    Auxiliary aids means services or devices that enable persons with 
impaired sensory, manual, or speaking skills to have an equal 
opportunity to participate in, and enjoy the benefits of, programs or 
activities conducted by the Department of Labor. For example, auxiliary 
aids useful for persons with impaired vision include readers, brailled 
materials, audio recordings, and other similar services and devices. 
Auxiliary aids useful for persons with impaired hearing include 
telephone handset amplifiers, telephones compatible with hearing aids, 
telecommunications devices for deaf persons (TDD's), interpreters, 
notetakers, written materials, and other similar services and devices. 
Persons with manual impairments may need other specially adapted 
equipment.
    Complete complaint means a written statement that contains the 
complainant's name and address and describes the actions in sufficient 
detail to inform the Department of the nature and date of the alleged 
violation of section 504. It shall be signed by the complainant or by 
someone authorized to do so on his or her behalf. Complaints filed on 
behalf of classes or third parties shall describe or identify (by name, 
if possible) the alleged victims of discrimination.
    Department means the Department of Labor.
    Director means the Director, Directorate of Civil Rights (DCR), 
Office of the Assistant Secretary for Administration and Management, 
U.S. Department of Labor, or his or her designee.
    Facility means all or any portion of buildings, structures, 
equipment, roads, walks, parking lots, rolling stock or other 
conveyances, or other real or personal property.
    Individual with handicaps means any person who has a physical or 
mental impairment that substantially limits one or more major life 
activities, has a record of such an impairment, or is regarded as having 
such an impairment. As used in this definition, the phrase:
    (a) Physical or mental impairment includes--
    (1) Any physiological disorder or condition, cosmetic disfigurement, 
or anatomical loss affecting one or more of the following body systems: 
neurological; musculoskeletal; special sense organs; respiratory, 
including speech organs; cardiovascular; reproductive; digestive; 
genitourinary; hemic and lymphatic; skin; and endocrine; or
    (2) Any mental or psychological disorder, such as mental 
retardation, organic brain syndrome, emotional or mental illness, and 
specific learning disabilities. The term physical or mental impairment 
includes, but is not limited to, such diseases and conditions as 
orthopedic, visual, speech, and hearing impairments, cerebral palsy, 
epilepsy, muscular dystrophy, multiple sclerosis, cancer, heart disease, 
diabetes, mental retardation, emotional illness, and drug addiction and 
alcoholism.
    (b) Major life activities includes functions such as caring for 
one's self, performing manual tasks, walking, seeing, hearing, speaking, 
breathing, learning, and working.
    (c) Has a record of such an impairment means that the individual has 
a history of, or has been misclassified as having, a mental or physical 
impairment that substantially limits one or more major life activities.
    (d) Is regarded as having an impairment means--
    (1) Has a physical or mental impairment that does not substantially 
limit major life activities but is treated by the Department as 
constituting such a limitation;

[[Page 345]]

    (2) Has a physical or mental impairment that substantially limits 
major life activities only as a result or the attitudes or others toward 
such impairment; or
    (3) Has none of the impairments defined in paragraph (a) of this 
definition but is treated by the Department as having such an 
impairment.
    Qualified individuals with handicaps means--
    (a) With respect to any program or activity of the Department under 
which a person is required to perform services or to achieve a level of 
accomplishment, an individual with handicaps who meets the essential 
eligibility requirements and who can achieve the purpose of the program 
or activity without modifications in the program or activity that the 
Department can demonstrate would result in a fundamental alteration in 
its nature;
    (b) With respect to any other Department program or activity, an 
individual with handicaps who meets the essential eligibility 
requirements for participation in, or receipt of benefits from, that 
program or activity, and
    (c) For purposes of employment, a Qualified handicapped person as 
that term is defined in 29 CFR 1613.702(f) which is made applicable to 
this part by Sec. 33.7.
    Section 504 means section 504 of the Rehabilitation Act of 1973 
(Pub. L. 93-112, 87 Stat. 394 (29 U.S.C. 794)), as amended by the 
Rehabilitation Act Amendments of 1974 (Pub. L. 93-516, 88 Stat. 1617), 
the Rehabilitation, Comprehensive Services, and Developmental 
Disabilities Act of 1978 (Pub. L. 95-602, 92 Stat. 2955), and the 
Rehabilitation Act Amendments of 1986 (Pub. L. 99-506, 100 Stat. 1810).

[52 FR 11606, Apr. 9, 1987, as amended at 52 FR 23967, June 26, 1987]



Sec. 33.4  Self-evaluation.

    (a) The Department shall, by May 11, 1988, evaluate, with the 
assistance of interested persons, including individuals with handicaps 
or organizations representing individuals with handicaps, its current 
policies and practices, and the effects thereof, that do not or may not 
meet the requirements of this part, and, to the extent modification of 
any such policies and practices is required, the Department shall 
proceed to make the necessary modifications.
    (b) The Department shall, for at least three years following 
completion of the evaluation required under paragraph (a) of this 
section, maintain on file and make available for public inspection--
    (1) A list of the interested persons consulted;
    (2) A description of areas examined and any problems identified; and
    (3) A description of any modifications made.

[52 FR 11606, Apr. 9, 1987; 52 FR 23967, June 26, 1987]



Sec. 33.5  Notice.

    The Department shall make available to employees, applicants, 
participants, beneficiaries, and other interested persons such 
information regarding the provisions of this part and its applicability 
to the programs or activities conducted by the Department, and make such 
information available to them in such manner as the ASAM finds necessary 
to apprise such persons of the protections against discrimination 
assured them by section 504 and this regulation.



Sec. 33.6  General prohibitions against discrimination.

    (a) No qualified individual with handicaps shall, on the basis of 
handicap, be excluded from participation in, be denied the benefits of, 
or otherwise be subjected to discrimination under any program or 
activity conducted by the Department.
    (b)(1) The Department, in providing any aid, benefit, or service, 
may not, directly or through contractual, licensing, or other 
arrangements, on the basis of handicap--
    (i) Deny a qualified individual with handicaps the opportunity to 
participate in or benefit from the aid, benefit, or service;
    (ii) Deny a qualified individual with handicaps an opportunity to 
participate in or benefit from the aid, benefit, or service that is not 
equal to that afforded others;
    (iii) Provide a qualified individual with handicaps with an aid, 
benefit, or service that is not as effective in affording equal 
opportunity to obtain the same result, to gain the same benefit,

[[Page 346]]

or to reach the same level of achievement as that provided to others;
    (iv) Provide different or separate aid, benefits, or services to 
individuals with handicaps or to any class of individuals with handicaps 
than is provided to others unless such action is necessary to provide 
qualified individuals with handicaps with aids, benefits, or services 
that are as effective as those provided to others;
    (v) Deny a qualified individual with handicaps the opportunity to 
participate as a member of planning or advisory boards; or
    (vi) Otherwise limit a qualified individual with handicaps in the 
enjoyment of any right, privilege, advantage, or opportunity enjoyed by 
others receiving the aid, benefit, or service.
    (2) The Department may not deny a qualified individual with 
handicaps the opportunity to participate in programs or activities 
despite the existence of permissibly separate or different programs or 
activities.
    (3) The Department may not, directly or through contractual or other 
arrangements, utilize criteria or methods of administration the purpose 
or effect of which would--
    (i) Subject qualified individuals with handicaps to discrimination 
on the basis of handicap; or
    (ii) Defeat or substantially impair accomplishment of the objectives 
of a program or activity with respect to individuals with handicaps .
    (4) The Department may not, in determining the site or location of a 
facility, make selections the purpose or effect of which would--
    (i) Exclude individuals with handicaps from, deny them the benefits 
of, or otherwise subject them to discrimination under any program or 
activity conducted by the Department; or
    (ii) Defeat or substantially impair the accomplishment of the 
objectives of a program or activity with respect to individuals with 
handicaps.
    (5) The provisions of paragraph (b)(4) of this section do not apply 
to sites or locations at which the Department owns or leases buildings 
on the date the regulations in this part become effective.
    (6) The Department, in the selection of procurement contractors, may 
not use criteria that subject qualified individuals with handicaps to 
discrimination on the basis of handicap.
    (7) The Department may not administer a licensing or certification 
program in a manner that subjects qualified individuals with handicaps 
to discrimination on the basis of handicap, nor may the Department 
establish requirements for the programs or activities of licensees or 
certified entities that subject qualified individuals with handicaps to 
discrimination on the basis of handicap. This part does not apply to the 
programs or activities of non-departmental entities that are licensed or 
certified by the Department of Labor.
    (c) The exclusion of nonhandicapped persons from the benefits of a 
program limited by Federal statute or Executive order to persons with 
handicaps or the exclusion of a specific class of individuals with 
handicaps from a program limited by Federal statute or Executive order 
to a different class of individuals with handicaps is not prohibited by 
this part.
    (d) The Department shall administer programs and activities in the 
most integrated setting appropriate to the needs of qualified 
individuals with handicaps.

[52 FR 11606, Apr. 9, 1987; 52 FR 23967, June 26, 1987]



Sec. 33.7  Employment.

    No qualified individual with handicaps shall, on the basis of 
handicap, be subjected to discrimination in employment under any program 
or activity conducted by the Department. The definitions, requirements 
and procedures of section 501 of the Rehabilitation Act of 1973 (29 
U.S.C. 791), as established in 29 CFR part 1613 (subpart G), shall apply 
to employment in federally conducted programs or activities.

[52 FR 11606, Apr. 9, 1987; 52 FR 23967, June 26, 1987]



Sec. 33.8  Program accessibility: Discrimination prohibited.

    Except as otherwise provided in Secs. 33.9 and 33.10 of this part, 
no qualified individual with handicaps shall, because the Department's 
facilities are

[[Page 347]]

inaccessible to or unusable by individuals with handicaps, be denied the 
benefits of, be excluded from participation in, or otherwise be 
subjected to discrimination under any program or activity conducted by 
the Department.

[52 FR 11606, Apr. 9, 1987; 52 FR 23967, June 26, 1987]



Sec. 33.9  Program accessibility: Existing facilities.

    (a) General. The Department shall operate such program or activity 
so that the program or activity, when viewed in its entirety, is readily 
accessible to and usable by individuals with handicaps. This paragraph 
does not--
    (1) Necessarily require the Department to make each of its existing 
facilities accessible to and usable by individuals with handicaps;
    (2) Require the Department to take any action that it can 
demonstrate would result in a fundamental alteration in the nature of a 
program or activity or in undue financial and administrative burdens.
    (b)(1) If a Department official believes that the proposed action 
would fundamentally alter the program or activity or would result in 
undue financial and administrative burdens, the official shall prepare a 
report for the Secretary of Labor which objectively considers and 
evaluates these issues based on the nature of the program and all 
departmental resources available for use in the funding and operation of 
the conducted program or activity. In preparing the report, the 
Department official shall make reasonable efforts to ensure that the 
person(s) requesting accommodation in the particular program or activity 
has an opportunity to provide any relevant information. The report shall 
specifically address any such information. Upon completion, the report 
and all information before the program official shall be transmitted to 
the Secretary for a decision to be made in accordance with paragraph 
(b)(2) of this section.
    (2) The Secretary shall decide, after considering the material 
submitted by the program official and all departmental resources 
available for use in the funding and operation of the conducted program 
or activity, whether the proposed action would fundamentally alter the 
program or result in undue financial and administrative burdens. A 
decision that compliance would result in such alteration or burdens must 
be accompanied by a written statement of the reasons for reaching that 
conclusion and shall be transmitted to the person(s) requesting 
accommodation. This decision represents the final administrative action 
of the Department.
    (3) The Department has the burden of proving that compliance with 
paragraph (a) of this section would result in such alteration or undue 
burdens.
    (c) If an action would result in such an alteration or such burdens, 
the Department shall take any other action that would not result in such 
an alteration or such a burden but would nevertheless ensure that 
qualified individuals with handicaps receive the benefits and services 
of the program or activity.
    (d) Methods. The Department may comply with the requirements of this 
section through such means as redesign of equipment, reassignment of 
services to accessible buildings, assignment of aides to beneficiaries, 
home visits, delivery of services at alternate accessible sites, 
alteration of existing facilities and construction of new facilities, 
use of accessible rolling stock, or any other methods that result in 
making its programs or activities readily accessible to and usable by 
individuals with handicaps. The Department is not required to make 
structural changes in existing facilities where other methods are 
effective in achieving compliance with this section. Alterations to 
existing buildings shall be made in accordance with the provisions of 
Sec. 33.10 of this part. In choosing among available methods for meeting 
the requirements of this section, the Department shall give priority to 
those methods that offer programs and activities to qualified 
individuals with handicaps in the most integrated setting appropriate.
    (e) Time period for compliance. The Department shall comply with the 
obligations established under this section within sixty days of the 
effective date of this part except that where structural changes in 
facilities are undertaken, such changes shall be made within three years 
of the effective date

[[Page 348]]

of this part, but in any event as expeditiously as possible.
    (f) Transition plan. In the event that structural changes to 
facilities will be undertaken to achieve program accessibility, the 
Department shall develop, within six months of the effective date of 
this part, a transition plan setting forth the steps necessary to 
complete such changes. The plan shall be developed with the assistance 
of interested persons, including individuals with handicaps and 
organizations representing individuals with handicaps. A copy of the 
transition plan shall be made available for public inspection. The plan 
shall, at a minimum--
    (1) Identify physical obstacles in the Department's facilities that 
limit the accessibility of its programs or activities to individuals 
with handicaps;
    (2) Describe in detail the methods that will be used to make the 
facilities accessible;
    (3) Specify the schedule for taking the steps necessary to achieve 
compliance with this section and, if the time period of the transition 
plan is longer than one year, identify steps that will be taken during 
each year of the transition period;
    (4) Indicate the official responsible for implementation of the 
plan; and
    (5) Identify the persons or groups with whose assistance the plan 
was prepared.

[52 FR 11606, Apr. 9, 1987; 52 FR 23967, June 26, 1987]



Sec. 33.10  Program accessibility: New construction and alterations.

    Each building or part of a building that is constructed or altered 
after the effective date of this part by, on behalf of, or for the use 
of the Department shall be designed, constructed, or altered so as to be 
readily accessible to and usable by individuals with handicaps in 
accordance with the requirements of the Uniform Federal Accessibility 
Standards adopted by the General Services Administration at 41 CFR 
Secs. 101-19.600 to 101-19.607 (1984).

[52 FR 11606, Apr. 9, 1987; 52 FR 23967, June 26, 1987]



Sec. 33.11  Communications.

    (a) The Department shall take appropriate steps to ensure effective 
communication with applicants, participants, personnel of other Federal 
entities, and members of the public.
    (1) The Department shall furnish appropriate auxiliary aids where 
necessary to afford an individual with handicaps an equal opportunity to 
participate in, and enjoy the benefits of, a program or activity 
conducted by the Department.
    (i) In determining what type of auxiliary aid is necessary, the 
Department shall give primary consideration to the requests of the 
individual with handicaps.
    (ii) The Department need not provide individually prescribed 
devices, readers for personal use or study, or other devices of a 
personal nature.
    (2) Where the Department communicates with applicants and 
beneficiaries by telephone, telecommunications devices for deaf persons 
(TDDs), or equally effective telecommunications systems shall be used.
    (b) The Department shall ensure that interested persons, including 
persons with impaired vision or hearing, can obtain information as to 
the existence and location of accessible services, activities, and 
facilities.
    (c) The Department shall provide signage at a primary entrance to 
each of its accessible facilities, directing users to a location at 
which they can obtain information about accessible facilities. The 
international symbol for accessibility shall be used at each primary 
entrance of an accessible facility.
    (d) The Department shall take appropriate steps to provide 
individuals with handicaps with information regarding their section 504 
rights under the Department's programs or activities. If the Department 
uses recruitment materials, informational publications, or other 
materials which it distributes or makes available to participants, 
beneficiaries, referral sources, applicants, employees, or the public, 
it shall include in those materials or publications a statement of the 
policy described in Sec. 33.6 of this part and information as to 
complaint procedures. The requirements of this paragraph

[[Page 349]]

may be met either by including applicable inserts in existing materials 
and publications or by revising and reprinting such materials, as 
appropriate.
    (e) This section does not require the Department to take any action 
that it can demonstrate would result in a fundamental alteration in the 
nature of a program or activity or in undue financial and administrative 
burdens.
    (1) If a Department official believes that the proposed action would 
fundamentally alter the program or activity or would result in undue 
financial and administrative burdens, the official shall prepare a 
report for the Secretary of Labor which objectively considers and 
evaluates these issues based on the nature of the program and all 
departmental resources available for use in the funding and operation of 
the conducted program or activity. In preparing the report, the 
Department official shall make reasonable efforts to ensure that the 
person(s) requesting accommodation in the particular program or activity 
has an opportunity to provide any relevant information. The report shall 
specifically address any such information. Upon completion, the report 
and all information before the program official shall be transmitted to 
the Secretary for a decision to be made in accordance with paragraph 
(e)(2) of this section.
    (2) The Secretary shall decide, after considering the material 
submitted by the program official and all departmental resources 
available for use in the funding and operation of the conducted program 
or activity, whether the proposed action would fundamentally alter the 
program or result in undue financial and administrative burdens. A 
decision that compliance would result in such alteration or burdens must 
be accompanied by a written statement of the reasons for reaching that 
conclusion and shall be transmitted to the person(s) requesting 
accommodation. This decision represents the final administrative action 
of the Department.
    (3) The Department has the burden of proving that compliance with 
paragraphs (a) through (d) of this section, as applicable, would result 
in such alteration or undue burdens.
    (f) If an action required to comply with this section would result 
in such an alteration or such burdens, the Department shall take any 
other action that would not result in such an alteration or such a 
burden but would nevertheless ensure that, to the maximum extent 
possible, individuals with handicaps receive the benefits and services 
of the program or activity.

[52 FR 11606, Apr. 9, 1987; 52 FR 24367, June 30, 1987]



Sec. 33.12  Complaint handling procedures.

    (a) Except as provided in paragraph (b) of this section, this 
section applies to all allegations of discrimination on the basis of 
handicap in programs or activities conducted by DOL.
    (b)(1) Complaints alleging violations of section 504 with respect to 
employment shall be processed according to the procedures established in 
29 CFR part 1613 pursuant to section 501 of the Rehabilitation Act of 
1973 (29 U.S.C. 791).
    (2) Complaints based upon program inaccessibility in violation of 
section 504 will be governed by the procedures at Secs. 33.9(b) and 
33.11(e) of this part, as applicable.
    (c) Responsibility for implementation and operation of this section 
shall be vested in the Director, Directorate of Civil Rights (DCR). 
Complaints may be delivered or mailed to the Director, Directorate of 
Civil Rights, U.S. Department of Labor, 200 Constitution Avenue, NW., 
Room N-4123, Washington, DC 20210.
    (d) All complaints must be filed within 180 days of the alleged act 
of discrimination. The Director may extend this time period for good 
cause.
    (e) Where a complaint contains insufficient information, the 
Director shall seek the needed information from the complainant. If the 
complainant is unavailable after reasonable means have been utilized to 
locate him or her, or the information is not furnished within 30 days of 
the date of such request, the complaint may be dismissed upon notice 
sent to the complainant's last known address.
    (f) If the Director receives a complaint over which the Department 
does not have jurisdiction, he or she shall

[[Page 350]]

promptly notify the complainant and shall make reasonable efforts to 
refer the complaint to the appropriate government entity.
    (g) The Director shall accept and investigate all complete 
complaints which are timely filed, are within the Department's 
jurisdiction, and state an allegation(s) which, if true, would violate 
section 504 or its implementing regulations.
    (1) Where the Director determines that the complaint will be 
investigated, he or she will notify the complainant(s) and the 
appropriate Department official(s).
    (2) Such notification will advise the parties that a determination 
on the merits of the complaint will be issued within 180 days of the 
date of notification unless the matter is resolved informally prior to 
that time.
    (3) If, during the course of the investigation, the Department 
official states that he or she believes that resolution of the complaint 
would require a fundamental alteration of the program or undue financial 
and administrative burdens, the complaint will proceed in accordance 
with Secs. 33.9(b) and 33.11(e) of this part, as applicable.
    (h) At any time prior to the issuance of the determination the 
parties to the complaint may resolve the complaint on an informal basis. 
For this purpose, the Director shall furnish, to the extent permitted by 
law, a copy of the investigative file to the complainant and the 
appropriate Department official. If the complaint is resolved, the terms 
of the agreement shall be reduced to writing and entered as part of the 
official file by the Deputy Assistant Secretary for Administration and 
Management (Deputy ASAM).
    (i) If informal resolution is not achieved, the Deputy ASAM shall 
issue a determination on the merits which notifies the parties to the 
complaint of the results of the investigation and includes--
    (1) The findings of fact and conclusions of law;
    (2) A remedy and/or corrective action, as appropriate, for each 
violation found; and
    (3) A notice of the right to appeal to the Assistant Secretary for 
Administration and Management (ASAM).
    (j)(1) An appeal of the Deputy ASAM's determination may be filed 
with the ASAM by any party to the complaint. Such appeal must be filed 
within 30 days of receipt of the determination. The ASAM may extend this 
time for good cause.
    (2) Timely appeals shall be accepted and processed by the ASAM. The 
ASAM's determination shall be based upon the written record which may 
include, but is not limited to, the determination made by the Deputy 
ASAM, the investigative file, and any other materials submitted by the 
parties pursuant to a request from the ASAM.
    (k) The ASAM shall notify all parties of his or her determination on 
the appeal within 90 days of the receipt of the appeal. The ASAM's 
determination represents the final administrative decision by the 
Department.
    (l) The time limits cited in paragraphs (g)(2) and (k) of this 
section may be extended with the permission of the Assistant Attorney 
General.
    (m) The Department may delegate its authority for conducting 
complaint investigations to other Federal agencies, except that the 
authority for making the final determination may not be delegated.
    (n) The Director shall respond to requests by the Architectural and 
Transportation Barriers Compliance Board for information on the status 
of any complaint alleging that buildings that are subject to the 
Architectural Barriers Act of 1968, as amended (42 U.S.C. 4151-4157), or 
section 502 of the Rehabilitation Act of 1973, as amended (29 U.S.C. 
792), are not readily accessible and usable to individuals with 
handicaps.

[52 FR 11606, Apr. 9, 1987; 52 FR 23967, June 26, 1987]



Sec. 33.13  Intimidation and retaliation prohibited.

    No person may discharge, intimidate, retaliate, threaten, coerce or 
otherwise discriminate against any person because such person has filed 
a complaint, furnished information, assisted or participated in any 
manner in an investigation, review, hearing or any other activity 
related to the administration of, or exercise of authority

[[Page 351]]

under, or privilege secured by section 504 and the regulations in this 
part.



PART 34--IMPLEMENTATION OF THE NONDISCRIMINATION AND EQUAL OPPORTUNITY REQUIREMENTS OF THE JOB TRAINING PARTNERSHIP ACT OF 1982, AS AMENDED (JTPA)--Table of Contents




                      Subpart A--General Provisions

Sec.
34.1  Purpose; application.
34.2  Definitions.
34.3  Discrimination prohibited.
34.4  Specific discriminatory actions prohibited on the ground of race, 
          color, religion, sex, national origin, age, political 
          affiliation or belief, citizenship, or participation in JTPA.
34.5  Specific discriminatory actions prohibited on the ground of 
          disability.
34.6  Communications with individuals with disabilities.
34.7  Employment practices.
34.8  Intimidation and retaliation prohibited.
34.9  Designation of responsible office; rulings and interpretations.
34.10  [Reserved]
34.11  Effect of other obligations or limitations.
34.12  Delegation and coordination.

Subpart B--Recordkeeping and Other Affirmative Obligations of Recipients

34.20  Assurance required; duration of obligation; covenants.
34.21  Equitable services.
34.22  Designation of Equal Opportunity Officer.
34.23  Dissemination of policy.
34.24  Data and information collection; confidentiality.

        Subpart C--Governor's Responsibilities to Implement the 
      Nondiscrimination and Equal Opportunity Requirements of JTPA

34.30  Application.
34.31  Recordkeeping.
34.32  Oversight and liability.
34.33  Methods of Administration.
34.34  Monitoring.

                    Subpart D--Compliance Procedures

34.40  Compliance reviews.
34.41  Notice to Show Cause.
34.42  Adoption of discrimination complaint processing procedures.
34.43  Complaints and investigations.
34.44  Corrective and remedial action.
34.45  Notice of violation; written assurances; Conciliation Agreements.
34.46  Final Determination.
34.47  Notice of finding of noncompliance.
34.48  Notification of Breach of Conciliation Agreement.

         Subpart E--Federal Procedures for Effecting Compliance

34.50  General.
34.51  Hearings.
34.52  Decision and post-termination proceedings.
34.53  Suspension, termination, denial or discontinuance of Federal 
          financial assistance under JTPA; alternate funds disbursal 
          procedure.

    Authority: 20 U.S.C. 1681; 29 U.S.C. 794, 1501, 1551, 1573, 1574, 
1575, 1576, 1577, 1578, 1579; 42 U.S.C. 2000d et seq., 6101.

    Source: 58 FR 4750, Jan. 15, 1993, unless otherwise noted.



                      Subpart A--General Provisions



Sec. 34.1  Purpose; application.

    (a) Purpose. The purpose of this part is to implement the 
nondiscrimination and equal opportunity provisions of the Job Training 
Partnership Act of 1982, as amended (JTPA), which are contained in 
section 167 of JTPA. Section 167 prohibits discrimination on the grounds 
of race, color, religion, sex, national origin, age, disability, 
political affiliation or belief, and for beneficiaries only, citizenship 
or participation in JTPA. This part clarifies the application of the 
nondiscrimination and equal opportunity provisions of JTPA and provides 
uniform procedures for implementing them.
    (b) Application of this part. This part applies to any recipient, as 
defined in Sec. 34.2. This part also applies to the employment practices 
of a recipient, as provided in Sec. 34.7.
    (c) Effect of this part on other obligations.
    (1) A recipient's compliance with this part shall satisfy any 
obligation of the recipient to comply with 29 CFR part 31, implementing 
title VI of the Civil Rights Act of 1964, as amended (title VI), and 
with subparts A, D and E of 29 CFR part 32, implementing section 504 of 
the Rehabilitation Act of 1973, as amended (section 504).
    (2) However, compliance with this part shall not affect any 
obligation of

[[Page 352]]

the recipient to comply with subparts B and C and appendix A of 29 CFR 
part 32, which pertain to employment practices and employment-related 
training, program accessibility, and accommodations under section 504.
    (3) Recipients that are also public entities or public 
accommodations as defined by titles II and III of the Americans with 
Disabilities Act of 1991 (ADA), should be aware of obligations imposed 
pursuant to those titles.
    (4) Compliance with this part does not affect, in any way, any 
obligation that a recipient may have to comply with Executive Order 
11246, as amended, section 503 of the Rehabilitation Act of 1973, as 
amended (29 U.S.C. 793), the affirmative action provisions of the 
Vietnam Era Veterans' Readjustment Assistance Act of 1974, as amended 
(38 U.S.C. 4212), the Equal Pay Act of 1963, as amended (29 U.S.C. 
206d), title VII of the Civil Rights Act of 1964, as amended (42 U.S.C. 
2000e et seq.), the Age Discrimination in Employment Act of 1967, as 
amended (29 U.S.C. 621), title IX of the Education Amendments of 1972, 
as amended (20 U.S.C. 1681), the Americans with Disabilities Act of 1990 
(ADA) (42 U.S.C. 12101 et seq.) and their respective implementing 
regulations.
    (5) This rule does not preempt consistent State and local 
requirements.
    (6) The rule generally codifies and consolidates already existing 
nondiscrimination and equal opportunity requirements. However, to the 
extent that this rule imposes any new requirements, it is not intended 
to have retroactive effect.
    (d) Limitation of Application. This part does not apply to:
    (1) Programs or activities funded by the Department exclusively 
under laws other than JTPA;
    (2) Contracts of insurance or guaranty;
    (3) Federal financial assistance to a person who is the ultimate 
beneficiary under any program;
    (4) Federal procurement contracts, with the exception of contracts 
to operate or provide services to Job Corps Centers; and
    (5) Federally-operated Job Corps Centers. The operating Department 
is responsible for enforcing the nondiscrimination and equal opportunity 
laws to which such Centers are subject.



Sec. 34.2  Definitions.

    As used in this part, the term:
    Administrative Law Judge means a person appointed as provided in 5 
U.S.C. 3105 and 5 CFR 930.203 and qualified under 5 U.S.C. 557 to 
preside at hearings held under the nondiscrimination and equal 
opportunity provisions of JTPA and this part.
    Applicant means the person or persons seeking JTPA services who have 
filed a completed application and for whom a formal eligibility 
determination has been made. For State Employment Security Agency (SESA) 
programs, applicant means the person or persons who make(s) application 
to receive benefits or services from the State employment service agency 
or the State unemployment compensation agency. See also the definitions 
of eligible applicant and participant in this section.
    Applicant for employment means the person or persons who make(s) 
application for employment with a recipient of Federal financial 
assistance under JTPA.
    Application for assistance means the process by which required 
documentation is provided to the Governor, recipient, or Department 
prior to and as a condition of receiving Federal financial assistance 
under JTPA (including both new and continuing assistance).
    Application for benefits means the process by which written 
information is provided by applicants or eligible applicants prior to 
and as a condition of receiving benefits or services from a recipient of 
financial assistance from the Department of Labor under JTPA.
    Assistant Attorney General means the Assistant Attorney General, 
Civil Rights Division, United States Department of Justice.
    Assistant Secretary means the Assistant Secretary for Administration 
and Management, United States Department of Labor.
    Auxiliary aids or services includes--
    (1) Qualified interpreters, notetakers, transcription services, 
written materials, telephone handset amplifiers, assistive listening 
systems, telephones compatible with hearing aids, closed

[[Page 353]]

caption decoders, open and closed captioning, telecommunications devices 
for deaf persons (TDDs), videotext displays, or other effective means of 
making aurally delivered materials available to individuals with hearing 
impairments;
    (2) Qualified readers, taped texts, audio recordings, brailled 
materials, large print materials, or other effective means of making 
visually delivered materials available to individuals with visual 
impairments;
    (3) Acquisition or modification of equipment or devices; and
    (4) Other similar services and actions.
    Beneficiary means the person or persons intended by Congress to 
receive benefits or services from a recipient of Federal financial 
assistance under JTPA.
    Citizenship: See Discrimination on the ground of citizenship.
    Department means the U.S. Department of Labor (DOL), including its 
agencies and organizational units.
    Director means the Director, Directorate of Civil Rights (DCR), 
Office of the Assistant Secretary for Administration and Management, 
U.S. Department of Labor, or a designee authorized to act for the 
Director.
    Directorate means the Directorate of Civil Rights (DCR), Office of 
the Assistant Secretary for Administration and Management, U.S. 
Department of Labor.
    Disability means, with respect to an individual, a physical or 
mental impairment that substantially limits one or more of the major 
life activities of such individual; a record of such an impairment; or 
being regarded as having such an impairment.
    (1)(i) The phrase physical or mental impairment means--
    (A) Any physiological disorder or condition, cosmetic disfigurement, 
or anatomical loss affecting one or more of the following body systems: 
Neurological, musculoskeletal, special sense organs, respiratory 
(including speech organs), cardiovascular, reproductive, digestive, 
genitourinary, hemic and lymphatic, skin, and endocrine;
    (B) Any mental or psychological disorder such as mental retardation, 
organic brain syndrome, emotional or mental illness, and specific 
learning disabilities.
    (ii) The phrase physical or mental impairment includes, but is not 
limited to, such contagious and noncontagious diseases and conditions as 
orthopedic, visual, speech and hearing impairments, cerebral palsy, 
epilepsy, muscular dystrophy, multiple sclerosis, cancer, heart disease, 
diabetes, mental retardation, emotional illness, specific learning 
disabilities, HIV disease (whether symptomatic or asymptomatic), 
tuberculosis, drug addiction, and alcoholism. The term impairment does 
not include homosexuality or bisexuality.
    (2) The phrase major life activities means functions such as caring 
for one's self, performing manual tasks, walking, seeing, hearing, 
speaking, breathing, learning, and working.
    (3) The phrase has a record of such an impairment means has a 
history of, or has been misclassified as having, a mental or physical 
impairment that substantially limits one or more major life activities.
    (4) The phrase is regarded as having an impairment means--
    (i) Has a physical or mental impairment that does not substantially 
limit major life activities but that is treated by the recipient as 
constituting such a limitation;
    (ii) Has a physical or mental impairment that substantially limits 
major life activities only as a result of the attitudes of others toward 
such impairment; or
    (iii) Has none of the impairments defined in paragraph (1) of this 
definition but is treated by the recipient as having such an impairment.
    (5) Consistent with amendments to the Rehabilitation Act of 1973 and 
to the JTPA, and with the ADA, this part uses the term disability in 
place of the term handicap. The two terms are intended to have identical 
meanings.
    Discrimination on the ground of citizenship means a denial of 
participation in programs or activities financially assisted in whole or 
in part under JTPA to persons on the basis of their status as citizens 
or nationals of the United States, lawfully admitted permanent resident 
aliens, lawfully admitted refugees and parolees, or other individuals

[[Page 354]]

authorized by the Attorney General to work in the United States.
    Eligible applicant means an applicant who has been determined 
eligible to participate in one or more titles under JTPA.
    Entity means any corporation, partnership, joint venture, 
unincorporated association, or State or local government, and any 
agency, instrumentality or subdivision of such a government.
    Facility means all or any portion of buildings, structures, 
equipment, roads, walks, parking lots, rolling stock, or other real or 
personal property or interest in such property.
    Federal financial assistance under JTPA means any grant, cooperative 
agreement, loan, contract; any subgrant made with a recipient of a grant 
or subcontract made pursuant to a JTPA contract; or any other 
arrangement by which the Department provides or otherwise makes 
available assistance under JTPA in the form of:
    (1) Funds, including funds made available for the acquisition, 
construction, renovation, restoration or repair of a building or 
facility or any portion thereof;
    (2) Services of Federal personnel; or
    (3) Real or personal property or any interest in or use of such 
property, including:
    (i) Transfers or leases of such property for less than fair market 
value or for reduced consideration;
    (ii) Proceeds from a subsequent transfer or lease of such property 
if the Federal share of its fair market value is not returned to the 
Federal Government; or
    (iii) Any other thing of value by way of grant, loan, contract, or 
cooperative agreement (other than a procurement contract or a contract 
of insurance or guaranty).
    Governor means the chief elected official of any State or his or her 
designee.
    Grant applicant means the entity which submits the required 
documentation to the Governor, recipient, or the Department, prior to 
and as a condition of receiving Federal financial assistance under JTPA.
    Guideline means written informational material supplementing an 
agency's regulations and provided to grant applicants and recipients to 
provide program-specific interpretations of their responsibilities under 
the regulations.
    Illegal use of drugs means the use of drugs, the possession or 
distribution of which is unlawful under the Controlled Substances Act. 
Illegal use of drugs does not include the use of a drug taken under 
supervision of a licensed health care professional, or other uses 
authorized by the Controlled Substances Act or other provisions of 
Federal law.
    Individual with a disability means a person who has a disability, as 
defined in this section. The term impairment does not include 
homosexuality or bisexuality; therefore, the term individual with a 
disability does not include an individual on the basis of homosexuality 
or bisexuality.
    (1) The term individual with a disability does not include an 
individual on the basis of:
    (i) Transvestism, transsexualism, pedophilia, exhibitionism, 
voyeurism, gender identity disorders not resulting from physical 
impairments, or other sexual behavior disorders;
    (ii) Compulsive gambling, kleptomania, or pyromania; or
    (iii) Psychoactive substance use disorders resulting from current 
illegal use of drugs.
    (2) The term individual with a disability also does not include an 
individual who is currently engaging in the illegal use of drugs, when a 
recipient acts on the basis of such use. This limitation should not be 
construed to exclude as an individual with a disability an individual 
who:
    (i) Has successfully completed a supervised drug rehabilitation 
program and is no longer engaging in the illegal use of drugs, or has 
otherwise been rehabilitated successfully and is no longer engaging in 
such use;
    (ii) Is participating in a supervised rehabilitation program and is 
no longer engaging in such use; or
    (iii) Is erroneously regarded as engaging in such use, but is not 
engaging in such use, except that it shall not be a violation of the 
nondiscrimination and equal opportunity provisions of JTPA or this part 
for a recipient to adopt or administer reasonable policies or 
procedures, including but not limited to drug testing, designed to 
ensure that

[[Page 355]]

an individual described in paragraph (2)(i) or (2)(ii) of this 
definition is no longer engaging in the illegal use of drugs.
    (3) With regard to employment, the term individual with a disability 
does not include any individual who is an alcoholic whose current use of 
alcohol prevents such individual from performing the duties of the job 
in question or whose employment, by reason of such current alcohol 
abuse, would constitute a direct threat to property or the safety of 
others.
    JTPA means the Job Training Partnership Act of 1982, as amended, 
Public Law 97-300, 96 Stat. 1322 (29 U.S.C. 1501 et seq.), including the 
Nontraditional Employment for Women Act of 1991, Public Law 102-235, 105 
Stat. 1806 (29 U.S.C. 1501), and the Job Training Reform Amendments of 
1992, Public Law 102-367, 106 Stat. 1021.
    JTPA-funded program or activity means a program or activity, 
operated by a recipient and funded under JTPA, for the provision of 
services, financial aid, or other benefit to individuals (including but 
not limited to education or training, health, welfare, housing, social 
service, rehabilitation or other services, whether provided through 
employees of the recipient or by others through contract or other 
arrangements with the recipient, and including work opportunities and 
cash, loan or other assistance to individuals), or for the provision of 
facilities for furnishing services, financial aid, or other benefits to 
individuals. It also includes services, financial aid, or other benefits 
provided in facilities constructed with the aid of Federal financial 
assistance under JTPA. It further includes services, financial aid, or 
other benefits provided with the aid of any non-JTPA funds, property, or 
other resources required to be expended or made available for the 
program to meet matching requirements or other conditions which must be 
met in order to receive the Federal financial assistance under JTPA.
    Methods of Administration means the written document and supporting 
documentation developed pursuant to Sec. 34.33.
    National Programs means programs receiving Federal funds under JTPA 
directly from the Department. Such programs include, but are not limited 
to, programs funded under title IV of JTPA, such as the Migrant and 
Seasonal Workers Programs, Native Americans Programs, Job Corps, 
National Activities and such Veterans' Employment programs as are funded 
by the Department. National programs also includes programs funded under 
certain titles of the Nontraditional Employment for Women Act.
    Noncompliance means a failure of a recipient to comply with any of 
the applicable requirements of the nondiscrimination and equal 
opportunity provisions of JTPA or this part.
    Participant means an individual who has been determined to be 
eligible to participate in and who is receiving services (except post-
termination and follow-up services) under a program authorized by JTPA. 
Participation shall be deemed to commence on the first day, following 
determination of eligibility, on which the participant began receiving 
subsidized employment, training, or other services provided under JTPA.
    Parties to a hearing means the Department and the grant applicant(s) 
or recipient(s).
    Prohibited ground means any basis upon which it is illegal to 
discriminate under the nondiscrimination and equal opportunity 
provisions of JTPA or this part, i.e., race, color, religion, sex, 
national origin, age, disability, political affiliation or belief, and, 
for beneficiaries only, citizenship or participation in JTPA.
    Qualified individual with a disability means:
    (1) With respect to employment, an individual with a disability who, 
with or without reasonable accommodation, is capable of performing the 
essential functions of the job in question;
    (2) With respect to services, an individual with a disability who 
meets the essential eligibility requirements for the receipt of such 
services;
    (3) With respect to employment and employment-related training 
programs, an individual with a disability who meets the eligibility 
requirements for participation in JTPA and who,

[[Page 356]]

with or without reasonable accommodation, is capable of performing the 
essential functions of the job or meets the qualifications of the 
training program, as applicable.
    Recipient means any entity to which Federal financial assistance 
under any title of JTPA is extended, either directly or through the 
Governor or through another recipient (including any successor, 
assignee, or transferee of a recipient), but excluding the ultimate 
beneficiaries of the JTPA-funded program or activity and the Governor. 
Recipient includes, but is not limited to: Job Corps Centers and Center 
operators (excluding federally-operated Job Corps Centers), State 
Employment Security Agencies, State-level agencies that administer JTPA 
funds, SDA grant recipients, Substate grant recipients and service 
providers, as well as National Program recipients.
    Respondent means the grant applicant or recipient against which a 
complaint has been filed pursuant to the nondiscrimination and equal 
opportunity provisions of JTPA or this part.
    SDA grant recipient means the entity that receives JTPA funds for a 
service delivery area (SDA) directly from the Governor.
    Secretary means the Secretary of Labor, U.S. Department of Labor, or 
his or her designee.
    Service provider means the operator of any JTPA-funded program or 
activity that receives funds from or through an SDA grant recipient or a 
Substate grantee.
    Small recipient means a recipient who serves fewer than 15 
beneficiaries, and employs fewer than 15 employees at all times during a 
grant year.
    Solicitor means the Solicitor of Labor, U.S. Department of Labor, or 
his or her designee.
    State means the individual states of the United States, the District 
of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, 
American Samoa, Guam, Wake Island, the Commonwealth of the Northern 
Mariana Islands, the Federated States of Micronesia, the Republic of the 
Marshall Islands, and Palau.
    State Employment Security Agency (SESA) means the State agency 
which, under the State Administrator, contains both the State Employment 
Service agency (State agency) and the State unemployment compensation 
agency.
    State Programs means programs funded in whole or in part under JTPA 
wherein the Governor and/or State receives and disburses the grant to or 
through SDA grant recipients or Substate grantees. Such programs include 
but are not limited to those programs funded in whole or in part under 
titles II or III of JTPA. State programs also includes State Employment 
Security Agencies.
    Substate grantee means that agency or organization selected to 
administer programs pursuant to section 312(b) of JTPA. The Substate 
grantee is the entity that receives title III funds for a substate area 
directly from the Governor.
    Terminee means a participant terminating during the applicable 
program year.



Sec. 34.3  Discrimination prohibited.

    No individual in the United States shall, on the ground of race, 
color, religion, sex, national origin, age, disability, political 
affiliation or belief, and for beneficiaries only, citizenship or 
participation in JTPA, be excluded from participation in, denied the 
benefits of, subjected to discrimination under, or denied employment in 
the administration of or in connection with any JTPA-funded program or 
activity.



Sec. 34.4  Specific discriminatory actions prohibited on the ground of race, color, religion, sex, national origin, age, political affiliation or belief, 
          citizenship, or participation in JTPA.

    (a) For the purposes of this section, prohibited ground means race, 
color, religion, sex, national origin, age, political affiliation or 
belief, and for beneficiaries only, citizenship or participation in 
JTPA. A recipient shall not, directly or through contractual, licensing, 
or other arrangements, on a prohibited ground:
    (1) Deny an individual any service, financial aid, or benefit 
provided under the JTPA-funded program or activity;
    (2) Provide any service, financial aid, or benefit to an individual 
which is different, or is provided in a different

[[Page 357]]

manner, from that provided to others under the JTPA-funded program or 
activity;
    (3) Subject an individual to segregation or separate treatment in 
any matter related to his or her receipt of any service, financial aid, 
or benefit under the JTPA-funded program or activity;
    (4) Restrict an individual in any way in the enjoyment of any 
advantage or privilege enjoyed by others receiving any service, 
financial aid, or benefit under the JTPA-funded program or activity;
    (5) Treat an individual differently from others in determining 
whether he or she satisfies any admission, enrollment, eligibility, 
membership, or other requirement or condition for any service, financial 
aid, function or benefit provided under the JTPA-funded program or 
activity;
    (6) Deny or limit an individual with respect to any opportunity to 
participate in the JTPA-funded program or activity, or afford him or her 
an opportunity to do so which is different from that afforded others 
under the JTPA-funded program or activity;
    (7) Deny an individual the opportunity to participate as a member of 
a planning or advisory body which is an integral part of the JTPA-funded 
program or activity;
    (8) Aid or perpetuate discrimination by providing significant 
assistance to an agency, organization, or person that discriminates on a 
prohibited ground in providing any service, financial aid, or benefit to 
applicants or participants in the JTPA-funded program or activity;
    (9) Refuse to accommodate a person's religious practices or beliefs, 
unless to do so would result in undue hardship; or
    (10) Otherwise limit on a prohibited ground an individual in 
enjoyment of any right, privilege, advantage, or opportunity enjoyed by 
others receiving any aid, benefit, service, or training.
    (b) In determining the types of services, financial aid or other 
benefits or facilities that will be provided under any JTPA-funded 
program or activity, or the class of individuals to whom or the 
situations in which such services, financial aid, or other benefits or 
facilities will be provided, a recipient shall not use, directly or 
through contractual, licensing, or other arrangements, standards, 
procedures or criteria that have the purpose or effect of subjecting 
individuals to discrimination on a prohibited ground or that have the 
purpose or effect of defeating or substantially impairing, on a 
prohibited ground, accomplishment of the objectives of the JTPA-funded 
program or activity. This paragraph applies to the administration of 
JTPA- funded programs or activities providing services, financial aid, 
benefits or facilities in any manner, including, but not limited to, 
recruitment, registration, counseling, testing, guidance, selection, 
placement, appointment, training, referral, promotion and retention.
    (c) In determining the site or location of facilities, a grant 
applicant or recipient may not make selections with the purpose or 
effect of excluding individuals from, denying them the benefits of, or 
subjecting them to discrimination on a prohibited ground, or with the 
purpose or effect of defeating or substantially impairing the 
accomplishment of the objectives of the program, or the 
nondiscrimination and equal opportunity provisions of JTPA or this part.
    (d) The exclusion of an individual from programs or activities 
limited by Federal statute or Executive Order to a certain class or 
classes of individuals of which the individual in question is not a 
member is not prohibited by this part.



Sec. 34.5  Specific discriminatory actions prohibited on the ground of disability.

    (a) In providing any aid, benefit, service or training under a JTPA-
funded program or activity, a recipient shall not, directly or through 
contractual, licensing, or other arrangements, on the ground of 
disability:
    (1) Deny a qualified individual with a disability the opportunity to 
participate in or benefit from the aid, benefit, service or training;
    (2) Afford a qualified individual with a disability an opportunity 
to participate in or benefit from the aid, benefit, service or training 
that is not equal to that afforded others;
    (3) Provide a qualified individual with a disability with an aid, 
benefit,

[[Page 358]]

service or training that is not as effective in affording equal 
opportunity to obtain the same result, to gain the same benefit, or to 
reach the same level of achievement as that provided to others;
    (4) Provide different or separate aid, benefits, or services to 
individuals with disabilities or to any class of individuals with 
disabilities unless such action is necessary to provide qualified 
individuals with disabilities with aid, benefits, services or training 
that are as effective as those provided to others;
    (5) Aid or perpetuate discrimination against a qualified individual 
with a disability by providing significant assistance to an agency, 
organization, or person that discriminates on the basis of disability in 
providing any aid, benefit, service or training to participants;
    (6) Deny a qualified individual with a disability the opportunity to 
participate as a member of planning or advisory boards;
    (7) Otherwise limit a qualified individual with a disability in 
enjoyment of any right, privilege, advantage, or opportunity enjoyed by 
others receiving any aid, benefit, service or training.
    (b) A recipient may not deny a qualified individual with a 
disability the opportunity to participate in JTPA-funded programs or 
activities despite the existence of permissibly separate or different 
programs or activities.
    (c) A recipient shall administer JTPA-funded programs and activities 
in the most integrated setting appropriate to the needs of qualified 
individuals with disabilities.
    (d) A recipient may not, directly or through contractual or other 
arrangements, utilize criteria or administrative methods:
    (1) That have the effect of subjecting qualified individuals with 
disabilities to discrimination on the ground of disability;
    (2) That have the purpose or effect of defeating or substantially 
impairing accomplishment of the objectives of the JTPA-funded program or 
activity with respect to individuals with disabilities; or
    (3) That perpetuate the discrimination of another entity if both 
entities are subject to common administrative control or are agencies of 
the same state.
    (e) In determining the site or location of facilities, a grant 
applicant or recipient may not make selections with the purpose or 
effect of excluding individuals with disabilities from, denying them the 
benefits of, or otherwise subjecting them to discrimination under any 
JTPA-funded program or activity, or with the purpose or effect of 
defeating or substantially impairing the accomplishment of the 
objectives of the JTPA-funded program or activity or this part with 
respect to individuals with disabilities.
    (f) As used in this section, references to the aid, benefit, service 
or training provided under a JTPA-funded program or activity include any 
aid, benefit, service or training provided in or through a facility that 
has been constructed, expanded, altered, leased, rented, or otherwise 
acquired, in whole or in part, with Federal financial assistance under 
JTPA.
    (g) The exclusion of an individual without a disability from the 
benefits of a program limited by Federal statute or Executive Order to 
individuals with disabilities or the exclusion of a specific class of 
individuals with disabilities from a program limited by Federal statute 
or Executive Order to a different class of individuals with disabilities 
is not prohibited by this part.
    (h) This part does not require a recipient to provide to individuals 
with disabilities: personal devices, such as wheelchairs; individually 
prescribed devices, such as prescription eyeglasses or hearing aids; 
readers for personal use or study; or services of a personal nature 
including assistance in eating, toileting, or dressing.



Sec. 34.6  Communications with individuals with disabilities.

    (a) Recipients shall take appropriate steps to ensure that 
communications with beneficiaries, applicants, eligible applicants, 
participants, applicants for employment, employees and members of the 
public who are individuals with disabilities, are as effective as 
communications with others.
    (b) A recipient shall furnish appropriate auxiliary aids or services 
where necessary to afford individuals with

[[Page 359]]

disabilities an equal opportunity to participate in, and enjoy the 
benefits of, the JTPA-funded program or activity. In determining what 
type of auxiliary aid or service is necessary, such recipient shall give 
primary consideration to the requests of the individual with a 
disability.
    (c) Where a recipient communicates with beneficiaries, applicants, 
eligible applicants, participants, applicants for employment and 
employees by telephone, telecommunications devices for individuals with 
hearing impairments (TDDs), or equally effective communications systems 
shall be used.
    (d) A recipient shall ensure that interested persons, including 
persons with visual or hearing impairments, can obtain information as to 
the existence and location of accessible services, activities, and 
facilities.
    (e) A recipient shall provide signage at a primary entrance to each 
of its inaccessible facilities, directing users to a location at which 
they can obtain information about accessible facilities. The 
international symbol for accessibility shall be used at each primary 
entrance of an accessible facility.
    (f) This section does not require a recipient to take any action 
that it can demonstrate would result in a fundamental alteration in the 
nature of a service, program, or activity or in undue financial and 
administrative burdens.
    (1) In those circumstances where a recipient believes that the 
proposed action would fundamentally alter the JTPA-funded program, 
activity, or service, or would result in undue financial and 
administrative burdens, such recipient has the burden of proving that 
compliance with this section would result in such alteration or burdens.
    (2) The decision that compliance would result in such alteration or 
burdens must be made by the recipient after considering all resources 
available for use in the funding and operation of the JTPA-funded 
program, activity, or service and must be accompanied by a written 
statement of the reasons for reaching that conclusion.
    (3) If an action required to comply with this section would result 
in such an alteration or such burdens, the recipient shall take any 
other action that would not result in such an alteration or such burdens 
but would nevertheless ensure that, to the maximum extent possible, 
individuals with disabilities receive the benefits or services provided 
by the recipient.



Sec. 34.7  Employment practices.

    (a) As used in this part, the term ``employment practices'' 
includes, but is not limited to, recruitment or recruitment advertising, 
selection, placement, layoff or termination, upgrading, demotion or 
transfer, training, participation in upward mobility programs, rates of 
pay or other forms of compensation, and use of facilities and other 
terms and conditions of employment.
    (b) Discrimination on the ground of race, color, religion, sex, 
national origin, age, disability, or political affiliation or belief is 
prohibited in employment practices in the administration of, or in 
connection with, any JTPA-funded program or activity.
    (c) Employee selection procedures. In implementing this section, a 
recipient shall comply with the Uniform Guidelines on Employee Selection 
Procedures, 41 CFR part 60-3.
    (d) Standards for employment-related investigations and reviews. In 
any investigation or compliance review, the Director shall consider EEOC 
regulations, guidelines and appropriate case law in determining whether 
a recipient has engaged in an unlawful employment practice.
    (e) As provided in Sec. 34.1(c)(2) of this part, this rule does not 
affect in any way the obligation of recipients to comply with subparts B 
and C and appendix A of 29 CFR part 32, implementing the requirements of 
section 504 pertaining to employment practices and employment-related 
training, program accessibility, and accommodations. Therefore, this 
section should not be understood to constitute an exhaustive list of 
employment-related nondiscrimination and equal opportunity obligations 
on the ground of disability.
    (f) Recipients that are also employers covered by titles I and II of 
the ADA should be aware of obligations imposed

[[Page 360]]

pursuant to those titles. See 29 CFR part 1630 and 28 CFR part 35.
    (g) This rule does not preempt consistent State and local 
requirements.



Sec. 34.8  Intimidation and retaliation prohibited.

    A recipient shall not discharge, intimidate, retaliate, threaten, 
coerce or discriminate against any person because such person has: filed 
a complaint; opposed a prohibited practice; furnished information; 
assisted or participated in any manner in an investigation, review, 
hearing or any other activity related to administration of, or exercise 
of authority under, or privilege secured by, the nondiscrimination and 
equal opportunity provisions of JTPA or this part; or otherwise 
exercised any rights and privileges under the nondiscrimination and 
equal opportunity provisions of JTPA or this part. The sanctions and 
penalties contained in section 167 of JTPA or this part may be imposed 
against any recipient that engages in any such proscribed activity or 
fails to take appropriate steps to prevent such activity.



Sec. 34.9  Designation of responsible office; rulings and interpretations.

    (a) The Directorate of Civil Rights (DCR), in the Office of the 
Assistant Secretary for Administration and Management, is responsible 
for administering and enforcing the nondiscrimination and equal 
opportunity provisions of JTPA and this part and for developing and 
issuing policies, standards, guidelines and procedures for effecting 
compliance.
    (b) The Director shall make any rulings under or interpretations of 
the nondiscrimination and equal opportunity provisions of JTPA or this 
part.



Sec. 34.10  [Reserved]



Sec. 34.11  Effect of other obligations or limitations.

    (a) Effect of State or local law or other requirements. The 
obligation to comply with the nondiscrimination and equal opportunity 
provisions of JTPA or this part shall not be obviated or alleviated by 
any State or local law or other requirement that, on a prohibited 
ground, prohibits or limits an individual's eligibility to receive 
services, compensation or benefits, to participate in any JTPA-funded 
program or activity, or to be employed by any recipient, or to practice 
any occupation or profession.
    (b) Effect of private organization rules. The obligation to comply 
with the nondiscrimination and equal opportunity provisions of JTPA and 
this part shall not be obviated or alleviated by any rule or regulation 
of any private organization, club, league or association that, on a 
prohibited ground, prohibits or limits an individual's eligibility to 
participate in any JTPA-funded program or activity to which this part 
applies.
    (c) Effect of the availability of employment opportunities. The 
availability of future employment opportunities, or lack thereof, in any 
occupation or profession for qualified individuals with disabilities or 
persons of a certain race, color, religion, sex, national origin, age, 
political affiliation or belief, or citizenship shall not be considered 
in recruiting, selecting or placing individuals in programs or 
activities.



Sec. 34.12  Delegation and coordination.

    (a) The Secretary may from time to time assign to officials of other 
departments or agencies of the Government (with the consent of such 
department or agency) responsibilities in connection with the 
effectuation of the nondiscrimination and equal opportunity provisions 
of JTPA and this part (other than responsibility for final decisions 
pursuant to Sec. 34.42), including the achievement of effective 
coordination and maximum uniformity within the Department and within the 
executive branch of the Government in the application of the 
nondiscrimination and equal opportunity provisions of JTPA or this part 
to similar programs and similar situations.
    (b) Any action taken, determination made, or requirement imposed by 
an official of another department or agency acting pursuant to an 
assignment of responsibility under this subsection shall have the same 
effect as though such action had been taken by the Director.
    (c) Whenever a compliance review or complaint investigation under 
this

[[Page 361]]

part reveals possible violation of Executive Order 11246, as amended, 
section 503 of the Rehabilitation Act of 1973, as amended, the 
affirmative action provisions of the Vietnam Era Veterans' Readjustment 
Assistance Act of 1974, as amended (38 U.S.C. 4212), the Equal Pay Act 
of 1963, as amended, title VII of the Civil Rights Act of 1964, as 
amended, the Age Discrimination in Employment Act of 1967, as amended, 
the Americans With Disabilities Act, or any other Federal civil rights 
law, that is not also a violation of the nondiscrimination and equal 
opportunity provisions of JTPA or this part, the Director shall attempt 
to notify the appropriate agency and provide it with all relevant 
documents and information.



Subpart B--Recordkeeping and Other Affirmative Obligations of Recipients



Sec. 34.20  Assurance required; duration of obligation; covenants.

    (a) Assurance. (1) Each application for Federal financial assistance 
under JTPA, as defined in Sec. 34.2, shall include an assurance, in the 
following form, with respect to the operation of the JTPA-funded program 
or activity and all agreements or arrangements to carry out the JTPA-
funded program or activity:

As a condition to the award of financial assistance under JTPA from the 
Department of Labor, the grant applicant assures, with respect to 
operation of the JTPA-funded program or activity and all agreements or 
arrangements to carry out the JTPA-funded program or activity, that it 
will comply fully with the nondiscrimination and equal opportunity 
provisions of the Job Training Partnership Act of 1982, as amended 
(JTPA), including the Nontraditional Employment for Women Act of 1991; 
title VI of the Civil Rights Act of 1964, as amended; section 504 of the 
Rehabilitation Act of 1973, as amended; the Age Discrimination Act of 
1975, as amended; title IX of the Education Amendments of 1972, as 
amended; and with all applicable requirements imposed by or pursuant to 
regulations implementing those laws, including but not limited to 29 CFR 
part 34. The United States has the right to seek judicial enforcement of 
this assurance.

    (2) The assurance shall be deemed incorporated by operation of law 
in the grant, cooperative agreement, contract or other arrangement 
whereby Federal financial assistance under JTPA is made available, 
whether or not it is physically incorporated in such document and 
whether or not there is a written agreement between the Department and 
the recipient, between the Department and the Governor, between the 
Governor and the recipient, or between recipients. The assurance may 
also be incorporated by reference in such grants, cooperative 
agreements, contracts or other arrangements.
    (b) Continuing State programs. Each application by a State or a 
State agency to carry out a continuing JTPA-funded program or activity 
shall, as a condition to its approval and the extension of any Federal 
financial assistance under JTPA pursuant to the application, provide a 
statement that the JTPA-funded program or activity is (or, in the case 
of a new JTPA-funded program or activity, will be) conducted in 
compliance with the nondiscrimination and equal opportunity provisions 
of JTPA and this part. The State shall certify that it has developed and 
maintains a Methods of Administration pursuant to Sec. 34.33.
    (c) Duration and scope of obligation. (1) Where the Federal 
financial assistance under JTPA is to provide or is in the form of 
personal property or real property or interest therein or structures 
thereon, the assurance shall obligate the recipient, or (in the case of 
a subsequent transfer) the transferee, for the period during which the 
property is used for a purpose for which Federal financial assistance 
under JTPA is extended, or for as long as the recipient retains 
ownership or possession of the property, whichever is longer.
    (2) In all other cases, the assurance shall obligate the recipient 
for the period during which Federal financial assistance under JTPA is 
extended.
    (d) Covenants. (1) Where Federal financial assistance under JTPA is 
provided in the form of a transfer of real property, structures, or 
improvements thereon, or interests therein, the instrument effecting or 
recording the transfer shall contain a covenant assuring 
nondiscrimination and equal opportunity for the period during which the 
real property is used for a purpose

[[Page 362]]

for which the Federal financial assistance under JTPA is extended.
    (2) Where no Federal transfer of real property or interest therein 
from the Federal Government is involved, but real property or an 
interest therein is acquired or improved under a program of Federal 
financial assistance under JTPA, the recipient shall include such 
covenant described in paragraph (d)(1) of this section in the instrument 
effecting or recording any subsequent transfer of such property.
    (3) When the property is obtained from the Federal Government, such 
covenant described in paragraph (d)(1) of this section may also include 
a condition coupled with a right of reverter to the Department in the 
event of a breach of the covenant.



Sec. 34.21  Equitable services.

    Recipients shall make efforts to provide equitable services among 
substantial segments of the population eligible for participation in 
JTPA. Such efforts shall include but not be limited to outreach efforts 
to broaden the composition of the pool of those considered for 
participation, to include members of both sexes, the various race/
ethnicity and age groups, and individuals with disabilities.



Sec. 34.22  Designation of Equal Opportunity Officer.

    (a) A recipient, other than a small recipient or service provider as 
defined in Sec. 34.2, shall designate an Equal Opportunity Officer to 
coordinate its responsibilities under this part. Such responsibilities 
include, but are not limited to, serving as the recipient's liaison with 
the Directorate and overseeing the development and implementation of the 
Methods of Administration pursuant to Sec. 34.33. The Equal Opportunity 
Officer shall report on equal opportunity matters directly to the State 
JTPA Director, Governor's JTPA Liaison, Job Corps Center Director, SESA 
Administrator, or chief executive officer of the SDA or substate grant 
recipient, as applicable. The Director may require the Equal Opportunity 
Officer and his or her staff to undergo training, the expenses of which 
shall be the responsibility of the recipient. The recipient shall make 
public the name, title of position, address and telephone number of the 
Equal Opportunity Officer.
    (b) Recipients shall assign sufficient staff and resources to the 
Equal Opportunity Officer to ensure compliance with the 
nondiscrimination and equal opportunity provisions of JTPA and this 
part.
    (c) Small recipients shall designate an individual responsible for 
the adoption and publication of complaint procedures and the processing 
of complaints pursuant to Sec. 34.42.
    (d) Service providers as defined by Sec. 34.2 shall not be required 
to designate an Equal Opportunity Officer. The responsibility for 
ensuring service provider compliance with the nondiscrimination and 
equal opportunity provisions of JTPA and this part shall rest with the 
Governor, SDA grant recipient or Substate grantee, as provided in the 
State's Methods of Administration.



Sec. 34.23  Dissemination of policy.

    (a) Initial and Continuing Notice. (l) A recipient shall provide 
initial and continuing notice that it does not discriminate on any 
prohibited ground, to: Applicants, eligible applicants, participants, 
applicants for employment, employees, and members of the public, 
including those with impaired vision or hearing, and unions or 
professional organizations holding collective bargaining or professional 
agreements with the recipient.
    (2) The notice requirement imposed pursuant to paragraph (a)(1) of 
this section requires, at a minimum, that the notice specified in 
paragraph (a)(5) of this section be: posted prominently, in reasonable 
numbers and places; disseminated in internal memoranda and other written 
communications; included in handbooks or manuals; and made available to 
each participant and made a part of the participant's file. The required 
notice to the public applicable to generally-distributed publications is 
contained in paragraph (b) of this section.
    (3) The recipient shall provide that the initial and continuing 
notice required by paragraph (a) of this section be provided in 
appropriate formats to individuals with visual impairments.

[[Page 363]]

Where notice has been given in an alternate format to a participant with 
a visual impairment, a record that such notice has been given shall be 
made a part of the participant's file.
    (4) The notice required by paragraph (a) of this section must be 
provided within 90 days of the effective date of this part or of the 
date this part first applies to the recipient, whichever comes later.
    (5) The notice required by paragraph (a) of this section shall 
contain the following prescribed language:

                      Equal Opportunity Is the Law

    This recipient is prohibited from discriminating on the ground of 
race, color, religion, sex, national origin, age, disability, political 
affiliation or belief, and for beneficiaries only, citizenship or 
participation in programs funded under the Job Training Partnership Act, 
as amended (JTPA), in admission or access to, opportunity or treatment 
in, or employment in the administration of or in connection with, any 
JTPA-funded program or activity. If you think that you have been 
subjected to discrimination under a JTPA-funded program or activity, you 
may file a complaint within 180 days from the date of the alleged 
violation with the recipient's Equal Opportunity Officer (or the person 
designated for this purpose), or you may file a complaint directly with 
the Director, Directorate of Civil Rights (DCR), U.S. Department of 
Labor, 200 Constitution Avenue NW., room N-4123, Washington, DC 20210. 
If you elect to file your complaint with the recipient, you must wait 
until the recipient issues a decision or until 60 days have passed, 
whichever is sooner, before filing with DCR (see address above). If the 
recipient has not provided you with a written decision within 60 days of 
the filing of the complaint, you need not wait for a decision to be 
issued, but may file a complaint with DCR within 30 days of the 
expiration of the 60-day period. If you are dissatisfied with the 
recipient's resolution of your complaint, you may file a complaint with 
DCR. Such complaint must be filed within 30 days of the date you 
received notice of the recipient's proposed resolution.

    (6) The Governor, the SDA grant recipient or the Substate grantee, 
as determined by the Governor in that State's Methods of Administration, 
shall be responsible for meeting the notice requirement of paragraph (a) 
of this section with respect to its service providers.
    (7) Recipient's responsibility to provide notice. Whenever a 
recipient passes on Federal financial assistance under JTPA to another 
recipient, the recipient passing on such assistance shall provide the 
recipient receiving the assistance with the notice prescribed in 
paragraph (a)(5) of this section.
    (b) Publications. (1) In recruitment brochures and other materials 
which are ordinarily distributed to the public to describe programs 
funded under JTPA or the requirements for participation by recipients 
and participants, recipients shall indicate that the JTPA-funded program 
or activity in question is an ``equal opportunity employer/program'' and 
that ``auxiliary aids and services are available upon request to 
individuals with disabilities.'' Where such materials indicate that the 
recipient may be reached by telephone, the materials shall state the 
telephone number of the TDD or relay service used by the recipient, as 
required by Sec. 34.6.
    (2) Recipients required by law or regulation to publish or broadcast 
program information in the news media shall ensure that such 
publications and broadcasts state that the JTPA-funded program or 
activity in question is an equal opportunity employer/program (or 
otherwise indicate that discrimination in the JTPA-funded program or 
activity is prohibited by Federal law), and indicate that auxiliary aids 
and services are available upon request to individuals with 
disabilities.
    (3) A recipient shall not use or distribute a publication of the 
type described in paragraph (b) of this section which suggests, by text 
or illustration, that such recipient treats beneficiaries, applicants, 
participants, employees or applicants for employment differently on any 
prohibited ground specified in Sec. 34.1(a), except as such treatment is 
otherwise permitted under Federal law or this part.
    (c) Services or information in a language other than English. A 
significant number or proportion of the population eligible to be served 
or likely to be directly affected by a JTPA-funded program or activity 
may need service or information in a language other than English in 
order that they be effectively informed of or able to participate in the 
JTPA-funded program or

[[Page 364]]

activity. In such circumstances, the recipient shall take reasonable 
steps, considering the scope of the program and the size and 
concentration of such population, to provide to such persons, in 
appropriate languages, the information needed; the initial and 
continuing notice required pursuant to paragraph (a) of this section; 
and such written materials as are distributed pursuant to paragraph (b) 
of this section.
    (d) Orientation. The recipient shall, during each presentation to 
orient new participants and/or new employees to its JTPA-funded program 
or activity, include a discussion of participants' and/or employees' 
rights under the nondiscrimination and equal opportunity provisions of 
JTPA and this part, including the right to file a complaint of 
discrimination with the recipient or the Director.
    (e) As provided in Sec. 34.6, the recipient shall take appropriate 
steps to ensure that communications with individuals with disabilities 
are as effective as communications with others.



Sec. 34.24  Data and information collection; confidentiality.

    (a) Data and information collection. The Director shall not require 
submission of data that can be obtained from existing reporting 
requirements or sources, including those of other agencies, if the 
source is known and available to the Director.
    (1) Each recipient shall collect such data and maintain such 
records, in accordance with procedures prescribed by the Director, as 
the Director finds necessary to determine whether the recipient has 
complied or is complying with the nondiscrimination and equal 
opportunity provisions of JTPA or this part.
    (2) Such records shall include, but are not limited to, records on 
applicants, eligible applicants, participants, terminees, employees and 
applicants for employment. Each recipient shall record the race/
ethnicity, sex, age, and where known, disability status, of every 
applicant, eligible applicant, participant, terminee, applicant for 
employment and employee. Such information shall be stored in such a 
manner as to ensure confidentiality and shall be used only for the 
purposes of recordkeeping and reporting; determining eligibility, where 
appropriate, for JTPA-funded programs or activities; determining the 
extent to which the recipient is operating its JTPA-funded program or 
activity in a nondiscriminatory manner; or other use authorized by the 
nondiscrimination and equal opportunity provisions of JTPA or this part.
    (3) In addition to the information which shall be collected, 
maintained, and upon request, submitted to the Directorate pursuant to 
paragraphs (a)(1) and (a)(2) of this section:
    (i) Each grant applicant and recipient shall promptly notify the 
Director of any administrative enforcement actions or lawsuits filed 
against it alleging discrimination on the ground of race, color, 
religion, sex, national origin, age, disability, political affiliation 
or belief, and for beneficiaries only, citizenship or participation in 
JTPA;
    (ii) Each grant applicant (as part of its application) and recipient 
(as part of a compliance review conducted pursuant to Sec. 34.40 (b) or 
(c), or monitoring activity carried out pursuant to Sec. 34.34) shall 
provide: the name of any other Federal agency that conducted a civil 
rights compliance review or complaint investigation during the two 
preceding years in which the grant applicant or recipient was found to 
be in noncompliance; and shall identify the parties to, the forum of, 
and case numbers pertaining to, any administrative enforcement actions 
or lawsuits filed against it during the two years prior to its 
application (or, with respect to recipients, its renewal application) 
which allege discrimination on the ground of race, color, religion, sex, 
national origin, age, disability, political affiliation or belief, 
citizenship or participation in JTPA;
    (iii) Each recipient shall maintain a log of complaints filed with 
it that allege discrimination on the ground of race, color, religion, 
sex, national origin, age, disability, political affiliation or belief, 
citizenship or participation in JTPA. The log shall include: the name 
and address of the complainant; the ground of the complaint, i.e., race, 
color, religion, sex, national origin, age, disability, political 
affiliation or belief, citizenship or participation in JTPA; a 
description of the complaint;

[[Page 365]]

the date the complaint was filed; the disposition and date of 
disposition of the complaint; and other pertinent information.
    (4) At the discretion of the Director, grant applicants and 
recipients may be required to provide such information and data as are 
necessary to investigate complaints and conduct compliance reviews on 
grounds prohibited under the nondiscrimination and equal opportunity 
provisions of JTPA and this part, other than race/ethnicity, sex, age, 
and disability.
    (5) At the discretion of the Director, recipients may be required to 
provide such particularized information and/or to submit such periodic 
reports as the Director deems necessary to determine compliance with the 
nondiscrimination and equal opportunity provisions of JTPA or this part.
    (6) At the discretion of the Director, grant applicants may be 
required to submit such particularized information as is necessary to 
determine whether or not the grant applicant, if funded, would be able 
to comply with the nondiscrimination and equal opportunity provisions of 
JTPA or this part.
    (7) Service Providers. A service provider's responsibility for 
collecting and maintaining the information required pursuant to this 
section may be assumed by the Governor, SDA grant recipient or Substate 
grantee, as provided in the State's Methods of Administration.
    (b) Access to sources of information. (1) Each grant applicant and 
recipient shall permit access by the Director during normal business 
hours to its premises and to its employees and participants, to the 
extent that such individuals are on the premises during the course of 
the investigation, for the purpose of conducting complaint 
investigations, compliance reviews, monitoring activities associated 
with a State's development and implementation of a Methods of 
Administration, and inspecting and copying such books, records, accounts 
and other materials as may be pertinent to ascertain compliance with and 
ensure enforcement of the nondiscrimination and equal opportunity 
provisions of JTPA or this part.
    (2) Asserted considerations of privacy or confidentiality shall not 
be a basis for withholding information from the Directorate and shall 
not bar the Directorate from evaluating or seeking to enforce compliance 
with the nondiscrimination and equal opportunity provisions of JTPA and 
this part. Information obtained pursuant to the requirements of this 
part shall be used only in connection with compliance and enforcement 
activities pertinent to the nondiscrimination and equal opportunity 
provisions of JTPA and this part. Whenever any information required of a 
grant applicant or recipient is in the exclusive possession of another 
agency or institution which, or person who, fails or refuses to furnish 
such information, the grant applicant or recipient shall provide 
certification to the Directorate of such refusal and the efforts it has 
made to obtain the information.
    (c) Record retention requirements. (1) Each recipient shall maintain 
for a period of not less than three years from the close of the 
applicable program year, applicant, eligible applicant, participant, 
terminee, employee and applicant for employment records; and such other 
records as are required under this part or by the Director. (2) Records 
regarding complaints and actions taken thereunder shall be maintained 
for a period of not less than three years from the date of resolution of 
the complaint.
    (d) Confidentiality. The identity of any person who furnishes 
information relating to, or assisting in, an investigation or a 
compliance review shall be kept confidential to the extent possible, 
consistent with a fair determination of the issues. A person whose 
identity it is necessary to disclose shall be protected from retaliation 
(see Sec. 34.8).
    (e) Where designation of persons by race or ethnicity is required, 
the guidelines of the Office of Management and Budget shall be used.



        Subpart C--Governor's Responsibilities to Implement the 
      Nondiscrimination and Equal Opportunity Requirements of JTPA



Sec. 34.30  Application.

    This subpart applies to State Programs as defined in Sec. 34.2. 
However, the

[[Page 366]]

provisions of Sec. 34.32 (b) and (c) do not apply to State Employment 
Security Agencies (SESAs), because the Governor's liability for any 
noncompliance on the part of a SESA cannot be waived.



Sec. 34.31  Recordkeeping.

    The Governor shall ensure that recipients collect and maintain 
records in a manner consistent with the provisions of Sec. 34.24 and any 
procedures prescribed by the Director pursuant to Sec. 34.24(a)(1). The 
Governor shall further ensure that recipients are able to provide data 
and reports in the manner prescribed by the Director.



Sec. 34.32  Oversight and liability.

    (a) The Governor shall be responsible for oversight of all JTPA-
funded State programs. This responsibility includes ensuring compliance 
with the nondiscrimination and equal opportunity provisions of JTPA and 
this part, and negotiating with the recipient to secure voluntary 
compliance when noncompliance is found under Sec. 34.45.
    (b) The Governor and the recipient shall be jointly and severally 
liable for all violations of the nondiscrimination and equal opportunity 
provisions of JTPA and this part by the recipient, unless the Governor 
has:
    (1) Established and adhered to a Methods of Administration, pursuant 
to Sec. 34.33, designed to give reasonable guarantee of the recipient's 
compliance with such provisions;
    (2) Entered into a written contract with the recipient which clearly 
establishes the recipient's obligations regarding nondiscrimination and 
equal opportunity;
    (3) Acted with due diligence to monitor the recipient's compliance 
with these provisions; and
    (4) Taken prompt and appropriate corrective action to effect 
compliance.
    (c) If the Director determines that the Governor has demonstrated 
substantial compliance with the requirements of paragraph (b) of this 
section, he or she may recommend to the Secretary that the imposition of 
sanctions against the Governor be waived and that sanctions be imposed 
only against the noncomplying recipient.



Sec. 34.33  Methods of Administration.

    (a)(1) Each Governor shall establish and adhere to a Methods of 
Administration for State programs as defined in Sec. 34.2. In those 
States in which one agency contains both SESA and JTPA programs, the 
Governor may develop a combined Methods of Administration.
    (2) Each Methods of Administration shall be designed to give 
reasonable guarantee that all recipients will comply and are complying 
with the nondiscrimination and equal opportunity provisions of JTPA and 
this part.
    (b) The Methods of Administration shall be:
    (1) In writing;
    (2) Updated periodically as required by the Director; and
    (3) Signed by the Governor.
    (c) The Methods of Administration shall, at a minimum:
    (1) Describe how the requirements of Secs. 34.20, 34.21, 34.22, 
34.23, 34.24, 34.31, and 34.42 have been satisfied; and
    (2) Include the following additional elements:
    (i) A system for periodically monitoring the compliance of 
recipients with this part, including a determination as to whether the 
recipient is conducting its JTPA-funded program or activity in a 
nondiscriminatory way;
    (ii) A system for reviewing the nondiscrimination and equal 
opportunity provisions of job training plans, contracts, assurances, and 
other similar agreements;
    (iii) Procedures for ensuring that recipients provide accessibility 
to individuals with disabilities;
    (iv) A system of policy communication and training to ensure that 
members of the recipients' staffs who have been assigned 
responsibilities pursuant to the nondiscrimination and equal opportunity 
provisions of JTPA or this part are aware of and can effectively carry 
out these responsibilities;
    (v) Procedures for obtaining prompt corrective action or, as 
necessary, applying sanctions when noncompliance is found; and
    (vi) Supporting documentation to show that the commitments made in 
the Methods of Administration have been and/or are being carried out. 
Supporting documentation includes, but is not limited to: policy and 
procedural

[[Page 367]]

issuances concerning required elements of the Methods of Administration; 
copies of monitoring instruments and instructions; evidence of the 
extent to which nondiscrimination and equal opportunity policies have 
been developed and communicated pursuant to this part; information 
reflecting the extent to which Equal Opportunity training, including 
training called for by Sec. 34.22, is planned and/or has been carried 
out; as applicable, reports of monitoring reviews and reports of follow-
up actions taken thereunder where violations have been found, including, 
where appropriate, sanctions; and copies of any notification made 
pursuant to Sec. 34.23.
    (d) The Governor shall, within 180 days of the effective date of 
this part:
    (1) Develop and implement Methods of Administration consistent with 
the requirements of this part, and
    (2) Submit a copy of the Methods of Administration to the Director.



Sec. 34.34  Monitoring.

    (a) The Director may periodically review the adequacy of the Methods 
of Administration established by a Governor, as well as the adequacy of 
the Governor's performance under that Methods of Administration, to 
determine compliance with the requirements of Sec. 34.33. The Director 
may review the Methods of Administration during a compliance review 
under Sec. 34.40, or at another time.
    (b) Nothing in this subpart shall limit or preclude the Director 
from monitoring directly any JTPA recipient or from investigating any 
matter necessary to determine a recipient's compliance with the 
nondiscrimination and equal opportunity provisions of JTPA or this part.
    (c) The procedures contained in subpart D of this part shall apply 
to reviews or investigations undertaken pursuant to paragraphs (a) and 
(b) of this section.



                    Subpart D--Compliance Procedures



Sec. 34.40  Compliance reviews.

    (a) The Director may from time to time conduct pre- and post-
approval compliance reviews of grant applicants for and recipients of 
Federal financial assistance under JTPA to determine compliance with the 
nondiscrimination and equal opportunity provisions of JTPA and this 
part. Techniques used in such reviews may include desk reviews, on-site 
reviews, and off-site analyses.
    (b) Pre-approval reviews. (1) As appropriate and necessary to ensure 
compliance with the nondiscrimination and equal opportunity provisions 
of JTPA or this part, the Director may review any application, or class 
of applications, for Federal financial assistance under JTPA prior to 
and as a condition of their approval. The basis for such review shall be 
the assurance specified in Sec. 34.20, information and reports submitted 
by the grant applicant pursuant to this part or guidelines published by 
the Director, and any relevant records on file with the Department.
    (2) Where the Director determines that the grant applicant for 
Federal financial assistance under JTPA, if funded, would not comply 
with the nondiscrimination and equal opportunity requirements of JTPA or 
this part, the Director shall issue a Letter of Findings. Such Letter of 
Findings shall advise the grant applicant, in writing, of:
    (i) The preliminary findings of the review;
    (ii) The proposed remedial or corrective action pursuant to 
Sec. 34.44 and the time within which the remedial or corrective action 
should be completed;
    (iii) Whether it will be necessary for the grant applicant to enter 
into a written Conciliation Agreement as described in Sec. 34.45; and
    (iv) The opportunity to engage in voluntary compliance negotiations.
    (3) If a grant applicant has agreed to certain remedial or 
corrective actions in order to receive Federal financial assistance 
under JTPA, the Department shall ensure that the remedial or corrective 
actions have been taken or that a Conciliation Agreement has been 
entered into, prior to approving the award of further assistance under 
JTPA. If a grant applicant refuses or fails to take remedial or 
corrective actions or to enter into a Conciliation Agreement, as 
applicable, the Director shall follow the procedures outlined in 
Sec. 34.46.
    (4) The Director shall notify, in a timely manner, the departmental

[[Page 368]]

granting agency of the findings of the pre-approval compliance review.
    (c) Post-approval reviews. (1) The Director may initiate a post-
approval review of any recipient to determine compliance with the 
nondiscrimination and equal opportunity provisions of JTPA and this 
part. The initiation of a review may be based on, but need not be 
limited to, the following: The results of routine program monitoring, 
the nature of or incidence of complaints, the date of the last review, 
and Congressional or community concerns.
    (2) Such review shall be initiated by a Notification Letter, 
advising the recipient of:
    (i) The practices to be reviewed;
    (ii) The programs to be reviewed;
    (iii) The data to be submitted by the recipient within 30 days of 
the receipt of the Notification Letter; and
    (iv) The opportunity, at any time prior to receipt of the Final 
Determination described in Sec. 34.46, to make a documentary or other 
submission which explains, validates or otherwise addresses the 
practices under review.
    (3) Except as provided in Sec. 34.41(e), within 210 days of issuing 
a Notification Letter initiating a review, the Director shall:
    (i) Issue a Letter of Findings, which shall advise the recipient, in 
writing, of:
    (A) The preliminary findings of the review;
    (B) Where appropriate, the proposed remedial or corrective action to 
be taken, and the time by which such action should be completed, as 
provided in Sec. 34.44;
    (C) Whether it will be necessary for the recipient to enter into a 
written assurance and/or Conciliation Agreement, as provided in 
Sec. 34.45; and
    (D) The opportunity to engage in voluntary compliance negotiations.
    (ii) Where no violation is found, the recipient shall be so informed 
in writing.
    (4) The time limit for submitting data to the Director pursuant to 
paragraph (c)(2)(iii) of this section may be modified by the Director.



Sec. 34.41  Notice to Show Cause.

    (a) The Director may issue a Notice to Show Cause to a recipient 
failing to comply with the requirements of this part, where such failure 
results in the inability of the Director to make a finding. Such a 
failure includes, but is not limited to, the failure or refusal to:
    (1) Submit requested data within 30 days of the receipt of the 
Notification Letter;
    (2) Submit documentation requested during a compliance review; or
    (3) Provide the Directorate access to a recipient's premises or 
records during a compliance review.
    (b) The Notice to Show Cause shall contain:
    (1) A description of the violation and a citation to the pertinent 
nondiscrimination or equal opportunity provision(s) of JTPA and this 
part;
    (2) The corrective action necessary to achieve compliance or, as may 
be appropriate, the concepts and principles of acceptable corrective or 
remedial action and the results anticipated; and
    (3) A request for a written response to the findings, including 
commitments to corrective action or the presentation of opposing facts 
and evidence.
    (c) Such Notice to Show Cause shall give the recipient 30 days to 
show cause why enforcement proceedings under the nondiscrimination and 
equal opportunity provisions of JTPA or this part should not be 
instituted. A recipient may make such a showing by, among other means:
    (1) Correcting the violation(s) that brought about the Notice to 
Show Cause and entering into a written assurance and/or entering into a 
Conciliation Agreement, as appropriate, pursuant to Sec. 34.45(d);
    (2) Demonstrating that the Directorate does not have jurisdiction; 
or
    (3) Demonstrating that the violation alleged by the Directorate did 
not occur.
    (d) If the recipient fails to show cause why enforcement proceedings 
should not be initiated, the Director shall follow the procedures 
outlined in Sec. 34.46.
    (e) The 210 day requirement provided for in Sec. 34.40(c)(3) shall 
be tolled during the pendency of a Notice to Show Cause.

[[Page 369]]



Sec. 34.42  Adoption of discrimination complaint processing procedures.

    (a) Each recipient shall adopt and publish procedures for processing 
complaints that allege a violation of the nondiscrimination and equal 
opportunity provisions of JTPA or this part. The procedures shall 
provide for the prompt and equitable resolution of such complaints. In 
the case of service providers, the procedures required by this paragraph 
shall be adopted and published on behalf of the service provider by the 
Governor, the SDA grant recipient or the Substate grantee, as provided 
in the State's Methods of Administration.
    (b) The recipient's Equal Opportunity Officer, or in the case of a 
small recipient, the person designated pursuant to Sec. 34.22(c), shall 
be responsible for the adoption and publication of procedures pursuant 
to paragraph (a) of this section, and for ensuring that such procedures 
are followed.
    (c) A recipient who processes a complaint alleging a violation of 
the nondiscrimination and equal opportunity provisions of JTPA or this 
part shall provide the complainant with written notification of the 
resolution within 60 days of the filing of the complaint. Such 
notification shall include a statement of complainant's right to file a 
complaint with the Director.



Sec. 34.43  Complaints and investigations.

    (a) Who may file. Any person who believes that he or she or any 
specific class of individuals has been or is being subjected to 
discrimination prohibited by the nondiscrimination and equal opportunity 
provisions of JTPA or this part may file a written complaint by him or 
herself or by a representative.
    (b) Where to file. The complaint may be filed either with the 
recipient or with the Director.
    (c) Time for filing. A complaint filed pursuant to this part must be 
filed within 180 days of the alleged discrimination. The Director, for 
good cause shown, may extend the filing time. This time period for 
filing is for the administrative convenience of the Directorate and does 
not create a defense for the respondent.
    (d) Contents of complaints. Each complaint shall be filed in writing 
and shall:
    (1) Be signed by the complainant or his or her authorized 
representative;
    (2) Contain the complainant's name and address (or specify another 
means of contacting him or her);
    (3) Identify the respondent; and
    (4) Describe the complainant's allegations in sufficient detail to 
allow the Director or the recipient, as applicable, to determine 
whether:
    (i) The Directorate or the recipient, as applicable, has 
jurisdiction over the complaint;
    (ii) The complaint was timely filed; and
    (iii) The complaint has apparent merit, i.e., whether the 
allegations, if true, would violate any of the nondiscrimination and 
equal opportunity provisions of JTPA or this part. The information 
required by this paragraph may be provided by completing and submitting 
the Directorate's Complaint Information and Privacy Act Consent Forms.
    (e) Right to Representation. Each complainant and respondent has the 
right to be represented by an attorney or other individual of his or her 
own choice.
    (f) Election of recipient-level complaint processing. Any person who 
elects to file his or her complaint with the recipient shall allow the 
recipient 60 days to process the complaint.
    (1) If, during the 60-day period, the recipient offers the 
complainant a resolution of the complaint but the resolution offered is 
not satisfactory to the complainant, the complainant or his or her 
representative may file a complaint with the Director within 30 days 
after the recipient notifies the complainant of its proposed resolution.
    (2) Within 60 days, the recipient shall offer a resolution of the 
complaint to the complainant, and shall notify the complainant of his or 
her right to file a complaint with the Director, and inform the 
complainant that this right must be exercised within 30 days.
    (3) If, by the end of 60 days, the recipient has not completed its 
processing of the complaint or has failed to

[[Page 370]]

notify the complainant of the resolution, the complainant or his or her 
representative may, within 30 days of the expiration of the 60-day 
period, file a complaint with the Director.
    (4) The Director may extend the 30-day time limit if the complainant 
is not notified as provided in paragraph (f)(2) of this section, or for 
other good cause shown.
    (5) Notification of no jurisdiction. The recipient shall notify the 
complainant in writing immediately upon determining that it does not 
have jurisdiction over a complaint that alleges a violation of the 
nondiscrimination and equal opportunity provisions of JTPA or this part. 
The notification shall also include the basis for such determination, as 
well as a statement of the complainant's right to file a written 
complaint with the Director within 30 days of receipt of the 
notification.
    (g) Complaints filed with the Director.
    (1) Notification of acceptance of complaint. The Director shall 
determine whether the Directorate will accept a complaint filed pursuant 
to this section. Where the Directorate accepts a complaint for 
investigation, he or she shall:
    (i) Acknowledge acceptance of the complaint for investigation to the 
complainant and the respondent, and
    (ii) Advise the complainant and respondent of the issues over which 
the Directorate has accepted jurisdiction.
    (2) Any complainant, respondent, or the authorized representative of 
any complainant or respondent, may contact the Directorate for 
information regarding the complaint filed pursuant to this section.
    (3) Where a complaint contains insufficient information, the 
Director shall seek the needed information from the complainant. If the 
complainant is unavailable after reasonable means have been used to 
locate him or her, or the information is not furnished within 15 days of 
the receipt of such request, the complaint file may be closed without 
prejudice upon notice sent to the complainant's last known address.
    (4) The Director may issue a subpoena, as authorized by Section 
163(c) of JTPA, directing the person named therein to appear and give 
testimony and/or produce documentary evidence, before a designated 
representative, relating to the complaint being investigated. Such 
attendance of witnesses, and the production of such documentary 
evidence, may be required from any place in the United States, at any 
designated time and place.
    (5) Where the Directorate lacks jurisdiction over a complaint, he or 
she shall:
    (i) So advise the complainant, indicating why the complaint falls 
outside the coverage of the nondiscrimination and equal opportunity 
provisions of JTPA or this part; and
    (ii) Where possible, refer the complaint to an appropriate Federal, 
State or local authority.
    (6) Where a complaint lacks apparent merit or has not been timely 
filed, it need not be investigated. Where a complaint will not be 
investigated, the Director shall so inform the complainant and indicate 
the basis for that determination.
    (7) Where a complaint alleging discrimination based on age falls 
within the jurisdiction of the Age Discrimination Act of 1975, as 
amended, the Director shall refer the complaint in accordance with the 
provisions of 45 CFR 90.43(c)(3), and shall so advise the complainant 
and the respondent.
    (8) Where a complaint solely alleges a charge of individual 
employment discrimination covered by the nondiscrimination and equal 
opportunity provisions of JTPA or this part and by title VII of the 
Civil Rights Act of 1964, as amended (42 U.S.C. 2000e to 2000e-17), the 
Equal Pay Act of 1963, as amended (29 U.S.C. 206(d)), or the Age 
Discrimination in Employment Act of 1976, as amended (29 U.S.C. 621, et 
seq.), the Director shall refer such ``joint complaint'' to the Equal 
Employment Opportunity Commission for investigation and conciliation 
under procedures for handling joint complaints at 29 CFR part 1691, and 
shall advise the complainant and the respondent of the referral.
    (9) Determinations. The Director shall determine at the conclusion 
of the investigation of a complaint whether there is reasonable cause to 
believe that a violation of the nondiscrimination and equal opportunity

[[Page 371]]

provisions of JTPA or this part has occurred.
    (i) Upon making such a cause finding, the Director shall issue an 
Initial Determination. The Initial Determination shall notify the 
complainant and the respondent, in writing, of:
    (A) The specific findings of the investigation;
    (B) The proposed corrective or remedial action and the time by which 
the corrective or remedial action must be completed, as provided in 
Sec. 34.44;
    (C) Whether it will be necessary for the respondent to enter into a 
written agreement, as provided in Sec. 34.45; and
    (D) The opportunity to engage in voluntary compliance negotiations.
    (ii) Where a no cause determination is made, the complainant and the 
respondent shall be so notified in writing. Such determination 
represents final agency action of the Department.



Sec. 34.44  Corrective and remedial action.

    (a) A Letter of Findings, Notice to Show Cause, or Initial 
Determination, issued pursuant to Secs. 34.40, 34.41 or 34.43 
respectively, shall include the specific steps the grant applicant or 
recipient, as applicable, must take within a stated period of time in 
order to achieve voluntary compliance.
    (b) Such steps shall include, but are not limited to:
    (1) Actions to end and/or redress the violation of the 
nondiscrimination and equal opportunity provisions of JTPA or this part;
    (2) Make whole relief where discrimination has been identified, 
including, as appropriate, back pay (which shall not accrue from a date 
more than 2 years prior to the filing of the complaint or the initiation 
of a compliance review) or other monetary relief; hire or reinstatement; 
retroactive seniority; promotion; benefits or other services 
discriminatorily denied; and
    (3) Such other remedial or affirmative relief as the Director deems 
necessary, including but not limited to outreach, recruitment and 
training designed to ensure equal opportunity.
    (c) Monetary relief may not be paid from Federal funds.



Sec. 34.45  Notice of violation; written assurances; Conciliation Agreements.

    (a) State Programs. (1) Violations at State-office level. Where the 
Director has determined that a violation of the nondiscrimination and 
equal opportunity provisions of JTPA or this part has occurred at the 
State-office level, he or she shall notify the Governor through the 
issuance of a Letter of Findings, Notice to Show Cause or Initial 
Determination, as appropriate, pursuant to Secs. 34.40, 34.41 or 34.43 
respectively. The Director may secure compliance with the 
nondiscrimination and equal opportunity provisions of JTPA and this part 
through, among other means, the execution of a written assurance and/or 
Conciliation Agreement, pursuant to paragraph (d) of this section.
    (2) Violations below State-office level. Where the Director has 
determined that a violation of the nondiscrimination and equal 
opportunity provisions of JTPA or this part has occurred below the 
State-office level, the Director shall so notify the Governor and the 
violating recipient(s) through the issuance of a Letter of Findings, 
Notice to Show Cause or Initial Determination, as appropriate, pursuant 
to Secs. 34.40, 34.41 or 34.43 respectively.
    (i) Such issuance shall: (A) Direct the Governor to initiate 
negotiations immediately with the violating recipient(s) to secure 
compliance by voluntary means;
    (B) Direct the Governor to complete such negotiations within 30 days 
of the Governor's receipt of the Notice to Show Cause or within 45 days 
of the Governor's receipt of the Letter of Findings or Initial 
Determination, as applicable. The Director reserves the right to enter 
into negotiations with the recipient at any time during the period. For 
good cause shown, the Director may approve an extension of time to 
secure voluntary compliance. The total time allotted to secure voluntary 
compliance shall not exceed 60 days.
    (C) Include a determination as to whether compliance should be 
achieved by: Immediate correction of the violation(s) and written 
assurance that such violations have been corrected, pursuant to 
paragraph (d)(1) of this section;

[[Page 372]]

entering into a written Conciliation Agreement pursuant to paragraph 
(d)(2) of this section; or both.
    (ii) If the Governor determines, at any time during the period 
described in paragraph (a)(2)(i)(B), that a recipient's compliance 
cannot be achieved by voluntary means, the Governor shall so notify the 
Director.
    (iii) If the Governor is able to secure voluntary compliance 
pursuant to paragraph (a)(2)(i) of this section, he or she shall submit 
to the Director for approval, as applicable: written assurance that the 
required action has been taken, as described in paragraph (d)(1) of this 
section; and/or a copy of the Conciliation Agreement, as described in 
paragraph (d)(2) of this section.
    (iv) The Director may disapprove any written assurance or 
Conciliation Agreement submitted for approval pursuant to paragraph 
(a)(2)(iii) of this section that fails to satisfy each of the applicable 
requirements provided in paragraph (d) of this section.
    (b) National Programs. Where the Director has determined that a 
violation of the nondiscrimination and equal opportunity provisions of 
JTPA or this part has occurred in a National Program, he or she shall 
notify the National Program recipient by issuing a Letter of Findings, 
Notice to Show Cause or Initial Determination, as appropriate, pursuant 
to Secs. 34.40, 34.41 or 34.43 respectively. The Director may secure 
compliance with the nondiscrimination and equal opportunity provisions 
of JTPA and this part through, among other means, the execution of a 
written assurance and/or Conciliation Agreement pursuant to paragraph 
(d) of this section, as applicable.
    (c) Written assurance; Conciliation Agreement. (1) Written 
assurance. A written assurance developed pursuant to this section must 
provide documentation that the violations listed in the Letter of 
Findings, Notice to Show Cause or Initial Determination, as applicable, 
have been corrected.
    (2) Conciliation Agreement. A Conciliation Agreement developed 
pursuant to this section must:
    (i) Be in writing;
    (ii) Address each cited violation;
    (iii) Specify the corrective or remedial action to be taken within a 
stated period of time to come into compliance;
    (iv) Provide for periodic reporting, as determined by the Director, 
on the status of the corrective and remedial action;
    (v) Provide that the violation(s) will not recur; and
    (vi) Provide for enforcement for a breach of the agreement.



Sec. 34.46  Final Determination.

    (a) The Director shall conclude that compliance cannot be secured 
through informal means when:
    (1) The grant applicant or recipient fails or refuses to correct the 
violation(s) within the applicable time period established by the Letter 
of Findings, Notice to Show Cause or Initial Determination; or
    (2) The Director has not approved an extension of time in which to 
secure voluntary compliance, pursuant to Sec. 34.45(a)(2)(i)(B), and:
    (i) Has not received notification pursuant to Sec. 34.45(a)(2)(iii) 
that voluntary compliance has been achieved; or
    (ii) Has disapproved a written assurance or Conciliation Agreement, 
pursuant to Sec. 34.45(a)(2)(iv); or
    (iii) Has received notice from the Governor, pursuant to 
Sec. 34.44(a)(2)(ii), that voluntary compliance cannot be achieved.
    (b) Upon so concluding, the Director may:
    (1) Issue a Final Determination which shall:
    (i) Specify the efforts made to achieve voluntary compliance and 
indicate that those efforts have been unsuccessful;
    (ii) Identify those matters upon which the Directorate and the grant 
applicant or recipient continue to disagree;
    (iii) List any modifications to the findings of fact or conclusions 
set forth in the Initial Determination, Notice to Show Cause or Letter 
of Findings;
    (iv) Determine the liability of the grant applicant or recipient, as 
applicable, and establish the extent of the liability, as appropriate;
    (v) Describe the corrective or remedial action that must be taken 
for the

[[Page 373]]

grant applicant or recipient to come into compliance;
    (vi) Indicate that the failure of the grant applicant or recipient 
to come into compliance within 10 days of the receipt of the Final 
Determination may result, after opportunity for a hearing, in the 
termination or denial of the grant, or discontinuation of assistance, as 
appropriate, or in referral to the Department of Justice with a request 
to file suit;
    (vii) Advise the grant applicant or recipient of the right to 
request a hearing, and reference the applicable procedures at 
Sec. 34.51; and
    (viii) Determine the Governor's liability, if any, in accordance 
with the provisions of Sec. 34.32; or
    (2) Refer the matter to the Attorney General with a recommendation 
that an appropriate civil action be instituted; or
    (3) Take such other action as may be provided by law.



Sec. 34.47  Notice of finding of noncompliance.

    Where a compliance review or complaint investigation results in a 
finding of noncompliance, the Director shall so notify: (a) the 
Departmental granting agency; and (b) the Assistant Attorney General.



Sec. 34.48  Notification of Breach of Conciliation Agreement.

    (a) Where a Governor is a party to a Conciliation Agreement, the 
Governor shall immediately notify the Director of a recipient's breach 
of any such Conciliation Agreement.
    (b) When it becomes known to the Director, through the Governor or 
by other means, that a Conciliation Agreement has been breached, the 
Director may issue a Notification of Breach of Conciliation Agreement.
    (c) A Notification of Breach of Conciliation Agreement issued 
pursuant to this section shall be directed, as applicable, to the 
Governor and/or other party(ies) to the Conciliation Agreement.
    (d) A Notification of Breach of Conciliation Agreement issued 
pursuant to paragraph (a) of this section shall:
    (1) Specify the efforts made to achieve voluntary compliance and 
indicate that those efforts have been unsuccessful;
    (2) Identify the specific provisions of the Conciliation Agreement 
violated;
    (3) Determine liability for the violation and the extent of the 
liability, as appropriate;
    (4) Indicate that failure of the violating party to come into 
compliance within 10 days of the receipt of the Notification of Breach 
of Conciliation Agreement may result, after opportunity for a hearing, 
in the termination or denial of the grant, or discontinuation of 
assistance, as appropriate, or in referral to the Department of Justice 
with a request from the Department to file suit;
    (5) Advise the violating party of the right to request a hearing, 
and reference the applicable procedures at Sec. 34.51(b); and
    (6) Include a determination as to the Governor's liability, if any, 
in accordance with the provisions of Sec. 34.32.
    (e) Where enforcement action pursuant to a Notification of Breach of 
Conciliation Agreement is commenced, the Director shall so notify: the 
Departmental granting agency; and the Governor, recipient or grant 
applicant, as applicable.



         Subpart E--Federal Procedures For Effecting Compliance



Sec. 34.50  General.

    (a) Sanctions; judicial enforcement. If, following issuance of a 
Final Determination pursuant to Sec. 34.46, or a Notification of Breach 
of Conciliation Agreement pursuant to Sec. 34.48, compliance has not 
been achieved, the Secretary may:
    (1) After opportunity for a hearing, suspend, terminate, deny or 
discontinue the Federal financial assistance under JTPA, in whole or in 
part;
    (2) Refer the matter to the Attorney General with a recommendation 
that an appropriate civil action be instituted; or
    (3) Take such action as may be provided by law.
    (b) Deferral of new grants. When termination proceedings under 
Sec. 34.51 have been initiated, the Department may defer action on 
applications for new financial assistance under JTPA until a

[[Page 374]]

Final Decision under Sec. 34.52 has been rendered. Deferral is not 
appropriate when financial assistance under JTPA is due and payable 
under a previously approved application.
    (1) New Federal financial assistance under JTPA includes all 
assistance for which an application or approval, including renewal or 
continuation of existing activities, or authorization of new activities, 
is required during the deferral period.
    (2) New Federal financial assistance under JTPA does not include 
assistance approved prior to the beginning of termination proceedings or 
increases in funding as a result of changed computations of formula 
awards.



Sec. 34.51  Hearings.

    (a) Notice of opportunity for hearing. As part of a Final 
Determination, or a Notification of Breach of a Conciliation Agreement, 
the Director shall include, and serve on the grant applicant or 
recipient (by certified mail, return receipt requested), a notice of 
opportunity for hearing.
    (b) Complaint; request for hearing; answer.
    (1) In the case of noncompliance which cannot be voluntarily 
resolved, the Final Determination or Notification of Breach of 
Conciliation Agreement shall be deemed the Department's formal 
complaint.
    (2) To request a hearing, the grant applicant or recipient must file 
a written answer to the Final Determination or Notification of Breach of 
Conciliation Agreement, and a copy of the Final Determination or 
Notification of Breach of Conciliation Agreement, with the Office of the 
Administrative Law Judges.
    (i) The answer must be filed within 30 days of the date of receipt 
of the Final Determination or Notification of Breach of Conciliation 
Agreement.
    (ii) A request for hearing must be set forth in a separate paragraph 
of the answer.
    (iii) The answer shall specifically admit or deny each finding of 
fact in the Final Determination or Notification of Breach of 
Conciliation Agreement. Where the grant applicant or recipient does not 
have knowledge or information sufficient to form a belief, the answer 
may so state and the statement shall have the effect of a denial. 
Findings of fact not denied shall be deemed admitted. The answer shall 
separately state and identify matters alleged as affirmative defenses 
and shall also set forth the matters of fact and law relied on by the 
grant applicant or recipient.
    (3) The grant applicant or recipient must simultaneously serve a 
copy of its filing on the Office of the Solicitor, Civil Rights 
Division, Room N-2464, U.S. Department of Labor, 200 Constitution Avenue 
NW., Washington DC 20210.
    (4)(i) The failure of a grant applicant or recipient to request a 
hearing under this paragraph, or to appear at a hearing for which a date 
has been set, is deemed to be a waiver of the right to a hearing; and
    (ii) Whenever a hearing is waived, all allegations of fact contained 
in the Final Determination or Notification of Breach of Conciliation 
Agreement shall be deemed admitted and the Final Determination or 
Notification of Breach of Conciliation Agreement shall be deemed the 
Final Decision of the Secretary as of the day following the last date by 
which the grant applicant or recipient was required to request a hearing 
or was to appear at a hearing. See Sec. 34.52(b)(3).
    (c) Time and place of hearing. Hearings shall be held at a time and 
place ordered by the Administrative Law Judge upon reasonable notice to 
all parties and, as appropriate, the complainant. In selecting a place 
for the hearing, due regard shall be given to the convenience of the 
parties, their counsel, if any, and witnesses.
    (d) Judicial process; evidence.
    (1) The Administrative Law Judge may use judicial process to secure 
the attendance of witnesses and the production of documents pursuant to 
Section 9 of the Federal Trade Commission Act (15 U.S.C. 49).
    (2) Evidence. In any hearing or administrative review conducted 
pursuant to this part, evidentiary matters shall be governed by the 
standards and principles set forth in the Uniform Rules of Evidence 
issued by the Department of Labor's Office of Administrative Law Judges, 
29 CFR part 18.

[[Page 375]]



Sec. 34.52  Decision and post-termination proceedings.

    (a) Initial Decision. After the hearing, the Administrative Law 
Judge shall issue an initial decision and order, containing findings and 
conclusions. The initial decision and order shall be served on all 
parties by certified mail, return receipt requested.
    (b) Exceptions; Final Decision. (1) Final decision after a hearing. 
The initial decision and order shall become the Final Decision and Order 
of the Secretary unless exceptions are filed by a party or, in the 
absence of exceptions, the Secretary serves notice that the Secretary 
shall review the decision.
    (i) A party dissatisfied with the initial decision and order may, 
within 45 days of receipt, file with the Secretary and serve on the 
other parties to the proceedings and on the Administrative Law Judge, 
exceptions to the initial decision and order or any part thereof.
    (ii) Upon receipt of exceptions, the Administrative Law Judge shall 
index and forward the record and the initial decision and order to the 
Secretary within three days of such receipt.
    (iii) A party filing exceptions must specifically identify the 
finding or conclusion to which exception is taken. Any exception not 
specifically urged shall be deemed to have been waived.
    (iv) Within 45 days of the date of filing such exceptions, a reply, 
which shall be limited to the scope of the exceptions, may be filed and 
served by any other party to the proceeding.
    (v) Requests for extensions for the filing of exceptions or replies 
thereto must be received by the Secretary no later than 3 days before 
the exceptions or replies are due.
    (vi) If no exceptions are filed, the Secretary may, within 30 days 
of the expiration of the time for filing exceptions, on his or her own 
motion serve notice on the parties that the Secretary will review the 
decision.
    (vii) Final Decision and Order. (A) Where exceptions have been 
filed, the initial decision and order of the Administrative Law Judge 
shall become the Final Decision and Order of the Secretary unless the 
Secretary, within 30 days of the expiration of the time for filing 
exceptions and any replies thereto, has notified the parties that the 
case is accepted for review. (B) Where exceptions have not been filed, 
the initial decision and order of the Administrative Law Judge shall 
become the Final Decision and Order of the Secretary unless the 
Secretary has served notice on the parties that the Secretary will 
review the decision, as provided in paragraph (b)(1)(vi) of this 
section.
    (viii) Any case reviewed by the Secretary pursuant to this paragraph 
shall be decided within 180 days of the notification of such review. If 
the Secretary fails to issue a Final Decision and Order within the 180-
day period, the initial decision and order of the Administrative Law 
Judge shall become the Final Decision and Order of the Secretary.
    (2) Final Decision where a hearing is waived.
    (i) If, after issuance of a Final Determination pursuant to 
Sec. 34.46(a) or Notification of Breach of Conciliation Agreement 
pursuant to Sec. 34.48, voluntary compliance has not been achieved 
within the time set by this part and the opportunity for a hearing has 
been waived as provided for in Sec. 34.51(b)(3), the Final Determination 
or Notification of Breach of Conciliation Agreement shall be deemed the 
Final Decision of the Secretary.
    (ii) When a Final Determination or Notification of Breach of 
Conciliation Agreement is deemed the Final Decision of the Secretary, 
the Secretary may, within 45 days, issue an order terminating or denying 
the grant or continuation of assistance or imposing other appropriate 
sanctions for the grant applicant or recipient's failure to comply with 
the required corrective and/or remedial actions, or referring the matter 
to the Attorney General for further enforcement action.
    (3) Final agency action. A Final Decision and Order issued pursuant 
to Sec. 34.52(b) constitutes final agency action.
    (c) Post-termination proceedings. (1) A grant applicant or recipient 
adversely affected by a Final Decision and Order issued pursuant to 
paragraph (b) of this section shall be restored, where appropriate, to 
full eligibility to receive Federal financial assistance under

[[Page 376]]

JTPA if it satisfies the terms and conditions of such Final Decision and 
Order and brings itself into compliance with the nondiscrimination and 
equal opportunity provisions of JTPA and this part.
    (2) A grant applicant or recipient adversely affected by a Final 
Decision and Order issued pursuant to paragraph (b) of this section may 
at any time petition the Director to restore its eligibility to receive 
Federal financial assistance under JTPA. A copy of the petition shall be 
served on the parties to the original proceeding which led to the Final 
Decision and Order issued pursuant to paragraph (b) of this section. 
Such petition shall be supported by information showing the actions 
taken by the grant applicant or recipient to comply with the 
requirements of paragraph (c)(1) of this section. The grant applicant or 
recipient shall have the burden of demonstrating that it has satisfied 
the requirements of paragraph (c)(1) of this section. Restoration to 
eligibility may be conditioned upon the grant applicant or recipient 
entering into a consent decree. While proceedings under this section are 
pending, sanctions imposed by the Final Decision and Order under 
paragraphs (b) (1) and (2) of this section shall remain in effect.
    (3) The Director shall issue a written decision on the petition for 
restoration.
    (i) If the Director determines that the requirements of paragraph 
(c)(1) of this section have not been satisfied, he or she shall issue a 
decision denying the petition.
    (ii) Within 30 days of its receipt of the Director's decision, the 
recipient or grant applicant may file a petition for review of the 
decision by the Secretary, setting forth the grounds for its objection 
to the Director's decision.
    (iii) The petition shall be served on the Director and on the Office 
of the Solicitor, Civil Rights Division.
    (iv) The Director may file a response to the petition within 14 
days.
    (v) The Secretary shall issue the final agency decision denying or 
granting the recipient's or grant applicant's request for restoration to 
eligibility.



Sec. 34.53  Suspension, termination, denial or discontinuance of Federal financial assistance under JTPA; alternate funds disbursal procedure.

    (a) Any action to suspend, terminate, deny or discontinue Federal 
financial assistance under JTPA shall be limited to the particular 
political entity, or part thereof or other recipient (or grant 
applicant) as to which the finding has been made and shall be limited in 
its effect to the particular program, or part thereof, in which the 
noncompliance has been found. No order suspending, terminating, denying 
or discontinuing Federal financial assistance under JTPA shall become 
effective until:
    (1) The Director has issued a Final Determination pursuant to 
Sec. 34.46 or Notification of Breach of Conciliation Agreement pursuant 
to Sec. 34.48;
    (2) There has been an express finding on the record, after 
opportunity for a hearing, of failure by the grant applicant or 
recipient to comply with a requirement imposed by or pursuant to the 
nondiscrimination and equal opportunity provisions of JTPA or this part;
    (3) A Final Decision has been issued by the Secretary, the 
Administrative Law Judge's decision and order has become the Final 
Decision of the Secretary, or the Final Determination or Notification of 
Conciliation Agreement has been deemed the Final Decision of the 
Secretary, pursuant to Sec. 34.52(b); and
    (4) The expiration of 30 days after the Secretary has filed, with 
the committees of Congress having legislative jurisdiction over the 
program involved, a full written report of the circumstances and grounds 
for such action.
    (b) When the Department withholds funds from a recipient or grant 
applicant under these regulations, the Secretary may disburse the 
withheld funds directly to an alternate recipient. In such case, the 
Secretary will require any alternate recipient to demonstrate:
    (1) The ability to comply with these regulations; and
    (2) The ability to achieve the goals of the nondiscrimination and 
equal opportunity provisions of JTPA.

[[Page 377]]



PART 37--IMPLEMENTATION OF THE NONDISCRIMINATION AND EQUAL OPPORTUNITY PROVISIONS OF THE WORKFORCE INVESTMENT ACT OF 1998 (WIA)--Table of Contents




                      Subpart A--General Provisions

Sec.
37.1  What is the purpose of this part?
37.2  To whom does this part apply, and what is the scope of this part?
37.3  How does this part affect a recipient's other obligations?
37.4  What definitions apply to this part?
37.5  What forms of discrimination are prohibited by this part?
37.6  What specific discriminatory actions, based on prohibited grounds 
          other than disability, are prohibited by this part?
37.7  What specific discriminatory actions based on disability are 
          prohibited by this part?
37.8  What are a recipient's responsibilities regarding reasonable 
          accommodation and reasonable modification for individuals with 
          disabilities?
37.9  What are a recipient's responsibilities to communicate with 
          individuals with disabilities?
37.10  To what extent are a recipient's employment practices covered by 
          this part?
37.11  To what extent are intimidation and retaliation prohibited by 
          this part?
37.12  What Department of Labor office is responsible for administering 
          this part?
37.13  Who is responsible for providing interpretations of this part?
37.14  Under what circumstances may the Secretary delegate the 
          responsibilities of this part?
37.15  What are the Director's responsibilities to coordinate with other 
          civil rights agencies?
37.16  What is this part's effect on a recipient's obligations under 
          other laws, and what limitations apply?

Subpart B--Recordkeeping and Other Affirmative Obligations of Recipients

                               Assurances

37.20  What is a grant applicant's obligation to provide a written 
          assurance?
37.21  How long will the recipient's obligation under the assurance 
          last, and how broad is the obligation?
37.22  How must covenants be used in connection with this part?

                       Equal Opportunity Officers

37.23  Who must designate an Equal Opportunity Officer?
37.24  Who is eligible to serve as an Equal Opportunity Officer?
37.25  What are the responsibilities of an Equal Opportunity Officer?
37.26  What are a recipient's obligations relating to the Equal 
          Opportunity Officer?
37.27  What are the obligations of small recipients regarding Equal 
          Opportunity Officers?
37.28  What are the obligations of service providers regarding Equal 
          Opportunity Officers?

                        Notice and Communication

37.29  What are a recipient's obligations to disseminate its equal 
          opportunity policy?
37.30  What specific wording must the notice contain?
37.31  Where must the notice required by Secs. 37.29 and 37.30 be 
          published?
37.32  When must the notice be provided?
37.33  Who is responsible for meeting the notice requirement with 
          respect to service providers?
37.34  What type of notice must a recipient include in publications, 
          broadcasts, and other communications?
37.35  What are a recipient's responsibilities to provide services and 
          information in languages other than English?
37.36  What responsibilities does a recipient have to communicate 
          information during orientations?

             Data and Information Collection and Maintenance

37.37  What are a recipient's responsibilities to collect and maintain 
          data and other information?
37.38  What information must grant applicants and recipients provide to 
          CRC?
37.39  How long must grant applicants and recipients maintain the 
          records required under this part?
37.40  What access to sources of information must grant applicants and 
          recipients provide the Director?
37.41  What responsibilities do grant applicants, recipients, and the 
          Department have to maintain the confidentiality of the 
          information collected?
37.42  What are a recipient's responsibilities under this part to 
          provide universal access to WIA Title I-financially assisted 
          programs and activities?

        Subpart C--Governor's Responsibilities to Implement the 
       Nondiscrimination and Equal Opportunity Requirements of WIA

37.50  To whom does this subpart apply?
37.51  What are a Governor's oversight responsibilities?
37.52  To what extent may a Governor be liable for the actions of a 
          recipient he or she has financially assisted under WIA Title 
          I?

[[Page 378]]

37.53  What are a Governor's oversight responsibilities regarding 
          recipients' recordkeeping?
37.54  That are a Governor's obligations to develop and maintain a 
          Methods of Administration?
37.55  When must the Governor carry out his or her obligations with 
          regard to the Methods of Administration?

                    Subpart D--Compliance Procedures

37.60  How does the Director evaluate compliance with the 
          nondiscrimination and equal opportunity provisions of WIA and 
          this part?
37.61  Is there authority to issue subpoenas?

                           Compliance Reviews

37.62  What are the authority and procedures for conducting pre-approval 
          compliance reviews?
37.63  What are the authority and procedures for conducting post-
          approval compliance reviews?
37.64  What procedures must the Director follow when CRC has completed a 
          post-approval compliance review?
37.65  What is the Director's authority to monitor the activities of a 
          Governor?
37.66  What happens if a recipient fails to submit requested data, 
          records, and/or information, or fails to provide CRC with the 
          required access?
37.67  What information must a Notice to Show Cause contain?
37.68  How may a recipient show cause why enforcement proceedings should 
          not be instituted?
37.69  What happens if a recipient fails to show cause?

                     Complaint Processing Procedures

37.70  Who may file a complaint concerning discrimination connected with 
          WIA Title I?
37.71  Where may a complaint be filed?
37.72  When must a complaint be filed?
37.73  What information must a complaint contain?
37.74  Are there any forms that a complainant may use to file a 
          complaint?
37.75  Is there a right of representation in the complaint process?
37.76  What are the required elements of a recipient's discrimination 
          complaint processing procedures?
37.77  Who is responsible for developing and publishing complaint 
          processing procedures for service providers?
37.78  Does a recipient have any special obligations in cases in which 
          the recipient determines that it has no jurisdiction over a 
          complaint?
37.79  If, before the 90-day period has expired, a recipient issues a 
          Notice of Final Action with which the complainant is 
          dissatisfied, how long does the complainant have to file a 
          complaint with the Director?
37.80  What happens if a recipient fails to issue a Notice of Final 
          Action within 90 days of the date on which a complaint was 
          filed?
37.81  Are there any circumstances under which the Director may extend 
          the time limit for filing a complaint with him or her?
37.82  Does the Director accept every complaint for resolution?
37.83  What happens if a complaint does not contain enough information?
37.84  What happens if CRC does not have jurisdiction over a complaint?
37.85  Are there any other circumstances in which the Director will send 
          a complaint to another authority?
37.86  What must the Director do if he or she determines that a 
          complaint will not be accepted?
37.87  What must the Director do if he or she determines that a 
          complaint will be accepted?
37.88  Who may contact CRC about a complaint?
37.89  May the Director offer the parties to a complaint the option of 
          mediation?

                             Determinations

37.90  If a complaint is investigated, what must the Director do when 
          the investigation is completed?
37.91  What notice must the Director issue if he or she finds reasonable 
          cause to believe that a violation has taken place?
37.92  What notice must the Director issue if he or she finds no 
          reasonable cause to believe that a violation has taken place?
37.93  What happens if the Director finds that a violation has taken 
          place, and the recipient fails or refuses to take the 
          corrective action listed in the Initial Determination?
37.94  What corrective or remedial actions may be imposed where, after a 
          compliance review or complaint investigation, the Director 
          finds a violation of the nondiscrimination and equal 
          opportunity provisions of WIA or this part?
37.95  What procedures apply if the Director finds that a recipient has 
          violated the nondiscrimination and equal opportunity 
          provisions of WIA or this part?
37.96  What are the required elements of a written assurance?
37.97  What are the required elements of a Conciliation Agreement?
37.98  What are the circumstances under which the Director will conclude 
          that compliance cannot be secured by voluntary means?
37.99  If the Director concludes that compliance cannot be secured by 
          voluntary

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          means, what actions must he or she take?
37.100  What information must a Final Determination contain?
37.101  Whom must the Director notify of a finding of noncompliance?

                   Breaches of Conciliation Agreements

37.102  What happens if a grant applicant or recipient breaches a 
          Conciliation Agreement?
37.103  Whom must the Director notify about a breach of a Conciliation 
          Agreement?
37.104  What information must a Notification of Breach of Conciliation 
          Agreement contain?
37.105  Whom must the Director notify if enforcement action under a 
          Notification of Breach of Conciliation Agreement is commenced?

         Subpart E--Federal Procedures For Effecting Compliance

37.110  What enforcement procedures does the Department follow to effect 
          compliance with the nondiscrimination and equal opportunity 
          provisions of WIA and this part?
37.111  What hearing procedures does the Department follow?
37.112  What procedures for initial and final decisions does the 
          Department follow?
37.113  What procedure does the Department follow to suspend, terminate, 
          withhold, deny or discontinue WIA Title I financial 
          assistance?
37.114  What procedure does the Department follow to distribute WIA 
          Title I financial assistance to an alternate recipient?
37.115  What procedures does the Department follow for post-termination 
          proceedings?


    Authority: Sections 134(b), 136(d)(2)(F), 136(e), 172(a), 183(c), 
185(c)(2), 185(d)(1)(E), 186, 187 and 188 of the Workforce Investment 
Act of 1998, 29 U.S.C. 2801 et seq.; Title VI of the Civil Rights Act of 
1964, as amended, 42 U.S.C. 2000d, et seq.; Section 504 of the 
Rehabilitation Act of 1973, as amended, 29 U.S.C. 794; the Age 
Discrimination Act of 1975, as amended, 42 U.S.C. 6101; and Title IX of 
the Education Amendments of 1972, as amended, 20 U.S.C. 1681.

    Source: 64 FR 61715, Nov. 12, 1999, unless otherwise noted.



                      Subpart A--General Provisions



Sec. 37.1  What is the purpose of this part?

    The purpose of this part is to implement the nondiscrimination and 
equal opportunity provisions of the Workforce Investment Act of 1998 
(WIA), which are contained in section 188 of WIA. Section 188 prohibits 
discrimination on the grounds of race, color, religion, sex, national 
origin, age, disability, political affiliation or belief, and for 
beneficiaries only, citizenship or participation in a WIA Title I-
financially assisted program or activity. This part clarifies the 
application of the nondiscrimination and equal opportunity provisions of 
WIA and provides uniform procedures for implementing them.



Sec. 37.2  To whom does this part apply, and what is the scope of this part?

    (a) This part applies to:
    (1) Any recipient, as defined in Sec. 37.4;
    (2) Programs and activities that are part of the One-Stop delivery 
system and that are operated by One-Stop partners listed in section 
121(b) of WIA, to the extent that the programs and activities are being 
conducted as part of the One-Stop delivery system; and
    (3) The employment practices of a recipient and/or One-Stop partner, 
as provided in Sec. 37.10.
    (b) Limitation of Application. This part does not apply to:
    (1) Programs or activities that are financially assisted by the 
Department exclusively under laws other than Title I of WIA, and that 
are not part of the One-Stop delivery system (including programs or 
activities implemented under, authorized by, and/or financially assisted 
by the Department under, JTPA);
    (2) Contracts of insurance or guaranty;
    (3) The ultimate beneficiary to this program of Federal financial 
assistance;
    (4) Federal procurement contracts, with the exception of contracts 
to operate or provide services to Job Corps Centers; and
    (5) Federally-operated Job Corps Centers. The operating Department 
is responsible for enforcing the nondiscrimination and equal opportunity 
laws to which such Centers are subject.



Sec. 37.3  How does this part affect a recipient's other obligations?

    (a) A recipient's compliance with this part will satisfy any 
obligation of the recipient to comply with 29 CFR part

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31, the Department of Labor's regulations implementing Title VI of the 
Civil Rights Act of 1964, as amended (Title VI), and with Subparts A, D 
and E of 29 CFR part 32, the Department's regulations implementing 
Section 504 of the Rehabilitation Act of 1973, as amended (Section 504).
    (b) 29 CFR part 32, Subparts B and C and Appendix A, the 
Department's regulations which implement the requirements of Section 504 
pertaining to employment practices and employment-related training, 
program accessibility, and reasonable accommodation, are hereby 
incorporated into this part by reference. Therefore, recipients must 
comply with the requirements set forth in those regulatory sections as 
well as the requirements listed in this part.
    (c) Recipients that are also public entities or public 
accommodations, as defined by Titles II and III of the Americans with 
Disabilities Act of 1990 (ADA), should be aware of obligations imposed 
by those titles.
    (d) Similarly, recipients that are also employers, employment 
agencies, or other entities covered by Title I of the ADA should be 
aware of obligations imposed by that title.
    (e) Compliance with this part does not affect, in any way, any 
additional obligation that a recipient may have to comply with the 
following laws and their implementing regulations:
    (1) Executive Order 11246, as amended;
    (2) Sections 503 and 504 of the Rehabilitation Act of 1973, as 
amended (29 U.S.C. 793 and 794);
    (3) The affirmative action provisions of the Vietnam Era Veterans' 
Readjustment Assistance Act of 1974, as amended (38 U.S.C. 4212);
    (4) The Equal Pay Act of 1963, as amended (29 U.S.C. 206d);
    (5) Titles VI and VII of the Civil Rights Act of 1964, as amended 
(42 U.S.C. 2000d et seq. and 2000e et seq.);
    (6) The Age Discrimination Act of 1975, as amended (42 U.S.C. 6101);
    (7) The Age Discrimination in Employment Act of 1967, as amended (29 
U.S.C. 621);
    (8) Title IX of the Education Amendments of 1972, as amended (Title 
IX) (20 U.S.C. 1681);
    (9) The Americans with Disabilities Act of 1990, as amended (42 
U.S.C. 12101 et seq.); and
    (10) The anti-discrimination provision of the Immigration and 
Nationality Act, as amended (8 U.S.C. 1324b).
    (f) This rule does not preempt consistent State and local 
requirements.



Sec. 37.4  What definitions apply to this part?

    As used in this part, the term:
    Administrative Law Judge means a person appointed as provided in 5 
U.S.C. 3105 and 5 CFR 930.203, and qualified under 5 U.S.C. 557, to 
preside at hearings held under the nondiscrimination and equal 
opportunity provisions of WIA and this part.
    Aid, benefits, services, or training means WIA Title I--financially 
assisted services, financial or other aid, or benefits provided by or 
through a recipient or its employees, or by others through contract or 
other arrangements with the recipient. ``Aid, benefits, services, or 
training'' includes, but is not limited to:
    (1) Core and intensive services;
    (2) Education or training;
    (3) Health, welfare, housing, social service, rehabilitation, or 
other supportive services;
    (4) Work opportunities; and
    (5) Cash, loans, or other financial assistance to individuals.
    As used in this part, the term includes any aid, benefits, services, 
or training provided in or through a facility that has been constructed, 
expanded, altered, leased, rented, or otherwise obtained, in whole or in 
part, with Federal financial assistance under Title I of WIA.
    Applicant means an individual who is interested in being considered 
for WIA Title I--financially assisted aid, benefits, services, or 
training by a recipient, and who has signified that interest by 
submitting personal information in response to a request by the 
recipient. See also the definitions of ``application for benefits,'' 
``eligible applicant/registrant,'' ``participant,'' ``participation,'' 
and ``recipient'' in this section.
    Applicant for employment means a person or persons who make(s) 
application for employment with a recipient of

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Federal financial assistance under WIA Title I.
    Application for assistance means the process by which required 
documentation is provided to the Governor, recipient, or Department 
before and as a condition of receiving WIA Title I financial assistance 
(including both new and continuing assistance).
    Application for benefits means the process by which information, 
including but not limited to a completed application form, is provided 
by applicants or eligible applicants before and as a condition of 
receiving WIA Title I--financially assisted aid, benefits, services, or 
training from a recipient.
    Assistant Attorney General means the Assistant Attorney General, 
Civil Rights Division, United States Department of Justice.
    Assistant Secretary means the Assistant Secretary for Administration 
and Management, United States Department of Labor.
    Auxiliary aids or services includes--
    (1) Qualified interpreters, notetakers, transcription services, 
written materials, telephone handset amplifiers, assistive listening 
systems, telephones compatible with hearing aids, closed caption 
decoders, open and closed captioning, telecommunications devices for 
deaf persons (TDDs/TTYs), videotext displays, or other effective means 
of making aurally delivered materials available to individuals with 
hearing impairments;
    (2) Qualified readers, taped texts, audio recordings, brailled 
materials, large print materials, or other effective means of making 
visually delivered materials available to individuals with visual 
impairments;
    (3) Acquisition or modification of equipment or devices; and
    (4) Other similar services and actions.
    Beneficiary means the individual or individuals intended by Congress 
to receive aid, benefits, services, or training from a recipient.
    Citizenship See ``Discrimination on the ground of citizenship'' in 
this section.
    CRC means the Civil Rights Center, Office of the Assistant Secretary 
for Administration and Management, U.S. Department of Labor.
    Department means the U.S. Department of Labor (DOL), including its 
agencies and organizational units.
    Departmental grantmaking agency means a grantmaking agency within 
the U.S. Department of Labor.
    Director means the Director, Civil Rights Center (CRC), Office of 
the Assistant Secretary for Administration and Management, U.S. 
Department of Labor, or a designee authorized to act for the Director.
    Disability means, with respect to an individual, a physical or 
mental impairment that substantially limits one or more of the major 
life activities of such individual; a record of such an impairment; or 
being regarded as having such an impairment.
    (1)(i) The phrase physical or mental impairment means--
    (A) Any physiological disorder or condition, cosmetic disfigurement, 
or anatomical loss affecting one or more of the following body systems: 
neurological, musculoskeletal, special sense organs, respiratory 
(including speech organs), cardiovascular, reproductive, digestive, 
genitourinary, hemic and lymphatic, skin, and endocrine;
    (B) Any mental or psychological disorder such as mental retardation, 
organic brain syndrome, emotional or mental illness, and specific 
learning disabilities.
    (ii) The phrase physical or mental impairment includes, but is not 
limited to, such contagious and noncontagious diseases and conditions as 
orthopedic, visual, speech and hearing impairments, cerebral palsy, 
epilepsy, muscular dystrophy, multiple sclerosis, cancer, heart disease, 
diabetes, mental retardation, emotional illness, specific learning 
disabilities, HIV disease (whether symptomatic or asymptomatic), 
tuberculosis, drug addiction, and alcoholism. The phrase ``physical or 
mental impairment'' does not include homosexuality or bisexuality.
    (2) The phrase major life activities means functions such as caring 
for one's self, performing manual tasks, walking, seeing, hearing, 
speaking, breathing, learning, and working.
    (3) The phrase has a record of such an impairment means has a 
history of, or has been misclassified as having, a mental or physical 
impairment that

[[Page 382]]

substantially limits one or more major life activities.
    (4) The phrase is regarded as having an impairment means--
    (i) Has a physical or mental impairment that does not substantially 
limit major life activities but that is treated by the recipient as 
being such a limitation;
    (ii) Has a physical or mental impairment that substantially limits 
major life activities only as a result of the attitudes of others toward 
such impairment; or
    (iii) Has none of the impairments defined in paragraph (1) of this 
definition but is treated by the recipient as having such an impairment.
    Discrimination on the ground of citizenship means a denial of 
participation in programs or activities financially assisted in whole or 
in part under Title I of WIA to individuals on the basis of their status 
as citizens or nationals of the United States, lawfully admitted 
permanent resident aliens, refugees, asylees, and parolees, or other 
immigrants authorized by the Attorney General to work in the United 
States.
    Eligible applicant/registrant means an individual who has been 
determined eligible to participate in one or more WIA Title I--
financially assisted programs or activities.
    Employment practices means a recipient's practices related to 
employment, including but not limited to:
    (1) Recruitment or recruitment advertising;
    (2) Selection, placement, layoff or termination of employees;
    (3) Upgrading, promotion, demotion or transfer of employees;
    (4) Training, including employment-related training;
    (5) Participation in upward mobility programs;
    (6) Deciding rates of pay or other forms of compensation;
    (7) Use of facilities; or
    (8) Deciding other terms, conditions, benefits and/or privileges of 
employment.
    Employment-related training means training that allows or enables an 
individual to obtain employment.
    Entity means any person, corporation, partnership, joint venture, 
sole proprietorship, unincorporated association, consortium, Indian 
tribe or tribal organization, Native Hawaiian organization, and/or 
entity authorized by State or local law; any State or local government; 
and/or any agency, instrumentality or subdivision of such a government.
    Facility means all or any portion of buildings, structures, sites, 
complexes, equipment, roads, walks, passageways, parking lots, rolling 
stock or other conveyances, or other real or personal property or 
interest in such property, including the site where the building, 
property, structure, or equipment is located. The phrase ``real or 
personal property'' in the preceding sentence includes indoor constructs 
that may or may not be permanently attached to a building or structure. 
Such constructs include, but are not limited to, office cubicles, 
computer kiosks, and similar constructs.
    Federal grantmaking agency means a Federal agency that provides 
financial assistance under any Federal statute.
    Financial assistance means any of the following:
    (1) Any grant, subgrant, loan, or advance of funds, including funds 
extended to any entity for payment to or on behalf of participants 
admitted to that entity for training, or extended directly to such 
participants for payment to that entity;
    (2) Provision of the services of grantmaking agency personnel, or of 
other personnel at the grantmaking agency's expense;
    (3) A grant or donation of real or personal property or any interest 
in or use of such property, including:
    (a) Transfers or leases of property for less than fair market value 
or for reduced consideration;
    (b) Proceeds from a subsequent sale, transfer, or lease of such 
property, if the grantmaking agency's share of the fair market value of 
the property is not returned to the grantmaking agency; and
    (c) The sale, lease, or license of, and/or the permission to use 
(other than on a casual or transient basis), such property or any 
interest in such property, either:
    (i) Without consideration,
    (ii) At a nominal consideration, or

[[Page 383]]

    (iii) At a consideration that is reduced or waived either for the 
purpose of assisting the recipient, or in recognition of the public 
interest to be served by such sale or lease to or use by the recipient;
    (4) Waiver of charges that would normally be made for the furnishing 
of services by the grantmaking agency; and
    (5) Any other agreement, arrangement, contract or subcontract (other 
than a procurement contract or a contract of insurance or guaranty), or 
other instrument that has as one of its purposes the provision of 
assistance or benefits under the statute or policy that authorizes 
assistance by the grantmaking agency.
    Financial assistance under Title I of WIA means any of the 
following, when authorized or extended under WIA Title I:
    (1) Any grant, subgrant, loan, or advance of Federal funds, 
including funds extended to any entity for payment to or on behalf of 
participants admitted to that entity for training, or extended directly 
to such participants for payment to that entity;
    (2) Provision of the services of Federal personnel, or of other 
personnel at Federal expense;
    (3) A grant or donation of Federal real or personal property or any 
interest in or use of such property, including:
    (a) Transfers or leases of property for less than fair market value 
or for reduced consideration;
    (b) Proceeds from a subsequent sale, transfer, or lease of such 
property, if the Federal share of the fair market value of the property 
is not returned to the Federal Government; and
    (c) The sale, lease, or license of, and/or the permission to use 
(other than on a casual or transient basis), such property or any 
interest in such property, either:
    (i) Without consideration,
    (ii) At a nominal consideration, or
    (iii) At a consideration that is reduced or waived either for the 
purpose of assisting the recipient, or in recognition of the public 
interest to be served by such sale or lease to or use by the recipient;
    (4) Waiver of charges that would normally be made for the furnishing 
of Government services; and
    (5) Any other agreement, arrangement, contract or subcontract (other 
than a Federal procurement contract or a contract of insurance or 
guaranty), or other instrument that has as one of its purposes the 
provision of assistance or benefits under WIA Title I.
    Fundamental alteration means:
    (1) A change in the essential nature of a program or activity as 
defined in this part, including but not limited to an aid, service, 
benefit, or training; or
    (2) A cost that a recipient can demonstrate would result in an undue 
burden. Factors to be considered in making the determination whether the 
cost of a modification would result in such a burden include:
    (a) The nature and net cost of the modification needed, taking into 
consideration the availability of tax credits and deductions, and/or 
outside financial assistance, for the modification;
    (b) The overall financial resources of the facility or facilities 
involved in the provision of the modification, including:
    (i) The number of persons aided, benefited, served, or trained by, 
or employed at, the facility or facilities; and
    (ii) The effect the modification would have on the expenses and 
resources of the facility or facilities;
    (c) The overall financial resources of the recipient, including:
    (i) The overall size of the recipient;
    (ii) The number of persons aided, benefited, served, trained, or 
employed by the recipient; and
    (iii) The number, type and location of the recipient's facilities;
    (d) The type of operation or operations of the recipient, including:
    (i) The geographic separateness and administrative or fiscal 
relationship of the facility or facilities in question to the recipient; 
and
    (ii) Where the modification sought is employment-related, the 
composition, structure and functions of the recipient's workforce; and
    (e) The impact of the modification upon the operation of the 
facility or facilities, including:

[[Page 384]]

    (i) The impact on the ability of other participants to receive aid, 
benefits, services, or training, or of other employees to perform their 
duties; and
    (ii) The impact on the facility's ability to carry out its mission.
    Governor means the chief elected official of any State or his or her 
designee.
    Grant applicant means an entity that submits the required 
documentation to the Governor, recipient, or Department, before and as a 
condition of receiving financial assistance under Title I of WIA.
    Grantmaking agency means an entity that provides Federal financial 
assistance.
    Guideline means written informational material supplementing an 
agency's regulations and provided to grant applicants and recipients to 
provide program-specific interpretations of their responsibilities under 
the regulations.
    Illegal use of drugs means the use of drugs, the possession or 
distribution of which is unlawful under the Controlled Substances Act, 
as amended (21 U.S.C. 812). ``Illegal use of drugs'' does not include 
the use of a drug taken under supervision of a licensed health care 
professional, or other uses authorized by the Controlled Substances Act 
or other provisions of Federal law.
    Individual with a disability means a person who has a disability, as 
defined in this section.
    (1) The term ``individual with a disability'' does not include an 
individual on the basis of:
    (i) Transvestism, transsexualism, pedophilia, exhibitionism, 
voyeurism, gender identity disorders not resulting from physical 
impairments, or other sexual behavior disorders;
    (ii) Compulsive gambling, kleptomania, or pyromania; or
    (iii) Psychoactive substance use disorders resulting from current 
illegal use of drugs.
    (2) The term ``individual with a disability'' also does not include 
an individual who is currently engaging in the illegal use of drugs, 
when a recipient acts on the basis of such use. This limitation does not 
exclude as an individual with a disability an individual who:
    (i) Has successfully completed a supervised drug rehabilitation 
program and is no longer engaging in the illegal use of drugs, or has 
otherwise been rehabilitated successfully and is no longer engaging in 
such use;
    (ii) Is participating in a supervised rehabilitation program and is 
no longer engaging in such use; or
    (iii) Is erroneously regarded as engaging in such use, but is not 
engaging in such use, except that it is not a violation of the 
nondiscrimination and equal opportunity provisions of WIA or this part 
for a recipient to adopt or administer reasonable policies or 
procedures, including but not limited to drug testing, designed to 
ensure that an individual described in paragraph (1)(i) or (1)(ii) of 
this definition is no longer engaging in the illegal use of drugs.
    (2) With regard to employment, the term ``individual with a 
disability'' does not include any individual who:
    (i) Is an alcoholic:
    (A) Whose current use of alcohol prevents such individual from 
performing the duties of the job in question, or
    (B) Whose employment, by reason of such current alcohol abuse, would 
constitute a direct threat to property or the safety of others; or
    (ii) Has a currently contagious disease or infection, if:
    (A) That disease or infection prevents him or her from performing 
the duties of the job in question, or
    (B) His or her employment, because of that disease or infection, 
would constitute a direct threat to the health and safety of others.
    Labor market area means an economically integrated geographic area 
within which individuals can reside and find employment within a 
reasonable distance or can readily change employment without changing 
their place of residence. Such an area must be identified in accordance 
with either criteria used by the Bureau of Labor Statistics of the 
Department of Labor in defining such areas, or similar criteria 
established by a Governor.
    LWIA (Local Workforce Investment Area) grant recipient means the 
entity that receives WIA Title I financial assistance for a Local 
Workforce Investment Area directly from the Governor

[[Page 385]]

and disburses those funds for workforce investment activities.
    Methods of Administration means the written document and supporting 
documentation developed under Sec. 37.54.
    National Programs means:
    (1) Job Corps; and
    (2) Programs receiving Federal funds under Title I, Subtitle D of 
WIA directly from the Department. Such programs include, but are not 
limited to, the Migrant and Seasonal Workers Programs, Native American 
Programs, and Veterans' Workforce Investment programs.
    Noncompliance means a failure of a grant applicant or recipient to 
comply with any of the applicable requirements of the nondiscrimination 
and equal opportunity provisions of WIA or this part.
    On-the-Job Training (OJT) means training by an employer that is 
provided to a paid participant while the participant is engaged in 
productive work that:
    (1) Provides knowledge or skills essential to the full and adequate 
performance of the job;
    (2) Provides reimbursement to the employer of up to 50 percent of 
the wage rate of the participant, for the extraordinary costs of 
providing the training and additional supervision related to the 
training; and
    (3) Is limited in duration as appropriate to the occupation for 
which the participant is being trained, taking into account the content 
of the training, the prior work experience of the participant, and the 
service strategy of the participant, as appropriate.
    Participant means an individual who has been determined to be 
eligible to participate in, and who is receiving aid, benefits, services 
or training under, a program or activity funded in whole or in part 
under Title I of WIA. ``Participant'' includes, but is not limited to, 
applicants receiving any service(s) under state Employment Service 
programs, and claimants receiving any service(s) under state 
Unemployment Insurance programs.
    Participation is considered to commence on the first day, following 
determination of eligibility, on which the participant began receiving 
subsidized aid, benefits, services, or training provided under Title I 
of WIA.
    Parties to a hearing means the Department and the grant 
applicant(s), recipient(s), or Governor.
    Population eligible to be served means the total population of 
adults and eligible youth who reside within the labor market area that 
is served by a particular recipient, and who are eligible to seek WIA 
Title I-financially assisted aid, benefits, services or training from 
that recipient. See the definition of ``labor market area'' in this 
section.
    Program or activity: See ``WIA Title I-financially assisted program 
or activity'' in this section.
    Prohibited ground means any basis upon which it is illegal to 
discriminate under the nondiscrimination and equal opportunity 
provisions of WIA or this part, i.e., race, color, religion, sex, 
national origin, age, disability, political affiliation or belief, and, 
for beneficiaries only, citizenship or participation in a WIA Title I-
financially assisted program or activity.
    Public entity means:
    (1) Any State or local government; and
    (2) Any department, agency, special purpose district, workforce 
investment board, or other instrumentality of a State or States or local 
government.
    Qualified individual with a disability means:
    (1) With respect to employment, an individual with a disability who, 
with or without reasonable accommodation, is capable of performing the 
essential functions of the job in question;
    (2) With respect to aid, benefits, services, or training, an 
individual with a disability who, with or without reasonable 
accommodation and/or reasonable modification, meets the essential 
eligibility requirements for the receipt of such aid, benefits, 
services, or training.
    Qualified interpreter means an interpreter who is able to interpret 
effectively, accurately, and impartially, either for individuals with 
disabilities or for individuals with limited English skills. The 
interpreter must be able to interpret both receptively and expressively, 
using any necessary specialized vocabulary.

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    Reasonable accommodation. (1) The term ``reasonable accommodation'' 
means:
    (i) Modifications or adjustments to an application/registration 
process that enables a qualified applicant/registrant with a disability 
to be considered for the aid, benefits, services, training, or 
employment that the qualified applicant/registrant desires; or
    (ii) Modifications or adjustments that enable a qualified individual 
with a disability to perform the essential functions of a job, or to 
receive aid, benefits, services, or training equal to that provided to 
qualified individuals without disabilities. These modifications or 
adjustments may be made to:
    (A) The environment where work is performed or aid, benefits, 
services, or training are given; or
    (B) The customary manner in which, or circumstances under which, a 
job is performed or aid, benefits, services, or training are given; or
    (iii) Modifications or adjustments that enable a qualified 
individual with a disability to enjoy the same benefits and privileges 
of the aid, benefits, services, training, or employment as are enjoyed 
by other similarly situated individuals without disabilities.
    (2) Reasonable accommodation includes, but is not limited to:
    (i) Making existing facilities used by applicants, registrants, 
eligible applicants/registrants, participants, applicants for 
employment, and employees readily accessible to and usable by 
individuals with disabilities; and
    (ii) Restructuring of a job or a service, or of the way in which 
aid, benefits, or training is/are provided; part-time or modified work 
or training schedules; acquisition or modification of equipment or 
devices; appropriate adjustment or modifications of examinations, 
training materials, or policies; the provision of readers or 
interpreters; and other similar accommodations for individuals with 
disabilities.
    (3) To determine the appropriate reasonable accommodation, it may be 
necessary for the recipient to initiate an informal, interactive process 
with the qualified individual with a disability in need of the 
accommodation. This process should identify the precise limitations 
resulting from the disability and potential reasonable accommodations 
that could overcome those limitations.
    Recipient means any entity to which financial assistance under WIA 
Title I is extended, either directly from the Department or through the 
Governor or another recipient (including any successor, assignee, or 
transferee of a recipient), but excluding the ultimate beneficiaries of 
the WIA Title I-funded program or activity. In instances in which a 
Governor operates a program or activity, either directly or through a 
State agency, using discretionary funds apportioned to him or her under 
WIA Title I (rather than disbursing the funds to another recipient), the 
Governor is also a recipient. ``Recipient'' includes, but is not limited 
to:
    (1) State-level agencies that administer, or are financed in whole 
or in part with, WIA Title I funds;
    (2) State Employment Security Agencies;
    (3) State and local Workforce Investment Boards;
    (4) LWIA grant recipients;
    (5) One-Stop operators;
    (6) Service providers, including eligible training providers;
    (7) On-the-Job Training (OJT) employers;
    (8) Job Corps contractors and center operators, excluding the 
operators of federally-operated Job Corps centers;
    (9) Job Corps national training contractors;
    (10) Outreach and admissions agencies, including Job Corps 
contractors that perform these functions;
    (11) Placement agencies, including Job Corps contractors that 
perform these functions; and
    (12) Other National Program recipients.
    In addition, for purposes of this part, One-Stop partners, as 
defined in section 121(b) of WIA, are treated as ``recipients,'' and are 
subject to the nondiscrimination and equal opportunity requirements of 
this part, to the extent that they participate in the One-Stop delivery 
system.
    Registrant means the same as ``applicant'' for purposes of this 
part. See also the definitions of ``application for

[[Page 387]]

benefits,'' ``eligible applicant/registrant,'' ``participant,'' 
``participation,'' and ``recipient'' in this section.
    Respondent means a grant applicant or recipient (including a 
Governor) against which a complaint has been filed under the 
nondiscrimination and equal opportunity provisions of WIA or this part.
    Secretary means the Secretary of Labor, U.S. Department of Labor, or 
his or her designee.
    Sectarian activities means religious worship or ceremony, or 
sectarian instruction.
    Section 504 means Section 504 of the Rehabilitation Act of 1973, 29 
U.S.C. 794, as amended, which forbids discrimination against qualified 
individuals with disabilities in federally-financed and conducted 
programs and activities.
    Service provider means:
    (1) Any operator of, or provider of aid, benefits, services, or 
training to:
    (a) Any WIA Title I--funded program or activity that receives 
financial assistance from or through any State or LWIA grant recipient; 
or
    (b) Any participant through that participant's Individual Training 
Account (ITA); or
    (2) Any entity that is selected and/or certified as an eligible 
provider of training services to participants.
    Small recipient means a recipient who:
    (a) Serves a total of fewer than 15 beneficiaries during the entire 
grant year, and
    (b) Employs fewer than 15 employees on any given day during the 
grant year.
    Solicitor means the Solicitor of Labor, U.S. Department of Labor, or 
his or her designee.
    State means the individual states of the United States, the District 
of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, 
American Samoa, Guam, Wake Island, the Commonwealth of the Northern 
Mariana Islands, the Federated States of Micronesia, the Republic of the 
Marshall Islands, and Palau.
    State Employment Security Agency (SESA) means the State agency that, 
under the State Administrator, contains both State agencies with 
responsibility for administering programs authorized under the Wagner-
Peyser Act, and unemployment insurance programs authorized under Title 
III of the Social Security Act.
    State Programs means programs financially assisted in whole or in 
part under Title I of WIA in which either:
    (1) The Governor and/or State receives and disburses the grant to or 
through LWIA grant recipients; or
    (2) The Governor retains the grant funds and operates the programs, 
either directly or through a State agency.
    ``State programs'' also includes State Employment Security Agencies, 
State Employment Service agencies, and/or State unemployment 
compensation agencies.
    Supportive services means services, such as transportation, child 
care, dependent care, housing, and needs-related payments, that are 
necessary to enable an individual to participate in WIA Title I-
financially assisted programs and activities, as consistent with the 
provisions of WIA.
    Terminee means a participant whose participation in the program 
terminates, voluntarily or involuntarily, during the applicable program 
year.
    Title VI means Title VI of the Civil Rights Act of 1964, 42 U.S.C. 
2000d, et seq., as amended, which forbids recipients of Federal 
financial assistance from discriminating on the basis of race, color, or 
national origin.
    Transferee means a person or entity to whom real or personal 
property, or an interest in such property, is transferred.
    Ultimate beneficiary See the definition of ``beneficiary'' in this 
section.
    Undue hardship This term has different meanings, depending upon 
whether it is used with regard to reasonable accommodation of 
individuals with disabilities, or with regard to religious 
accommodation.
    (1) Reasonable accommodation of individuals with disabilities: (i) 
In general, ``undue hardship'' means significant difficulty or expense 
incurred by a recipient, when considered in light of the factors set 
forth in paragraph (ii).
    (ii) Factors to be considered in determining whether an 
accommodation would impose an undue hardship on a recipient include:

[[Page 388]]

    (A) The nature and net cost of the accommodation needed, taking into 
consideration the availability of tax credits and deductions, and/or 
outside funding, for the accommodation;
    (B) The overall financial resources of the facility or facilities 
involved in the provision of the reasonable accommodation, including:
    (1) The number of persons aided, benefited, served, or trained by, 
or employed at, the facility or facilities, and
    (2) The effect the accommodation would have on the expenses and 
resources of the facility or facilities;
    (C) The overall financial resources of the recipient, including:
    (1) The overall size of the recipient,
    (2) The number of persons aided, benefited, served, trained, or 
employed by the recipient, and
    (3) The number, type and location of the recipient's facilities;
    (D) The type of operation or operations of the recipient, including:
    (1) The geographic separateness and administrative or fiscal 
relationship of the facility or facilities in question to the recipient, 
and
    (2) Where the individual is seeking an employment-related 
accommodation, the composition, structure and functions of the 
recipient's workforce; and
    (E) The impact of the accommodation upon the operation of the 
facility or facilities, including:
    (1) The impact on the ability of other participants to receive aid, 
benefits, services, or training, or of other employees to perform their 
duties, and
    (2) The impact on the facility's ability to carry out its mission.
    (2) Religious accommodation For purposes of religious accommodation 
only, ``undue hardship'' means any additional, unusual costs, other than 
de minimis costs, that a particular accommodation would impose upon a 
recipient. See Trans World Airlines, Inc. v. Hardison, 432 U.S. 63, 81, 
84 (1977).
    WIA means the Workforce Investment Act of 1998, Pub. L. 105-220.
    WIA Title I financial assistance See the definition of ``Federal 
financial assistance under Title I of WIA'' in this section.
    WIA Title I-funded program or activity means:
    (1) A program or activity, operated by a recipient and funded, in 
whole or in part, under Title I of WIA, that provides either:
    (i) Any aid, benefits, services, or training to individuals; or
    (ii) Facilities for furnishing any aid, benefits, services, or 
training to individuals;
    (2) Aid, benefits, services, or training provided in facilities that 
are being or were constructed with the aid of Federal financial 
assistance under WIA Title I; or
    (3) Aid, benefits, services, or training provided with the aid of 
any non-WIA Title I funds, property, or other resources that are 
required to be expended or made available in order for the program to 
meet matching requirements or other conditions which must be met in 
order to receive the WIA Title I financial assistance.
    See the definition of ``aid, benefits, services, or training'' in 
this section.



Sec. 37.5  What forms of discrimination are prohibited by this part?

    No individual in the United States may, on the ground of race, 
color, religion, sex, national origin, age, disability, political 
affiliation or belief, and for beneficiaries only, citizenship or 
participation in any WIA Title I--financially assisted program or 
activity, be excluded from participation in, denied the benefits of, 
subjected to discrimination under, or denied employment in the 
administration of or in connection with any WIA Title I--funded program 
or activity.



Sec. 37.6  What specific discriminatory actions, based on prohibited grounds other than disability, are prohibited by this part?

    (a) For the purposes of this section, ``prohibited ground'' means 
race, color, religion, sex, national origin, age, political affiliation 
or belief, and for beneficiaries only, citizenship or participation in 
any WIA Title I--financially assisted program or activity.
    (b) A recipient must not, directly or through contractual, 
licensing, or other arrangements, on a prohibited ground:
    (1) Deny an individual any aid, benefits, services, or training 
provided

[[Page 389]]

under a WIA Title I--funded program or activity;
    (2) Provide to an individual any aid, benefits, services, or 
training that is different, or is provided in a different manner, from 
that provided to others under a WIA Title I--funded program or activity;
    (3) Subject an individual to segregation or separate treatment in 
any matter related to his or her receipt of any aid, benefits, services, 
or training under a WIA Title I--funded program or activity;
    (4) Restrict an individual in any way in the enjoyment of any 
advantage or privilege enjoyed by others receiving any aid, benefits, 
services, or training under a WIA Title I--funded program or activity;
    (5) Treat an individual differently from others in determining 
whether he or she satisfies any admission, enrollment, eligibility, 
membership, or other requirement or condition for any aid, benefits, 
services, or training provided under a WIA Title I--funded program or 
activity;
    (6) Deny or limit an individual with respect to any opportunity to 
participate in a WIA Title I--funded program or activity, or afford him 
or her an opportunity to do so that is different from the opportunity 
afforded others under a WIA Title I--funded program or activity;
    (7) Deny an individual the opportunity to participate as a member of 
a planning or advisory body that is an integral part of the WIA Title 
I--funded program or activity; or
    (8) Otherwise limit on a prohibited ground an individual in 
enjoyment of any right, privilege, advantage, or opportunity enjoyed by 
others receiving any WIA Title I--financially assisted aid, benefits, 
services, or training.
    (c) A recipient must not, directly or through contractual, 
licensing, or other arrangements:
    (1) Aid or perpetuate discrimination by providing significant 
assistance to an agency, organization, or person that discriminates on a 
prohibited ground in providing any aid, benefits, services, or training 
to registrants, applicants or participants in a WIA Title I--funded 
program or activity; or
    (2) Refuse to accommodate an individual's religious practices or 
beliefs, unless to do so would result in undue hardship, as defined in 
section 37.4.
    (d) (1) In making any of the determinations listed in paragraph 
(d)(2) of this section, either directly or through contractual, 
licensing, or other arrangements, a recipient must not use standards, 
procedures, criteria, or administrative methods that have any of the 
following purposes or effects:
    (i) Subjecting individuals to discrimination on a prohibited ground; 
or
    (ii) Defeating or substantially impairing, on a prohibited ground, 
accomplishment of the objectives of either:
    (A) The WIA Title I--funded program or activity; or
    (B) the nondiscrimination and equal opportunity provisions of WIA or 
this part.
    (2) The determinations to which this paragraph applies include, but 
are not limited to:
    (i) The types of aid, benefits, services, training, or facilities 
that will be provided under any WIA Title I--funded program or activity;
    (ii) The class of individuals to whom such aid, benefits, services, 
training, or facilities will be provided; or
    (iii) The situations in which such aid, benefits, services, 
training, or facilities will be provided.
    (3) Paragraph (d) of this section applies to the administration of 
WIA Title I--funded programs or activities providing aid, benefits, 
services, training, or facilities in any manner, including, but not 
limited to:
    (i) Outreach and recruitment;
    (ii) Registration;
    (iii) Counseling and guidance;
    (iv) Testing;
    (v) Selection, placement, appointment, and referral;
    (vi) Training; and
    (vii) Promotion and retention.
    (4) A recipient must not take any of the prohibited actions listed 
in paragraph (d) of this section either directly or through contractual, 
licensing, or other arrangements.
    (e) In determining the site or location of facilities, a grant 
applicant or recipient must not make selections that have any of the 
following purposes or effects:

[[Page 390]]

    (1) On a prohibited ground:
    (i) Excluding individuals from a WIA Title I--financially assisted 
program or activity;
    (ii) Denying them the benefits of such a program or activity; or
    (iii) Subjecting them to discrimination; or
    (2) Defeating or substantially impairing the accomplishment of the 
objectives of either:
    (i) The WIA Title I--financially assisted program or activity; or
    (ii) The nondiscrimination and equal opportunity provisions of WIA 
or this part.
    (f) (1) A recipient must not permit participants to be employed or 
trained in sectarian activities.
    (2) This paragraph applies to any facility that is, or will be, 
primarily used or inherently devoted either:
    (A) For sectarian instruction; or
    (B) As a place of worship,
    (ii) A recipient must not permit participants to be employed or 
trained in any way to:
    (A) Construct any part of such a facility,
    (B) Operate any part of such a facility, or
    (C) Maintain any part of that facility.
    (3) If a facility is not primarily or inherently devoted to 
sectarian instruction or religious worship, a recipient may permit the 
use of WIA Title I funds to employ participants to maintain the 
facility, if the organization that operates the facility is part of a 
program or activity that provides services to participants.
    (g) The exclusion of an individual from programs or activities 
limited by Federal statute or Executive Order to a certain class or 
classes of individuals of which the individual in question is not a 
member is not prohibited by this part.



Sec. 37.7  What specific discriminatory actions based on disability are prohibited by this part?

    (a) In providing any aid, benefits, services, or training under a 
WIA Title I--financially assisted program or activity, a recipient must 
not, directly or through contractual, licensing, or other arrangements, 
on the ground of disability:
    (1) Deny a qualified individual with a disability the opportunity to 
participate in or benefit from the aid, benefits, services, or training;
    (2) Afford a qualified individual with a disability an opportunity 
to participate in or benefit from the aid, benefits, services, or 
training that is not equal to that afforded others;
    (3) Provide a qualified individual with a disability with an aid, 
benefit, service or training that is not as effective in affording equal 
opportunity to obtain the same result, to gain the same benefit, or to 
reach the same level of achievement as that provided to others;
    (4) Provide different, segregated, or separate aid, benefits, 
services, or training to individuals with disabilities, or to any class 
of individuals with disabilities, unless such action is necessary to 
provide qualified individuals with disabilities with aid, benefits, 
services or training that are as effective as those provided to others;
    (5) Deny a qualified individual with a disability the opportunity to 
participate as a member of planning or advisory boards; or
    (6) Otherwise limit a qualified individual with a disability in 
enjoyment of any right, privilege, advantage, or opportunity enjoyed by 
others receiving any aid, benefit, service or training.
    (b) A recipient must not, directly or through contractual, 
licensing, or other arrangements, aid or perpetuate discrimination 
against qualified individuals with disabilities by providing significant 
assistance to an agency, organization, or person that discriminates on 
the basis of disability in providing any aid, benefits, services or 
training to registrants, applicants, or participants.
    (c) A recipient must not deny a qualified individual with a 
disability the opportunity to participate in WIA Title I--financially 
assisted programs or activities despite the existence of permissibly 
separate or different programs or activities.
    (d) A recipient must administer WIA Title I--financially assisted 
programs and activities in the most integrated

[[Page 391]]

setting appropriate to the needs of qualified individuals with 
disabilities.
    (e) A recipient must not, directly or through contractual, 
licensing, or other arrangements, use standards, procedures, criteria, 
or administrative methods:
    (1) That have the purpose or effect of subjecting qualified 
individuals with disabilities to discrimination on the ground of 
disability;
    (2) That have the purpose or effect of defeating or substantially 
impairing accomplishment of the objectives of the WIA Title I--
financially assisted program or activity with respect to individuals 
with disabilities; or
    (3) That perpetuate the discrimination of another entity if both 
entities are subject to common administrative control or are agencies of 
the same state.
    (f) In determining the site or location of facilities, a grant 
applicant or recipient must not make selections that have any of the 
following purposes or effects:
    (1) On the basis of disability:
    (i) Excluding qualified individuals from a WIA Title I-financially 
assisted program or activity;
    (ii) Denying them the benefits of such a program or activity; or
    (iii) Subjecting them to discrimination; or
    (2) Defeating or substantially impairing the accomplishment of the 
disability-related objectives of either:
    (i) The WIA Title I-financially assisted program or activity; or
    (ii) The nondiscrimination and equal opportunity provisions of WIA 
or this part.
    (g) A recipient, in the selection of contractors, must not use 
criteria that subject qualified individuals with disabilities to 
discrimination on the basis of disability.
    (h) A recipient must not administer a licensing or certification 
program in a manner that subjects qualified individuals with 
disabilities to discrimination on the basis of disability, nor may a 
recipient establish requirements for the programs or activities of 
licensees or certified entities that subject qualified individuals with 
disabilities to discrimination on the basis of disability. The programs 
or activities of entities that are licensed or certified by a recipient 
are not, themselves, covered by this part.
    (i) A recipient must not impose or apply eligibility criteria that 
screen out or tend to screen out an individual with a disability or any 
class of individuals with disabilities from fully and equally enjoying 
any aid, benefit, service, training, program, or activity, unless such 
criteria can be shown to be necessary for the provision of the aid, 
benefit, service, training, program, or activity being offered.
    (j) Nothing in this part prohibits a recipient from providing aid, 
benefits, services, training, or advantages to individuals with 
disabilities, or to a particular class of individuals with disabilities, 
beyond those required by this part.
    (k) A recipient must not place a surcharge on a particular 
individual with a disability, or any group of individuals with 
disabilities, to cover the costs of measures, such as the provision of 
auxiliary aids or program accessibility, that are required to provide 
that individual or group with the nondiscriminatory treatment required 
by WIA Title I or this part.
    (l) A recipient must not exclude, or otherwise deny equal aid, 
benefits, services, training, programs, or activities to, an individual 
or entity because of the known disability of an individual with whom the 
individual or entity is known to have a relationship or association.
    (m) The exclusion of an individual without a disability from the 
benefits of a program limited by Federal statute or Executive Order to 
individuals with disabilities, or the exclusion of a specific class of 
individuals with disabilities from a program limited by Federal statute 
or Executive Order to a different class of individuals with 
disabilities, is not prohibited by this part.
    (n) This part does not require a recipient to provide any of the 
following to individuals with disabilities:
    (1) Personal devices, such as wheelchairs;
    (2) Individually prescribed devices, such as prescription eyeglasses 
or hearing aids;
    (3) Readers for personal use or study; or

[[Page 392]]

    (4) Services of a personal nature, including assistance in eating, 
toileting, or dressing.
    (o)(1) Nothing in this part requires an individual with a disability 
to accept an accommodation, aid, benefit, service, training, or 
opportunity provided under WIA Title I or this part that such individual 
chooses not to accept.
    (2) Nothing in this part authorizes the representative or guardian 
of an individual with a disability to decline food, water, medical 
treatment, or medical services for that individual.



Sec. 37.8  What are a recipient's responsibilities regarding reasonable accommodation and reasonable modification for individuals with disabilities?

    (a) With regard to aid, benefits, services, training, and 
employment, a recipient must provide reasonable accommodation to 
qualified individuals with disabilities who are applicants, registrants, 
eligible applicants/registrants, participants, employees, or applicants 
for employment, unless providing the accommodation would cause undue 
hardship. See the definitions of ``reasonable accommodation'' and 
``undue hardship'' in Sec. 37.4 of this part.
    (1) In those circumstances where a recipient believes that the 
proposed accommodation would cause undue hardship, the recipient has the 
burden of proving that the accommodation would result in such hardship.
    (2) The recipient must make the decision that the accommodation 
would cause such hardship only after considering all factors listed in 
the definition of ``undue hardship'' in Sec. 37.4. The decision must be 
accompanied by a written statement of the recipient's reasons for 
reaching that conclusion. The recipient must provide a copy of the 
statement of reasons to the individual or individuals who requested the 
accommodation.
    (3) If a requested accommodation would result in undue hardship, the 
recipient must take any other action that would not result in such 
hardship, but would nevertheless ensure that, to the maximum extent 
possible, individuals with disabilities receive the aid, benefits, 
services, training, or employment provided by the recipient.
    (b) A recipient must also make reasonable modifications in policies, 
practices, or procedures when the modifications are necessary to avoid 
discrimination on the basis of disability, unless making the 
modifications would fundamentally alter the nature of the service, 
program, or activity. See the definition of ``fundamental alteration'' 
in Sec. 37.4 of this part.
    (1) In those circumstances where a recipient believes that the 
proposed modification would fundamentally alter the program, activity, 
or service, the recipient has the burden of proving that the 
modification would result in such an alteration.
    (2) The recipient must make the decision that the modification would 
result in such an alteration only after considering all factors listed 
in the definition of ``fundamental alteration'' in Sec. 37.4. The 
decision must be accompanied by a written statement of the recipient's 
reasons for reaching that conclusion. The recipient must provide a copy 
of the statement of reasons to the individual or individuals who 
requested the modification.
    (3) If a modification would result in a fundamental alteration, the 
recipient must take any other action that would not result in such an 
alteration, but would nevertheless ensure that, to the maximum extent 
possible, individuals with disabilities receive the aid, benefits, 
services, training, or employment provided by the recipient.



Sec. 37.9  What are a recipient's responsibilities to communicate with individuals with disabilities?

    (a) Recipients must take appropriate steps to ensure that 
communications with beneficiaries, registrants, applicants, eligible 
applicants/registrants, participants, applicants for employment, 
employees, and members of the public who are individuals with 
disabilities, are as effective as communications with others.
    (b) A recipient must furnish appropriate auxiliary aids or services 
where necessary to afford individuals with disabilities an equal 
opportunity to participate in, and enjoy the benefits of, the WIA Title 
I--financially assisted program or activity. In determining what type of 
auxiliary aid or

[[Page 393]]

service is appropriate and necessary, such recipient must give primary 
consideration to the requests of the individual with a disability.
    (c) Where a recipient communicates by telephone with beneficiaries, 
registrants, applicants, eligible applicants/registrants, participants, 
applicants for employment, and/or employees, the recipient must use 
telecommunications devices for individuals with hearing impairments 
(TDDs/TTYs), or equally effective communications systems, such as 
telephone relay services.
    (d) A recipient must ensure that interested individuals, including 
individuals with visual or hearing impairments, can obtain information 
as to the existence and location of accessible services, activities, and 
facilities.
    (e)(1) A recipient must provide signage at a primary entrance to 
each of its inaccessible facilities, directing users to a location at 
which they can obtain information about accessible facilities. The 
signage provided must meet the most current standards prescribed by the 
General Services Administration under the Architectural Barriers Act at 
41 CFR 101-19.6. Alternative standards for the signage may be adopted 
when it is clearly evident that such alternative standards provide 
equivalent or greater access to the information.
    (2) The international symbol for accessibility must be used at each 
primary entrance of an accessible facility.
    (f) This section does not require a recipient to take any action 
that it can demonstrate would result in a fundamental alteration in the 
nature of a service, program, or activity.
    (1) In those circumstances where a recipient believes that the 
proposed action would fundamentally alter the WIA Title I--financially 
assisted program, activity, or service, the recipient has the burden of 
proving that compliance with this section would result in such an 
alteration.
    (2) The decision that compliance would result in such an alteration 
must be made by the recipient after considering all resources available 
for use in the funding and operation of the WIA Title I--financially 
assisted program, activity, or service, and must be accompanied by a 
written statement of the reasons for reaching that conclusion.
    (3) If an action required to comply with this section would result 
in the fundamental alteration described in paragraph (f)(1) of this 
section, the recipient must take any other action that would not result 
in such an alteration, but would nevertheless ensure that, to the 
maximum extent possible, individuals with disabilities receive the 
benefits or services provided by the recipient.



Sec. 37.10  To what extent are employment practices covered by this part?

    (a) Discrimination on the ground of race, color, religion, sex, 
national origin, age, disability, or political affiliation or belief is 
prohibited in employment practices in the administration of, or in 
connection with:
    (1) Any WIA Title I-financially assisted program or activity; and
    (2) Any program or activity that is part of the One-Stop delivery 
system and is operated by a One-Stop partner listed in Section 121(b) of 
WIA, to the extent that the program or activity is being conducted as 
part of the One-Stop delivery system.
    (b) Employee selection procedures. In implementing this section, a 
recipient must comply with the Uniform Guidelines on Employee Selection 
Procedures, 41 CFR part 60-3.
    (c) Standards for employment-related investigations and reviews. In 
any investigation or compliance review, the Director must consider Equal 
Employment Opportunity Commission (EEOC) regulations, guidance and 
appropriate case law in determining whether a recipient has engaged in 
an unlawful employment practice.
    (d) As provided in Sec. 37.3(b) of this part, 29 CFR part 32, 
subparts B and C and Appendix A, which implement the requirements of 
Section 504 pertaining to employment practices and employment-related 
training, program accessibility, and reasonable accommodation, have been 
incorporated into this part by reference. Therefore, recipients must 
comply with the requirements set forth in those regulatory sections as 
well as the requirements listed in this part.

[[Page 394]]

    (e) Recipients that are also employers, employment agencies, or 
other entities covered by Titles I and II of the ADA should be aware of 
obligations imposed by those titles. See 29 CFR part 1630 and 28 CFR 
part 35.
    (f) Similarly, recipients that are also employers covered by the 
anti-discrimination provision of the Immigration and Nationality Act 
should be aware of the obligations imposed by that provision. See 8 
U.S.C. 1324b, as amended.
    (g) This rule does not preempt consistent State and local 
requirements.



Sec. 37.11  To what extent are intimidation and retaliation prohibited by this part?

    (a) A recipient must not discharge, intimidate, retaliate, threaten, 
coerce or discriminate against any individual because the individual 
has:
    (1) Filed a complaint alleging a violation of Section 188 of WIA or 
this part;
    (2) Opposed a practice prohibited by the nondiscrimination and equal 
opportunity provisions of WIA or this part;
    (3) Furnished information to, or assisted or participated in any 
manner in, an investigation, review, hearing, or any other activity 
related to any of the following:
    (i) Administration of the nondiscrimination and equal opportunity 
provisions of WIA or this part;
    (ii) Exercise of authority under those provisions; or
    (iii) Exercise of privilege secured by those provisions; or
    (4) Otherwise exercised any rights and privileges under the 
nondiscrimination and equal opportunity provisions of WIA or this part.
    (b) The sanctions and penalties contained in Section 188(b) of WIA 
or this part may be imposed against any recipient that engages in any 
such retaliation or intimidation, or fails to take appropriate steps to 
prevent such activity.



Sec. 37.12  What Department of Labor office is responsible for administering this part?

    The Civil Rights Center (CRC), in the Office of the Assistant 
Secretary for Administration and Management, is responsible for 
administering and enforcing the nondiscrimination and equal opportunity 
provisions of WIA and this part, and for developing and issuing 
policies, standards, guidance, and procedures for effecting compliance.



Sec. 37.13  Who is responsible for providing interpretations of this part?

    The Director will make any rulings under, or interpretations of, the 
nondiscrimination and equal opportunity provisions of WIA or this part.



Sec. 37.14  Under what circumstances may the Secretary delegate the responsibilities of this part?

    (a) The Secretary may from time to time assign to officials of other 
departments or agencies of the Government (with the consent of such 
department or agency) responsibilities in connection with the 
effectuation of the nondiscrimination and equal opportunity provisions 
of WIA and this part (other than responsibility for final decisions 
under Sec. 37.112), including the achievement of effective coordination 
and maximum uniformity within the Department and within the executive 
branch of the Government in the application of the nondiscrimination and 
equal opportunity provisions of WIA or this part to similar programs and 
similar situations.
    (b) Any action taken, determination made, or requirement imposed by 
an official of another department or agency acting under an assignment 
of responsibility under this section has the same effect as if the 
action had been taken by the Director.



Sec. 37.15  What are the Director's responsibilities to coordinate with other civil rights agencies?

    (a) Whenever a compliance review or complaint investigation under 
this part reveals possible violation of one or more of the laws listed 
in paragraph (b) of this section, or of any other Federal civil rights 
law, that is not also a violation of the nondiscrimination and equal 
opportunity provisions of WIA or this part, the Director must attempt to 
notify the appropriate agency and provide it with all relevant documents 
and information.
    (b) This section applies to the following:

[[Page 395]]

    (1) Executive Order 11246, as amended;
    (2) Section 503 of the Rehabilitation Act of 1973, as amended (29 
U.S.C. 793);
    (3) The affirmative action provisions of the Vietnam Era Veterans' 
Readjustment Assistance Act of 1974, as amended (38 U.S.C. 4212);
    (4) The Equal Pay Act of 1963, as amended (29 U.S.C. 206d);
    (5) Title VII of the Civil Rights Act of 1964, as amended (42 U.S.C. 
2000e et seq.);
    (6) The Age Discrimination in Employment Act of 1967, as amended (29 
U.S.C. 621);
    (7) The Americans with Disabilities Act of 1990, as amended (42 
U.S.C. 12101 et seq.);
    (8) The anti-discrimination provision of the Immigration and 
Nationality Act, as amended (8 U.S.C. 1324b); and
    (9) Any other Federal civil rights law.



Sec. 37.16  What is this part's effect on a recipient's obligations under other laws, and what limitations apply?

    (a) Effect of State or local law or other requirements. The 
obligation to comply with the nondiscrimination and equal opportunity 
provisions of WIA or this part are not excused or reduced by any State 
or local law or other requirement that, on a prohibited ground, 
prohibits or limits an individual's eligibility to receive aid, 
benefits, services, or training; to participate in any WIA Title I--
financially assisted program or activity; to be employed by any 
recipient; or to practice any occupation or profession.
    (b) Effect of private organization rules. The obligation to comply 
with the nondiscrimination and equal opportunity provisions of WIA and 
this part is not excused or reduced by any rule or regulation of any 
private organization, club, league or association that, on a prohibited 
ground, prohibits or limits an individual's eligibility to participate 
in any WIA Title I--financially assisted program or activity to which 
this part applies.
    (c) Effect of possible future exclusion from employment 
opportunities. A recipient must not exclude any individual from, or 
restrict any individual's participation in, any program or activity 
based on the recipient's belief or concern that the individual will 
encounter limited future employment opportunities because of his or her 
race, color, religion, sex, national origin, age, disability, political 
affiliation or belief, or citizenship.



Subpart B--Recordkeeping and Other Affirmative Obligations of Recipients

                               Assurances



Sec. 37.20  What is a grant applicant's obligation to provide a written assurance?

    (a) (1) Each application for financial assistance under Title I of 
WIA, as defined in Sec. 37.4, must include the following assurance:

    As a condition to the award of financial assistance from the 
Department of Labor under Title I of WIA, the grant applicant assures 
that it will comply fully with the nondiscrimination and equal 
opportunity provisions of the following laws:
    Section 188 of the Workforce Investment Act of 1998 (WIA), which 
prohibits discrimination against all individuals in the United States on 
the basis of race, color, religion, sex, national origin, age, 
disability, political affiliation or belief, and against beneficiaries 
on the basis of either citizenship/status as a lawfully admitted 
immigrant authorized to work in the United States or participation in 
any WIA Title I--financially assisted program or activity;
    Title VI of the Civil Rights Act of 1964, as amended, which 
prohibits discrimination on the bases of race, color and national 
origin;
    Section 504 of the Rehabilitation Act of 1973, as amended, which 
prohibits discrimination against qualified individuals with 
disabilities;
    The Age Discrimination Act of 1975, as amended, which prohibits 
discrimination on the basis of age; and
    Title IX of the Education Amendments of 1972, as amended, which 
prohibits discrimination on the basis of sex in educational programs.
    The grant applicant also assures that it will comply with 29 CFR 
part 37 and all other regulations implementing the

[[Page 396]]

laws listed above. This assurance applies to the grant applicant's 
operation of the WIA Title I-financially assisted program or activity, 
and to all agreements the grant applicant makes to carry out the WIA 
Title I-financially assisted program or activity. The grant applicant 
understands that the United States has the right to seek judicial 
enforcement of this assurance.

    (2) The assurance is considered incorporated by operation of law in 
the grant, cooperative agreement, contract or other arrangement whereby 
Federal financial assistance under Title I of the WIA is made available, 
whether or not it is physically incorporated in such document and 
whether or not there is a written agreement between the Department and 
the recipient, between the Department and the Governor, between the 
Governor and the recipient, or between recipients. The assurance also 
may be incorporated by reference in such grants, cooperative agreements, 
contracts, or other arrangements.
    (b) Continuing State programs. Each Strategic Five-Year State Plan 
submitted by a State to carry out a continuing WIA Title I-financially 
assisted program or activity must provide a statement that the WIA Title 
I-financially assisted program or activity is (or, in the case of a new 
WIA Title I-financially assisted program or activity, will be) conducted 
in compliance with the nondiscrimination and equal opportunity 
provisions of WIA and this part, as a condition to the approval of the 
Five-Year Plan and the extension of any WIA Title I financial assistance 
under the Plan. The State also must certify that it has developed and 
maintains a Methods of Administration under Sec. 37.54.



Sec. 37.21  How long will the recipient's obligation under the assurance last, and how broad is the obligation?

    (a) Where the WIA Title I financial assistance is intended to 
provide, or is in the form of, either personal property, real property, 
structures on real property, or interest in any such property or 
structures, the assurance will obligate the recipient, or (in the case 
of a subsequent transfer) the transferee, for the longer of:
    (1) The period during which the property is used either:
    (i) For a purpose for which WIA Title I financial assistance is 
extended; or
    (ii) For another purpose involving the provision of similar services 
or benefits; or
    (2) The period during which either:
    (i) The recipient retains ownership or possession of the property; 
or
    (ii) The transferee retains ownership or possession of the property 
without compensating the Departmental grantmaking agency for the fair 
market value of that ownership or possession.
    (b) In all other cases, the assurance will obligate the recipient 
for the period during which WIA Title I financial assistance is 
extended.



Sec. 37.22  How must covenants be used in connection with this part?

    (a) Where WIA Title I financial assistance is provided in the form 
of a transfer of real property, structures, or improvements on real 
property or structures, or interests in real property or structures, the 
instrument effecting or recording the transfer must contain a covenant 
assuring nondiscrimination and equal opportunity for the period 
described in Sec. 37.21.
    (b) Where no Federal transfer of real property or interest therein 
from the Federal Government is involved, but real property or an 
interest therein is acquired or improved under a program of WIA Title I 
financial assistance, the recipient must include the covenant described 
in paragraph (a) of this section in the instrument effecting or 
recording any subsequent transfer of such property.
    (c) When the property is obtained from the Federal Government, the 
covenant described in paragraph (a) of this section also may include a 
condition coupled with a right of reverter to the Department in the 
event of a breach of the covenant.

[[Page 397]]

                       Equal Opportunity Officers



Sec. 37.23  Who must designate an Equal Opportunity Officer?

    Every recipient must designate an Equal Opportunity Officer (``EO 
Officer''), except small recipients and service providers, as defined in 
Sec. 37.4. The responsibilities of small recipients and service 
providers are described in Secs. 37.27 and 37.28.



Sec. 37.24  Who is eligible to serve as an Equal Opportunity Officer?

    A senior-level employee of the recipient should be appointed as the 
recipient's Equal Opportunity Officer. Depending upon the size of the 
recipient, the size of the recipient's WIA Title I-financially assisted 
programs or activities, and the number of applicants, registrants, and 
participants served by the recipient, the EO Officer may, or may not, be 
assigned other duties. However, he or she must not have other 
responsibilities or activities that create a conflict, or the appearance 
of a conflict, with the responsibilities of an EO Officer.



Sec. 37.25  What are the responsibilities of an Equal Opportunity Officer?

    An Equal Opportunity Officer is responsible for coordinating a 
recipient's obligations under this part. Those responsibilities include, 
but are not limited to:
    (a) Serving as the recipient's liaison with CRC;
    (b) Monitoring and investigating the recipient's activities, and the 
activities of the entities that receive WIA Title I funds from the 
recipient, to make sure that the recipient and its subrecipients are not 
violating their nondiscrimination and equal opportunity obligations 
under WIA Title I and this part;
    (c) Reviewing the recipient's written policies to make sure that 
those policies are nondiscriminatory;
    (d) Developing and publishing the recipient's procedures for 
processing discrimination complaints under Secs. 37.76 through 37.79, 
and making sure that those procedures are followed;
    (e) Reporting directly to the appropriate official (including, but 
not limited to, the State WIA Director, Governor's WIA Liaison, Job 
Corps Center Director, SESA Administrator, or LWIA grant recipient) 
about equal opportunity matters;
    (f) Undergoing training (at the recipient's expense) to maintain 
competency, if the Director requires him or her, and/or his or her 
staff, to do so; and
    (g) If applicable, overseeing the development and implementation of 
the recipient's Methods of Administration under Sec. 37.54.



Sec. 37.26  What are a recipient's obligations relating to the Equal Opportunity Officer?

    A recipient has the following obligations:
    (a) Making the Equal Opportunity Officer's name, and his or her 
position title, address, and telephone number (voice and TDD/TTY) 
public;
    (b) Ensuring that the EO Officer's identity and contact information 
appears on all internal and external communications about the 
recipient's nondiscrimination and equal opportunity programs;
    (c) Assigning sufficient staff and resources to the Equal 
Opportunity Officer, and providing him or her with the necessary support 
of top management, to ensure compliance with the nondiscrimination and 
equal opportunity provisions of WIA and this part; and
    (d) Ensuring that the EO Officer and his/her staff are afforded the 
opportunity to receive the training necessary and appropriate to 
maintain competency.



Sec. 37.27  What are the obligations of small recipients regarding Equal Opportunity Officers?

    Although small recipients do not need to designate Equal Opportunity 
Officers who have the full range of responsibilities listed above, they 
must designate an individual who will be responsible for developing and 
publishing of complaint procedures, and the processing of complaints, as 
explained in Secs. 37.76 through 37.79.



Sec. 37.28  What are the obligations of service providers regarding Equal Opportunity Officers?

    Service providers, as defined in Sec. 37.4, are not required to 
designate an Equal Opportunity Officer. The obligation for ensuring 
service provider compliance

[[Page 398]]

with the nondiscrimination and equal opportunity provisions of WIA and 
this part rests with the Governor or LWIA grant recipient, as specified 
in the State's Methods of Administration.

                        Notice and Communication



Sec. 37.29  What are a recipient's obligations to disseminate its equal opportunity policy?

    (a) A recipient must provide initial and continuing notice that it 
does not discriminate on any prohibited ground. This notice must be 
provided to:
    (1) Registrants, applicants, and eligible applicants/registrants;
    (2) Participants;
    (3) Applicants for employment and employees;
    (4) Unions or professional organizations that hold collective 
bargaining or professional agreements with the recipient;
    (5) Subrecipients that receive WIA Title I funds from the recipient; 
and
    (6) Members of the public, including those with impaired vision or 
hearing.
    (b) As provided in Sec. 37.9, the recipient must take appropriate 
steps to ensure that communications with individuals with disabilities 
are as effective as communications with others.



Sec. 37.30  What specific wording must the notice contain?

    The notice must contain the following specific wording:

                      Equal Opportunity Is the Law

    It is against the law for this recipient of Federal financial 
assistance to discriminate on the following bases:
    against any individual in the United States, on the basis of race, 
color, religion, sex, national origin, age, disability, political 
affiliation or belief; and
    against any beneficiary of programs financially assisted under Title 
I of the Workforce Investment Act of 1998 (WIA), on the basis of the 
beneficiary's citizenship/status as a lawfully admitted immigrant 
authorized to work in the United States, or his or her participation in 
any WIA Title I-financially assisted program or activity.
    The recipient must not discriminate in any of the following areas:
    deciding who will be admitted, or have access, to any WIA Title I-
financially assisted program or activity;
    providing opportunities in, or treating any person with regard to, 
such a program or activity; or
    making employment decisions in the administration of, or in 
connection with, such a program or activity.

      What to Do If You Believe You Have Experienced Discrimination

    If you think that you have been subjected to discrimination under a 
WIA Title I-financially assisted program or activity, you may file a 
complaint within 180 days from the date of the alleged violation with 
either:
    the recipient's Equal Opportunity Officer (or the person whom the 
recipient has designated for this purpose); or
    the Director, Civil Rights Center (CRC), U.S. Department of Labor, 
200 Constitution Avenue NW, Room N-4123, Washington, DC 20210.
    If you file your complaint with the recipient, you must wait either 
until the recipient issues a written Notice of Final Action, or until 90 
days have passed (whichever is sooner), before filing with the Civil 
Rights Center (see address above).
    If the recipient does not give you a written Notice of Final Action 
within 90 days of the day on which you filed your complaint, you do not 
have to wait for the recipient to issue that Notice before filing a 
complaint with CRC. However, you must file your CRC complaint within 30 
days of the 90-day deadline (in other words, within 120 days after the 
day on which you filed your complaint with the recipient).
    If the recipient does give you a written Notice of Final Action on 
your complaint, but you are dissatisfied with the decision or 
resolution, you may file a complaint with CRC. You must file your CRC 
complaint within 30 days of the date on which you received the Notice of 
Final Action.



Sec. 37.31  Where must the notice required by Secs. 37.29 and 37.30 be published?

    (a) At a minimum, the notice required by Secs. 37.29 and 37.30 must 
be:
    (1) Posted prominently, in reasonable numbers and places;

[[Page 399]]

    (2) Disseminated in internal memoranda and other written or 
electronic communications;
    (3) Included in handbooks or manuals; and
    (4) Made available to each participant, and made part of each 
participant's file.
    (b) The notice must be provided in appropriate formats to 
individuals with visual impairments. Where notice has been given in an 
alternate format to a participant with a visual impairment, a record 
that such notice has been given must be made a part of the participant's 
file.



Sec. 37.32  When must the notice required by Secs. 37.29 and 37.30 be provided?

    The notice required by Secs. 37.29 and 37.30 must be initially 
provided within 90 days of the effective date of this part, or of the 
date this part first applies to the recipient, whichever comes later.



Sec. 37.33  Who is responsible for meeting the notice requirement with respect to service providers?

    The Governor or the LWIA grant recipient, as determined by the 
Governor and as provided in that State's Methods of Administration, will 
be responsible for meeting the notice requirement provided in Sections 
37.29 and 37.30 with respect to a State's service providers.



Sec. 37.34  What type of notice must a recipient include in publications, broadcasts, and other communications?

    (a) Recipients must indicate that the WIA Title I-financially 
assisted program or activity in question is an ``equal opportunity 
employer/program,'' and that ``auxiliary aids and services are available 
upon request to individuals with disabilities,'' in recruitment 
brochures and other materials that are ordinarily distributed or 
communicated in written and/or oral form, electronically and/or on 
paper, to staff, clients, or the public at large, to describe programs 
financially assisted under Title I of WIA or the requirements for 
participation by recipients and participants. Where such materials 
indicate that the recipient may be reached by telephone, the materials 
must state the telephone number of the TDD/TTY or relay service used by 
the recipient, as required by Sec. 37.9(c).
    (b) Recipients that publish or broadcast program information in the 
news media must ensure that such publications and broadcasts state that 
the WIA Title I-financially assisted program or activity in question is 
an equal opportunity employer/program (or otherwise indicate that 
discrimination in the WIA Title I-financially assisted program or 
activity is prohibited by Federal law), and indicate that auxiliary aids 
and services are available upon request to individuals with 
disabilities.
    (c) A recipient must not communicate any information that suggests, 
by text or illustration, that the recipient treats beneficiaries, 
registrants, applicants, participants, employees or applicants for 
employment differently on any prohibited ground specified in Sec. 37.5, 
except as such treatment is otherwise permitted under Federal law or 
this part.



Sec. 37.35  What are a recipient's responsibilities to provide services and information in languages other than English?

    (a) A significant number or proportion of the population eligible to 
be served, or likely to be directly affected, by a WIA Title I-
financially assisted program or activity may need services or 
information in a language other than English in order to be effectively 
informed about, or able to participate in, the program or activity. 
Where such a significant number or proportion exists, a recipient must 
take the following actions:
    (1) Consider:
    (i) The scope of the program or activity, and
    (ii) The size and concentration of the population that needs 
services or information in a language other than English; and
    (2) Based on those considerations, take reasonable steps to provide 
services and information in appropriate languages. This information must 
include the initial and continuing notice required under Secs. 37.29 and 
37.30, and all information that is communicated under Sec. 37.34.

[[Page 400]]

    (b) In circumstances other than those described in paragraph (a) of 
this section, a recipient should nonetheless make reasonable efforts to 
meet the particularized language needs of limited-English-speaking 
individuals who seek services or information from the recipient.



Sec. 37.36  What responsibilities does a recipient have to communicate information during orientations?

    During each presentation to orient new participants, new employees, 
and/or the general public to its WIA Title I-financially assisted 
program or activity, a recipient must include a discussion of rights 
under the nondiscrimination and equal opportunity provisions of WIA and 
this part, including the right to file a complaint of discrimination 
with the recipient or the Director.

             Data and Information Collection and Maintenance



Sec. 37.37  What are a recipient's responsibilities to collect and maintain data and other information?

    (a) The Director will not require submission of data that can be 
obtained from existing reporting requirements or sources, including 
those of other agencies, if the source is known and available to the 
Director.
    (b)(1) Each recipient must collect such data and maintain such 
records, in accordance with procedures prescribed by the Director, as 
the Director finds necessary to determine whether the recipient has 
complied or is complying with the nondiscrimination and equal 
opportunity provisions of WIA or this part. The system and format in 
which the records and data are kept must be designed to allow the 
Governor and CRC to conduct statistical or other quantifiable data 
analyses to verify the recipient's compliance with section 188 of WIA 
and this part.
    (2) Such records must include, but are not limited to, records on 
applicants, registrants, eligible applicants/registrants, participants, 
terminees, employees, and applicants for employment. Each recipient must 
record the race/ethnicity, sex, age, and where known, disability status, 
of every applicant, registrant, eligible applicant/registrant, 
participant, terminee, applicant for employment, and employee. Such 
information must be stored in a manner that ensures confidentiality, and 
must be used only for the purposes of recordkeeping and reporting; 
determining eligibility, where appropriate, for WIA Title I-financially 
assisted programs or activities; determining the extent to which the 
recipient is operating its WIA Title I-financially assisted program or 
activity in a nondiscriminatory manner; or other use authorized by law.
    (c) Each recipient must maintain, and submit to CRC upon request, a 
log of complaints filed with it that allege discrimination on the 
ground(s) of race, color, religion, sex, national origin, age, 
disability, political affiliation or belief, citizenship, and/or 
participation in a WIA Title I-financially assisted program or activity. 
The log must include: the name and address of the complainant; the 
ground of the complaint; a description of the complaint; the date the 
complaint was filed; the disposition and date of disposition of the 
complaint; and other pertinent information. Information that could lead 
to identification of a particular individual as having filed a complaint 
must be kept confidential.
    (d) Where designation of individuals by race or ethnicity is 
required, the guidelines of the Office of Management and Budget must be 
used.
    (e) A service provider's responsibility for collecting and 
maintaining the information required under this section may be assumed 
by the Governor or LWIA grant recipient, as provided in the State's 
Methods of Administration.



Sec. 37.38  What information must grant applicants and recipients provide to CRC?

    In addition to the information which must be collected, maintained, 
and, upon request, submitted to CRC under Sec. 37.37:
    (a) Each grant applicant and recipient must promptly notify the 
Director when any administrative enforcement actions or lawsuits are 
filed against it alleging discrimination on the ground of race, color, 
religion, sex, national origin, age, disability, political affiliation 
or belief, and for beneficiaries only, citizenship or participation in a

[[Page 401]]

WIA Title I-financially assisted program or activity. This notification 
must include:
    (1) The names of the parties to the action or lawsuit;
    (2) The forum in which each case was filed; and
    (3) The relevant case numbers.
    (b) Each grant applicant (as part of its application) and recipient 
(as part of a compliance review conducted under Section 37.63, or 
monitoring activity carried out under Sec. 37.65) must provide the 
following information:
    (1) The name of any other Federal agency that conducted a civil 
rights compliance review or complaint investigation, and that found the 
grant applicant or recipient to be in noncompliance, during the two 
years before the grant application was filed or CRC began its 
examination; and
    (2) Information about any administrative enforcement actions or 
lawsuits that alleged discrimination on any protected basis, and that 
were filed against the grant applicant or recipient during the two years 
before the application or renewal application, compliance review, or 
monitoring activity. This information must include:
    (i) The names of the parties;
    (ii) The forum in which each case was filed; and
    (iii) The relevant case numbers.
    (c) At the discretion of the Director, grant applicants and 
recipients may be required to provide, in a timely manner, any 
information and data necessary to investigate complaints and conduct 
compliance reviews on grounds prohibited under the nondiscrimination and 
equal opportunity provisions of WIA and this part.
    (d) At the discretion of the Director, recipients may be required to 
provide, in a timely manner, the particularized information and/or to 
submit the periodic reports that the Director considers necessary to 
determine compliance with the nondiscrimination and equal opportunity 
provisions of WIA or this part.
    (e) At the discretion of the Director, grant applicants may be 
required to submit, in a timely manner, the particularized information 
necessary to determine whether or not the grant applicant, if 
financially assisted, would be able to comply with the nondiscrimination 
and equal opportunity provisions of WIA or this part.
    (f) Where designation of individuals by race or ethnicity is 
required, the guidelines of the Office of Management and Budget must be 
used.



Sec. 37.39  How long must grant applicants and recipients maintain the records required under this part?

    (a) Each recipient must maintain the following records for a period 
of not less than three years from the close of the applicable program 
year:
    (1) The records of applicants, registrants, eligible applicants/
registrants, participants, terminees, employees, and applicants for 
employment; and
    (2) Such other records as are required under this part or by the 
Director.
    (b) Records regarding complaints and actions taken on the complaints 
must be maintained for a period of not less than three years from the 
date of resolution of the complaint.



Sec. 37.40  What access to sources of information must grant applicants and recipients provide the Director?

    (a) Each grant applicant and recipient must permit access by the 
Director during normal business hours to its premises and to its 
employees and participants, to the extent that such individuals are on 
the premises during the course of the investigation, for the purpose of 
conducting complaint investigations, compliance reviews, monitoring 
activities associated with a State's development and implementation of a 
Methods of Administration, and inspecting and copying such books, 
records, accounts and other materials as may be pertinent to ascertain 
compliance with and ensure enforcement of the nondiscrimination and 
equal opportunity provisions of WIA or this part.
    (b) Asserted considerations of privacy or confidentiality are not a 
basis for withholding information from CRC and will not bar CRC from 
evaluating or seeking to enforce compliance with the nondiscrimination 
and equal opportunity provisions of WIA and this part.
    (c) Whenever any information that the Director asks a grant 
applicant or recipient to provide is in the exclusive

[[Page 402]]

possession of another agency, institution, or person, and that agency, 
institution, or person fails or refuses to furnish the information upon 
request, the grant applicant or recipient must certify to CRC that it 
has made efforts to obtain the information and that the agency, 
institution, or person has failed or refused to provide it. This 
certification must list the name and address of the agency, institution, 
or person that has possession of the information and the specific 
efforts the grant applicant or recipient made to obtain it.



Sec. 37.41  What responsibilities do grant applicants, recipients, and the Department have to maintain the confidentiality of the information collected?

    The identity of any individual who furnishes information relating 
to, or assisting in, an investigation or a compliance review, including 
the identity of any individual who files a complaint, must be kept 
confidential to the extent possible, consistent with a fair 
determination of the issues. An individual whose identity it is 
necessary to disclose must be protected from retaliation (see 
Sec. 37.11).



Sec. 37.42  What are a recipient's responsibilities under this part to provide universal access to WIA Title I-financially assisted programs and activities?

    Recipients must take appropriate steps to ensure that they are 
providing universal access to their WIA Title I-financially assisted 
programs and activities. These steps should involve reasonable efforts 
to include members of both sexes, various racial and ethnic groups, 
individuals with disabilities, and individuals in differing age groups. 
Such efforts may include, but are not limited to:
    (a) Advertising the recipient's programs and/or activities in media, 
such as newspapers or radio programs, that specifically target various 
populations;
    (b) Sending notices about openings in the recipient's programs and/
or activities to schools or community service groups that serve various 
populations; and
    (c) Consulting with appropriate community service groups about ways 
in which the recipient may improve its outreach and service to various 
populations.



        Subpart C--Governor's Responsibilities to Implement the 
       Nondiscrimination and Equal Opportunity Requirements of WIA



Sec. 37.50  To whom does this subpart apply?

    This subpart applies to State Programs as defined in Sec. 37.4. 
However, the provisions of Sec. 37.52(b) do not apply to State 
Employment Security Agencies (SESAs), because the Governor's liability 
for any noncompliance on the part of a SESA cannot be waived.



Sec. 37.51  What are a Governor's oversight responsibilities?

    The Governor is responsible for oversight of all WIA Title I-
financially assisted State programs. This responsibility includes 
ensuring compliance with the nondiscrimination and equal opportunity 
provisions of WIA and this part, and negotiating, where appropriate, 
with a recipient to secure voluntary compliance when noncompliance is 
found under Sec. 37.95(b).



Sec. 37.52  To what extent may a Governor be liable for the actions of a recipient he or she has financially assisted under WIA Title I?

    (a) The Governor and the recipient are jointly and severally liable 
for all violations of the nondiscrimination and equal opportunity 
provisions of WIA and this part by the recipient, unless the Governor 
has:
    (1) Established and adhered to a Methods of Administration, under 
Section 37.54, designed to give reasonable guarantee of the recipient's 
compliance with such provisions;
    (2) Entered into a written contract with the recipient that clearly 
establishes the recipient's obligations regarding nondiscrimination and 
equal opportunity;
    (3) Acted with due diligence to monitor the recipient's compliance 
with these provisions; and
    (4) Taken prompt and appropriate corrective action to effect 
compliance.

[[Page 403]]

    (b) If the Director determines that the Governor has demonstrated 
substantial compliance with the requirements of paragraph (a) of this 
section, he or she may recommend to the Secretary that the imposition of 
sanctions against the Governor be waived and that sanctions be imposed 
only against the noncomplying recipient.



Sec. 37.53  What are a Governor's oversight responsibilities regarding recipients' recordkeeping?

    The Governor must ensure that recipients collect and maintain 
records in a manner consistent with the provisions of Sec. 37.37 and any 
procedures prescribed by the Director under Sec. 37.37(b). The Governor 
must further ensure that recipients are able to provide data and reports 
in the manner prescribed by the Director.



Sec. 37.54  What are a Governor's obligations to develop and maintain a Methods of Administration?

    (a) (1) Each Governor must establish and adhere to a Methods of 
Administration for State programs as defined in Sec. 37.4. In those 
States in which one agency contains both SESA or unemployment insurance 
and WIA Title I-financially assisted programs, the Governor should 
develop a combined Methods of Administration.
    (2) Each Methods of Administration must be designed to give a 
reasonable guarantee that all recipients will comply, and are complying, 
with the nondiscrimination and equal opportunity provisions of WIA and 
this part.
    (b) The Methods of Administration must be:
    (1) In writing, addressing each requirement of Sec. 37.54(d) with 
narrative and documentation;
    (2) Reviewed and updated as required in Sec. 37.55; and
    (3) Signed by the Governor.
    (c) [Reserved]
    (d) At a minimum, each Methods of Administration must:
    (1) Describe how the State programs and recipients have satisfied 
the requirements of the following regulations:
    (i) Sections 37.20 through 37.22 (assurances);
    (ii) Sections 37.23 through 37.28 (Equal Opportunity Officers);
    (iii) Sections 37.29 through 37.36 (Notice and Communication);
    (iv) Sections 37.37 through 37.41 (Data and Information Collection 
and Maintenance);
    (v) Section 37.42 (Universal Access);
    (vi) Section 37.53 (Governor's Oversight Responsibilities Regarding 
Recipients' Recordkeeping); and
    (vii) Sections 37.76 through 37.79 (Complaint Processing 
Procedures); and
    (2) Include the following additional elements:
    (i) A system for determining whether a grant applicant, if 
financially assisted, and/or a training provider, if selected as 
eligible under section 122 of the Act, is likely to conduct its WIA 
Title I--financially assisted programs or activities in a 
nondiscriminatory way, and to comply with the regulations in this part;
    (ii) A system for periodically monitoring the compliance of 
recipients with WIA section 188 and this part, including a determination 
as to whether each recipient is conducting its WIA Title I--financially 
assisted program or activity in a nondiscriminatory way. At a minimum, 
each periodic monitoring review required by this paragraph must include:
    (A) A statistical or other quantifiable analysis of records and data 
kept by the recipient under Sec. 37.37, including analyses by race/
ethnicity, sex, age, and disability status;
    (B) An investigation of any significant differences identified in 
paragraph (A) of this section in participation in the programs, 
activities, or employment provided by the recipient, to determine 
whether these differences appear to be caused by discrimination. This 
investigation must be conducted through review of the recipient's 
records and any other appropriate means; and
    (C) An assessment to determine whether the recipient has fulfilled 
its administrative obligations under section 188 or this part (for 
example, recordkeeping, notice and communication) and any duties 
assigned to it under the MOA;
    (iii) A review of recipient policy issuances to ensure they are 
nondiscriminatory;

[[Page 404]]

    (iv) A system for reviewing recipients' job training plans, 
contracts, assurances, and other similar agreements to ensure that they 
are both nondiscriminatory and contain the required language regarding 
nondiscrimination and equal opportunity;
    (v) Procedures for ensuring that recipients comply with the 
requirements of Section 504 and this part with regard to individuals 
with disabilities;
    (vi) A system of policy communication and training to ensure that EO 
Officers and members of the recipients' staffs who have been assigned 
responsibilities under the nondiscrimination and equal opportunity 
provisions of WIA or this part are aware of and can effectively carry 
out these responsibilities;
    (vii) Procedures for obtaining prompt corrective action or, as 
necessary, applying sanctions when noncompliance is found; and
    (viii) Supporting documentation to show that the commitments made in 
the Methods of Administration have been and/or are being carried out. 
This supporting documentation includes, but is not limited to:
    (A) policy and procedural issuances concerning required elements of 
the Methods of Administration;
    (B) copies of monitoring instruments and instructions;
    (C) evidence of the extent to which nondiscrimination and equal 
opportunity policies have been developed and communicated as required by 
this part;
    (D) information reflecting the extent to which Equal Opportunity 
training, including training called for by Secs. 37.25(f) and 37.26(c), 
is planned and/or has been carried out;
    (E) reports of monitoring reviews and reports of follow-up actions 
taken under those reviews where violations have been found, including, 
where appropriate, sanctions; and
    (F) copies of any notices made under Secs. 37.29 through 37.36.



Sec. 37.55  When must the Governor carry out his or her obligations with regard to the Methods of Administration?

    (a) Within 180 days of either the date on which this interim final 
rule is effective, or the date on which the Department gives final 
approval to a State's Five-Year Plan, whichever is later, a Governor 
must:
    (1) Develop and implement a Methods of Administration consistent 
with the requirements of this part, and
    (2) Submit a copy of the Methods of Administration to the Director.
    (b) The Governor must promptly update the Methods of Administration 
whenever necessary, and must notify the Director in writing at the time 
that any such updates are made.
    (c) Every two years from the date on which the initial MOA is 
submitted to the Director under Sec. 37.55(a)(2), the Governor must 
review the Methods of Administration and the manner in which it has been 
implemented, and determine whether any changes are necessary in order 
for the State to comply fully and effectively with the nondiscrimination 
and equal opportunity provisions of WIA and this part.
    (1) If any such changes are necessary, the Governor must make the 
appropriate changes and submit them, in writing, to the Director.
    (2) If the Governor determines that no such changes are necessary, 
s/he must certify, in writing, to the Director that the Methods of 
Administration previously submitted continues in effect.



                    Subpart D--Compliance Procedures



Sec. 37.60  How does the Director evaluate compliance with the nondiscrimination and equal opportunity provisions of WIA and this part?

    From time to time, the Director may conduct pre-approval compliance 
reviews of grant applicants for, and post-approval compliance reviews of 
recipients of, WIA Title I financial assistance, to determine compliance 
with the nondiscrimination and equal opportunity provisions of WIA and 
this part. Reviews may focus on one or more specific programs or 
activities, or one or more issues within a program or activity. The 
Director may also investigate and resolve complaints alleging violations 
of the nondiscrimination and equal opportunity provisions of WIA and 
this part.

[[Page 405]]



Sec. 37.61  Is there authority to issue subpoenas?

    Yes, section 183(c) of WIA authorizes the issuance of subpoenas. A 
subpoena may direct the individual named on the subpoena to take the 
following actions:
    (a) To appear:
    (1) Before a designated CRC representative,
    (2) At a designated time and place;
    (b) To give testimony; and/or
    (c) To produce documentary evidence.


The subpoena may require the appearance of witnesses, and the production 
of documents, from any place in the United States, at any designated 
time and place.

                           Compliance Reviews



Sec. 37.62  What are the authority and procedures for conducting pre-approval compliance reviews?

    (a) As appropriate and necessary to ensure compliance with the 
nondiscrimination and equal opportunity provisions of WIA or this part, 
the Director may review any application, or class of applications, for 
Federal financial assistance under Title I of WIA, before and as a 
condition of their approval. The basis for such review may be the 
assurance specified in Sec. 37.20, information and reports submitted by 
the grant applicant under this part or guidance published by the 
Director, and any relevant records on file with the Department.
    (b) Where the Director determines that the grant applicant for 
Federal financial assistance under WIA Title I, if financially assisted, 
might not comply with the nondiscrimination and equal opportunity 
requirements of WIA or this part, the Director must:
    (1) Notify, in a timely manner, the Departmental grantmaking agency 
and the Assistant Attorney General of the findings of the pre-approval 
compliance review; and
    (2) Issue a Letter of Findings. The Letter of Findings must advise 
the grant applicant, in writing, of:
    (i) The preliminary findings of the review;
    (ii) The proposed remedial or corrective action under Section 37.94 
and the time within which the remedial or corrective action should be 
completed;
    (iii) Whether it will be necessary for the grant applicant to enter 
into a written Conciliation Agreement as described in Secs. 37.95 and 
37.97; and
    (iv) The opportunity to engage in voluntary compliance negotiations.
    (c) If a grant applicant has agreed to certain remedial or 
corrective actions in order to receive WIA Title I-funded Federal 
financial assistance, the Department must ensure that the remedial or 
corrective actions have been taken, or that a Conciliation Agreement has 
been entered into, before approving the award of further assistance 
under WIA Title I. If a grant applicant refuses or fails to take 
remedial or corrective actions or to enter into a Conciliation 
Agreement, as applicable, the Director must follow the procedures 
outlined in Secs. 37.98 through 37.100.



Sec. 37.63  What are the authority and procedures for conducting post-approval compliance reviews?

    (a) The Director may initiate a post-approval compliance review of 
any recipient to determine compliance with the nondiscrimination and 
equal opportunity provisions of WIA and this part. The initiation of a 
post-approval review may be based on, but need not be limited to, the 
results of routine program monitoring by other Departmental or Federal 
agencies, or the nature or frequency of complaints.
    (b) A post-approval review must be initiated by a Notification 
Letter, advising the recipient of:
    (1) The practices to be reviewed;
    (2) The programs to be reviewed;
    (3) The information, records, and/or data to be submitted by the 
recipient within 30 days of the receipt of the Notification Letter, 
unless this time frame is modified by the Director; and
    (4) The opportunity, at any time before receipt of the Final 
Determination described in Secs. 37.99 and 37.100, to make a documentary 
or other submission that explains, validates or otherwise addresses the 
practices under review.
    (c) The Director may conduct post-approval reviews using such 
techniques as desk audits and on-site reviews.

[[Page 406]]



Sec. 37.64  What procedures must the Director follow when CRC has completed a post-approval compliance review?

    (a) Where, as the result of a post-approval review, the Director has 
made a finding of noncompliance, he or she must issue a Letter of 
Findings. This Letter must advise the recipient, in writing, of:
    (1) The preliminary findings of the review;
    (2) Where appropriate, the proposed remedial or corrective action to 
be taken, and the time by which such action should be completed, as 
provided in Sec. 37.94;
    (3) Whether it will be necessary for the recipient to enter into a 
written assurance and/or Conciliation Agreement, as provided in 
Secs. 37.96 and 37.97; and
    (4) The opportunity to engage in voluntary compliance negotiations.
    (b) Where no violation is found, the recipient must be so informed 
in writing.



Sec. 37.65  What is the Director's authority to monitor the activities of a Governor?

    (a) The Director may periodically review the adequacy of the Methods 
of Administration established by a Governor, as well as the adequacy of 
the Governor's performance under the Methods of Administration, to 
determine compliance with the requirements of Secs. 37.50 through 37.55. 
The Director may review the Methods of Administration during a 
compliance review under Secs. 37.62 and 37.63, or at another time.
    (b) Nothing in this subpart limits or precludes the Director from 
monitoring directly any WIA Title I recipient or from investigating any 
matter necessary to determine a recipient's compliance with the 
nondiscrimination and equal opportunity provisions of WIA or this part.



Sec. 37.66  What happens if a recipient fails to submit requested data, records, and/or information, or fails to provide CRC with the required access?

    The Director may issue a Notice to Show Cause to a recipient failing 
to comply with the requirements of this part, where such failure results 
in the inability of the Director to make a finding. Such a failure 
includes, but is not limited to, the recipient's failure or refusal to:
    (a) Submit requested information, records, and/or data within 30 
days of receiving a Notification Letter;
    (b) Submit, in a timely manner, information, records, and/or data 
requested during a compliance review, complaint investigation, or other 
action to determine a recipient's compliance with the nondiscrimination 
and equal opportunity provisions of WIA or this part; or
    (c) Provide CRC access in a timely manner to a recipient's premises, 
records, or employees during a compliance review, as required in 
Sec. 37.40.



Sec. 37.67  What information must a Notice to Show Cause contain?

    (a) A Notice to Show Cause must contain:
    (1) A description of the violation and a citation to the pertinent 
nondiscrimination or equal opportunity provision(s) of WIA and this 
part;
    (2) The corrective action necessary to achieve compliance or, as may 
be appropriate, the concepts and principles of acceptable corrective or 
remedial action and the results anticipated; and
    (3) A request for a written response to the findings, including 
commitments to corrective action or the presentation of opposing facts 
and evidence.
    (b) A Notice to Show Cause must give the recipient 30 days to show 
cause why enforcement proceedings under the nondiscrimination and equal 
opportunity provisions of WIA or this part should not be instituted.



Sec. 37.68  How may a recipient show cause why enforcement proceedings should not be instituted?

    A recipient may show cause why enforcement proceedings should not be 
instituted by, among other means:
    (a) Correcting the violation(s) that brought about the Notice to 
Show Cause and entering into a written assurance and/or entering into a 
Conciliation Agreement, as appropriate, under Secs. 37.95 through 37.97;

[[Page 407]]

    (b) Demonstrating that CRC does not have jurisdiction; or
    (c) Demonstrating that the violation alleged by CRC did not occur.



Sec. 37.69  What happens if a recipient fails to show cause?

    If the recipient fails to show cause why enforcement proceedings 
should not be initiated, the Director must follow the enforcement 
procedures outlined in Secs. 37.99 and 37.100.

                     Complaint Processing Procedures



Sec. 37.70  Who may file a complaint concerning discrimination connected with WIA Title I?

    Any person who believes that either he or she, or any specific class 
of individuals, has been or is being subjected to discrimination 
prohibited by WIA or this part, may file a written complaint, either by 
him/herself or through a representative.



Sec. 37.71  Where may a complaint be filed?

    A complainant may file a complaint with either the recipient or the 
Director. Complaints filed with the Director should be sent to the 
address listed in the notice in Sec. 37.30.



Sec. 37.72  When must a complaint be filed?

    Generally, a complaint must be filed within 180 days of the alleged 
discrimination. However, for good cause shown, the Director may extend 
the filing time. The time period for filing is for the administrative 
convenience of CRC, and does not create a defense for the respondent.



Sec. 37.73  What information must a complaint contain?

    Each complaint must be filed in writing, and must contain the 
following information:
    (a) The complainant's name and address (or another means of 
contacting the complainant);
    (b) The identity of the respondent (the individual or entity that 
the complainant alleges is responsible for the discrimination);
    (c) A description of the complainant's allegations. This description 
must include enough detail to allow the Director or the recipient, as 
applicable, to decide whether:
    (i) CRC or the recipient, as applicable, has jurisdiction over the 
complaint;
    (ii) The complaint was filed in time; and
    (iii) The complaint has apparent merit; in other words, whether the 
complainant's allegations, if true, would violate any of the 
nondiscrimination and equal opportunity provisions of WIA or this part; 
and
    (d) The complainant's signature or the signature of the 
complainant's authorized representative.



Sec. 37.74  Are there any forms that a complainant may use to file a complaint?

    Yes. A complainant may file a complaint by completing and submitting 
CRC's Complaint Information and Privacy Act Consent Forms, which may be 
obtained either from the recipient's EO Officer, or from CRC at the 
address listed in the notice contained in Sec. 37.30.



Sec. 37.75  Is there a right of representation in the complaint process?

    Yes. Both the complainant and the respondent have the right to be 
represented by an attorney or other individual of their choice.



Sec. 37.76  What are the required elements of a recipient's discrimination complaint processing procedures?

    (a) The procedures that a recipient adopts and publishes must 
provide that the recipient will issue a written Notice of Final Action 
on discrimination complaints within 90 days of the date on which the 
complaint is filed.
    (b) At a minimum, the procedures must include the following 
elements:
    (1) Initial, written notice to the complainant that contains the 
following information:
    (i) An acknowledgment that the recipient has received the complaint, 
and
    (ii) Notice that the complainant has the right to be represented in 
the complaint process;
    (2) A written statement of the issue(s), provided to the 
complainant, that includes the following information:
    (i) A list of the issues raised in the complaint, and

[[Page 408]]

    (ii) For each such issue, a statement whether the recipient will 
accept the issue for investigation or reject the issue, and the reasons 
for each rejection;
    (3) A period for fact-finding or investigation of the circumstances 
underlying the complaint;
    (4) A period during which the recipient attempts to resolve the 
complaint. The methods available to resolve the complaint must include 
alternative dispute resolution (ADR), as described in paragraph (c) of 
this section
    (5) A written Notice of Final Action, provided to the complainant 
within 90 days of the date on which the complaint was filed, that 
contains the following information:
    (i) For each issue raised in the complaint, a statement of either:
    (A) The recipient's decision on the issue and an explanation of the 
reasons underlying the decision, or
    (B) A description of the way the parties resolved the issue; and
    (ii) Notice that the complainant has a right to file a complaint 
with CRC within 30 days of the date on which the Notice of Final Action 
is issued if he or she is dissatisfied with the recipient's final action 
on the complaint.
    (c) The procedures the recipient adopts must provide for alternative 
dispute resolution (ADR). The recipient's ADR procedures must provide 
that:
    (1) The choice whether to use ADR or the customary process rests 
with the complainant;
    (2) A party to any agreement reached under ADR may file a complaint 
with the Director in the event the agreement is breached. In such 
circumstances, the following rules will apply:
    (i) The non-breaching party may file a complaint with the Director 
within 30 days of the date on which the non-breaching party learns of 
the alleged breach;
    (ii) The Director must evaluate the circumstances to determine 
whether the agreement has been breached. If he or she determines that 
the agreement has been breached, the complainant may file a complaint 
with CRC based upon his/her original allegation(s), and the Director 
will waive the time deadline for filing such a complaint.
    (3) If the parties do not reach an agreement under ADR, the 
complainant may file a complaint with the Director as described in 
Secs. 37.71 through 37.74.



Sec. 37.77  Who is responsible for developing and publishing complaint processing procedures for service providers?

    The Governor or the LWIA grant recipient, as provided in the State's 
Methods of Administration, must develop and publish, on behalf of its 
service providers, the complaint processing procedures required in 
Sec. 37.76. The service providers must then follow those procedures.



Sec. 37.78  Does a recipient have any special obligations in cases in which the recipient determines that it has no jurisdiction over a complaint?

    Yes. If a recipient determines that it does not have jurisdiction 
over a complaint, it must notify the complainant, in writing, 
immediately. This Notice of Lack of Jurisdiction must include:
    (a) A statement of the reasons for that determination, and
    (b) Notice that the complainant has a right to file a complaint with 
CRC within 30 days of the date on which the complainant receives the 
Notice.



Sec. 37.79  If, before the 90-day period has expired, a recipient issues a Notice of Final Action with which the complainant is dissatisfied, how long does the 
          complainant have to file a complaint with the Director?

    If, during the 90-day period, the recipient issues its Notice of 
Final Action, but the complainant is dissatisfied with the recipient's 
decision on the complaint, the complainant or his/her representative may 
file a complaint with the Director within 30 days after the date on 
which the complainant receives the Notice.



Sec. 37.80  What happens if a recipient fails to issue a Notice of Final Action within 90 days of the date on which a complaint was filed?

    If, by the end of 90 days from the date on which the complainant 
filed the complaint, the recipient has failed to

[[Page 409]]

issue a Notice of Final Action, the complainant or his/her 
representative may file a complaint with the Director within 30 days of 
the expiration of the 90-day period. In other words, the complaint must 
be filed with the Director within 120 days of the date on which the 
complaint was filed with the recipient.



Sec. 37.81  Are there any circumstances under which the Director may extend the time limit for filing a complaint with him or her?

    Yes. The Director may extend the 30-day time limit:
    (a) If the recipient does not include in its Notice of Final Action 
the required notice about the complainant's right to file with the 
Director, as described in Sec. 37.76(b)(5)(ii); or
    (b) For other good cause shown.
    The complainant has the burden of proving to the Director that the 
time limit should be extended.



Sec. 37.82  Does the Director accept every complaint for resolution?

    No. The Director must determine whether CRC will accept a particular 
complaint for resolution. For example, a complaint need not be accepted 
if:
    (a) It has not been timely filed;
    (b) CRC has no jurisdiction over the complaint; or
    (c) CRC has previously decided the matter.



Sec. 37.83  What happens if a complaint does not contain enough information?

    (a) If a complaint does not contain enough information, the Director 
must try to get the needed information from the complainant.
    (b) The Director may close the complainant's file, without 
prejudice, if:
    (1) The Director makes reasonable efforts to try to find the 
complainant, but is unable to reach him or her; or
    (2) The complainant does not provide the needed information to CRC 
within the time specified in the request for more information.
    (c) If the Director closes the complainant's file, he or she must 
send written notice to the complainant's last known address.



Sec. 37.84  What happens if CRC does not have jurisdiction over a complaint?

    If CRC does not have jurisdiction over a complaint, the Director 
must:
    (a) Notify the complainant and explain why the complaint falls 
outside the coverage of the nondiscrimination and equal opportunity 
provisions of WIA or this part; and
    (b) Where possible, transfer the complaint to an appropriate 
Federal, State or local authority.



Sec. 37.85  Are there any other circumstances in which the Director will send a complaint to another authority?

    Yes. The Director refers complaints to other agencies in the 
following circumstances:
    (a) Where the complaint alleges discrimination based on age, and the 
complaint falls within the jurisdiction of the Age Discrimination Act of 
1975, as amended, then the Director must refer the complaint, in 
accordance with the provisions of 45 CFR 90.43(c)(3).
    (b) Where the only allegation in the complaint is a charge of 
individual employment discrimination that is covered both by WIA or this 
part and by one or more of the laws listed below, then the complaint is 
a ``joint complaint,'' and the Director may refer it to the EEOC for 
investigation and conciliation under the procedures described in 29 CFR 
part 1640 or 1691, as appropriate. The relevant laws are:
    (1) Title VII of the Civil Rights Act of 1964, as amended (42 U.S.C. 
2000e to 2000e-17);
    (2) The Equal Pay Act of 1963, as amended (29 U.S.C. 206(d));
    (3) The Age Discrimination in Employment Act of 1976, as amended (29 
U.S.C. 621, et seq.); and
    (4) Title I of the Americans with Disabilities Act of 1990, as 
amended (42 U.S.C. 12101 et seq.).
    (c) Where the complaint alleges discrimination by an entity that 
operates a program or activity financially assisted by a Federal 
grantmaking agency other than the Department, but that participates as a 
partner in a One-Stop delivery system, the following procedures apply:

[[Page 410]]

    (1) Where the complaint alleges discrimination on a basis that is 
prohibited both by Section 188 of WIA and by a civil rights law enforced 
by the Federal grantmaking agency, then CRC and the grantmaking agency 
have dual jurisdiction over the complaint, and the Director will refer 
the complaint to the grantmaking agency for processing. In such 
circumstances, the grantmaking agency's regulations will govern the 
processing of the complaint.
    (2) Where the complaint alleges discrimination on a basis that is 
prohibited by Section 188 of WIA, but not by any civil rights laws 
enforced by the Federal grantmaking agency, then CRC has sole 
jurisdiction over the complaint, and will retain the complaint and 
process it pursuant to this part. Such bases generally include religion, 
political affiliation or belief, citizenship, and/or participation in a 
WIA Title I-financially assisted program or activity.
    (d) Where the Director makes a referral under this section, he or 
she must notify the complainant and the respondent about the referral.



Sec. 37.86  What must the Director do if he or she determines that a complaint will not be accepted?

    If a complaint will not be accepted, the Director must notify the 
complainant, in writing, about that fact, and provide the complainant 
his/her reasons for making that determination.



Sec. 37.87  What must the Director do if he or she determines that a complaint will be accepted?

    If the Director accepts the complaint for resolution, he or she must 
notify the complainant, the respondent, and the grantmaking agency. The 
notice must:
    (a) State that the complaint will be accepted,
    (b) Identify the issues over which CRC has accepted jurisdiction; 
and
    (c) Explain the reasons why any issues were rejected.



Sec. 37.88  Who may contact CRC about a complaint?

    Both the complainant and the respondent, or their authorized 
representatives, may contact CRC for information about the complaint. 
The Director will determine what information, if any, about the 
complaint will be released.



Sec. 37.89  May the Director offer the parties to a complaint the option of mediation?

    Yes. The Director may offer the parties to a complaint the option of 
mediating the complaint. In such circumstances, the following rules 
apply:
    (a) Mediation is voluntary; the parties must consent before the 
mediation process will proceed.
    (b) The mediation will be conducted under guidance issued by the 
Director.
    (c) If the parties are unable to reach resolution of the complaint 
through mediation, CRC will investigate and process the complaint under 
Secs. 37.82 through 37.88 of this part.

                             Determinations



Sec. 37.90  If a complaint is investigated, what must the Director do when the investigation is completed?

    At the conclusion of the investigation of the complaint, the 
Director must take the following actions:
    (a) Determine whether there is reasonable cause to believe that the 
respondent has violated the nondiscrimination and equal opportunity 
provisions of WIA or this part; and
    (b) Notify the complainant, the respondent, and the grantmaking 
agency, in writing, of that determination.



Sec. 37.91  What notice must the Director issue if he or she finds reasonable cause to believe that a violation has taken place?

    If the Director finds reasonable cause to believe that the 
respondent has violated the nondiscrimination and equal opportunity 
provisions of WIA or this part, he or she must issue an Initial 
Determination. The Initial Determination must include:
    (a) The specific findings of the investigation;
    (b) The corrective or remedial action that the Department proposes 
to the respondent, under Sec. 37.94;
    (c) The time by which the respondent must complete the corrective or 
remedial action;

[[Page 411]]

    (d) Whether it will be necessary for the respondent to enter into a 
written agreement under Sec. 37.95 and 37.96; and
    (e) The opportunity to engage in voluntary compliance negotiations.



Sec. 37.92  What notice must the Director issue if he or she finds no reasonable cause to believe that a violation has taken place?

    If the Director determines that there is no reasonable cause to 
believe that a violation has taken place, he or she must issue a Final 
Determination under Sec. 37.100. The Final Determination represents the 
Department's final agency action on the complaint.



Sec. 37.93  What happens if the Director finds that a violation has taken place, and the recipient fails or refuses to take the corrective action listed in the 
          Initial Determination?

    Under such circumstances, the Department must take the actions 
described in Sec. 37.99 of this part.



Sec. 37.94  What corrective or remedial actions may be imposed where, after a compliance review or complaint investigation, the Director finds a violation of 
          the nondiscrimination and equal opportunity provisions of WIA 
          or this part?

    (a) A Letter of Findings, Notice to Show Cause, or Initial 
Determination, issued under Secs. 37.62 or 37.63, 37.66 and 37.67, or 
37.91 respectively, must include the specific steps the grant applicant 
or recipient, as applicable, must take within a stated period of time in 
order to achieve voluntary compliance.
    (b) Such steps must include:
    (1) Actions to end and/or redress the violation of the 
nondiscrimination and equal opportunity provisions of WIA or this part;
    (2) Make whole relief where discrimination has been identified, 
including, as appropriate, back pay (which must not accrue from a date 
more than 2 years before the filing of the complaint or the initiation 
of a compliance review) or other monetary relief; hire or reinstatement; 
retroactive seniority; promotion; benefits or other services 
discriminatorily denied; and
    (3) Such other remedial or affirmative relief as the Director deems 
necessary, including but not limited to outreach, recruitment and 
training designed to ensure equal opportunity.
    (c) Monetary relief may not be paid from Federal funds.



Sec. 37.95  What procedures apply if the Director finds that a recipient has violated the nondiscrimination and equal opportunity provisions of WIA or this 
          part?

    (a) Violations at State level. Where the Director has determined 
that a violation of the nondiscrimination and equal opportunity 
provisions of WIA or this part has occurred at the State level, he or 
she must notify the Governor through the issuance of a Letter of 
Findings, Notice to Show Cause or Initial Determination, as appropriate, 
under Sec. 37.62 or 37.63, 37.66 and 37.67, or 37.91, respectively. The 
Director may secure compliance with the nondiscrimination and equal 
opportunity provisions of WIA and this part through, among other means, 
the execution of a written assurance and/or Conciliation Agreement, 
under paragraph (d) of this section.
    (b) Violations below State level. Where the Director has determined 
that a violation of the nondiscrimination and equal opportunity 
provisions of WIA or this part has occurred below the State level, the 
Director must so notify the Governor and the violating recipient(s) 
through the issuance of a Letter of Findings, Notice to Show Cause or 
Initial Determination, as appropriate, under Secs. 37.62 or 37.63, 37.66 
and 37.67, or 37.91, respectively.
    (1) Such issuance must:
    (i) Direct the Governor to initiate negotiations immediately with 
the violating recipient(s) to secure compliance by voluntary means;
    (ii) Direct the Governor to complete such negotiations within 30 
days of the Governor's receipt of the Notice to Show Cause or within 45 
days of the Governor's receipt of the Letter of Findings or Initial 
Determination, as applicable. The Director reserves the right to enter 
into negotiations with the recipient at any time during the period. For 
good cause shown, the Director may approve an extension of time to 
secure voluntary compliance. The total time allotted to secure voluntary 
compliance must not exceed 60 days.

[[Page 412]]

    (iii) Include a determination as to whether compliance must be 
achieved by:
    (A) Immediate correction of the violation(s) and written assurance 
that such violations have been corrected, under Sec. 37.96;
    (B) Entering into a written Conciliation Agreement under Sec. 37.97; 
or
    (C) Both.
    (2) If the Governor determines, at any time during the period 
described in paragraph (b)(1)(ii) of this section, that a recipient's 
compliance cannot be achieved by voluntary means, the Governor must so 
notify the Director.
    (3) If the Governor is able to secure voluntary compliance under 
paragraph (b)(1) of this section, he or she must submit to the Director 
for approval, as applicable:
    (i) Written assurance that the required action has been taken, as 
described in Sec. 37.96;
    (ii) A copy of the Conciliation Agreement, as described in 
Sec. 37.97; or
    (iii) Both.
    (4) The Director may disapprove any written assurance or 
Conciliation Agreement submitted for approval under paragraph (b)(3) of 
this section that fails to satisfy each of the applicable requirements 
provided in Secs. 37.96 or 37.97.
    (c) Violations in National Programs. Where the Director has 
determined that a violation of the nondiscrimination and equal 
opportunity provisions of WIA or this part has occurred in a National 
Program, he or she must notify the Federal grantmaking agency and the 
recipient by issuing a Letter of Findings, Notice to Show Cause, or 
Initial Determination, as appropriate, under Secs. 37.62 or 37.63, 37.66 
and 37.67, or 37.91, respectively. The Director may secure compliance 
with the nondiscrimination and equal opportunity provisions of WIA and 
this part through, among other means, the execution of a written 
assurance and/or Conciliation Agreement under Secs. 37.96 or 37.97, as 
applicable.



Sec. 37.96  What are the required elements of a written assurance?

    A written assurance must provide documentation that the violations 
listed in the Letter of Findings, Notice to Show Cause or Initial 
Determination, as applicable, have been corrected.



Sec. 37.97  What are the required elements of a Conciliation Agreement?

    A Conciliation Agreement must:
    (a) Be in writing;
    (b) Address each cited violation;
    (c) Specify the corrective or remedial action to be taken within a 
stated period of time to come into compliance;
    (d) Provide for periodic reporting on the status of the corrective 
and remedial action;
    (e) Provide that the violation(s) will not recur; and
    (f) Provide for enforcement for a breach of the agreement.



Sec. 37.98  When will the Director conclude that compliance cannot be secured by voluntary means?

    The Director will conclude that compliance cannot be secured by 
voluntary means under the following circumstances:
    (a) The grant applicant or recipient fails or refuses to correct the 
violation(s) within the time period established by the Letter of 
Findings, Notice to Show Cause or Initial Determination; or
    (b) The Director has not approved an extension of time for agreement 
on voluntary compliance, under Sec. 37.95(b)(1)(ii), and he or she 
either:
    (1) Has not been notified, under Sec. 37.95(b)(3), that the grant 
applicant or recipient has agreed to voluntary compliance;
    (2) Has disapproved a written assurance or Conciliation Agreement, 
under Sec. 37.95(b)(4); or
    (3) Has received notice from the Governor, under Sec. 37.95(b)(2), 
that the grant applicant or recipient will not comply voluntarily.



Sec. 37.99  If the Director concludes that compliance cannot be secured by voluntary means, what actions must he or she take?

    If the Director concludes that compliance cannot be secured by 
voluntary means, he or she must either:
    (a) Issue a Final Determination;
    (b) Refer the matter to the Attorney General with a recommendation 
that an appropriate civil action be instituted; or

[[Page 413]]

    (c) Take such other action as may be provided by law.



Sec. 37.100  What information must a Final Determination contain?

    A Final Determination must contain the following information:
    (a) A statement of the efforts made to achieve voluntary compliance, 
and a statement that those efforts have been unsuccessful;
    (b) A statement of those matters upon which the grant applicant or 
recipient and CRC continue to disagree;
    (c) A list of any modifications to the findings of fact or 
conclusions that were set forth in the Initial Determination, Notice to 
Show Cause or Letter of Findings;
    (d) A statement of the grant applicant's or recipient's liability, 
and, if appropriate, the extent of that liability;
    (e) A description of the corrective or remedial actions that the 
grant applicant or recipient must take to come into compliance;
    (f) A notice that if the grant applicant or recipient fails to come 
into compliance within 10 days of the date on which it receives the 
Final Determination, one or more of the following consequences may 
result:
    (1) After the grant applicant or recipient is given the opportunity 
for a hearing, its WIA Title I funds may be terminated, discontinued, or 
withheld in whole or in part, or its application for such funds may be 
denied, as appropriate;
    (2) The Secretary of Labor may refer the case to the Department of 
Justice with a request to file suit against the grant applicant or 
recipient; or
    (3) the Secretary may take any other action against the grant 
applicant or recipient that is provided by law;
    (g) A notice of the grant applicant's or recipient's right to 
request a hearing under the procedures described in Secs. 37.112 through 
37.115; and
    (h) A determination of the Governor's liability, if any, under 
Sec. 37.52.



Sec. 37.101  Whom must the Director notify of a finding of noncompliance?

    Where a compliance review or complaint investigation results in a 
finding of noncompliance, the Director must notify:
    (a) The grant applicant or recipient;
    (b) The grantmaking agency; and
    (c) Tthe Assistant Attorney General.

                   Breaches of Conciliation Agreements



Sec. 37.102  What happens if a grant applicant or recipient breaches a Conciliation Agreement?

    When it becomes known to the Director that a Conciliation Agreement 
has been breached, the Director may issue a Notification of Breach of 
Conciliation Agreement.



Sec. 37.103  Whom must the Director notify about a breach of a Conciliation Agreement?

    The Director must send a Notification of Breach of Conciliation 
Agreement to the Governor, the grantmaking agency, and/or other 
party(ies) to the Conciliation Agreement, as applicable.



Sec. 37.104  What information must a Notification of Breach of Conciliation Agreement contain?

    A Notification of Breach of Conciliation Agreement must:
    (a) Specify any efforts made to achieve voluntary compliance, and 
indicate that those efforts have been unsuccessful;
    (b) Identify the specific provisions of the Conciliation Agreement 
violated;
    (c) Determine liability for the violation and the extent of the 
liability;
    (d) Indicate that failure of the violating party to come into 
compliance within 10 days of the receipt of the Notification of Breach 
of Conciliation Agreement may result, after opportunity for a hearing, 
in the termination or denial of the grant, or discontinuation of 
assistance, as appropriate, or in referral to the Department of Justice 
with a request from the Department to file suit;
    (e) Advise the violating party of the right to request a hearing, 
and reference the applicable procedures in Section 37.111; and
    (f) Include a determination as to the Governor's liability, if any, 
in accordance with the provisions of Sec. 37.52.

[[Page 414]]



Sec. 37.105  Whom must the Director notify if enforcement action under a Notification of Breach of Conciliation Agreement is commenced?

    In such circumstances, the Director must notify:
    (a) The grantmaking agency; and
    (b) The Governor, recipient or grant applicant, as applicable.



         Subpart E--Federal Procedures For Effecting Compliance



Sec. 37.110  What enforcement procedures does the Department follow to effect compliance with the nondiscrimination and equal opportunity provisions of WIA and 
          this part?

    (a) Sanctions; judicial enforcement. If compliance has not been 
achieved after issuance of a Final Determination under Secs. 37.99 and 
37.100, or a Notification of Breach of Conciliation Agreement under 
Secs. 37.102 through 37.105, the Secretary may:
    (1) After opportunity for a hearing, suspend, terminate, deny or 
discontinue the WIA Title I financial assistance, in whole or in part;
    (2) Refer the matter to the Attorney General with a recommendation 
that an appropriate civil action be instituted; or
    (3) Take such action as may be provided by law.
    (b) Deferral of new grants. When proceedings under Sec. 37.111 have 
been initiated against a particular recipient, the Department may defer 
action on that recipient's applications for new WIA Title I financial 
assistance until a Final Decision under Sec. 37.112 has been rendered. 
Deferral is not appropriate when WIA Title I financial assistance is due 
and payable under a previously approved application.
    (1) New WIA Title I financial assistance includes all assistance for 
which an application or approval, including renewal or continuation of 
existing activities, or authorization of new activities, is required 
during the deferral period.
    (2) New WIA Title I financial assistance does not include assistance 
approved before the beginning of proceedings under Sec. 37.111, or 
increases in funding as a result of changed computations of formula 
awards.



Sec. 37.111  What hearing procedures does the Department follow?

    (a) Notice of opportunity for hearing. As part of a Final 
Determination, or a Notification of Breach of a Conciliation Agreement, 
the Director must include, and serve on the grant applicant or recipient 
(by certified mail, return receipt requested), a notice of opportunity 
for hearing.
    (b) Complaint; request for hearing; answer. (1) In the case of 
noncompliance that cannot be voluntarily resolved, the Final 
Determination or Notification of Breach of Conciliation Agreement is 
considered the Department's formal complaint.
    (2) To request a hearing, the grant applicant or recipient must file 
a written answer to the Final Determination or Notification of Breach of 
Conciliation Agreement, and a copy of the Final Determination or 
Notification of Breach of Conciliation Agreement, with the Office of the 
Administrative Law Judges, 800 K Street N.W., Suite 400, Washington, DC 
20001.
    (i) The answer must be filed within 30 days of the date of receipt 
of the Final Determination or Notification of Breach of Conciliation 
Agreement.
    (ii) A request for hearing must be set forth in a separate paragraph 
of the answer.
    (iii) The answer must specifically admit or deny each finding of 
fact in the Final Determination or Notification of Breach of 
Conciliation Agreement. Where the grant applicant or recipient does not 
have knowledge or information sufficient to form a belief, the answer 
may so state and the statement will have the effect of a denial. 
Findings of fact not denied are considered admitted. The answer must 
separately state and identify matters alleged as affirmative defenses, 
and must also set forth the matters of fact and law relied on by the 
grant applicant or recipient.
    (3) The grant applicant or recipient must simultaneously serve a 
copy of its filing on the Office of the Solicitor, Civil Rights 
Division, Room N-2464,

[[Page 415]]

U.S. Department of Labor, 200 Constitution Avenue N.W., Washington DC 
20210.
    (4) (i) The failure of a grant applicant or recipient to request a 
hearing under this paragraph, or to appear at a hearing for which a date 
has been set, waives the right to a hearing; and
    (ii) Whenever a hearing is waived, all allegations of fact contained 
in the Final Determination or Notification of Breach of Conciliation 
Agreement are considered admitted, and the Final Determination or 
Notification of Breach of Conciliation Agreement becomes the Final 
Decision of the Secretary as of the day following the last date by which 
the grant applicant or recipient was required to request a hearing or 
was to appear at a hearing. See Sec. 37.112(b)(3).
    (c) Time and place of hearing. Hearings will be held at a time and 
place ordered by the Administrative Law Judge upon reasonable notice to 
all parties and, as appropriate, the complainant. In selecting a place 
for the hearing, due regard must be given to the convenience of the 
parties, their counsel, and witnesses, if any.
    (d) Judicial process; evidence. (1) The Administrative Law Judge may 
use judicial process to secure the attendance of witnesses and the 
production of documents authorized by Section 9 of the Federal Trade 
Commission Act (15 U.S.C. 49).
    (2) Evidence. In any hearing or administrative review conducted 
under this part, evidentiary matters will be governed by the standards 
and principles set forth in the Uniform Rules of Evidence issued by the 
Department of Labor's Office of Administrative Law Judges, 29 CFR part 
18.



Sec. 37.112  What procedures for initial and final decisions does the Department follow?

    (a) Initial Decision. After the hearing, the Administrative Law 
Judge must issue an initial decision and order, containing findings of 
fact and conclusions of law. The initial decision and order must be 
served on all parties by certified mail, return receipt requested.
    (b) Exceptions; Final Decision. (1) Final decision after a hearing. 
The initial decision and order becomes the Final Decision and Order of 
the Secretary unless exceptions are filed by a party or, in the absence 
of exceptions, the Secretary serves notice that he or she will review 
the decision.
    (i) A party dissatisfied with the initial decision and order may, 
within 45 days of receipt, file with the Secretary and serve on the 
other parties to the proceedings and on the Administrative Law Judge, 
exceptions to the initial decision and order or any part thereof.
    (ii) Upon receipt of exceptions, the Administrative Law Judge must 
index and forward the record and the initial decision and order to the 
Secretary within three days of such receipt.
    (iii) A party filing exceptions must specifically identify the 
finding or conclusion to which exception is taken. Any exception not 
specifically urged is waived.
    (iv) Within 45 days of the date of filing such exceptions, a reply, 
which must be limited to the scope of the exceptions, may be filed and 
served by any other party to the proceeding.
    (v) Requests for extensions for the filing of exceptions or replies 
must be received by the Secretary no later than 3 days before the 
exceptions or replies are due.
    (vi) If no exceptions are filed, the Secretary may, within 30 days 
of the expiration of the time for filing exceptions, on his or her own 
motion serve notice on the parties that the Secretary will review the 
decision.
    (vii) Final Decision and Order.
    (A) Where exceptions have been filed, the initial decision and order 
of the Administrative Law Judge becomes the Final Decision and Order of 
the Secretary unless the Secretary, within 30 days of the expiration of 
the time for filing exceptions and replies, has notified the parties 
that the case is accepted for review.
    (B) Where exceptions have not been filed, the initial decision and 
order of the Administrative Law Judge becomes the Final Decision and 
Order of the Secretary unless the Secretary has served notice on the 
parties that he or she will review the decision, as provided in 
paragraph (b)(1)(vi) of this section.
    (viii) Any case reviewed by the Secretary under this paragraph must 
be

[[Page 416]]

decided within 180 days of the notification of such review. If the 
Secretary fails to issue a Final Decision and Order within the 180-day 
period, the initial decision and order of the Administrative Law Judge 
becomes the Final Decision and Order of the Secretary.
    (2) Final Decision where a hearing is waived.
    (i) If, after issuance of a Final Determination under Sec. 37.100 or 
Notification of Breach of Conciliation Agreement under Sec. 37.104, 
voluntary compliance has not been achieved within the time set by this 
part and the opportunity for a hearing has been waived as provided for 
in Sec. 37.111(b)(4), the Final Determination or Notification of Breach 
of Conciliation Agreement becomes the Final Decision of the Secretary.
    (ii) When a Final Determination or Notification of Breach of 
Conciliation Agreement becomes the Final Decision of the Secretary, the 
Secretary may, within 45 days, issue an order terminating or denying the 
grant or continuation of assistance or imposing other appropriate 
sanctions for the grant applicant or recipient's failure to comply with 
the required corrective and/or remedial actions, or referring the matter 
to the Attorney General for further enforcement action.
    (3) Final agency action. A Final Decision and Order issued under 
Sec. 37.112(b) constitutes final agency action.



Sec. 37.113  What procedure does the Department follow to suspend, terminate, withhold, deny or discontinue WIA Title I financial assistance?

    Any action to suspend, terminate, deny or discontinue WIA Title I 
financial assistance must be limited to the particular political entity, 
or part thereof, or other recipient (or grant applicant) as to which the 
finding has been made, and must be limited in its effect to the 
particular program, or part thereof, in which the noncompliance has been 
found. No order suspending, terminating, denying or discontinuing WIA 
Title I financial assistance will become effective until:
    (a) The Director has issued a Final Determination under Sec. 37.100 
or Notification of Breach of Conciliation Agreement under Sec. 37.104;
    (b) There has been an express finding on the record, after 
opportunity for a hearing, of failure by the grant applicant or 
recipient to comply with a requirement imposed by or under the 
nondiscrimination and equal opportunity provisions of WIA or this part;
    (c) A Final Decision has been issued by the Secretary, the 
Administrative Law Judge's decision and order has become the Final 
Decision of the Secretary, or the Final Determination or Notification of 
Conciliation Agreement has been deemed the Final Decision of the 
Secretary, under Sec. 37.112(b); and
    (d) The expiration of 30 days after the Secretary has filed, with 
the committees of Congress having legislative jurisdiction over the 
program involved, a full written report of the circumstances and grounds 
for such action.



Sec. 37.114  What procedure does the Department follow to distribute WIA Title I financial assistance to an alternate recipient?

    When the Department withholds funds from a recipient or grant 
applicant under these regulations, the Secretary may disburse the 
withheld funds directly to an alternate recipient. In such case, the 
Secretary will require any alternate recipient to demonstrate:
    (a) The ability to comply with these regulations; and
    (b) The ability to achieve the goals of the nondiscrimination and 
equal opportunity provisions of WIA.



Sec. 37.115  What procedures does the Department follow for post-termination proceedings?

    (a) A grant applicant or recipient adversely affected by a Final 
Decision and Order issued under Sec. 37.112(b) will be restored, where 
appropriate, to full eligibility to receive WIA Title I financial 
assistance if the grant applicant or recipient satisfies the terms and 
conditions of the Final Decision and Order and brings itself into 
compliance with the nondiscrimination and equal opportunity provisions 
of WIA and this part.
    (b) A grant applicant or recipient adversely affected by a Final 
Decision and Order issued under Sec. 37.112(b) may at any time petition 
the Director to restore its eligibility to receive WIA

[[Page 417]]

Title I financial assistance. A copy of the petition must be served on 
the parties to the original proceeding that led to the Final Decision 
and Order. The petition must be supported by information showing the 
actions taken by the grant applicant or recipient to bring itself into 
compliance. The grant applicant or recipient has the burden of 
demonstrating that it has satisfied the requirements of paragraph (a) of 
this section. While proceedings under this section are pending, 
sanctions imposed by the Final Decision and Order under Sec. 37.112(b) 
(1) and (2) must remain in effect.
    (c) The Director must issue a written decision on the petition for 
restoration.
    (1) If the Director determines that the grant applicant or recipient 
has not brought itself into compliance, he or she must issue a decision 
denying the petition.
    (2) Within 30 days of its receipt of the Director's decision, the 
recipient or grant applicant may file a petition for review of the 
decision by the Secretary, setting forth the grounds for its objection 
to the Director's decision.
    (3) The petition must be served on the Director and on the Office of 
the Solicitor, Civil Rights Division.
    (4) The Director may file a response to the petition within 14 days.
    (5) The Secretary must issue the final agency decision denying or 
granting the recipient's or grant applicant's request for restoration to 
eligibility.



PART 42--COORDINATED ENFORCEMENT--Table of Contents




Sec.
42.1  General statement.
42.2  Purpose.
42.3  National Committee.
42.4  Structure of the National Committee.
42.5  Policy review.
42.6  Enforcement strategy.
42.7  Complaint/directed action logs.
42.8  Coordination plan.
42.9  Farm Labor Specialist (ESA).
42.10  Farm Labor contact persons and regional coordinators (OSHA).
42.20  Regional Farm Labor Coordinated Enforcement Committee.
42.21  Data collection.

    Authority: 29 U.S.C. 49, et seq.; 29 U.S.C. 201 et seq.; 29 U.S.C. 
651, et seq; 29 U.S.C. 801, et seq.; 5 U.S.C. 301.

    Source: 45 FR 39489, June 10, 1980, unless otherwise noted.



Sec. 42.1  General statement.

    These regulations are promulgated by the Secretary of Labor to 
describe the coordination of the activities of the Employment Standards 
Administration, the Occupational Safety and Health Administration, and 
the Employment and Training Administration relating to migrant 
farmworkers.



Sec. 42.2  Purpose.

    (a) These regulations coordinate the activities of ESA, OSHA and 
ETA, and are intended to:
    (1) Ensure effective enforcement efforts under the protective 
statutes--i.e., the Farm Labor Contractor Registration Act (FLCRA), the 
Occupational Safety and Health Act (OSHA), and the Fair Labor Standards 
Act (FLSA) (protective statutes).
    (2) Ensure that the enforcement efforts of DOL agencies are 
coordinated to maximize their effectiveness, yet minimize unnecessary 
duplication.
    (3) Focus the attention of DOL agencies upon the special employment-
related problems faced by migrant farmworkers.
    (4) Coordinate DOL enforcement efforts with related activities of 
farmworker groups, federal and State agencies, and other concerned 
parties outside the Department of Labor whose operations are related to 
the employment, housing, and working conditions of migrant farmworkers.
    (5) Establish an information exchange which will afford the 
Department, farmworker groups, and other concerned parties outside the 
Department of Labor the opportunity to exchange information concerning 
wages, hours and working conditions.



Sec. 42.3  National Committee.

    A National Farm Labor Coordinated Enforcement Committee (National 
Committee) is hereby established which shall be responsible for: 
Reviewing policies, guidelines and enforcement goals and strategies for 
the Department of Labor with respect to migrant

[[Page 418]]

farm labor-related enforcement efforts under the protective statutes; 
resolving policies which are in conflict between DOL agencies; advising 
the Secretary on legislative initiatives which would strengthen farm 
labor-related enforcement efforts; and providing guidance and 
recommendations to DOL agencies on related enforcement activities.



Sec. 42.4  Structure of the National Committee.

    (a) The National Committee shall consist of the Under Secretary of 
Labor, the Solicitor of Labor, and the Assistant Secretaries for the 
Employment Standards Administration (ESA), the Occupational Safety and 
Health Administration (OSHA), and the Employment and Training 
Administration (ETA).
    (b) The Committee shall be headed by the Under Secretary, who shall 
assign to one of his/her Special Assistants the responsibility of 
directing the necessary staff work required by the Committee.
    (c) The National Committee shall meet on a quarterly basis to review 
the Department's responsibilities affecting migrant farmworkers, and at 
any other time as determined by the Under Secretary to be necessary to 
carry out the National Committee's responsibilities.
    (d) There shall be a National Committee staff level working group 
consisting of senior staff representatives from the Branch of Farm Labor 
Law Enforcement, the Wage and Hour Division, the U.S. Employment Service 
(the National MSFW Monitor Advocate), the Employment and Training 
Administration, the Office of Field Coordination and the Directorate of 
Federal Compliance and State Programs in the Occupational Safety and 
Health Administration, and the Office of the Solicitor.
    (e) The Special Assistant to the Under Secretary shall be the 
director of the staff level working group.
    (f) The staff level working group shall meet monthly or more 
frequently as requested by the director.
    (g) The director, or another member of the National Committee, shall 
attend the annual public meeting of each of the Regional Farm Labor 
Coordinating Committees.



Sec. 42.5  Policy review.

    (a) The National Committee shall review the policies of OSHA, ESA 
and the United States Employment Service (USES), and the Office of the 
Solicitor and shall guide the respective agencies in improving the 
effectiveness of and coordination among all DOL agencies assigned 
responsibilities related to migrant farmworkers. These policies and 
guidance shall include such issues as the following:
    (1) The coordination of inspections, including housing inspections, 
reports and procedures of DOL agencies and State agencies designated by 
the Department to follow-up on complaints under, and to detect promptly 
violations of, any of the protective statutes.
    (2) The expedited enforcement and legal procedures to accommodate 
the transient and seasonal nature of migrant farmworker's problems.
    (3) The development of systems for prompt and efficient referral to 
the appropriate federal or State agency of violations or complaints 
discovered by or reported to DOL agencies or appropriate State agencies, 
along with prompt and efficient follow-up action by the appropriate 
agency from the initiation of the investigation through final 
enforcement action.
    (4) The training of all appropriate DOL personnel in order to ensure 
coordinated and effective enforcement.
    (5) The level of enforcement achieved by the remedies or sanctions 
used by DOL agencies to enforce the protective statutes.
    (6) The effectiveness of the Specialists Program and the Regional 
Farm Labor Coordinated Enforcement Committees.



Sec. 42.6  Enforcement strategy.

    (a) Each Regional Farm Labor Coordinated Enforcement Committee shall 
annually prepare, on a regional basis, a migrant farm labor enforcement 
strategy for each protective statute pursuant to Sec. 42.20(c)(3). The 
National Committee shall review these regional strategies and make 
recommendations to the appropriate DOL agencies. In reviewing the 
enforcement

[[Page 419]]

strategies, the Committee shall pay particular attention to:
    (1) The priorities set for the investigation and enforcement 
activities of compliance officers.
    (2) Available data on the past and current levels of enforcement of 
the protective statutes in the region, including the data collected 
pursuant to Sec. 42.21, infra.
    (3) The level of attention given to directed activity as 
distinguished from complaint-initiated compliance activities.
    (4) The capability of the agency to respond quickly and thoroughly 
under the strategy to emergencies involving violations of any of the 
protective statutes.
    (5) The level of priority given by the Office of the Solicitor to 
farm labor-related enforcement activities under the respective 
protective statutes.
    (6) The ability of agencies to respond quickly and effectively to 
resolve complaints.
    (7) The extent to which agencies follow through with appropriate 
remedies and sanctions.
    (8) The degree to which agencies coordinate and cooperate on a local 
and regional level.
    (9) Other activities of DOL agencies related to migrant farmworker 
enforcement.



Sec. 42.7  Complaint/directed action logs.

    (a) To facilitate the Committee's review of all migrant farmworker 
complaints, including pre and post occupancy housing inspections and the 
enforcement strategies of DOL agencies, the Committee shall oversee the 
operation of a system of coordinated Complaint/Directed Action Logs 
(logs). The logs shall be maintained by each DOL agency and appropriate 
SESA and OSHA State agencies.
    (b) The logs shall record both the numbers of compliance actions 
initiated as a result of complaints and those initiated on the basis of 
directed activity. They shall also include a statistical record of all 
original referrals both from and to other DOL agencies or federal or 
State authorities.
    (1) Whenever a complaint is received and/or an investigation is 
completed by an agency, the appropriate official of that agency shall 
enter the matter on the log.
    (2) Wherever possible, the responsible agency, upon request, shall 
inform the complainant of the status of the actions pending, and shall 
inform, when applicable, the referring agency.
    (3) ESA, OSHA, USES, and the Office of the Solicitor shall be 
responsible for preparing the quarterly statistical summary by regions 
of the respective agency's compliance activity. This summary shall 
include all complaints and compliance actions which (i) were pursued to 
completion by the subagency during the reporting period or (ii) were 
received during the reporting period or earlier, and are pending. Each 
agency also shall report a summary of aging and resource allocation 
data. The summary shall be submitted to the National Committee and the 
appropriate Regional Committee.
    (c) The National Committee staff shall analyze the statistical 
summaries and shall recommend National or Regional Committee action 
where problems or short-comings are identified. Pursuant to this review, 
the National Committee shall take steps to ensure that the responsible 
agencies make timely responses to complaints and conduct vigorous 
enforcement action.



Sec. 42.8  Coordination plan.

    (a) Based upon, among other things, the regional enforcement 
strategies submitted under Sec. 42.6, the National Committee shall 
develop an annual coordination plan concerning farm labor-related 
responsibilities of the Department, including migrant housing 
inspections, the referral of complaints, enforcement action on 
violations of federal or State employment-related laws subject to the 
jurisdiction of DOL, or regulations administered by DOL or appropriate 
State agencies, and assistance to stranded migrant farmworkers.
    (b) The coordination plan shall describe the present program 
responsibilities of ESA for enforcement in the farm labor area of the 
Fair Labor Standards Act, and the Farm Labor Contractor Registration 
Act. The plan shall include a statistical summary of the prior-year 
complaints under, and alleged violations of, FLSA and FLCRA as recorded 
in the logs of the

[[Page 420]]

ESA Wage and Hour Regional and Area Offices, and shall set forth general 
goals and objectives for FLSA and FLCRA enforcement activities for the 
following year as established by ESA.
    (c) The coordination plan shall describe the present program 
responsibilities of OSHA for protecting the safety and health of migrant 
farmworkers. The plan shall include a statistical summary of prior-year 
complaints under, and alleged violations of, OSHA recorded in the logs 
of the OSHA State and area offices, and shall provide general goals for 
OSHA enforcement activities for the following year as established by 
OSHA.
    (d) The plan shall include a review of the procedures developed by 
ETA to handle emergency situations, such as the stranding or 
displacement of migrants, and shall provide general goals for USES 
activities for the following year.



Sec. 42.9  Farm Labor Specialist (ESA).

    (a) The Assistant Secretary for ESA shall designate ESA Compliance 
Officers as Farm Labor Specialists (Specialists). The Specialists shall 
be assigned to area offices, or field stations under area offices, with 
significant numbers of agricultural worker activity as designated by 
ESA. These Specialists shall coordinate FLCRA and FLSA activities in 
agricultural employment and shall be responsible for:
    (1) Conducting FLCRA/FLSA farm labor investigations;
    (2) Serving as staff advisors and consultants to regional and area 
officials on FLCRA and FLSA;
    (3) Coordinating FLCRA and FLSA activities with appropriate OSHA and 
USES activities;
    (4) Directing special migrant farmworker enforcement activities;
    (5) Monitoring the farm labor-related activities of significant crew 
leaders and growers in the area to ascertain that those against whom ESA 
has taken enforcement action are operating in compliance with FLCRA and 
FLSA;
    (6) Conducting technical assistance and public information programs 
regarding FLCRA and FLSA;
    (7) Coordinating of referrals to and from other federal and State 
agencies with farm labor responsibilities, such as OSHA and USES;
    (8) Advising regularly the Regional Committee on actual farm labor 
working conditions in their areas and otherwise participating in 
regional coordination activities as directed by the Regional Committee; 
and
    (9) Providing specialized training on FLCRA and FLSA as may be 
requried.



Sec. 42.10  Farm labor contact persons and regional coordinators (OSHA).

    (a) OSHA Area Directors shall be responsible for ensuring that: (1) 
Migrant farmworker complaints and referrals are evaluated, and 
appropriate action is taken; and (2) migrant farmworker camp inspections 
are scheduled promptly.
    (b) OSHA Area Directors shall designate OSHA compliance officers to 
serve in the capacity of Farm Labor Contact Persons. These Farm Labor 
Contact Persons shall be trained in enforcement of the Occupational 
Safety and Health Act of 1970 (84 Stat. 1590, 29 U.S.C. 651 et seq.) and 
all OSHA standards affecting migrant farmworkers. These Farm Labor 
Contact Persons shall be designated in OSHA area offices with 
responsibility for conducting a significant number of migrant farmworker 
camp inspections.
    (c) The OSHA Area Directors shall assign the Farm Labor Contact 
Person to:
    (1) Conduct migrant farmworker camp inspections during periods when 
migrant housing facilities are occupied, or when it is reasonably 
predictable the facilities will imminently be occupied;
    (2) Serve as a technical advisor on migrant farmworker-related 
matters;
    (3) Train other compliance officers to conduct migrant farmworker 
camp inspections; and
    (4) Perform other OSHA duties, including duties not related to 
migrant farmworker OSHA enforcement.
    (d) Regional Administrators for OSHA shall designate a Farm Labor 
Regional Coordinator to coordinate migrant farmworker activities. The 
Farm Labor Regional Coordinators shall:

[[Page 421]]

    (1) Coordinate all migrant farmworker related activity within the 
Region's jurisdiction, i.e., enforcement, training, and public 
information;
    (2) Serve as representatives of the OSHA Regional Administrators on 
the Regional Farm Labor Coordinated Enforcement Committee's staff level 
work group; and
    (3) Perform other OSHA duties.
    (e) OSHA shall request State designees of States having approved 
occupational safety and health plans and responsibility for conducting a 
significant number of migrant farmworker camp inspections to appoint a 
State Farm Labor Coordinator. The State Farm Labor Coordinator shall:
    (1) Coordinate State OSHA migrant farmworker camp inspections and 
other migrant farmworker enforcement activities consistent with the 
objectives of this section; and
    (2) Represent the State on the Regional Farm Labor Coordinating 
Committee's staff level working group.



Sec. 42.20  Regional Farm Labor Coordinated Enforcement Committee.

    (a) Under the leadership of the ESA Regional Administrator, each 
region shall establish a Regional Farm Labor Coordinated Enforcement 
Committee (Regional Committee), including representatives of ESA, OSHA, 
ETA (the Regional MSFW Monitor Advocate), and the Office of the Regional 
Solicitor.
    (b) The Regional Committee shall be headed by the Regional 
Administrator of ESA.
    (c) The Regional Committee shall:
    (1) Meet regularly on at least a quarterly basis;
    (2) Exchange information on enforcement activities, including 
complaint/directed action logs developed by the DOL subagencies;
    (3) Develop a written coordinated enforcement strategy specifying 
for the region all information which the Regional Committee believes 
will be helpful to the National Committee in formulating the annual 
coordination plan. This strategy shall include at a minimum all 
information called for by Sec. 42.8 for the region, taking into account 
particular conditions in the region (e.g., the seasonality of the farm 
labor population). Once it is reviewed by the National Committee and 
appropriately revised, the regional offices of ESA, ETA, and OSHA shall 
follow the enforcement strategy for the year, with revisions as needed 
by changing circumstances during the year. The National Committee shall 
be advised of any such revisions;
    (4) Maintain contacts with State agencies, farm labor groups, 
growers, and other interested parties; and
    (5) Coordinate cross-training of enforcement personnel within the 
region.
    (d) There shall be a regional committee staff level working group in 
each region consisting of regional staff representatives from ESA, ETA, 
OSHA, the Office of the Regional Solicitor, and OSHA State Farm Labor 
Coordinators within that region. This working group shall meet at least 
monthly.
    (e) The designated Farm Labor Specialist (ESA), Farm Labor Regional 
Coordinators (OSHA), and MSFW Monitor Advocates (USES) in each region 
shall be available to provide staff support to the Regional Committees.
    (f) To facilitate coordination with farm labor groups and growers in 
each region, the respective Regional Committee shall hold an annual 
public meeting, transcribe or recorded at the option of the Regional 
Committee, which shall be:
    (1) Publicized to all appropriate migrant farmworker and grower 
associations in the region;
    (2) Conducted by the director of the Regional Committee with other 
DOL agency representatives participating as necessary; and
    (3) Opened to all members of the public.
    (g) The Regional Committee shall conduct and cooperate with the 
National Committee in order to develop, implement and ensure the uniform 
and effective application of coordinated enforcement efforts.



Sec. 42.21  Data collection.

    (a) For each protective statute, ESA, OSHA, and the Office of the 
Solicitor (SOL) shall regularly collect statistical data reflecting 
their enforcement efforts on a regional and national basis and shall 
submit such data quarterly

[[Page 422]]

to the National and Regional Committees. Fourth quarter data shall be 
accompanied by annual summaries. These submissions shall include at 
least the data items specified in this section. The data collected will 
provide a basis for coordination of enforcement of the protection 
statutes.
    (b) The statistical data submitted by ESA on FLCRA enforcement shall 
include: (1) Total compliance actions covered by the Act, showing total 
farm labor contractor (FLC) actions, total farm labor contractor 
employee (FLCE) actions, total User actions, total concurrent FLSA 
actions, and total actions with noncompliance; (2) total types of 
assignments (JS complaint, other complaint, employers of undocumented 
workers); (3) total types of compliance actions (conciliation, full 
investigation, follow-up investigation, other); (4) total compliance 
hours expended; (5) total crew workers affected; (6) total violations by 
categories and type of violation (FLC, FLCE, User); (7) total compliance 
actions in which civil money penalties (CMPs) are assessed and total 
amount assessed; (8) total compliance actions in which CMPs are 
collected and total amount collected.
    (c) The Wage-Hour Division shall submit the following statistical 
data on FLSA enforcement with respect to employees working within the 
categories of Agriculture, Agricultural Products, and Agricultural 
Services, etc., and various subcategories of each of these three major 
categories: (1) Total number of completed investigations; (2) total 
hours spent in conducting investigations; (3) number of employees found 
underpaid (total, under minimum wage provisions, under overtime 
provisions); (4) amount of underpayment found (total, under minimum wage 
provisions, under overtime provisions); (5) total number of employees to 
whom income was restored; and (6) total amount of money restored.
    (d) OSHA's migrant farmworker enforcement statistical data shall be 
submitted for each region on a state-by-state basis, including OSHA 
State Plan States, and shall include: (1) Number of complaints received 
and number of inspections conducted in response; (2) number of referrals 
received and number of inspections conducted in response; (3) number of 
programmed or directed inspections, (4) number of violations found by 
type of violation (serious, willful, repeat and other than serious); (5) 
total number of employees affected by inspections; (6) approximate total 
hours spent on migrant camp inspections; (7) number of inspections for 
which penalties were proposed and amount proposed; (8) number of 
inspections for which penalties were collected and amount collected.
    (e) The SOL shall submit statistical data on farm labor-related 
enforcement efforts under each protective statute which shall include: 
(1) Total cases received by SOL; (2) actions taken on cases (settled, 
referred to ALJ, civil actions filed, referrals to U.S. Attorney); and 
(3) results of cases (including injunctions and license revocations and 
denials).
    (f) Complaint Response Data--ESA and OSHA shall submit annually a 
summary of aging data for their respective migrant farmworker-related 
activities under FLCRA, FLSA and OSHA respectively, showing aging from 
receipt of a complaint or completion of an investigation until referral 
to SOL or other final action by the enforcement agency. The Office of 
the Solicitor shall submit similar data showing aging of matters between 
receipt by SOL of a case and the completion of some responsive action on 
the case. Where available, OSHA shall submit data showing the average 
length of time between receipt of a complaint and the completion of the 
action taken in response to the complaint. Where available, ESA shall 
submit data showing complaints received, complaints on hand, and number 
of actions completed based on complaints.
    (g) The National Committee shall review the data collection systems 
of ESA, OSHA and SOL, as they pertain to farm labor enforcement, and 
recommend any necessary changes to the subagencies.

[[Page 423]]



PART 44--PROCESS FOR ELECTING STATE AGENCY EMPLOYMENT STATISTICS REPRESENTATIVES FOR CONSULTATIONS WITH DEPARTMENT OF LABOR--Table of Contents




Sec.
44.1  Purpose and scope.
44.2  Election cycle and tenure of representatives.
44.3  Election process.

    Authority: 5 U.S.C. 301; 20 U.S.C. 9276(c); 29 U.S.C. 49 1-2.

    Source: 65 FR 7195, Feb. 11, 2000, unless otherwise noted.



Sec. 44.1  Purpose and scope.

    This part contains the regulations of the U.S. Department of Labor 
establishing a process for the election of representatives of the States 
to participate in formal consultations with the Department of Labor for 
purposes of the development of an annual employment statistics plan and 
to address other employment statistics issues. The representatives are 
to be elected by and from the State employment statistics directors 
affiliated with the State agencies designated to carry out the 
employment statistics responsibilities under the revised section 15 of 
the Wagner-Peyser Act (29 U.S.C. 49 1-2), as amended by section 309 of 
the Workforce Investment Act of 1998. The revised section 15(d)(2) of 
the Wagner-Peyser Act requires the Secretary to establish a process for 
the election of such representatives from each of the 10 Federal regions 
of the Department of Labor.



Sec. 44.2  Election cycle and tenure of representatives.

    (a) Election cycle. The States located within each Federal region, 
as defined in this paragraph, shall elect one representative in 
accordance with the procedures specified in this part. The initial 
election for representatives of the States from all 10 Federal regions 
will be held not later than February 17, 1999. For purposes of this 
section, the Federal regions shall be the Standard Federal regions 
identified in former OMB Circular A-105 (issued April 4, 1974). This 
former Circular is available through the Office of the Commissioner of 
Labor Statistics, telephone number (202) 691-7808. For the 
representatives elected from the Federal regions II, IV, VII, VIII, and 
X, the initial term shall terminate on January 1, 2000. Subsequent 
elections for representatives from such regions shall be held in the 
last quarter of 1999 and thereafter biennially within the last calendar 
quarter of the year. For the representatives from the Federal regions I, 
III, V, VI, and IX, the initial term shall terminate on January 1, 2001. 
Subsequent elections for representatives from such regions shall be held 
within the last calendar quarter of 2000 and thereafter, biennially 
within the last calendar quarter of the year. After the initial 
election, the terms of all representatives shall terminate on January 1 
of the third calendar year after the preceding scheduled election.
    (b) Tenure. The terms of the representatives elected in the first 
election shall commence upon election. The terms of representatives 
elected in subsequent elections shall commence January 1 of the year 
following the scheduled election. Representatives may serve for an 
unlimited number of terms.



Sec. 44.3  Election process.

    (a) Process. The Commissioner of Labor Statistics of the U.S. 
Department of Labor (hereafter referred to as ``the Commissioner'') or 
his or her designee shall conduct the elections. The Commissioner shall 
provide a ballot containing the names of the employment statistics 
directors in the appropriate region to the employment statistics 
director in each State who is affiliated with the State agency 
designated pursuant to section 15(e) of the Wagner-Peyser Act. If a 
State has not designated an agency, or has not provided the name of the 
employment statistics director to the Commissioner, the State shall not 
participate in the election process. Each director may vote for one 
director to be the regional representative. The Commissioner shall 
prescribe a time limit that will not be less than one week for the 
directors to mark and return the ballots. Only votes received by the 
Commissioner within the prescribed time limit will be counted. The 
Commissioner will

[[Page 424]]

tally the votes from the ballots received within the prescribed time 
limit and the director receiving the most votes in the region will be 
the representative for that region. If there is a tie after the first 
round of votes are counted, the Commissioner shall conduct additional 
rounds of voting using a ballot containing the names of the directors 
who tied with the most votes in the previous round until a 
representative is elected. The Commissioner will prescribe a time limit 
of not less than one week for each additional round of voting and will 
tally the votes received within the prescribed time limit. The director 
with the most votes will be the representative.
    (b) Method of transmission. The Commissioner may distribute the 
ballots relating to the election under this part by electronic mail or 
other methods the Commissioner determines to be appropriate and may 
specify the methods through which votes are to be cast.
    (c) Vacancies. If a representative does not complete the term, the 
Commissioner shall conduct an election to elect a replacement for the 
remainder of the term using the procedures described in paragraph (a) 
and (b) of this section.



PART 70--PRODUCTION OR DISCLOSURE OF INFORMATION OR MATERIALS--Table of Contents




                           Subpart A--General

Sec.
70.1  Purpose and scope.
70.2  Definitions.
70.3  Policy.
70.4  Public access to certain materials.
70.5  Compilation of new records.
70.6  Disclosure of originals.
70.7  Authority of component officials in Department of Labor.
70.8  Supplementary regulations currently in force.

  Subpart B--Procedures for Disclosure of Records Under the Freedom of 
                             Information Act

70.19  Requests for records.
70.20  Responses by components to requests.
70.21  Form and content of component responses.
70.22  Appeals from denial of requests.
70.23  Action on appeals.
70.24  Form and content of action on appeals.
70.25  Time limits and order in which requests and appeals shall be 
          processed.
70.26  Predisclosure notification to submitters of confidential 
          commercial information.
70.27  Preservation of records.

              Subpart C--Costs for Production of Documents

70.38  Definitions.
70.39  Statutes specifically providing for setting of fees.
70.40  Charges assessed for the production of records.
70.41  Reduction or waiver of fees.
70.42  Ancillary considerations.

                        Subpart D--Public Records

70.53  Office of Labor-Management Standards.
70.54  Pension and Welfare Benefits Administration.

Appendix A to Part 70--Disclosure Officers
Appendix B to Part 70--Freedom of Information/Privacy Act Coordinators

    Authority: 5 U.S.C. 301, 5 U.S.C. 552, as amended; Reorganization 
Plan No. 6 of 1950, 5 U.S.C. Appendix; E.O. 12600, 52 FR 23781 (June 25, 
1987).

    Source: 54 FR 23144, May 30, 1989, unless otherwise noted.



                           Subpart A--General



Sec. 70.1  Purpose and scope.

    This part contains the regulations of the Department of Labor 
implementing the Freedom of Information Act (FOIA), as amended, 5 U.S.C. 
552 and Executive Order 12600. It also implements the public information 
provisions of the Labor Management Reporting and Disclosure Act (LMRDA), 
29 U.S.C. 435, 461. Subpart A contains general information about 
Department of Labor policies and procedures; subpart B sets forth the 
procedures for obtaining access to records of the Department; subpart C 
contains the Department's regulations on fees; and subpart D sets forth 
the procedures for obtaining access to certain public records. Appendix 
A contains a list of all Department of Labor disclosure officers from 
whom records may be obtained.

[[Page 425]]



Sec. 70.2  Definitions.

    As used in this part:
    (a) The terms agency, person, party, rule, order, and adjudication 
have the meaning attributed to these terms by the definition in 5 U.S.C. 
551.
    (b) Component means each separate bureau, office, board, division, 
commission, service or administration of the Department of Labor.
    (c) Disclosure officer means an official of the Department of Labor 
who has authority to disclose records under the FOIA and to whom 
requests to inspect or copy records in his/her custody may be addressed. 
Department of Labor disclosure officers are listed in Appendix A.
    (d) The Secretary means the Secretary of Labor.
    (e) The Department means the Department of Labor.
    (f) Request means any request for records made pursuant to 5 U.S.C. 
552(a)(3).
    (g) Requester means any person who makes a request to a component.
    (h) Confidential commercial information means records provided to 
the government by a submitter that arguably contain material exempt from 
release under Exemption 4 of the Freedom of Information Act, 5 U.S.C. 
552(b)(4), because disclosure could reasonably be expected to cause 
substantial competitive harm.
    (i) Business submitter means any person or entity who provides 
confidential commercial information to the government. The term business 
submitter, includes, but is not limited to corporations, labor 
organizations, state governments and foreign governments.



Sec. 70.3  Policy.

    All agency records, except those specifically exempted from 
mandatory disclosure by one or more provisions of 5 U.S.C. 552(b) shall 
be made promptly available to any person submitting a written request in 
accordance with the procedures of this part.



Sec. 70.4  Public access to certain materials.

    (a) To the extent required by 5 U.S.C. 552(a)(2), each component 
within the Department shall make the following materials available for 
public inspection and copying (unless they are published and copies are 
offered for sale):
    (1) Final opinions, including concurring and dissenting opinions, as 
well as orders, made in the adjudication of cases;
    (2) Those statements of policy and interpretation which have been 
adopted by the agency and are not published in the Federal Register; and
    (3) Administrative staff manuals and instructions to staff that 
affect a member of the public, and which are not exempt from disclosure 
under section (b) of the FOIA.
    (b) Each component of the Department shall also maintain and make 
available current indexes providing identifying information regarding 
any matter issued, adopted or promulgated after July 4, 1967, and 
required by paragraph (a) of this section to be made available or 
published. Each component shall publish and make available for 
distribution, copies of such indexes and supplements thereto at least 
quarterly, unless it determines by Notice published in the Federal 
Register that publication would be unnecessary and impracticable. After 
issuance of such Notice, the component shall provide copies of any index 
upon request at a cost not to exceed the direct cost of duplication.
    (c) Whenever it is determined to be necessary to prevent a clearly 
unwarranted invasion of personal privacy, identifying details may be 
deleted from any record covered by this subsection that is published or 
made available for inspection.
    (d) Certain records of the Department are available for examination 
or copying without the submission of a formal request under the FOIA, 
e.g., records maintained in public reference facilities. Information 
about the availability of records for examination and copying may be 
obtained by addressing an inquiry to the component which has custody of 
the records, or if the appropriate component is unknown, to the 
Assistant Secretary for Administration and Management.

[54 FR 23144, May 30, 1989; 54 FR 25204, June 13, 1989]

[[Page 426]]



Sec. 70.5  Compilation of new records.

    Nothing in 5 U.S.C. 552 or this part requires that any agency or 
component create a new record, either manually from preexisting files or 
through creation of a computer program, in order to respond to a request 
for records.



Sec. 70.6  Disclosure of originals.

    No original document or record in the custody of the Department of 
Labor, or of any agency or officer thereof, shall on any occasion be 
given to any agent, attorney, or any other person not officially 
connected with the Department without the written consent of the 
Secretary or the Solicitor of Labor.



Sec. 70.7  Authority of component officials in Department of Labor.

    Each agency of the Department of Labor for which an officer or 
officers have authority to issue rules and regulations may through such 
officers promulgate supplementary regulations not inconsistent with this 
part, governing the disclosure of particular or specific records which 
are in the custody of that departmental unit.



Sec. 70.8  Supplementary regulations currently in force.

    Regulations duly promulgated by agencies of the Department and 
currently in force which govern the disclosure of records in the custody 
of the affected agency, shall remain in effect, insofar as such 
regulations are consistent with the provisions of this part, until such 
regulations are modified or rescinded.



  Subpart B--Procedures for Disclosure of Records Under the Freedom of 
                             Information Act



Sec. 70.19  Requests for records.

    (a) To whom to direct requests. Requests under this subpart for a 
record of the Department of Labor must be in writing. A request should 
be sent to the component that maintains the record at its proper address 
and both the envelope and the request itself should be clearly marked 
``Freedom of Information Act Request.'' (Appendix A of this part lists 
the components of the Department of Labor and their addresses.) The 
functions of each component are summarized in the United States 
Government Manual which is issued annually and is available from the 
Superintendent of Documents. This initial list of responsible officials 
has been included for informational purposes only, and the officials may 
be changed through appropriate designation. Regional, district and field 
office addresses have been included in Appendix A to assist requesters 
in identifying the disclosure officer who is most likely to have custody 
of the records sought. Requesters who need guidance in defining a 
request or determining the proper component to which the request should 
be addressed, may write to the Assistant Secretary for Administration 
and Management, 200 Constitution Avenue NW., Washington, DC 20210.
    (b) Description of information requested. Each request shall 
reasonably describe the record or records sought; i.e., in sufficient 
detail to permit identification and location thereof with a reasonable 
amount of effort. So far as practicable, the request should specify the 
subject matter of the record, the date or approximate date when made, 
the place where made, the person or office that made it, and any other 
pertinent identifying details.
    (c) Deficient descriptions. If the description is insufficient so 
that a professional employee who is familiar with the subject area of 
the request cannot locate the record with a reasonable amount of effort, 
the officer processing the request will notify the requester and 
indicate any additional information required. Every reasonable effort 
shall be made to assist a requester in the identification and location 
of the record or records sought.
    (d) Classified records. Any request for classified records which are 
in the custody of the Department of Labor shall be referred to the 
classifying agency under the provisions of Sec. 70.20 (c) and (d).
    (e) Agreement to pay fees. The filing of a request under this 
subpart shall be deemed to constitute an agreement by the requester to 
pay all applicable fees charged under this part, up to $25.

[[Page 427]]



Sec. 70.20  Responses by components to requests.

    (a) In general. (1) Except as otherwise provided in this section, 
when a request for a record is received, the component having custody of 
the requested record shall ordinarily be responsible for responding to 
the request.
    (2) However, when another component or agency is better able to 
determine the disclosability of a record, that component or agency shall 
be responsible for responding to the request.
    (3) The time for responding to a request begins to run when it is 
received by the department or component responsible for making the 
determination on disclosure.
    (b) Authority to grant or deny requests. The disclosure officer, or 
his or her designee, is authorized to grant or deny any request for a 
record in his or her custody.
    (c) Determination that request has been received by the proper 
component. (1) When a component receives a request for a record, the 
component shall promptly determine whether another component or another 
agency of the Government is better able to determine whether the record 
is exempt to any extent from mandatory disclosure under the FOIA.
    (2) If the receiving component determines that it is the component 
and agency better able to determine whether or not to disclose the 
record requested, that component shall respond to the request.
    (3) If the receiving component believes that another component or 
agency is better able to determine whether the requested record is 
exempt from mandatory disclosure under the FOIA, the receiving component 
shall refer the request to the component or agency that it believes 
should handle the request.
    (4) If the receiving component determines that it is the component 
and agency better able to determine whether part of the requested 
records is exempt from disclosure, and another component or agency has 
primary responsibility with respect to other parts of the requested 
record, the receiving component shall either:
    (i) Respond to the request after consulting with the appropriate 
component or agency concerning the records for which that component or 
agency has primary responsibility, or
    (ii) Respond to the part of the request for which it has primary 
responsibility and refer the other portion or portions of the request to 
the appropriate component or agency.
    (d) Notice of referral. Whenever a component refers all or any part 
of the responsibility for responding to a request to another component 
or to another agency, it shall notify the requester of the referral and 
inform the requester of the name and address of each component or agency 
to which the request has been referred and the portions of the request 
so referred.
    (e) Processing of requests that are not properly addressed. (1) A 
request that is not properly addressed as specified in Sec. 70.7(a) of 
this subpart shall be forwarded to the appropriate component, if known, 
or to the Office of the Assistant Secretary for Administration and 
Management (OASAM), which shall make reasonable efforts to determine the 
appropriate component and, if able to do so, shall forward the request 
to the appropriate component or components for processing. A request not 
addressed to the appropriate component will be deemed not to have been 
received by the Department of Labor until OASAM has forwarded the 
request to the appropriate component and that component has received the 
request, or until the request would have been so forwarded and received 
with the exercise of reasonable diligence by Department personnel.
    (2) A component receiving an improperly addressed request forwarded 
by OASAM shall notify the requester of the date on which it received the 
request.
    (f) Date for determining responsive records. In determining records 
responsive to a request, a component will include only those records 
existing as of the date of its receipt of the request as that date is 
determined in accordance with paragraph (c).



Sec. 70.21  Form and content of component responses.

    (a) Form of notice granting a request. After a component has made a 
determination to grant a request in whole or

[[Page 428]]

in part, the component shall so notify the requester in writing. The 
notice shall describe the manner in which the record will be disclosed, 
whether by providing a copy of the record to the requester or by making 
a copy of the record available to the requester for inspection at a 
reasonable time and place. The procedure for such an inspection shall 
not unreasonably disrupt the operations of the component. The component 
shall inform the requester in the notice of any fees to be charged in 
accordance with the provisions of subpart C.
    (b) Form of notice denying a request. A disclosure officer denying a 
request in whole or in part shall so notify the requester in writing. 
The notice must be signed by the disclosure officer or his designee, and 
shall include:
    (1) The name and title or position of the disclosure officer and if 
applicable, of the designee.
    (2) A brief statement of the reason or reasons for the denial, 
including the FOIA exemption or exemptions which the component has 
relied upon in denying the request.
    (3) A statement that the denial may be appealed under Sec. 70.22 and 
a description of the requirements of that subsection.
    (c) Record cannot be located or has been destroyed. If a requested 
record cannot be located from the information supplied, or is known or 
believed to have been destroyed or otherwise disposed of, the component 
shall so notify the requester in writing.



Sec. 70.22  Appeals from denial of requests.

    When a request for access to records or for a waiver of fees has 
been denied in whole or in part, where a requester disputes matters 
relating to the assessment of fees, or when a component fails to respond 
to a request within the time limits set forth in the FOIA, the requester 
may appeal the denial of the request to the Solicitor of Labor. The 
appeal must be filed within 90 days of:
    (a) The denial, actual or constructive, of the request, including a 
denial of a request for a fee waiver,
    (b) An agency's response on a dispute of matters relating to the 
assessment of fees, or
    (c) In the case of a partial denial, 90 days from the date the 
material was received by the requester.

The appeal shall state, in writing, the grounds for appeal, including 
any supporting statements or arguments. To facilitate processing, the 
appeal should include copies of the initial request and the response of 
the disclosure officer. The appeal shall be addressed to the Solicitor 
of Labor, Department of Labor, 200 Constitution Avenue NW., Washington, 
DC 20210. Both the envelope and the letter of appeal itself must be 
clearly marked: ``Freedom of Information Act Appeal.''

[54 FR 23144, May 30, 1989; 54 FR 25204, June 13, 1989]



Sec. 70.23  Action on appeals.

    The Solicitor of Labor, or his designee, shall review the 
appellant's supporting papers and make a determination de novo whether 
the denial specified in Sec. 70.22 was proper and in accord with the 
applicable law.



Sec. 70.24  Form and content of action on appeals.

    The disposition of an appeal shall be in writing. A decision 
affirming in whole or in part the denial of a request shall include a 
brief statement of the reason or reasons for the affirmance, including 
each FOIA exemption relied upon and its relation to each record 
withheld, and a statement that judicial review of the denial is 
available in the United States District Court for the judicial district 
in which the requester resides or has his principal place of business, 
the judicial district in which the requested records are located, or the 
District of Columbia. If it is determined on appeal that a record should 
be disclosed, the record should be provided promptly in accordance with 
the decision on appeal.



Sec. 70.25  Time limits and order in which requests and appeals shall be processed.

    Components of the Department of Labor shall comply with the time 
limits required by the FOIA for responding to and processing requests 
and appeals, unless there are exceptional circumstances within the 
meaning of 5 U.S.C. 552(a)(6)(C). A component shall

[[Page 429]]

notify a requester whenever the component is unable to respond to or 
process the request or appeal within the time limits established by the 
FOIA.



Sec. 70.26  Predisclosure notification to submitters of confidential commercial information.

    (a) In general. FOIA requests for confidential commercial 
information provided to the Department by business submitters shall be 
processed in accordance with this section.
    (b) Designation of confidential commercial information. Business 
submitters of information to the Department, at the time of submission 
or within a reasonable time thereafter, may designate specific 
information as confidential commercial information subject to the 
provisions of this section. Such a designation may be made for 
information which the submitter claims could reasonably be expected to 
cause substantial competitive harm. The designation must be in writing 
and whenever possible, the submitter's claim of confidentiality shall be 
supported by a statement or certification by an officer or authorized 
representative of the submitter that the identified information in 
question is, in fact, confidential commercial or financial information 
and has not been disclosed to the public.
    (c) Notice to submitters of confidential commercial information. A 
component shall provide a business submitter with prompt written notice 
of a request encompassing its business information whenever required 
under paragraph (d) of this section, and except as is provided in 
paragraph (g) of this section. Such written notice shall either describe 
the nature of the confidential commercial information requested or 
provide copies of the relevant records or portions thereof.
    (d) When notice is required. (1) For confidential commercial 
information submitted to the Department prior to January 1, 1988, the 
component shall provide a business submitter with notice of a request 
whenever:
    (i) Less than 10 years have passed since the date the information 
was received by the Department and the information is subject to prior 
express commitment of confidentiality given by the component to the 
business submitter, or
    (ii) The component has reason to believe that disclosure of the 
information could reasonably be expected to cause substantial 
competitive harm.
    (2) For confidential commercial information submitted to the 
Department on or after January 1, 1988, the component shall provide a 
business submitter with notice of a FOIA request whenever:
    (i) The business submitter has in good faith previously designated 
the information as commercially or financially sensitive information, or
    (ii) The component has reason to believe that disclosure of the 
information could reasonably be expected to cause substantial 
competitive harm.

Notice of a request for confidential commercial information falling 
within paragraph (d)(2)(i) of this section shall be required for a 
period of not more than ten years after the date of submission. The 
business submitter may request a specific notice period of greater 
duration. The submitter should provide a justification for such a 
request. In such a case, the Department may, in its discretion, provide 
for an extended notice period.
    (e) Opportunity to object to disclosure. Through the notice 
described in paragraph (c) of this section, a component shall afford a 
business submitter a reasonable period within which to provide the 
component with a detailed statement of any objection to disclosure. Such 
statement shall specify all grounds for withholding any of the 
information under Exemption 4 of the Freedom of Information Act, and 
shall demonstrate the basis for the contention that the information is a 
trade secret or commercial or financial information that is privileged 
or confidential. Information provided by a business submitter pursuant 
to this paragraph may itself be subject to disclosure under the FOIA.
    (f) Notice of intent to disclose. A component shall consider a 
business submitter's objections and specific grounds for nondisclosure 
prior to determining whether to disclose business information which has 
been designated

[[Page 430]]

by the submitter as confidential commercial information. Whenever a 
component decides to disclose such information over the objection of a 
business submitter or designee, the component shall notify the business 
submitter in writing. Such notice shall include:
    (1) A description of the information to be disclosed;
    (2) A specified disclosure date;
    (3) A statement of why the submitter's objections were not 
sustained.
    Such notice of intent to disclose shall to the extent permitted by 
law be forwarded a resonable number of days prior to the specified date 
upon which disclosure is intended. The requester shall be provided with 
a copy of the notice of intent to disclose.
    (g) Exceptions to notice requirements. The notice requirements of 
this section shall not apply if:
    (1) The component determines that the information should not be 
disclosed;
    (2) The information has been lawfully published or has been 
officially made available to the public; or
    (3) Disclosure of the information is required by law (other than 5 
U.S.C. 552).
    (4) The disclosure is required by a rule that
    (i) Was adopted pursuant to notice and public comment;
    (ii) Specifies narrow classes of records submitted to the agency 
that are to be released under the Freedom of Information Act; and
    (iii) Provides in exceptional circumstances for notice when the 
submitter provides written justification, at the time the information is 
submitted or a reasonable time thereafter, that disclosure of the 
information could reasonably be expected to cause substantial 
competitive harm.
    (5) The information requested has not been designated by the 
submitter as in accordance with paragraph (b) of this Section, and the 
submitter had an opportunity to do so at the time of submission of the 
information or a reasonable time thereafter, unless the component has 
reason to believe that disclosure of the information would result in 
substantial competitive harm; or
    (6) The designation made by the submitter in accordance with these 
regulations appears obviously frivolous; except that in such case, the 
component must provide the submitter with written notice of any final 
administrative disclosure determination within a reasonable number of 
days prior to the specified disclosure date.
    (h) Notice of FOIA lawsuit. Whenever a requester brings suit seeking 
to compel disclosure of confidential commercial information covered by 
paragraph (b) of this section, the component shall promptly notify the 
business submitter.
    (i) Notice requirements. The component shall fulfill the notice 
requirements of this section by addressing the notice to the business 
submitter or its legal successor at the address indicated on the 
records, or the last known address. If the notice is returned, the 
component shall make a reasonable effort to locate the business 
submitter or its legal successor. Where notification of a voluminous 
number of submitters is required, such notification may be accomplished 
by posting and publishing the notice in a place reasonably calculated to 
accomplish notification.



Sec. 70.27  Preservation of records.

    Each component shall preserve all correspondence relating to the 
requests it receives under this part, and all records processed pursuant 
to such requests, until such time as the destruction of such 
correspondence and records is authorized pursuant to title 44 of the 
United States Code. Under no circumstances shall records be destroyed 
while they are the subject of a pending request, appeal, or lawsuit 
under the Act.



              Subpart C--Costs for Production of Documents



Sec. 70.38  Definitions.

    The following definitions apply to the terms of this subpart.
    (a) The term a statute specifically providing for setting the level 
of fees for particular types of records (See 5 U.S.C. 552(a)(4)(A)(vi)), 
means any statute other than FOIA that specifically requires a 
Government agency to establish a fee schedule for particular types

[[Page 431]]

of records. An example of such a statute is section 205(c) of the Labor-
Management Reporting and Disclosure Act, as amended, 29 U.S.C. 435(c). 
Statutes such as the User Fee Statute which only provide a general 
discussion of fees without explicitly requiring that an agency set and 
collect fees for particular documents are not within the meaning of this 
term.
    (b) The term direct costs means those expenditures which an agency 
actually incurs in searching for and duplicating (and in the case of a 
commercial requester, reviewing) documents to respond to an FOIA 
request. Direct costs includes the salary of the employee performing the 
work and the cost of operating duplicating machinery, and when 
appropriate the cost of the medium in which the information is made 
available.
    (c) The term duplication means the process of making a copy of a 
document necessary to respond to a FOIA request. Such copies can take 
the form of paper copy, microform, audio-visual materials or machine-
readable documentation (e.g., magnetic tape or disk), among others.
    (d) The term search means the process of looking for material that 
is responsive to a FOIA request; including page-by-page or line-by-line 
identification of materials within documents or, when available, use of 
an existing computer program. Searches do not include the review of 
material, as defined in Sec. 70.38(e), which is performed to determine 
whether material is exempt from disclosure.
    (e) The term review means the process of examining documents located 
in response to a request that is for a commercial use, as defined in 
Sec. 70.38 (f), to determine whether any portion of the document located 
is exempt from disclosure, and accordingly may be withheld. It also 
includes the act of preparing materials for disclosure, i.e. doing all 
that is necessary to excise them and otherwise prepare them for release. 
Review does not include time spent resolving general legal or policy 
issues regarding the application of exemptions.
    (f) The term commercial use request means a request from one who 
seeks information for a use or purpose that furthers the commercial, 
trade or profit interests of the requester or the person or entity on 
whose behalf the request was submitted. When a request is submitted by a 
commercial entity or its representative and from the nature of the 
information sought it appears the request is to further the objective of 
that entity, the request will be treated as a commercial use request 
unless the requester indicates that the information is being sought for 
a non-commercial purpose. Where a requester indicates that the 
information is being sought for a non-commercial purpose, the disclosure 
officer will evaluate the requester's submission and determine how the 
request is to be treated. While requests by non-profit organizations 
would normally fall outside the commercial use category, when the 
disclosure officer determines that a request by such an entity or one 
acting on its behalf does further the entity's commercial interests, he 
or she may treat the request as a commercial use request.
    (g) The term educational institution means:
    (1) An institution which is a preschool, a public or private 
elementary or secondary school, an institution of undergraduate higher 
education, an institution of graduate higher education, an institution 
of professional education, or an institution of vocational education, 
and
    (2) Operates a program or programs of scholarly research. To qualify 
under this definition, the program of scholarly research in connection 
with which the information is sought must be carried out under the 
auspices of the academic institution itself as opposed to the individual 
scholarly pursuits of persons affiliated with an institution. For 
example, a request from a professor to assist him or her in writing a 
book independent of his or her institutional responsibilities would not 
qualify under this definition, whereas a request predicated upon 
research funding granted to the institution would meet its requirements. 
Likewise, a request from a student enrolled in an individual course of 
study at an educational institution would not qualify as a request from 
the institution.

[[Page 432]]

    (h) The term non-commercial scientific institute means an 
institution that is not operated on a commercial basis as that term is 
defined in Sec. 70.38(f), and that is operated solely for the purpose of 
conducting scientific research, the results of which are not intended to 
promote any particular product or industry.
    (i) The term representative of the news media means any person 
actively gathering news for an entity that is organized and operated to 
publish or broadcast news to the public. Factors indicating such 
representation status include press accreditation, guild membership, a 
history of continuing publication, business registration, and/or Federal 
Communication Commission licensing, among others. For purpose of this 
definition the term news contemplates information that is about current 
events or that would be of current interest to the public. A freelance 
journalist shall be treated as a representative of the news media if the 
person can demonstrate a solid basis for expecting publication of 
matters related to the requested information through a qualifying news 
media entity. A publication contract with a qualifying news media entity 
satisfies this requirement. An individual's past publication record with 
organizations of the foregoing nature is also relevant to this 
determination. Examples of news media entities include:
    (1) Television or radio stations broadcasting to the public at 
large, and
    (2) Publishers of periodicals including newsletters (but only in 
those instances where they can qualify as disseminators of news) who 
make their products available for purchase or subscription by the 
general public.

[54 FR 23144, May 30, 1989; 54 FR 25204, June 13, 1989]



Sec. 70.39  Statutes specifically providing for setting of fees.

    Nothing in this subpart shall supersede fees chargeable under a 
statute other than the Freedom of Information Act which specifically 
provides for setting the level of fees for particular types of records.



Sec. 70.40  Charges assessed for the production of records.

    (a) There are three types of charges assessed in connection with the 
production of agency records in response to a Freedom of Information Act 
request: costs associated with
    (1) Searching for or locating responsive records (search costs),
    (2) Reproducing such records (reproduction costs), and
    (3) Reviewing records to determine whether any materials are exempt 
(review costs).
    (b) There are four types of FOIA requesters:
    (1) Commercial use requesters,
    (2) Educational and non-commercial scientific institutions,
    (3) Representatives of the news media, and
    (4) All other requesters.

Depending upon the nature of the requester, one or all of the foregoing 
costs may be assessed. Paragraph (c) of this section sets forth the 
extent to which the foregoing costs may be assessed against each type of 
requester. Paragraph (d) of this section establishes the actual rate to 
be charged in connection with each of the foregoing types of costs. 
Paragraph (e) delineates the manner in which costs are to be assessed 
against an individual seeking access to records about himself or herself 
which are covered by the Privacy Act.
    (c) (1) Commercial use requester. When a commercial use requester as 
defined in Sec. 70.38(f) makes a request for documents, search costs, 
reproduction costs and review costs may be assessed in their entirety.
    (2) Educational or non-commercial, scientific institution requester. 
When an educational or non-commercial scientific institution requester, 
as defined in Secs. 70.38 (g) and (h), makes a request, only 
reproduction costs may be assessed, excluding charges for the first 100 
pages.
    (3) Request by representative of news media. When a representative 
of the news media as defined in Sec. 70.38(i) makes a request, only 
reproduction costs may be assessed, excluding charges for the first 100 
pages.
    (4) All other requesters. Requesters who do not fall within 
paragraphs

[[Page 433]]

(c)(1), (2), and (3) of this section may be charged search costs and 
reproduction costs, except that the first 100 pages of reproduction and 
the first two hours of search time shall be furnished without charge. 
Where computer searches are involved, i.e., executing an existing 
program, however, the monetary equivalent of two hours of search time by 
a professional employee shall be deducted from the total costs of 
computer processing time.
    (d)(1) Search costs. When a search for records is performed by a 
clerical employee, a rate of $2.50 per quarter hour will be applicable. 
When a search is performed by professional or supervisory personnel, a 
rate of $5.00 per quarter hour will be applicable. If the search for 
requested records requires transportation of the searcher to the 
location of the records or transportation of the records to the 
searcher, all transportation costs in excess of $5.00 may be added to 
the search cost. When an existing computer program is employed to locate 
records responsive to a request, the disclosure officer may charge the 
actual cost of providing the service.
    (2) Reproduction costs. The standard copying charge for documents in 
paper copy is $.15 per page. When responsive information is provided in 
a format other than paper copy, such as in the form of computer tapes 
and discs, the requester may be charged the direct costs of the tape, 
disc or whatever medium is used to produce the information, as well as 
any related reproduction costs.
    (3) Review costs. Costs associated with the review of documents, as 
defined in Sec. 70.38(c), will be applicable at a rate of $5.00 per 
quarter hour. Except as noted below, charges may only be assessed for 
review at the initial level, i.e. the review undertaken the first time 
the documents are analyzed to determine the applicability of specific 
exemptions to the particular record or portion of the record. Thus a 
requester would not be charged for review at the administrative appeal 
level with regard to the applicability of an exemption already applied 
at the initial level. When, however, a record has been withheld pursuant 
to an exemption which is subsequently determined not to apply and is 
reviewed again at the appellate level to determine the potential 
applicability of other exemptions, the costs attendant to such 
additional review may be assessed.
    (4) Mailing cost. Where requests for copies are made by mail, no 
postage charge will be made for transmitting by regular mail a single 
copy of the requested record to the requester, or for mailing additional 
copies where the total postage cost does not exceed $1. However, where 
the volume of page copy or method of transmittal requested is such that 
transmittal charges to the Department are in excess of $1, the 
transmittal costs will be added, unless appropriate stamps or stamped 
envelopes are furnished with the request, or authorization is given for 
collection of shipping charges on delivery.
    (e) Privacy Act requesters. Requests from individuals for records 
about themselves which are contained within agency systems of records 
shall be treated under the fee provisions of the Privacy Act of 1974 
which permit the assessment of reproduction costs only, after providing 
the first copy of a file at no cost.

[54 FR 23144, May 30, 1989; 54 FR 30503, July 20, 1989]



Sec. 70.41  Reduction or waiver of fees.

    This section sets forth conditions under which the applicable 
charges for records responsive to a request under 5 U.S.C. 552, as set 
forth in Sec. 70.40, are subject to reduction or waiver by the 
disclosure officer.
    (a) Statutorily required waiver or reduction in fees. Documents 
shall be furnished without charge or at a charge below the fees set 
forth in Sec. 70.40 if all of the following conditions are satisfied:
    (1) The subject of the requested records concerns the operations or 
activities of the United States Government;
    (2) The disclosure of the requested records is likely to contribute 
to an understanding of Government operations or activities;
    (3) The disclosure is likely to contribute to a public understanding 
of such operations or activities;

[[Page 434]]

    (4) The contribution to public understanding of government 
operations and activities will be significant; and
    (5) The public's interest in disclosure exceeds the requester's 
commercial interest in disclosure.
    (b) De minimis costs. Where the cost of collecting a fee to be 
assessed to a requester exceeds the amount of the fee which would 
otherwise be assessed, no fee need be charged. Under normal 
circumstances, fees which do not exceed $5.00 need not be collected.
    (c) Reformulating requests. When the estimated reproduction costs 
are likely to exceed $25.00, the requester may be notified of the 
estimated amount of fees, unless the requester has indicated in advance 
its willingness to pay fees as high as those anticipated. Such notice 
may invite the requester to reformulate the request to satisfy his or 
her needs at a lower cost.



Sec. 70.42  Ancillary considerations.

    (a) Costs assessed when no records are disclosed. The costs of 
searching for and, in the case of a commercial use request, reviewing 
records may be assessed even where ultimately no documents are disclosed 
or located.
    (b) Aggregating requests. A requester may not file multiple 
requests, each seeking portions of a document or documents in order to 
avoid the payment of fees. When there is reason to believe that a 
requester or a group of requesters acting in concert, is attempting to 
break a request down into a series of requests for the purpose of 
evading the assessment of fees, any such requests may be aggregated and 
the requesters charged as if there were only a single request.
    (c) Advance payments. An advance payment before work is commenced or 
continued on a request, may not be required unless:
    (1) It is estimated or determined that the allowable charge that a 
requester may be required to pay are likely to exceed $250. When a 
determination is made that the allowable charges are likely to exceed 
$250, the requester shall be notified of the likely cost and be required 
to provide satisfactory assurance of full payment where the requester 
has a history of prompt payment of FOIA fees, or be required to tender 
advance payment of at least 50% of the full estimated charges in the 
case of requesters with no history of payment; or
    (2) A requester has previously failed to pay a fee charged in a 
timely fashion (i.e., within 30 days of the date of the billing) in 
which case the requester may be required:
    (i) To pay the full amount owed plus any applicable interest as 
provided in Sec. 70.41(e), when an outstanding balance is due and owing, 
and
    (ii) To make an advance payment of the full amount of the estimated 
fee before the component begins to process a new request.
    (3) In any case, the payment of outstanding fees may be required 
before responsive materials are actually disclosed to a requester.
    (d) Time limits to respond extended when advance payments requested. 
When an advance payment of fees in accordance with paragraph (c) of this 
section has been requested the administrative time limits prescribed in 
subsection (a)(6) of the FOIA, 5 U.S.C. 552(a)(6), will only begin to 
run after such advance payment has been received by the agency.
    (e) Interest charges. Interest charges on an unpaid bill may be 
assessed starting on the 31st day following the day on which the billing 
was sent. Interest shall be at the rate prescribed in section 3717 of 
title 31 U.S.C. and shall accrue from the date of the billing.
    (f) Authentication of copies--(1) Fees. The Freedom of Information 
Act does not require certification or attestation under seal of copies 
of records furnished in accordance with its provisions. Pursuant to 
provisions of the general user-charger statute, 31 U.S.C. 9701 and 
subchapter II of title 29 U.S.C., the following charges may be made 
where such services are requested:
    (i) For certification of true copies, each $1.
    (ii) For attestation under the seal of the Department, each $3.
    (2) Authority and form for attestation under seal. Authority is 
hereby given to any officer or officers of the Department of Labor 
designated as authentication officer or officers of the Department to 
sign and issue attestations

[[Page 435]]

under the seal of the Department of Labor.
    (g) Transcripts. All transcripts shall be made available in 
accordance with the terms set forth in Sec. 70.40.



                        Subpart D--Public Records



Sec. 70.53  Office of Labor-Management Standards.

    (a) The following documents in the custody of the Office of Labor-
Management Standards are public information available for inspection 
and/or purchase of copies in accordance with paragraphs (b) and (c) of 
this section.
    (1) Data and information contained in any report or other document 
filed pursuant to sections 201, 202, 203, 211, and 301 of the Labor-
Management Reporting and Disclosure Act of 1959 (73 Stat. 524-28, 530, 
79 Stat. 888, 29 U.S.C. 431-433, 441, 461).
    (2) Data and information contained in any report or other document 
filed pursuant to the reporting requirements of part 458 of this title, 
which are the regulations implementing the standards of conduct 
provisions of the Civil Service Reform Act of 1978, 5 U.S.C. 7120, and 
the Foreign Service Act of 1980, 22 U.S.C. 4117. The reporting 
requirements are found in 29 CFR 458.3.
    (b) The above documents are available from: U.S. Department of 
Labor, Office of Labor-Management Standards, Public Documents Room, N-
5616, 200 Constitution Avenue, NW., Washington, DC 20210. Documents are 
also available from the OLMS area or district office in whose geographic 
jurisdiction the reporting organization or individual is located. The 
addresses of these offices are listed in appendix A of this part.
    (c) Pursuant to 29 U.S.C. 435(c) which provides that the Secretary 
shall by regulation provide for the furnishing of copies of the above 
documents, upon payment of a charge based upon the cost of the service, 
these documents are available at a cost of .15 per page of record copies 
furnished. Authentication of copies is available in accordance with the 
fee schedule established in section 70.42(f). In accordance with 5 
U.S.C. 552(a)(4)(A)(vi), the provisions for fees, fee waivers and fee 
reductions in subpart C do not supersede the above charges for these 
documents.
    (d) Upon request of the Governor of a State for copies of any 
reports or documents filed pursuant to sections 201, 202, 203, or 211 of 
the Labor-Management Reporting and Disclosure Act of 1959 (73 Stat. 524-
528, 79 Stat. 888; 29 U.S.C. 431-441), or for information contained 
therein, which have been filed by any person whose principal place of 
business or headquarters is in such State, the Office of Labor-
Management Standards shall:
    (1) Make available without payment of a charge to the State agency 
designated by law or by such Governor, such requested copies of 
information and data, or
    (2) Require the person who filed such reports and documents to 
furnish such copies or information and data directly to the State agency 
thus designated.



Sec. 70.54  Pension and Welfare Benefits Administration.

    The following documents are in the custody of the Pension and 
Welfare Benefits Administration at the address indicated below, and the 
right of inspection and copying provided in this part may be exercised 
at such offices: Copies of summary plan descriptions, and annual 
reports, statements and other documents filed pursuant to the Employee 
Retirement Income Security Act, title I, part I, except that information 
described in sections 105(a) and 105(c) with respect to a participant 
may be disclosed only to the extent that information respecting that 
participant's benefits under title II of the Social Security Act may be 
disclosed under such Act.
    Address: U.S. Department of Labor, Pension and Welfare Benefits 
Administration, Public Documents Room N-5507, 200 Constitution Avenue, 
NW., Washington, DC 20210.

               Appendix A to Part 70--Disclosure Officers

    (a) Offices in Washington, DC, are maintained by the following 
agencies of the Department of Labor. Field offices are maintained by 
some of these, as listed in the United States Government Manual (see 
Sec. 70.5(b)).
    (1) Office of the Secretary of Labor
    (2) Office of the Solicitor of Labor

[[Page 436]]

    (3) Office of the Assistant Secretary for Administration and 
Management
    (4) Office of Information and Public Affairs
    (5) Office of the Inspector General
    (6) Bureau of International Affairs
    (7) Bureau of Labor Statistics
    (8) Employment Standards Administration
    (9) Employment and Training Administration
    (10) Mine Safety and Health Administration
    (11) Occupational Safety and Health Administration
    (12) Office of the Americn Workplace
    (13) Pension and Welfare Benefits Administration
    (14) Office of Assistant Secretary for Veterans' Employment and 
Training
    (15) Employees' Compensation Appeals Board
    (16) Wage Appeals Board
    (17) Benefits Review Board
    (18) Board of Contract Appeals
    (19) Office of Administrative Law Judges

    The heads of the foregoing agencies shall make available for 
inspection and copying in accordance with the provisions of this part, 
records in their custody or in the custody of component units within 
their organizations, either directly or through their authorized 
representative in particular offices and locations.

    (b)(1) The titles of the responsible officials of the various 
independent agencies in the Department of Labor are listed below. This 
list is provided for information and to assist requesters in locating 
the office most likely to have responsive records. The officials may be 
changed by appropriate designation. Unless otherwise specified, the 
mailing addresses of the officials shall be: U.S. Department of Labor, 
200 Constitution Avenue, NW., Washington, DC 20210.

Secretary of Labor, Attention: Assistant Secretary for Administration 
and Management (OASAM)
Deputy Solicitor, Office of the Solicitor
Chief Administrative Law Judge, Office of the Administrative Law Judges 
(OALJs)
Assistant Secretary for Administration and Management (OASAM)
Deputy Assistant Secretary for Administration and Management (OASAM)
Director, National Capital Service Center (NCSC)
Deputy Director, National Capital Service Center (NCSC)
Director, Office of Personnel Management Services (NCSC)
Director, Office of Procurement Services (NCSC)
Director, Directorate of Personnel Management (OASAM)
Deputy Director, Directorate of Personnel Management (OASAM)
Comptroller, Office of the Comptroller (OASAM)
Deputy Comptroller, Office of the Comptroller (OASAM)
Director, Office of Budget (Comptroller-OASAM)
Director, Office of Accounting (Comptroller-OASAM)
Director, Office of Financial Policy and Systems (Comptroller-OASAM)
Director, Directorate of Administrative and Procurement Programs (OASAM)
Director, Office of Facilities Management (OASAM)
Chief, Division of Security and Emergency Preparedness (OASAM)
Director, Office of Acquisition Integrity (OASAM)
Director, Office of Safety and Health (OASAM)
Director, Directorate of Civil Rights (OASAM)
Director, Directorate of Information Resources Management (DIRM-OASAM)
Director, Office of IRM Policy (DIRM-OASAM)
Director, DOL Academy
Director, Office of Small Business and Minority Affairs
Comptroller, Office of the Comptroller (OASAM)
Director, Office of Safety and Health (OASAM)
Director, Directorate of Civil Rights (OASAM)
Director, Office of Employee and Labor-Management Relations (OASAM)
Director, Office of Employment and Evaluation (OASAM)
Chief, Division of Security and Emergency Preparedness (OASAM)
Director, Office of Acquisition Integrity (OASAM)
Chairperson, Employees' Compensation Appeals Board (ECAB)
Deputy Assistant Secretary for Policy
Deputy Director, Office of Information and Public Affairs
Director, Office of Administrative Appeals
Assistant Inspector General, Office of Resource Management and 
Legislative Assessment, Office of the Inspector General (OIG)
Director, Office of Management, Administration and Planning, Bureau of 
International Labor Affairs (ILAB)
Assistant Secretary for the American Workplace (OAW)
Deputy Assistant Secretary for Labor-Management Programs, OAW
Deputy Assistant Secretary for Labor-Management Standards, OAW
Deputy Assistant Secretary for Work and Technology Policy, OAW
Commissioner, Bureau of Labor Statistics

    The mailing address for responsible officials in the Bureau of Labor 
Statistics is:

[[Page 437]]

Rm. 4040--Postal Square Bldg., 2 Massachusetts Ave., NE., Washington, DC 
20212-0001.

Assistant Secretary for Employment Standards, Employment Standards 
Administration (ESA)
Director, Office of Workers' Compensation Programs (OWCP), Assistant to 
the Director, OWCP, ESA
Director for Federal Employees' Compensation, OWCP, ESA
Director for Longshore and Harbor Workers' Compensation, OWCP, ESA
Director for Coal Mine Workers' Compensation, OWCP, ESA
Administrator, Wage and Hour Division, ESA
Deputy Administrator, Wage and Hour Division, ESA
Assistant Administrator, Office of Program Operations, Wage and Hour 
Division, ESA
Assistant Administrator, Office of Policy, Planning and Review, Wage and 
Hour Division, ESA
Deputy Assistant Administrator, Wage and Hour Division, ESA
Director, Office of Federal Contract Compliance Programs (OFCCP), ESA
Director, Division of Policy, Planning and Program Development, OFCCP, 
ESA
Director, Division of Program Operations, OFCCP, ESA
Director, Office of Management, Administration and Planning, ESA
Director, Division of Personnel and Organization Management, ESA
Director, Division of Internal Management Control, ESA
Director, Equal Employment Opportunity Unit, ESA
Director, Office of Public Affairs, ESA
Director, Division of Policy and Research Analysis, ESA
Assistant Secretary of Labor, Employment and Training Administration 
(ETA)
Deputy Assistant Secretary of Labor, Employment and Training 
Administration (ETA)
Administrator, Office of Financial and Administative Management, ETA
Director, Office of Management Support, ETA
Director, Office of Human Resources, ETA
Director, Office of the Comptroller, ETA
Director, Office of Information Resources Management, ETA
Director, Office of Grants and Contracts Management, ETA
Chief, Division of Acquisition and Assistance, ETA
Administrator, Office of Regional Management, ETA
Administrator, Office of Strategic Planning and Policy Development, ETA
Director, Unemployment Insurance Service, ETA
Director, United States Employment Service, ETA
Chief, Division of Foreign Labor Certifications, ETA
Administrator, Office of Job Training Programs, ETA
Director, Office of Employment and Training Programs, ETA
Director, Office of Job Corps, ETA
Director, Office of Special Targeted Programs, ETA
Administrator, Office of Work-Based Learning, ETA
Director, Bureau of Apprenticeship and Training, ETA
Director, Office of Worker Retraining and Adjustment Programs, ETA
Director, Office of Trade Adjustment Assistance, ETA
Director, Office of Equal Employment Opportunity Occupational Safety and 
Health Administration (OSHA)
Director, Office of Management Accountability and Performance, OSHA
Director, Office of Information and Consumer Affairs, OSHA
Director, Office of Field Operations, OSHA
Director, Office of Construction and Engineering, OSHA
Director, Directorate of Federal-State Operations, OSHA
Director, Directorate of Policy, OSHA
Director, Directorate of Administrative Programs, OSHA
Director, Office of Personnel Management, OSHA
Director, Office of Administrative Services, OSHA
Director, Office of Management Data Systems, OSHA
Director, Office of Management Systems and Organization, OSHA
Director, Office of Program Budgeting, Planning and Financial 
Management, OSHA
Director, Directorate of Technical Support, OSHA
Director, Directorate of Safety Standards Programs, OSHA
Director, Directorate of Health Standards Programs, OSHA
Director, Office of Statistics, OSHA
Director of Program Services, Pension and Welfare Benefits 
Administration
Assistant Secretary for Veterans' Employment and Training (VETS)
Deputy Assistant Secretary for Veterans' Employment and Training, VETS
Director, Office of Information, Management and Budget, VETS

    The mailing address for responsible officials in the Mine Safety and 
Health Administration is: 4015 Wilson Boulevard, Arlington, Virginia 
22203.

Deputy Assistant Secretary
Chief, Office of Congressional and Legislative Affairs
Director, Office of Information and Public Affairs

[[Page 438]]

Administrator for Coal Mine Safety and Health
Chief, Office of Technical Compliance and Investigation (Coal)
Administrator for Metal and Nonmetal Mine Safety and Health
Director, Office of Assessments
Director, Office of Standards, Regulations and Variances
Director of Program Planning and Evaluation
Director of Administration and Management
Director of Educational Policy and Development

    The mailing address for the Office of Administrative Law Judges and 
the Benefits Review Board is, respectively: 800 K Street, NW., 
Washington, DC 20001-8002 and 20001-8001.

Chief, Office of Administrative Law Judges, suite 400-N.
Chair, Benefits Review Board, suite 500-N.

    (2) The titles of the responsible officials in the field offices of 
the various independent agencies are listed below: Unless otherwise 
specified, the mailing address for these officials by region, shall be:

                                Region I:

One Congress Street, 11th floor, Boston, Massachusetts 02114.

           In Region I, Only, the Mailing Address For OSHA Is:

133 Portland Street, 1st floor, Boston, Massachusetts 02114.

                               Region II:

201 Varick Street, New York, New York 10014.

                               Region III:

Gateway Building, 3535 Market Street, Philadelphia, Pennsylvania 19104.

                               Region IV:

1375 Peachtree Street, NE., Atlanta, Georgia 30367.
214 N. Hogan Street, suite 1006, Jacksonville, Florida 32202, (OWCP 
Only).

                                Region V:

Kluczynski Federal Building, 230 South Dearborn Street, Chicago, 
Illinois 60604.
1240 East Ninth Street, room 851, Cleveland, Ohio 44199, (FEC only).

                               Region VI:

525 Griffin Square Building, Griffin & Young Streets, Dallas, Texas 
75202.

                               Region VII:

Federal Office Building, 911 Walnut Street, Kansas City, Missouri 64106.

                              Region VIII:

Federal Office Building, 1961 Stout Street, Denver, Colorado 80294.
    and
1801 California Street, Denver, Colorado 80202.

    The mailing address for the Director of the Regional Bureau of 
Apprentice and Training in Region VIII is:

Room 465, U.S. Custom House, 721--19th Street, Denver, CO. 80202.

                               Region IX:

71 Stevenson Street, San Francisco, California 94105.

                                Region X:

111 Third Avenue, Seattle, Washington 98101-3212.
Regional Administrator for Administration and Management (OASAM)
Regional Personnel Officer, OASAM
Regional Director for Information and Public Affairs
Regional Administrator for Employment and Training Administration (ETA)
Regional Director, Job Corps, ETA
Director, Regional Bureau of Apprenticeship and Training, ETA
Regional Management Analyst, ETA-Atlanta, Georgia
Regional Administrator for Wage and Hour, ESA
Regional Director for Federal Contract Compliance Programs, ESA
Regional Director for the Office of Workers' Compensation Programs, ESA
District Director, Office of Workers' Compensation Programs, ESA

   Wage and Hour Division, ESA Responsible Officials, District Offices

135 High Street, room 310, Hartford, Connecticut 06103.
66 Pearl Street, room 211, Portland, Maine 04101.
One Bowdoin Square, 8th floor, Boston, Massachusetts 02114.
200 Sheffield St., room 102, Mountainside, New Jersey 07092.
3131 Princeton Pike, Building 5, room 216, Lawrenceville, New Jersey 
08648.
Leo W. O' Brien Federal Bldg. rm. 822, Albany, New York 12207.
1967 Turnbull Avenue, Bronx, New York 10473.
111 West Huron Street, room 617, Buffalo, New York 14202.
825 East Gate Boulevard, room 202, Garden City, New York 11530.
26 Federal Plaza, room 3838, New York, New York 10278.
159 Carlos Chardon Street, room 102, Hato Rey, Puerto Rico 00918.

[[Page 439]]

Federal Office Building, room 913, 31 Hopkins Plaza, Charles Center, 
Baltimore, Maryland 21201.
U.S. Custom House, room 238, Second and Chestnut Streets, Philadelphia, 
Pennsylvania 19106.
Federal Building, room 313, 1000 Liberty Avenue, Pittsburgh, 
Pennsylvania 15222.
3329 Penn Place, 20 North Pennsylvania Ave., Wilkes-Barre, Pennsylvania 
18701.
Federal Building, room 7000, 400 North Eighth Street, Richmond, Virginia 
23240.
2 Hale Street, suite 301, Charleston, West Virginia 25301-2834.
1375 Peachtree St NE., room 668, Atlanta, Georgia 30367.
Berry Building, suite 301, 2015 North Second Avenue, Birmingham, Alabama 
35203.
Federal Building, room 407, 299 East Broward Boulevard, Fort Lauderdale, 
Florida 33301.
3728 Phillips Hwy., suite 219, Jacksonville, Florida 32207.
1150 Southwest First Street, room 202, Miami, Florida 33130.
Austin Laurel Bldg., suite 300, 4905 W. Laurel Street, Tampa, Florida 
33607.
Federal Building, room 167, 600 Martin Luther King Jr. Place, 
Louisville, Kentucky 40202.
800 Briar Creek Road, suite CC-412, Charlotte, North Carolina 28205.
Somerset Park Building, 4407 Bland Rd., suite 260, Raleigh, North 
Carolina 27609.
Federal Building, room 1072, 1835 Assembly Street, Columbia, South 
Carolina 29201.
1 Jackson Place, No.1020, 188 East Capitol Street, Jackson, Mississippi 
39210.
1321 Murfreesboro Road, suite 511, Nashville, Tennessee 37217.
230 South Dearborn Street, room 412, Chicago, Illinois 60604-1595.
509 West Capitol Avenue, suite 205, Springfield, Illinois 62704.
46 East Ohio Street, room 148, Indianapolis, Indiana 46204-1919.
River Glen Plaza, suite 160, 501 East Monroe, South Bend, Indiana 46601-
1615.
2920 Fuller Avenue, NE., suite 100, Grand Rapids, Michigan 49505-3409.
Bridge Place, room 106, 220 South Second Street, Minneapolis, Minnesota 
55401-2104.
Federal Office Building, room 817, 1240 East Ninth Street, Cleveland, 
Ohio 44199-2054.
525 Vine Street, room 880, Cincinnati, Ohio 45202-3268.
646 Federal Office Building, 200 North High Street, Columbus, Ohio 
43215-2475.
Federal Center Building, room 309, 212 East Washington Avenue, Madison, 
Wisconsin 53703-2878.
Savers Building, suite 611, 320 West Capitol, Little Rock, Arkansas 
72201.
701 Loyola Avenue, room 13028, New Orleans, Louisiana 70113.
Western Bank Bldg., suite 840, 505 Marquette, NW., Albuquerque, New 
Mexico 87102-2160.
Government Plaza Building, room 307, 400 Mann Street, Corpus Christi, 
Texas 78401.
Federal Building, room 507, 525 South Griffin Street, Dallas, Texas 
75202.
2320 LaBranch, room 2100, Houston, Texas 77004.
Northchase I Office Building, suite 140, 10127 Morocco, suite 104, San 
Antonio, Texas 78216.
Fifty-One Yale Building, suite 303, 5110 South Square, Tulsa, Oklahoma 
74135-7438.
Federal Building, room 643, 210 Walnut Street, Des Moines, Iowa 50309.
Federal Office Building, room 2900, 911 Walnut Street, Kansas City, 
Missouri 64106.
1222 Spruce Street, rm. 9102B, St. Louis, Missouri 63103.
Federal Building, room 715, 106 South 15th Street, Omaha, Nebraska 
68102.
Room 615, Federal Office Building, 1961 Stout Street, PO Drawer 3505, 
Denver, Colorado 80294.
10 West Broadway, suite 307, Salt Lake City, Utah 84101.
3221 North 16th Street, suite 301, Phoenix, Arizona 85016.
300 South Glendale Avenue, room 250, Glendale, California 91205-1752.
2981 Fulton Avenue, Sacramento, California 95821.
211 Main Street, room 341, San Francisco, California 94105.
5675 Ruffin Road, suite 320, San Diego, California 92123-5378.
111 SW Columbia, suite 1010, Portland, Oregon 97201-5842.
1111 Third Avenue, suite 755, Seattle, Washington 98101-3212.

    Office of Federal Contract Compliance Programs, ESA, Responsible 
                       Officials, Regional Offices

One Congress Street, 11th floor, Boston, Massachusetts 02114.
201 Varick Street, room 750, New York, New York 10014.
Gateway Building, room 15340, 3535 Market Street, Philadelphia, 
Pennsylvania 19104.
1375 Peachtree Street, NE., suite 678, Atlanta, Georgia 30367.
Kluczynski Federal Building, room 570, 230 South Dearborn Street, 
Chicago, Illinois 60604.
Federal Building, room 840, 525 South Griffin Street, Dallas, Texas 
75202.
Federal Office Building, 911 Walnut Street, room 2011, Kansas City, 
Missouri 64106.
1801 California Street, suite 935, Denver, Colorado 80202.
71 Stevenson Street, suite 1700, San Francisco, California 94105.
1111 Third Avenue, suite 610, Seattle, Washington 98101-3212.

[[Page 440]]

 Office of Workers' Compensation Programs, ESA, Responsible Officials, 
                           District Directors

One Congress Street, 11th Floor, Boston, Massachusetts 02203, (FECA and 
LHWCA only).
201 Varick Street, Seventh Floor, New York, New York 10014, (FECA and 
LHWCA only).
3535 Market Street, Philadelphia, Pennsylvania 19104, (FECA and LHWCA 
only).
Penn Traffic Building, 319 Washington Street, Johnstown, Pennsylvania 
15901, (BLBA only).
South Main Towers, 116 South Main Street, room 208, Wilkes-Barre, 
Pennsylvania 18701, (BLBA only).
Wellington Square, 1225 South Main Street, Greensburg, Pennsylvania 
15601, (BLBA only).
31 Hopkins Plaza, room 1026, Baltimore, Maryland 22201, (LHWCA only).
Federal Building, 200 Granby Mall, room 212, Norfolk, Virginia 23510, 
(LHWCA only).
2 Hale Street, suite 304, Charleston, West Virginia 25301, (BLBA only).
609 Market Street, Parkersburg, West Virginia 26101, (BLBA only).
800 North Capitol Street, NW., Washington, DC 20211, (FECA only).
1200 Upshur Street, NW., Washington, DC 20210, (DCCA only).
334 Main Street, Fifth Floor, Pikeville, Kentucky 41501, (BLBA only).
500 Springdale Plaza, Spring Street, Mt. Sterling, Kentucky 40353, (BLBA 
only).
214 N. Hogan Street, 10th Floor, Jacksonville, Florida 32201, (FECA and 
LHWCA only).
230 South Dearborn Street, 8th floor, Chicago, Illinois 60604, (FECA and 
LHWCA).
1240 East 9th Street, Cleveland, Ohio 44199, (FECA only).
274 Marconi Boulevard, 3rd Floor, Columbus, Ohio 43215, (BLBA only).
525 Griffin Street, Federal Building, Dallas, Texas 75202, (FECA only).
701 Loyola Avenue, room 13032, New Orleans, Louisiana 70113, (LHWCA 
only).
12600 North Featherwood Drive, Houston, Texas 77034, (LHWCA only).
911 Walnut Street, Kansas City, Missouri 64106, (FECA only).
1801 California Street, Denver, Colorado 80202, (FECA and BLBA only).
71 Stevenson Street, 2nd Floor, San Francisco, California 94105, (FECA 
and LHWCA only).
401 E. Ocean Boulevard, suite 720, Long Beach, California 90802, (LHWCA 
only).
300 Ala Moana Boulevard, room 5108, Honolulu, Hawaii 96850, (LHWCA 
only).
1111 3rd Avenue, Seattle, Washington 98101-3212, (LHWCA and FECA only).

            Mine Safety & Health Administration Field Offices

            Chief, Division of Mining Information System MSHA

P.O. Box 25367, DFC, Denver, CO 80225-0367.

         Superintendent, National Mine Health and Safety Academy

P.O. Box 1166, Beckley, WV 25802-1166.

             Chief, Approval and Certification Center, MSHA

R.R. Box 251, Industrial Park Road, Triadelphia, WV 26059.

            District Manager for Coal Mine Safety and Health

Penn Place, room 3128, 20 N. Pennsylvania Avenue, Wilkes-Barre, PA 
18701.
RR1, Box 736, Hunker, PA 15639.
5012 Mountaineer Mall, Morgantown, WV 26505.
100 Bluestone Road, Mt. Hope, WV 25880.
P.O. Box 560, Norton, VA 24273.
219 Ratliff Creek Road, Pikeville, KY 41501.
HC 66, Box 1762, Barbourville, KY 40906.
P.O. Box 418, Vincennes, IN 47591.
P.O. Box 25367, Denver, CO 80225-0367.
100 YMCA Drive, Madisonville, KY 42431-9019.

     District Manager for Metal and NonMetal Mine Safety and Health

230 Executive Drive, Mars, PA 16046-9812.
135 Gemini Circle, suite 212, Birmingham, AL 35209.
515 W. 1st Street, #228, Duluth, MN 55802-1302.
1100 Commerce Street, room 4C50, Dallas, TX 75242-0499.
P.O. Box 25367, Denver, CO 80225-0367.
3333 Vaca Valley Parkway, suite 600, Vacaville, CA 95688.

   Office of Labor-Management Standards, Regional Directors--District 
                                Directors

                         OLMS Regional Directors

Suite 600, 1365 Peachtree Street, NE., Atlanta, GA 30367.
Suite 302, 121 High Street, Boston, MA 02110.
Suite 774, Federal Office Building, 230 S. Dearborn Street, Chicago, IL 
60604.
Suite 831, Federal Office Building, 1240 E. Ninth Street, Cleveland, OH 
44199.
Suite 300, 525 Griffin Sq. Bldg., Griffin & Young Streets, Dallas, TX 
75202.
Suite 2200, Federal Office Bldg., 911 Walnut Street, Kansas City, MO 
64106.
Suite 878, 201 Varick Street, New York, NY 10014.
Suite 9452, William Green Federal Bldg., 600 Arch Street, Philadelphia, 
PA 19106.
Suite 725, 71 Stevenson Place, San Francisco, CA 94105.
Suite 558, Riddell Bldg., 1730 K Street, NW., Washington, DC 20006.

[[Page 441]]

                         OLMS District Directors

Suite 1310, Federal Bldg., 111 W. Huron Street, Buffalo, NY 14202.
Suite 950, 525 Vine Street, Cincinnati, OH 45202.
Suite 940, 1801 California Street, Denver, CO 80202-2614.
Suite 630, Federal Bldg., & Courthouse, 231 W. Lafayette Street, 
Detroit, MI 48226.
Suite 350, Federal Office Bldg., Carlos Chardon Street, Hato Rey, PR 
00918.
Suite 165, 401 Louisiana Street, Houston, TX 77002.
Suite 708, 3660 Wilshire Boulevard, Los Angeles, CA 90010.
Suite 503, Washington Square Bldg., 111 NW 183rd Street, Miami, FL 
33169.
Suite 118, 517 East Wisconsin Avenue, Milwaukee, WI 53202-4504.
Suite 100, Bridgeplace, 220 South Second Street, Minneapolis, MN 55401.
Suite 238, 233 Cumberland Bend Drive, Nashville, TN 37228.
Metro Star Plaza, 190 Middlesex/Essex Turnpike, Iselin, NJ 08830.
Suite 804, 234 Church Street, New Haven, CT 06510.
Suite 13009, 701 Loyola Avenue, New Orleans, LA 70113.
Suite 801, Federal Office Bldg., 1000 Liberty Avenue, Pittsburgh, PA 
15222.
Suite 9109 E, 1222 Spruce Street, St. Louis, MO 63103.
Suite 880, 111 3rd Avenue, Seattle, WA 98101-3212.
Suite 301, 4905 W. Laurel Street, Tampa, FL 33607.

 Regional Administrator, Occupational Safety and Health Administration 
                                 (OSHA)

                           Area Director, OSHA

Valley Office Park, 13 Branch Street, Methuen, Massachusetts 01844.
639 Granite Street, 4th Floor, Braintree, Massachusetts 02184.
279 Pleasant Street, suite 201, Concord, New Hampshire 03301.
380 Westminister Mall, room 243, Providence, Rhode Island 02903.
1145 Main Street, room 108, Springfield, Massachusetts 01103-1493.
40 Western Avenue, room 121, Augusta, Maine 04330.
Federal Office Building, 450 Main Street, room 508, Hartford, 
Connecticut 06103.
One LaFayette Square, suite 202, Bridgeport, Connecticut 06604.
90 Church Street, room 1407, New York, New York 10007.
990 Westbury Road, Westbury, New York 11590.
42-40 Bell Boulevard, Bayside, New York 11361.
3300 Vikery Road, North New, Syracuse, New York 13212.
5360 Genesee Street, Bowmansville, New York 14026.
U.S. Courthouse & Federal Office Building, Carlos Chardon Avenue, room 
559, Hato Key, Puerto Rico 00918.
401 New Karner Road, suite 300, Albany, New York 12205-3809.
Marlton Executive Park, Building 2, suite 120, 701 Route 73 South, 
Marlton, New Jersey 08053.
299 Cherry Hill Road, suite 304, Parsippany, New Jersey 07054.
500 Route 17 South, 2nd Floor, Hasbrouck Heights, New Jersey 07604.
Plaza 35, suite 205, 1030 St. Georges Avenue, Avenel, New Jersey 07001.
660 White Plains Road, 4th Floor, Tarrytown, New York 10591-5107.
US Custom House, room 242, Second & Chestnut Street, Philadelphia, 
Pennsylvania 19106.
One Rodney Square, suite 402, 920 King Street, Wilmington, Delaware 
19801.
Federal Building, room 1428, 1000 Liberty Avenue, Pittsburgh, 
Pennsylvania 15222.
20 North Pennsylvania Avenue, Penn Place, room 2005, Wilkes-Barre, 
Pennsylvania 18701-3590.
850 North 5th Street, Allentown, Pennsylvania 18102.
550 Eagan Street, room 206, Charleston, West Virginia 25301.
3939 West Ridge Road, suite B12, Erie, Pennsylvania 16506-1857.
Progress Plaza, 49 North Progress Street, Harrisburg, Pennsylvania 
17109.
Federal Building, room 1110, Charles Center, 31 Hopkins Plaza, 
Baltimore, Maryland 21201.
Federal Office Building, 200 Granby Street, room 835, Norfolk, Virginia 
23510-1811.
La Vista Perimeter Office Park, Building 7, suite 110, Tucker, Georgia 
30084.
2400 Herodian Way, suite 250, Smyrna, Georgia 30080.
450 Mall Boulevard, suite J, Savannah, Georgia 31406.
Todd Mall, 2047 Canyon Road, Birmingham, Alabama 35216.
3737 Government Boulevard, suite 100, Mobile, Alabama 36693.
1835 Assembly Street, room 1468, Columbia, South Carolina 29201.
Jacaranda Executive Court, 8040 Peters Road, Building H-100, Fort 
Lauderdale, Florida 33324.
3780 I-55 North, suite 210, Jackson, Mississippi 39211-6323.
3100 University Boulevard South, room 303, Jacksonville, Florida 32216.
John C. Watts Federal Building, 330 West Broadway, room 108, Frankfort, 
Kentucky 40601.
2002 Richard Jones Road, suite C-205, Nashville, Tennessee 37215.
Century Station, 300 Fayetteville Mall, room 438, Raleigh, North 
Carolina 27601.

[[Page 442]]

5807 Breckenridge Parkway, suite A, Tampa, Florida 33610.
1600 167th Street, suite 12, Calumet City, Illinois 60409.
O'Hara Lake Plaza, 2360 East Devon Avenue, suite 1010, Des Plaines, 
Illinois 60018.
344 Smoke Tree Business Park, North Aurora, Illinois 60542.
Federal Office Building, 1240 East 9th Street, room 899, Cleveland, Ohio 
44199.
Federal Office Building, 200 N. High Street, room 620, Columbus, Ohio 
43215.
US P.O. & Courthouse Building, 46 East Ohio Street, room 423, 
Indianapolis, Indiana 46204.
36 Triangle Park Drive, Cincinnati, Ohio 45246.
2618 North Ballard Road, Appleton, Wisconsin 54915.
Henry S. Reuss Building, room 1180, 310 West Wisconsin Avenue, 
Milwaukee, Wisconsin 53203.
110 South 4th Street, room 116, Minneapolis, Minnesota 55401.
234 North Summit Street, room 734, Toledo, Ohio 43604.
801 South Waverly Road, suite 306, Lansing, Michigan 48917-4200.
4802 East Broadway, Madison, Wisconsin 53716.
2918 W. Willow Knolls Road, Peoria, Illinois 61614.
8344 East R.L. Thornton Freeway, suite 420, Dallas, Texas 75228.

611 East 6th Street, Grant Building, room 303, Austin, Texas 78701.
Westbank Building, suite 820, 505 Marquette Avenue, NW., Albuquerque, 
New Mexico 87102.
2156 Wooddale Boulevard, Hoover Annex, suite 200, Baton Rouge, Louisiana 
70806.
Government Plaza, 400 Mann Street, room 300, Corpus Christi, Texas 
78401.
Federal Office Building, 1205 Texas Avenue, room 422, Lubbock, Texas 
79401.
350 North Sam Houston Parkway East, room 120, Houston, Texas 77060.
17625 El Camino Real, suite 400, Houston, Texas 77058.
420 West Main Place, suite 300, Oklahoma City, Oklahoma 73102.
North Starr II, suite 430, 8713 Airport Freeway, Fort Worth, Texas 
76180-7604.
Savers Building, suite 828, 320 West Capitol Avenue, Little Rock, 
Arkansas 72201.
4171 North Mesa Street, room C119, El Paso, Texas 79902.
6200 Connecticut Avenue, suite 100, Kansas City, Missouri 64120.
911 Washington Avenue, room 420, St. Louis, Missouri 63101.
210 Walnut Street, room 815, Des Moines, Iowa 50309.
300 Epic Center, 301 North Main, Wichita, Kansas 67202.
Overland--Wolf Building, room 100, 6910 Pacific Street, Omaha, Nebraska 
68106.
5799 Broadmoor, suite 338, Mission, Kansas 66202.
19 North 25th Street, Billings, Montana 59101.
220 E. Rosser, room 348, P.O. Box 2439, Bismarck, North Dakota 58501.
7935 East Prentice Avenue, suite 209, Englewood, Colorado 80011-2714.
1391 Speer Boulevard, suite 210, Denver, Colorado 80204.
1781 South 300 West, PO Box 65200, Salt Lake City, Utah 84165-0200.
71 Stevenson Street, room 415, San Francisco, California 94105.
300 Ala Moana Boulevard, suite 5122, PO Box 50072, Honolulu, Hawaii 
96850.
3221 North 16th Street, suite 100, Phoenix, Arizona 85016.
1050 East William, suite 435, Carson City, Nevada 89701.
301 West Northern Lights Boulevard, suite 407, Anchorage, Alaska 99503.
3050 North Lakeharbor Lane, suite 134, Boise, Idaho 83703.
121 107th Avenue, Northeast, room 110, Bellevue, Washington 98004.
1220 Southwest Third Avenue, room 640, Portland, Oregon 97204.

 Pension and Welfare Benefits Administration Area Director or District 
                               Supervisor

Area Director, One Bowdoin Square, 7th Floor, Boston, Massachusetts 
02114.
Area Director, 1633 Broadway, rm. 226, New York, NY 10019.
Area Director, 3535 Market Street, room M300, Gateway Building, 
Philadelphia, Pennsylvania 19104.
District Supervisor, 1730 K Street NW., suite 556, Washington, DC 20006.
Area Director, 1371 Peachtree Street NE., room 205, Atlanta, Georgia 
30367.
District Supervisor, 111 NW. 183rd Street, suite 504, Miami, Florida 
33169.
Area Director, 1885 Dixie Highway, suite 210, Ft. Wright, Kentucky 
41011.
District Supervisor, 231 W. Lafayette Street, room 619, Detroit, 
Michigan 48226.
Area Director, 401 South State St., suite 840, Chicago, Illinois 60605.
Area Director, room 1700, 911 Walnut Street, Kansas City, Missouri 
64106.
District Supervisor, 815 Olive Street, room 338, St. Louis, Missouri 
63101.
Area Director, 525 Griffin Street, room 707, Dallas, Texas 75202.
Area Director, 71 Stevenson Street, suite 915, P.O. Box 190250, San 
Francisco, California 94119-0250.
District Director, 1111 Third Avenue, room 860, Seattle, Washington 
98101-3212.
Area Director, 3660 Wilshire Boulevard, room 718, Los Angeles, 
California 90010.
Area Director, suite 514, 790 E. Colorado Blvd., Pasadena, CA 91101.

[[Page 443]]

   Regional Administrators, Veterans' Employment and Training Service 
                                 (VETS)

Region I: One Congress Street, 11th Floor, Boston, Massachusetts 02114.
Region II: 201 Varick Street, room 766, New York, New York 10014.
Region III: U.S. Customs House, room 305, Second and Chestnut Streets, 
Philadelphia, Pennsylvania 19106.
Region IV: 1371 Peachtree Street, NE., room 326, Atlanta, Georgia 30367.
Region V: 230 South Dearborn, room 1064, Chicago, Illinois 60604.
Region VI: 525 Griffin Street, room 205, Dallas, Texas 75202.
Region VII: Federal Building, room 803, 911 Walnut Street, Kansas City, 
Missouri 64106.
Region VIII: 1801 California Street, suite 910, Denver, Colorado 80202-
2614.
Region IX: 71 Stevenson Street, suite 705, San Francisco, California 
94105.
Region X: 1111 Third Avenue, suite 800, Seattle, Washington 98101-3212.

[54 FR 23144, May 30, 1989, as amended at 59 FR 29900, June 9, 1994]
       Appendix B to Part 70--Freedom of Information/Privacy Act 
                             Coordinators

----------------------------------------------------------------------------------------------------------------
                 Agency                            Person                      Address            Telephone \1\
----------------------------------------------------------------------------------------------------------------
Office of the Secretary (O/SECY).......  Tena Lumpkins.............  Rm. N-1301, FPB...........         219-5095
Office of the Assistant Secretary for    Tena Lumpkins.............  Rm. N-1301, FPB...........         219-5095
 Admin. and Management (OASAM).
Office of the Admin. Law Judges (OALJ).  Mary Grace Dorsey.........  Suite 400-N, 800 K St., NW         633-0355
                                                                      WDC.
Benefits Review Board (BRB)............  Sharon Ratliff............  Suite 500-N, 800 K St., NW         633-7503
                                                                      WDC.
Office of the American Workplace, Ofc    Kelly Andrews.............  RM. N-5411, FPB...........         219-4473
 of Statutory Programs (OAW/OSP).
Bureau of Labor Statistics (BLS).......  K. Kurz or D. Solis.......  Rm. 3255, PSB.............         606-7628
Employees Compensation Appeals Board     Mary Ellen McKenna........  Rm. 300, Reporters Bldg...         401-8600
 (ECAB).
Employment Standards Admin. (ESA)......  Dorothy Chester...........  Rm. S-3013C, FPB..........         219-8447
Employment and Training Admin. (ETA)...  Patsy Files...............  Rm. N-4671, FPB...........         219-6695
Ofc of the Inspector General (OIG).....  Pamela Davis..............  Rm. S-5506, FPB...........         219-6747
Deputy Under Secretary for               Patricia Clark............  Rm. S-5303, FPB...........         219-6136
 International Labor Affairs (ILAB).
Office of Labor-Management Standards     James Santelli............  Rm. N-5613, FPB...........         219-7373
 (OLMS).
Mine Safety and Health Admin. (MSHA)...  Tom Brown.................  Rm. 605, BT#3 Arlington,     (703) 235-1452
                                                                      VA.
Occupational Safety and Health Admin.    James Foster..............  Rm. N-3647, FPB...........         219-8148
 (OSHA).
Pension and Welfare Benefits Admin.      June Patron...............  Rm. N-5625, FPB...........         219-6999
 (PWBA).
President's Committee on the Employment  Gregory Best..............  Suite 300, 1331 F St., NW          376-6200
 of Persons with Disabilities (PCEPD).                                WDC.
Office of the Solicitor (OSOL).........  Elizabeth Newton..........  Rm. N-2414, FPB...........         219-6884
Veterans' Employment and Training        Bernard Wroble............  Rm. S-1310, FPB...........        219-6350
 Service (VETS).
----------------------------------------------------------------------------------------------------------------
\1\ All numbers are within area code (202) except MSHA.

                           Building Addresses

    a. Frances Perkins Building, 200 Constitution Avenue, NW., 
Washington, DC 20210.
    b. Postal Square Building, 2 Massachusetts Avenue, NE., Washington, 
DC 20212-0001.
    c. Ballston Towers No. 3, 4015 Wilson Boulevard, Arlington, VA 
22203.
    d. Reporters' Building, 300 7th Street, SW., Washington, DC 20024.
    e. Tech World, 800 K Street, NW., Washington, DC 20001-8002.

[59 FR 29904, June 9, 1994]



PART 71--PROTECTION OF INDIVIDUAL PRIVACY AND ACCESS TO RECORDS UNDER THE PRIVACY ACT OF 1974--Table of Contents




                           Subpart A--General

Sec.
71.1  General provisions.
71.2  Request for access to records.
71.3  Responses by components to requests for access to records.
71.4  Form and content of component responses.
71.5  Access to records.
71.6  Fees for access to records.

[[Page 444]]

71.7  Appeals from denials of access.
71.8  Preservation of records.
71.9  Request for correction or amendment of records.
71.10  Certain records not subject to correction.
71.11  Emergency disclosures.
71.12  Use and collection of social security numbers.
71.13  Employee standards of conduct.
71.14  Use of nonpublic information.
71.15  Training.

      Subpart B--Exemption of Records Systems Under the Privacy Act

71.50  General exemptions pursuant to subsection (j) of the Privacy Act.
71.51  Specific exemptions pursuant to subsection (k)(2) of the Privacy 
          Act.
71.52  Specific exemptions pursuant to subsection (k)(5) of the Privacy 
          Act.

Appendix A to Part 71--Responsible Officials

    Authority: 5 U.S.C. 301; 5 U.S.C. 552a as amended; Reorganization 
Plan No. 6 of 1950, 5 U.S.C. Appendix.

    Source: 63 FR 56741, Oct. 22, 1998, unless otherwise noted.



                           Subpart A--General



Sec. 71.1  General provisions.

    (a) Purpose and scope. This part contains the regulations of the 
U.S. Department of Labor implementing the Privacy Act of 1974, 5 U.S.C. 
552a. The regulations apply to all records which are contained in 
systems of records maintained by, or under the control of, the 
Department of Labor and which are retrieved by an individual's name or 
personal identifier. These regulations set forth the procedures by which 
an individual may seek access under the Privacy Act to records 
pertaining to him, may request correction or amendment of such records, 
or may seek an accounting of disclosures of such records by the 
Department. These regulations are applicable to each component of the 
Department.
    (b) Government-wide systems of records. (1) DOL/GOVT-1 (Office of 
Workers' Compensation Programs, Federal Employees' Compensation Act 
File):
    (i) All records, including claim forms, medical, investigative and 
other reports, statements of witnesses, and other papers relating to 
claims for compensation filed under the Federal Employees' Compensation 
Act (as amended and extended), are covered by the government-wide system 
of records entitled DOL/GOVT-1. This system is maintained by and under 
the control of the Employment Standards Administration's Office of 
Workers' Compensation Programs (OWCP), and, as such, all records 
contained in the OWCP claims file, as well as all copies of such 
documents retained and/or maintained by the injured worker's employing 
agency, are official records of the OWCP.
    (ii) The protection, release, inspection and copying of records 
covered by DOL/GOVT-1 shall be accomplished in accordance with the 
rules, guidelines and provisions of this part, as well as with part 70 
of this subtitle, and with the notice of the systems of records and 
routine uses published in the Federal Register. All questions relating 
to access/disclosure, and/or the amendment of FECA records maintained by 
the OWCP or an employing agency, are to be resolved in accordance with 
this part.
    (iii)(A) While an employing agency may establish procedures that an 
injured employee or beneficiary should follow in requesting access to 
documents it maintains, any decision issued in response to such a 
request must comply with the rules and regulations of the Department of 
Labor.
    (B) Any administrative appeal taken from a denial issued by the 
employing agency shall be filed with the Solicitor of Labor in 
accordance with Secs. 71.7 and 71.9 of this part.
    (iv) No agency other than the OWCP has authority to issue 
determinations in response to requests for the correction or amendment 
of records contained in or covered by DOL/GOVT-1. Any request for 
correction or amendment received by an employing agency must be referred 
to the OWCP for review and decision.
    (2) For the government-wide system of records entitled DOL/GOVT-2 
(Job Corps Student Records), a system maintained by and under the 
control of the Employment and Training Administration, the regulations 
of this Department shall govern, including the procedure for requesting 
access to, or

[[Page 445]]

amendment of the records, as well as appeals therefrom, shall govern.
    (c) Definitions. As used in this subpart, the following terms shall 
have the following meanings:
    (1) Agency has the meaning set forth in 5 U.S.C. 552(f).
    (2) Component means each separate agency, bureau, office, board, 
division, commission, service, or administration of the Department of 
Labor, as well as each agency which possesses records covered by a DOL 
government-wide system of records.
    (3) Individual Data Subject means the individual by whose name or 
identifier the subject record is retrieved.
    (4) Record means any item, collection, or grouping of information 
about an individual which is maintained by any component within a system 
of records and which contains the individual's name, identifying number, 
symbol, or other identifying particular assigned to the individual, such 
as a fingerprint, voiceprint, or photograph.
    (5) Requester means an individual who makes either a request for 
access, a request for correction or amendment, or a request for an 
accounting.
    (6) Routine use has the meaning set forth in 5 U.S.C. 552a(7).
    (7) Statistical record has the meaning set forth in 5 U.S.C. 
552a(6).
    (8) System of records means a group of any records under the control 
of the Department or any component from which information is retrieved 
by the name of an individual or by some identifying number, symbol, or 
other identifying particular assigned to that individual.
    (9) Under the control of means those official records for which the 
agency is officially responsible and either has in its possession or 
exercises dominion over. This excludes those records which, although in 
the physical possession of agency employees and used by them in 
performing official functions, are not, in fact, agency records. 
Uncirculated personal notes, papers and records which are retained or 
discarded at the author's discretion and over which the agency exercises 
no dominion or control (e.g., personal telephone list) are not agency 
records for purposes of this part.
    (10) He, his, and him include ``she'', ``hers'' and ``her''.



Sec. 71.2  Requests for access to records.

    (a) Procedure for making requests for access to records. An 
individual, or legal representative acting on his behalf, may request 
access to a record about himself by appearing in person or by writing to 
the component that maintains the record. (See appendix A to this part 
which lists the components of the Department of Labor and their 
addresses.) A requester in need of guidance in defining his request may 
write to the Assistant Secretary for Administration and Management, U.S. 
Department of Labor, 200 Constitution Avenue, NW, Washington, DC 20210-
0002. A request should be addressed to the component that maintains the 
requested record. Both the envelope and the request itself should be 
marked: ``Privacy Act Request.''
    (b) Description of records sought. A request for access to records 
must describe the records sought in sufficient detail to enable 
Department personnel to locate the system of records containing the 
record with a reasonable amount of effort. Whenever possible, a request 
for access should describe the nature of the record sought, the date of 
the record or the period in which the record was compiled, and the name 
or identifying number of the system of records in which the requester 
believes the record is kept.
    (c) Agreement to pay fees. The filing of a request for access to a 
record under this subpart shall be deemed to constitute an agreement to 
pay all applicable fees charged under Sec. 71.6 up to $25.00. The 
component responsible for responding to the request shall confirm this 
agreement in its letter of acknowledgment to the requester. When filing 
a request, a requester may specify a willingness to pay a greater 
amount, if applicable.
    (d) Verification of identity. Any individual who submits a request 
for access to records must verify his identity in one of the following 
ways:
    (1) Any requester making a request in writing must state in his 
request his full name, and current address. In addition, a requester 
must provide with his request an example of his signature,

[[Page 446]]

which shall be notarized, or signed as an unsworn declaration under 
penalty of perjury, pursuant to 28 U.S.C. 1746. In order to facilitate 
the identification of the requested records, a requester may also 
include in his request his Social Security number.
    (2) Any requester submitting a request in person may provide to the 
component a form of official photographic identification, such as a 
passport, an identification badge or a driver's license which contains 
the photograph of the requester. If a requester is unable to produce a 
form of photographic identification, he may provide to the component two 
or more acceptable forms of identification bearing his name and address. 
In all cases, sufficient identification must be presented to confirm 
that the requester is the individual data subject.
    (e) Verification of guardianship. The parent, guardian, or 
representative of a minor or the guardian or representative of a person 
judicially determined to be incompetent who submits a request for access 
to the records of the minor or incompetent must establish:
    (1) His identity, as required in paragraph (d) of this section,
    (2) That the requester is the parent, guardian, or representative of 
the subject of the record, which may be proved by providing a copy of 
the subject's birth certificate showing parentage or by providing a 
court order establishing the guardianship, and
    (3) That he seeks to act on behalf of the subject of the record.
    (f) The disclosure officer may waive the requirements set forth in 
paragraphs (d) and (e) of this section when he deems such action to be 
appropriate, and may substitute in lieu thereof, other reasonable means 
of identification.



Sec. 71.3  Responses by components to requests for access to records.

    (a) In general. Except as otherwise provided in this section, the 
component that:
    (1) First receives a request for access to a record, and
    (2) Has possession of the requested record is the component 
ordinarily responsible for responding to the request.
    (b) Authority to grant or deny requests. The head of a component, or 
his designee (i.e. disclosure officer), is authorized to make an initial 
grant or denial of any request for access to a record in the possession 
of that component.
    (c) Processing of requests for access not properly addressed. A 
request for access that is not properly addressed as specified in 
Sec. 71.2 shall be forwarded to the Assistant Secretary for 
Administration and Management, who shall forward the request to the 
appropriate component or components for processing. A request not 
addressed to the appropriate component will be deemed not to have been 
received by the Department until the Assistant Secretary for 
Administration and Management has forwarded the request to the 
appropriate component which has the record and that component has 
received the request. When the component receives an improperly 
addressed request, it shall notify the requester of the date on which it 
received the request. Accordingly, a request for access shall be deemed 
received on the date that it is received in the appropriate component.
    (d) Date for determining responsive records. In determining the 
extent to which records are responsive to a request for access, a 
component ordinarily will include only those records within the 
component's possession and control as of the date of its receipt of the 
request.
    (e) First party requests. A request for access by the individual 
data subject for his or her own records shall be processed both under 
the Freedom of Information Act (FOIA) and the Privacy Act (PA).



Sec. 71.4  Form and content of component responses.

    (a) Form of notice granting request for access. A request by the 
individual data subject for access to his or her own records shall not 
be denied unless both a Privacy Act exemption and a Freedom of 
Information Act exemption apply to the requested records. A component 
shall make a determination within 30 days to grant or deny a request for 
access in whole or in part. If the request is granted in whole, the

[[Page 447]]

component shall so notify the requester in writing. The notice shall 
describe the manner in which access to the record will be granted and 
shall inform the requester of any fees to be charged in accordance with 
Sec. 71.6.
    (b) Form of notice denying request for access. A component denying a 
request for access in whole or in part shall so notify the requester in 
writing. The notice, signed by the responsible agency official, shall 
include:
    (1) The name and title or position of the person responsible for the 
denial;
    (2) A brief statement of the reason or reasons for the denial, 
including the Privacy Act and FOIA exemption or exemptions which the 
component has relied upon in denying the request; and
    (3) A statement that the denial may be appealed under Sec. 71.7(a), 
and a description of the requirements of that paragraph.
    (c) Record cannot be located. If no records are found which are 
responsive to the request, the component shall so notify the requester 
in writing. Such notification by the component shall inform the 
requester that, if the requester considers this response to be a denial 
of their request, the requester has a right to appeal to the Solicitor 
of Labor, within ninety days, as set forth in Sec. 71.7.
    (d) Medical records. When an individual requests medical records 
concerning himself, which are not otherwise exempt from disclosure, the 
disclosure officer shall, if deemed necessary because of possible harm 
to the individual, advise the individual that the Department of Labor 
believes that the records should be provided to a physician designated 
in writing by the individual. In addition, the Department shall request 
the individual to designate such a physician. Upon receipt of the 
designation, the disclosure officer will permit the physician to review 
the records or to receive copies of the records by mail, upon proper 
verification of identity.



Sec. 71.5  Access to records.

    (a) Manner of access. A component that has made a determination to 
grant a request for access shall grant the requester access to the 
requested record either by providing the requester with a copy of the 
record, or making the record available for inspection by the requester 
at a reasonable time and place. The component shall charge the requester 
only duplication costs in accordance with the provisions of Sec. 71.6. 
If a component provides access to a record by making the record 
available for inspection by the requester, the manner of such inspection 
shall not unreasonably disrupt the operations of the component.
    (b) Accompanying person. A requester appearing in person to review 
his own records may be accompanied by another individual of his own 
choosing. The requester shall provide the Department with his or her 
written consent to disclose the record to the accompanying person.



Sec. 71.6  Fees for access to records.

    (a) When charged. A component shall charge fees pursuant to 31 
U.S.C. 9701 and 5 U.S.C. 552a(f)(5) for the copying of records unless 
the component, in its discretion, waives or reduces the fees for good 
cause shown. A component shall charge fees at the rate of $0.15 per 
page. In accordance with the provisions of the Freedom of Information 
Act, the first 100 pages of copying shall be furnished without charge. 
For materials other than paper copies, the component may charge the 
direct costs of reproduction, but only if the requester has been 
notified of such costs before they are incurred. Fees shall not be 
charged where they would amount, in the aggregate, for one request or 
for a series of related requests, to less than $15.00. Notwithstanding 
any other provision of this paragraph, the first copy of an individual's 
Privacy Act record shall be provided to the individual at no cost.
    (b) Notice of estimated fees amounting to between $25 to $250. When 
a component determines or estimates that the fees to be charged under 
this section may amount to between $25 to $250, the component shall 
notify the requester as soon as practicable of the actual or estimated 
amount of the fee, unless the requester has indicated in advance his 
willingness to pay a fee as high as that anticipated.
    (c) Notice of estimated fees in excess of $250. When a component 
determines or estimates that the fees to be charged

[[Page 448]]

under this section may amount to more than $250, the component shall 
notify the requester as soon as practicable of the actual or estimated 
amount of the fee, unless the requester has indicated in advance his 
willingness to pay a fee as high as that estimated. If the fee is 
estimated to be in excess of $250, then the agency may require payment 
in advance. (If only a portion of the fee can be estimated readily, the 
component shall advise the requester that the estimated fee may be only 
a portion of the total fee.) Where the estimated fee exceeds $250 and a 
component has so notified the requester, the component will be deemed 
not to have received the request for access to records until the 
requester has paid the anticipated fee, in full or in part. A notice to 
a requester pursuant to this paragraph shall offer him the opportunity 
to confer with Department personnel with the object of reformulating his 
request to meet his needs at a lower cost.
    (d) Form of payment. Requesters must pay fees by cash, check or 
money order payable to either the Treasury of the United States, or the 
U.S. Department of Labor. However, the Department shall not require 
advance payment in any case where the fee is under $250, except that 
where a requester has previously failed to pay a fee charged under this 
part, the requester must pay the component or the Department the full 
amount owed and make an advance deposit of the full amount of any 
estimated fee before a component shall be required to process a new or 
pending request for access from that requester.



Sec. 71.7  Appeals from denials of access.

    (a) Appeals to the Solicitor of Labor. When a component denies in 
whole or in part a request for access to records, the requester may 
appeal the denial to the Solicitor of Labor within 90 days of his 
receipt of the notice denying his request. An appeal to the Solicitor of 
Labor shall be made in writing, addressed to the Solicitor of Labor, 
U.S. Department of Labor, 200 Constitution Avenue, NW, Washington, DC. 
20210-0002. Both the envelope and the letter of appeal itself must be 
clearly marked: ``Privacy Act Appeal.'' An appeal not so addressed and 
marked shall be forwarded to the Office of the Solicitor as soon as it 
is identified as an appeal under the Privacy Act. An appeal that is 
improperly addressed shall be deemed not to have been received by the 
Department until the Office of the Solicitor receives the appeal.
    (b) Form of action on appeal. The disposition of an appeal shall be 
in writing. A written decision affirming in whole or in part the denial 
of a request for access shall include a brief statement of the reason or 
reasons for the affirmation, including each Privacy Act and FOIA 
exemption relied upon and its relation to each record withheld, and a 
statement that judicial review of the denial is available in the U.S. 
District Court for the judicial district in which the requester resides 
or has his principal place of business, the judicial district in which 
the requested records are located, or the District of Columbia. If the 
denial of a request for access is reversed on appeal, the requester 
shall be so notified and the request shall be processed promptly in 
accordance with the decision on appeal.
    (c) Delegation of Authority by the Solicitor of Labor. The Solicitor 
of Labor is authorized to delegate his authority to decide appeals from 
any and all denials of access to other senior attorneys within the 
Office of the Solicitor.



Sec. 71.8  Preservation of records.

    Each component shall preserve all correspondence relating to the 
requests it receives under this subpart, and all records processed 
pursuant to such requests, until such time as the destruction of such 
correspondence and records is authorized pursuant to title 44 of the 
U.S. Code and record schedules approved by the National Archives and 
Records Administration, and otherwise in accordance with retention 
requirements as published in the agency's system of records. Under no 
circumstances shall records be destroyed while they are the subject of a 
pending request for access, appeal, or lawsuit under the Act.



Sec. 71.9  Request for correction or amendment of records.

    (a) How made. An individual may submit a request for correction or 
amendment of a record pertaining to him.

[[Page 449]]

The request must be in writing and must be addressed to the component 
that maintains the record. (Appendix A of this part lists the components 
of the Department and their addresses.) The request must identify the 
particular record in question, state the correction or amendment sought, 
and set forth the justification for the change. Both the envelope and 
the request itself must be clearly marked: ``Privacy Act Amendment 
Request.''
    (b) Initial determination. Within 30 working days of receiving a 
request for correction or amendment, a component shall notify the 
requester whether his request will be granted or denied, in whole or in 
part. If the component grants the request in whole or in part, it shall 
send the requester a copy of the amended record, in releasable form, as 
proof of the change. If the component denies the request in whole or in 
part, it shall notify the requester in writing of the denial. The notice 
of denial shall state the reason or reasons for the denial and advise 
the requester of his right to appeal.
    (c) Appeals. When a request for correction or amendment is denied in 
whole or in part, the requester may appeal the denial to the Solicitor 
of Labor within 90 days of his receipt of the notice denying his 
request. An appeal to the Solicitor of Labor shall be made in writing, 
shall set forth the specific item of information sought to be corrected 
or amended, and shall include any documentation said to justify the 
change. An appeal shall be addressed to the Solicitor of Labor, U.S. 
Department of Labor, 200 Constitution Avenue, NW, Washington, DC 20210-
0002. Both the envelope and the letter of appeal itself must be clearly 
marked: ``Privacy Act Amendment Appeal.''
    (d) Determination on appeal. The Solicitor of Labor shall decide all 
appeals from denials of requests to correct or amend records. All such 
appeals shall be decided within 30 working days of receipt of the 
appeal, unless there is good cause shown to extend this period. The 
appellant shall be notified if the period for decision has been 
extended.
    (1) If the denial of a request is affirmed on appeal, the requester 
shall be so notified in writing and advised of:
    (i) The reason or reasons the denial has been affirmed,
    (ii) The requester's right to file a Statement of Disagreement, as 
provided in paragraph (f) of this section, and
    (iii) The requester's right to obtain judicial review of the denial 
in the U.S. District Court for the judicial district in which the 
requester resides or has its principal place of business, the judicial 
district in which the record is located, or the District of Columbia.
    (2) If the denial is reversed on appeal, the requester shall be so 
notified and the request for correction or amendment shall be promptly 
remanded to the component that denied the request for processing in 
accordance with the decision on appeal.
    (e) Delegation of Authority by the Solicitor of Labor. The Solicitor 
of Labor is authorized to delegate his or her authority to decide any 
and all appeals from denials of requests to correct or amend records to 
other senior attorneys within the Office of the Solicitor.
    (f) Statements of disagreement. A requester whose request or appeal 
under this section has been denied shall have the right to file a 
Statement of Disagreement with the Solicitor of Labor, U.S. Department 
of Labor, 200 Constitution Avenue, NW, Washington, DC 20210-0002, within 
30 days of receiving notice of denial. Statements of Disagreement may 
not exceed one typed page per fact disputed. Statements exceeding this 
limit shall be returned to the requester for condensation. Upon receipt 
of a Statement of Disagreement under this section, the agency shall 
promptly have the statement included in the record and shall have the 
disputed record marked so as to indicate that a Statement of 
Disagreement has been filed.
    (g) Notices of correction or amendment or disagreement. Within 30 
working days of the correction or amendment of a record, the component 
that maintains the record shall advise all components or agencies to 
which it previously disclosed the record that the record has been 
amended. Whenever an individual has filed a Statement of Disagreement, a 
component shall append a copy of the Statement to the disputed record 
whenever the record is disclosed. The

[[Page 450]]

component may also append to the disputed record a written statement 
giving the component's reasons for denying the request to correct or 
amend the record.



Sec. 71.10  Certain records not subject to correction.

    Certain records are not subject to correction or amendment. These 
include, but are not limited to:
    (a) Transcripts of testimony given under oath or written statements 
made under oath;
    (b) Transcripts or decisions of grand jury, administrative, 
judicial, or quasi-judicial proceedings which constitute the official 
record of such proceedings;
    (c) Records duly exempted from correction pursuant to 5 U.S.C. 
552a(j) or 552a(k) by rulemaking promulgated under the Administrative 
Procedure Act (5 U.S.C. 551 et seq.)



Sec. 71.11  Emergency disclosures.

    If the record of an individual has been disclosed to any person 
under compelling circumstances affecting the health or safety of any 
person, as described in 5 U.S.C. 552a(b)(8), the individual to whom the 
record pertains shall be notified of the disclosure at his last known 
address within 10 working days. The notice of such disclosure shall be 
in writing and shall state the nature of the information disclosed, the 
person or agency to whom it was disclosed, the date of disclosure, and 
the compelling circumstances justifying the disclosure. The officer who 
made or authorized the disclosure shall be responsible for providing 
such notification.



Sec. 71.12  Use and collection of social security numbers.

    (a) Each component unit that requests an individual to disclose his 
social security account number shall provide the individual, in writing, 
with the following information:
    (1) The statute, regulation, Executive Order or other authority 
under which the number is solicited;
    (2) Whether the disclosure is mandatory or voluntary; and
    (3) The consequences, if any, to the individual should he or she 
refuse or fail to disclose the number.
    (b) Neither the Department nor any of its component units shall, in 
the absence of specific federal statutory authority, deny to an 
individual any right, benefit or privilege provided by law solely 
because of such individual's refusal to disclose his social security 
account number.
    (c) The head of each component unit shall ensure that employees 
authorized to collect social security account numbers or tax identifying 
numbers, are aware of the statutory or other basis for collecting such 
information, of the uses to which such numbers may be put, and of the 
consequences, if any, that might follow if a person refuses to disclose 
the requested number.



Sec. 71.13  Employee standards of conduct.

    (a) Each component shall inform its employees of the provisions of 
the Privacy Act, including the Act's civil liability and criminal 
penalty provisions. Each component also shall notify its employees that 
they have a duty to:
    (1) Protect the security of records,
    (2) Ensure the accuracy, relevance, timeliness, and completeness of 
records,
    (3) Avoid the unauthorized disclosure, either verbal or written, of 
records, and
    (4) Ensure that the component maintains no system of records without 
public notice.
    (b) Except to the extent that the Privacy Act permits such 
activities, an employee of the Department of Labor shall:
    (1) Not collect information of a personal nature from individuals 
unless the employee is authorized to collect such information to perform 
a function or discharge a responsibility of the Department;
    (2) Collect from individuals only that information which is 
necessary to the performance of the functions or to the discharge of the 
responsibilities of the Department;
    (3) Collect information about an individual directly from that 
individual, whenever practicable;
    (4) Inform each individual from whom information is collected of:

[[Page 451]]

    (i) The legal authority that authorizes the Department to collect 
such information,
    (ii) The principal purposes for which the Department intends to use 
the information,
    (iii) The routine uses the Department may make of the information, 
and
    (iv) The practical and legal effects upon the individual of not 
furnishing the information;
    (5) Maintain all records which are used by the agency in making any 
determination about any individual with such accuracy, relevance, 
timeliness, and completeness as to ensure fairness to the individual in 
the determination;
    (6) Maintain no record describing how any individual exercises 
rights guaranteed by the First Amendment to the United States 
Constitution, unless:
    (i) The individual has volunteered such information for his own 
benefit,
    (ii) A statute expressly authorizes the Department to collect, 
maintain, use, or disseminate the information, or
    (iii) The individual's beliefs, activities, or membership are 
pertinent to and within the scope of an authorized law enforcement 
activity;
    (7) Notify the head of the component of the existence or development 
of any system of records that has not been disclosed to the public;
    (8) Disclose no record to anyone, for any use, unless authorized by 
the Act;
    (9) Maintain and use records with care to prevent the inadvertent 
disclosure of a record to anyone; and
    (10) Notify the head of the component of any record that contains 
information that the Act or the foregoing provisions of this paragraph 
do not permit the Department to maintain.



Sec. 71.14  Use of nonpublic information.

    (a) Prohibition. (1) An employee shall not engage in a financial 
transaction using nonpublic information, nor allow the improper use of 
nonpublic information to further his own private interest or that of 
another, whether through advice or recommendations, or by knowing 
unauthorized disclosure. See 5 CFR 2635.703.
    (2) Nonpublic information is information that an employee gains by 
reason of Federal employment that he knows or reasonably should know has 
not been made available to the general public. Nonpublic information 
includes information contained in a Privacy Act system of records which 
an individual knew or should have known:
    (i) Is normally exempt from disclosure under Exemptions 6 or 7(C) of 
the Freedom of Information Act, or is otherwise protected from 
disclosure by statute, Executive Order or regulation;
    (ii) Has not actually been disseminated to the general public and is 
not authorized to be made available to the public upon request.
    (b) Sanctions. Any DOL employee who willfully discloses any 
information or records from any file that contains individually-
identifiable information to any person or agency not entitled to receive 
it, and the disclosure of which is prohibited by the Privacy Act or by 
rules or regulations established thereunder, and who, knowing the 
disclosure of the specific material is so prohibited, will be subject to 
disciplinary action, as appropriate.
    (c) Public Disclosures by Third Parties of DOL Privacy Act Records. 
When Labor Department records subject to the Privacy Act are disclosed 
to third parties, and as a condition of the disclosure of such records, 
the person or entity to whom the records are furnished is expressly 
prohibited from further disseminating the information, any further 
dissemination of the information so furnished to such person or entity 
may be subject to the penalties set forth in 18 U.S.C. 641.



Sec. 71.15  Training.

    All DOL systems managers, disclosure officers, and employees with 
responsibilities under the Privacy Act shall periodically attend 
training offered by the Department on the Privacy Act.



      Subpart B--Exemption of Records Systems Under the Privacy Act



Sec. 71.50  General exemptions pursuant to subsection (j) of the Privacy Act.

    (a) The following systems of records are eligible for exemption 
under 5 U.S.C. 552a(j)(2) because they are maintained by a component of 
the agency or subcomponent which performs as its principal function the 
enforcement of

[[Page 452]]

criminal laws, and they contain investigatory material compiled for 
criminal law enforcement purposes. Accordingly, these systems of records 
are exempt from the following subsections of 552a of title 5 U.S. Code: 
(c)(3) and (4), (d), (e)(1), (2), and (3), (e)(4)(G), (H), and (I), 
(e)(5) and (8), (f) and (g).
    (1) DOL/ESA-45 ( Investigative Files of the Office of Labor-
Management Standards), a system of records maintained by the Office of 
Labor-Management Standards.
    (2) DOL/OIG-1 (General Investigative Files, and Subject Title Index, 
USDOL/OIG), a system of records maintained by the Office of the 
Inspector General (OIG).
    (3) DOL/OIG-2 (Freedom of Information/Privacy Acts Records), a 
system of records maintained by the OIG.
    (4) DOL/OIG-3 (Case Development Records), a system of records 
maintained by the OIG.
    (5) DOL/OIG-5 (Investigative Case Tracking Systems/Audit Information 
Reporting Systems, USDOL/OIG), a system of records maintained by the 
OIG.
    (6) DOL/MSHA-20 (Civil/Criminal Investigations), a system of records 
maintained by the Mine Safety and Health Administration.
    (7) DOL/PWBA-2 (Office of Enforcement Index Cards and Investigation 
Files), a system of records maintained by the Pension and Welfare 
Benefits Administration.
    (b) This exemption applies to the extent that information in these 
systems of records is subject to exemption pursuant to 5 U.S.C. 
552a(j)(2).
    (c) These systems are exempted for the reasons set forth in 
paragraphs (c)(1) through (12) of this section, from the following 
subsections of 5 U.S.C. 552a:
    (1) Subsection (c)(3). The release of the disclosure accounting 
would present a serious impediment to law enforcement by permitting the 
subject of an investigation of an actual or potential criminal violation 
to determine whether he is the subject of investigation, or to obtain 
valuable information concerning the nature of that investigation and the 
information obtained, or to identify witnesses and informants.
    (2) Subsection (c)(4). Since an exemption is being claimed for 
subsection (d) f the Act (Access to Records), this subsection is 
inapplicable to the extent that these systems of records are exempted 
from subsection (d).
    (3) Subsection (d). Access to records contained in these systems 
would inform the subject of an actual or potential criminal 
investigation of the existence of that investigation, of the nature and 
scope of the investigation, of the information and evidence obtained as 
to his or her activities, and of the identity of witnesses or 
informants. Such access would, accordingly, provide information that 
could enable the subject to avoid detection, apprehension, and 
prosecution. This result, therefore, would constitute a serious 
impediment to effective law enforcement not only because it would 
prevent the successful completion of the investigation but also because 
it could endanger the physical safety of witnesses or informants, lead 
to the improper influencing of witnesses, the destruction of evidence, 
or the fabrication of testimony. Amendment of the records would 
interfere with ongoing criminal law enforcement proceedings and imposes 
an impossible administrative burden by requiring criminal investigations 
to be continuously reinvestigated.
    (4) Subsection (e)(1). In the course of criminal and related law 
enforcement investigations, cases, and matters, the agency will 
occasionally obtain information concerning actual or potential 
violations of law that may not be technically within its statutory or 
other authority, or it may compile information in the course of an 
investigation which may not be relevant to a specific prosecution. In 
the interests of effective law enforcement, it is necessary to retain 
some or all of such information since it can aid in establishing 
patterns of criminal activity and can provide valuable leads for Federal 
and other law enforcement agencies. Moreover, it is difficult to know 
during the course of an investigation what is relevant and necessary. In 
this connection, facts or evidence may not seem relevant at first, but 
later in the investigation, their relevance is borne out.

[[Page 453]]

    (5) Subsection (e)(2). To collect information to the greatest extent 
practicable from the subject individual of a criminal investigation or 
prosecution would present a serious impediment to law enforcement 
because the subject of the investigation or prosecution would be placed 
on notice as to the existence of the investigation and would therefore 
be able to avoid detection or apprehension, improperly influence 
witnesses, destroy evidence, or fabricate testimony.
    (6) Subsection (e)(3). To provide individuals supplying information 
with a form which includes the information required by subsection (e)(3) 
would constitute a serious impediment to law enforcement, i.e., it could 
compromise the existence of a confidential investigation or reveal the 
identity of witnesses or confidential informants.
    (7) Subsections (e)(4)(G) and (H). These subsections are 
inapplicable to the extent that these systems are exempt from the access 
provisions of subsection (d) and the rules provisions of subsection (f).
    (8) Subsection (e)(4)(I). The categories of sources of the records 
in these systems have been published in the Federal Register in broad 
generic terms in the belief that this is all that subsection (e)(4)(I) 
of the Act requires. In the event, however, that this subsection should 
be interpreted to require more detail as to the identity of sources of 
the records in this system, exemption from this provision is necessary 
to protect the confidentiality of the sources of criminal and related 
law enforcement information. Such exemption is further necessary to 
protect the privacy and physical safety of witnesses and informants.
    (9) Subsection (e)(5). In the collection of information for criminal 
enforcement purposes it is impossible to determine in advance what 
information is accurate, relevant, timely, and complete. With the 
passage of time, seemingly irrelevant or untimely information may 
acquire new significance as further investigation brings new details to 
light. Furthermore, the accuracy of such information can often only be 
determined in a court of law. The restrictions of subsection (e)(5) 
would inhibit the ability of government attorneys in exercising their 
judgment in reporting on information and investigations and impede the 
development of criminal information and related data necessary for 
effective law enforcement.
    (10) Subsection (e)(8). The individual notice requirements of 
subsection (e)(8) could present a serious impediment to law enforcement 
as this could interfere with the ability to issue warrants or subpoenas 
and could reveal investigative techniques, procedures, or evidence.
    (11) Subsection (f). Procedures for notice to an individual pursuant 
to subsection (f)(1) as to existence of records pertaining to the 
individual dealing with an actual or potential criminal, civil, or 
regulatory investigation or prosecution must be exempted because such 
notice to an individual would be detrimental to the successful conduct 
and/or completion of an investigation or case, pending or future. In 
addition, mere notice of the fact of an investigation could inform the 
subject or others that their activities are under investigation or may 
become the subject of an investigation and could enable the subjects to 
avoid detection, to influence witnesses improperly, to destroy evidence, 
or to fabricate testimony. Since an exemption is being claimed for 
subsection (d) of the Act (Access to Records) the rules required 
pursuant to subsections (f)(2) through (5) are inapplicable to these 
systems of records to the extent that these systems of records are 
exempted from subsection (d).
    (12) Subsection (g). Since an exemption is being claimed for 
subsections (d) (Access to Records) and (f) (Agency Rules) this section 
is inapplicable, and is exempted for the reasons set forth for those 
subsections, to the extent that these systems of records are exempted 
from subsections (d) and (f).



Sec. 71.51  Specific exemptions pursuant to subsection (k)(2) of the Privacy Act.

    (a) The following systems of records are eligible for exemption 
under 5 U.S.C. 552a(k)(2) because they contain investigatory material 
compiled for law enforcement purposes other than material within the 
scope of subsection

[[Page 454]]

(j)(2) of 5 U.S.C. 552a. Provided however, that if any individual is 
denied any right, privilege or benefit to which he would otherwise be 
entitled by Federal law, or for which he would otherwise be eligible, as 
a result of the maintenance of such material, such material shall be 
provided to such individual, except to the extent that the disclosure of 
such material would reveal the identity of a source who furnished 
information to the Government under an express promise that the identity 
of the source would be held in confidence, or prior to January 1, 1975, 
under an implied promise that the identity of the source would be held 
in confidence. Accordingly the following systems of records are exempt 
from (c)(3), (d)(1), (d)(2), (d)(3), (d)(4), (e)(1), (e)(4)(G), 
(e)(4)(I) and (f) of 5 U.S.C. 552a.
    (1) DOL/GOVT-1 (Office of Workers' Compensation Programs, Federal 
Employees' Compensation Act File), a system of records maintained by the 
Employment Standards Administration (ESA).
    (2) DOL/OASAM-17 (Equal Employment Opportunity Complaint Files), a 
system of records maintained by the Office of the Assistant Secretary 
for Administration and Management (OASAM).
    (3) DOL/OASAM-19 (Negotiated Grievance Procedure and Unfair Labor 
Practice Files), a system of records maintained by OASAM.
    (4) DOL/OASAM-20 (Personnel Investigation Records), a system of 
records maintained by OASAM.
    (5) DOL/OASAM-22 (Directorate of Civil Rights Discrimination 
Complaint Case Files), a system of records maintained by OASAM.
    (6) DOL/OASAM-29 (OASAM Employee Administrative Investigation File), 
a system of records maintained by OASAM.
    (7) DOL/BLS-7 (BLS Employee Conduct Investigation), a system of 
records maintained by the Bureau of Labor Statistics (BLS).
    (8) DOL/ESA-2 (Office of Federal Contract Compliance Programs, 
Complaint Files), a system of records maintained by ESA.
    (9) DOL/ESA-25 (Office of Federal Contract Compliance Programs, 
Management Information Systems (OFCCP/MIS), a system of records 
maintained by ESA.
    (10) DOL/ESA-26 (Office of Workers' Compensation Programs, Longshore 
and Harbor Workers' Compensation Act Investigation Files), a system of 
records maintained by ESA.
    (11) DOL/ESA-27 (Office of Workers' Compensation Programs, Longshore 
Act Claimant Representatives), a system of records maintained by ESA.
    (12) DOL/ESA-28 (Office of Workers' Compensation Programs, 
Physicians and Health Care Providers Excluded under the Longshore Act), 
a system of records maintained by ESA.
    (13) DOL/ESA-29 (Office of Workers' Compensation Programs, 
Physicians and Health Care Providers Excluded under the Federal 
Employees' Compensation Act), a system of records maintained by ESA.
    (14) DOL/ESA-32 (ESA, Complaint and Employee Conduct 
Investigations), a system of records maintained by ESA.
    (15) DOL/ESA-36 (ESA, Wage and Hour Division, MSPA/FLCRA Civil Money 
Penalty Record Files), a system of records maintained by ESA.
    (16) DOL/ESA-40 (ESA, Wage and Hour Division, MSPA/FLCRA Tracer 
List), a system of records maintained by ESA.
    (17) DOL/ESA-41 (ESA, Wage and Hour Division, MSPA/FLCRA Certificate 
Action Record Files), a system of records maintained by ESA.
    (18) DOL/ESA-45 (Investigative Files of the Office of Labor-
Management Standards), a system maintained by the Office of Labor-
Management Standards.
    (19) DOL/ETA-16 (Employment and Training Administration 
Investigatory File), a system of records maintained by the Employment 
and Training Administration (ETA).
    (20) DOL/ETA-22 (ETA Employee Conduct Investigations), a system of 
records maintained by ETA.
    (21) DOL/OIG-1 (General Investigative Files, and Subject Title 
Index, USDOL/OIG), a system of records maintained by the Office of the 
Inspector General (OIG).

[[Page 455]]

    (22) DOL/OIG-2 (Freedom of Information/Privacy Acts Records), a 
system of records maintained by the OIG.
    (23) DOL/OIG-3 (Case Development Records), a system of records 
maintained by OIG.
    (24) DOL/OIG-5 (Investigative Case Tracking Systems/Audit 
Information Reporting Systems, USDOL/OIG), a system of records 
maintained by OIG.
    (25) DOL/MSHA-10 (Discrimination Investigations), a system of 
records maintained by the Mine Safety and Health Administration (MSHA).
    (26) DOL/MSHA-19 (Employee Conduct Investigations), a system of 
records maintained by MSHA.
    (27) DOL/MSHA-20 (Civil/Criminal Investigations), a system of 
records maintained by MSHA.
    (28) DOL/OSHA-1 (Discrimination Complaint File), a system of records 
maintained by the Occupational Safety and Health Administration (OSHA).
    (29) DOL/OSHA-12 (Employee Conduct Investigations), a system of 
records maintained by OSHA.
    (30) DOL/PWBA-2 (Office of Enforcement Index Cards and Investigation 
Files), a system of records maintained by the Pension and Welfare 
Benefits Administration (PWBA).
    (31) DOL/PWBA-7 (PWBA Employee Conduct Investigations), a system of 
records maintained by PWBA.
    (32) DOL/SOL-8 (Special Litigation Files), a system of records 
maintained by the Office of the Solicitor (SOL).
    (33) DOL/SOL-9 (Freedom of Information Act and Privacy Act Appeals 
Files), a system of records maintained by SOL.
    (34) DOL/SOL-11 (Division of Civil Rights Defensive Litigation 
Files), a system of records maintained by SOL.
    (35) DOL/SOL-12 (Third-party Recovery Files), a system of records 
maintained by SOL.
    (36) DOL/SOL-13 (SOL Employee Conduct Investigations), a system of 
records maintained by SOL.
    (37) DOL/SOL-15 (Solicitor's Office Litigation Files), a system of 
records maintained by SOL.
    (38) DOL/VETS-1 (Veterans' Reemployment Complaint File--VETS-1), a 
system of records maintained by the Veterans' Employment and Training 
Service (VETS).
    (39) DOL/VETS-2 (Veterans' Preference Complaint File), a system of 
records maintained by VETS.
    (b) This exemption applies to the extent that information in these 
systems is subject to exemption pursuant to 5 U.S.C. 552a(k)(2).
    (c) The systems of records listed under paragraphs (a)(1) through 
(a)(39) of this section are exempted for the reasons set forth in 
paragraphs (c) (1) through (6) of this section, from the following 
subsections of 5 U.S.C. 552a:
    (1) Subsection (c)(3). The release of the disclosure accounting, for 
disclosures made pursuant to subsection (b) of the Act, including those 
permitted under the routine uses published for these systems of records, 
would enable the subject of an investigation of an actual or potential 
civil case to determine whether he or she is the subject of 
investigation, to obtain valuable information concerning the nature of 
that investigation and the information obtained, and to determine the 
identity of witnesses or informants. Such access to investigative 
information would, accordingly, present a serious impediment to law 
enforcement. In addition, disclosure of the accounting would constitute 
notice to the individual of the existence of a record even though such 
notice requirement under subsection (f)(1) is specifically exempted for 
this system of records.
    (2) Subsections (d)(1), (d)(2), (d)(3), and (d)(4). Access to the 
records contained in these systems would inform the subject of an actual 
or potential civil investigation of the existence of that investigation, 
of the nature and scope of the information and evidence obtained as to 
his or her activities, and of the identity of witnesses or informants. 
Such access would, accordingly, provide information that could enable 
the subject to avoid detection. This result, therefore, would constitute 
a serious impediment to effective law enforcement not only because it 
would prevent the successful completion of the investigation but also 
because it could endanger the physical safety of witnesses or 
informants, lead to the improper influencing of witnesses, the 
destruction of evidence, or the fabrication of testimony.

[[Page 456]]

    (3) Subsection (e)(1). The notices for these systems of records 
published in the Federal Register set forth the basic statutory or 
related authority for maintenance of these systems. However, in the 
course of civil and related law enforcement investigations, cases and 
matters, the agency will occasionally obtain information concerning 
actual or potential violations of law that are not strictly or 
technically within its statutory or other authority or may compile 
information in the course of an investigation which may not be relevant 
to a specific case. In the interests of effective law enforcement, it is 
necessary to retain some or all of such information in this system of 
records since it can aid in establishing patterns of compliance and can 
provide valuable leads for Federal and other law enforcement agencies. 
Moreover, it is difficult to know during the course of an investigation 
what is relevant and necessary. In this connection, facts or evidence 
may not seem relevant at first, but later in the investigation, their 
relevance is borne out.
    (4) Subsections (e)(4) (G) and (H). Since an exemption is being 
claimed for subsections (f) (Agency Rules) and (d) (Access to Records) 
of the Act, these subsections are inapplicable to the extent that these 
systems of records are exempted from subsections (f) and (d).
    (5) Subsection (e)(4)(I). The categories of sources of the records 
in these systems have been published in the Federal Register in broad 
generic terms in the belief that this is all that subsection (e)(4)(I) 
of the Act requires. In the event, however, that this subsection should 
be interpreted to require more detail as to the identity of sources of 
the records in this system, exemption from this provision is necessary 
in order to protect the confidentiality of the sources of civil law 
enforcement information. Such exemption is further necessary to protect 
the privacy and physical safety of witnesses and informants.
    (6) Subsection (f). Procedures for notice to an individual pursuant 
to subsection (f)(1) as to existence of records pertaining to the 
individual dealing with an actual or potential criminal, civil, or 
regulatory investigation or prosecution must be exempted because such 
notice to an individual would be detrimental to the successful conduct 
and/or completion of an investigation or case, pending or future. In 
addition, mere notice of the fact of an investigation could inform the 
subject or others that their activities are under or may become the 
subject of an investigation and could enable the subjects to avoid 
detection, to influence witnesses improperly, to destroy evidence, or to 
fabricate testimony. Since an exemption is being claimed for subsection 
(d) of the Act (Access to Records), the rules required pursuant to 
subsections (f)(2) through (5) are inapplicable to these systems of 
records to the extent that these systems of records are exempted from 
subsection (d).



Sec. 71.52  Specific exemptions pursuant to subsection (k)(5) of the Privacy Act.

    (a) The following systems of records are eligible for exemption 
under 5 U.S.C. 552a(k)(5) because they contain investigatory material 
compiled solely for the purpose of determining suitability, eligibility, 
or qualifications for Federal civilian employment, military service, 
Federal contracts, or access to classified information, but only to the 
extent that the disclosure of such material would reveal the identity of 
a source who furnished information to the Government under an express 
promise that the identity of the source would be held in confidence, or, 
prior to January 1, 1975 , under an implied promise that the identity of 
the source would be held in confidence. Accordingly, these systems of 
records are exempt from (c)(3), (d)(1), (d)(2), (d)(3), (d)(4), (e)(1), 
(e)(4)(G), (e)(4)(I) and (f) of 5 U.S.C. 552a.
    (1) DOL/OASAM-20 (Personnel Investigation Records), a system of 
records maintained by the Office of the Assistant Secretary for 
Administration and Management (OASAM).
    (2) DOL/OIG-1 (General Investigative Files, and Subject Title Index, 
USDOL/OIG), a system of records maintained by the Office of the 
Inspector General (OIG).
    (3) DOL/OIG-2 (Freedom of Information/Privacy Acts Records), a 
system of records maintained by the OIG.

[[Page 457]]

    (4) DOL/OIG-3 (Case Development Records), a system of records 
maintained by the OIG.
    (5) DOL/OIG-5 (Investigative Case Tracking Systems/Audit Information 
Reporting Systems, USDOL/OIG), a system of records maintained by the 
OIG.
    (b) This exemption applies to the extent that information in these 
systems is subject to exemption pursuant to 5 U.S.C. 552a(k)(5).
    (c) The systems of records listed under paragraphs (a)(1) through 
(a)(5) of this section are exempted for the reasons set forth in 
paragraphs (c)(1) through (6) of this section, from the following 
subsections of 5 U.S.C. 552a:
    (1) Subsection (c)(3). The release of the disclosure accounting, for 
disclosures made pursuant to subsection (b) of the Act, including those 
permitted under the routine uses published for this system of records, 
would enable the subject of an investigation of an actual or potential 
civil case to determine whether he or she is the subject of 
investigation, to obtain valuable information concerning the nature of 
that investigation and the information obtained, and to determine the 
identity of witnesses or informants. Such access to investigative 
information would, accordingly, present a serious impediment to the 
investigation. In addition, disclosure of the accounting would 
constitute notice to the individual of the existence of a record even 
though such notice requirement under subsection (f)(1) is specifically 
exempted for this system of records.
    (2) Subsections (d)(1), (d)(2), (d)(3), and (d)(4). Access to the 
records contained in these systems would inform the subject of an actual 
or potential investigation of the existence of that investigation, of 
the nature and scope of the information and evidence obtained as to his 
or her activities, and of the identity of witnesses or informants. Such 
access would, accordingly, provide information that could enable the 
subject to avoid detection. This result, therefore, would constitute a 
serious impediment to effective investigation not only because it would 
prevent the successful completion of the investigation but also because 
it could endanger the physical safety of witnesses or informants, lead 
to the improper influencing of witnesses, the destruction of evidence, 
or the fabrication of testimony.
    (3) Subsection (e)(1). The notices for these systems of records 
published in the Federal Register set forth the basic statutory or 
related authority for maintenance of this system. However, in the course 
of civil and related investigations, cases and matters, the agency will 
occasionally obtain information concerning actual or potential 
violations of law that are not strictly or technically within its 
statutory or other authority or may compile information in the course of 
an investigation which may not be relevant to a specific case. In the 
interests of effective investigation, it is necessary to retain some or 
all of such information in these systems of records since it can aid in 
establishing patterns of compliance and can provide valuable leads for 
Federal and other law enforcement agencies. Moreover, it is difficult to 
know during the course of an investigation what is relevant and 
necessary. In this connection, facts or evidence may not seem relevant 
at first, but later in the investigation, their relevance is borne out.
    (4) Subsections (e)(4)(G) and (H). Since an exemption is being 
claimed for subsections (f) (Agency Rules) and (d) (Access to Records) 
of the Act, these subsections are inapplicable to the extent that these 
systems of records are exempted from subsections (f) and (d).
    (5) Subsection (e)(4)(I). The categories of sources of the records 
in these systems have been published in the Federal Register in broad 
generic terms in the belief that this is all that subsection (e)(4)(I) 
of the Act requires. In the event, however, that this subsection should 
be interpreted to require more detail as to the identity of sources of 
the records in this system, exemption from this provision is necessary 
in order to protect the confidentiality of the sources of investigatory 
information. Such exemption is further necessary to protect the privacy 
and physical safety of witnesses and informants.
    (6) Subsection (f). Procedures for notice to an individual pursuant 
to subsection (f)(1) as to existence of records

[[Page 458]]

pertaining to the individual dealing with an actual or potential 
investigation must be exempted because such notice to an individual 
would be detrimental to the successful conduct and/or completion of an 
investigation or case, pending or future. In addition, mere notice of 
the fact of an investigation could inform the subject or others that 
their activities are under or may become the subject of an investigation 
and could enable the subjects to avoid detection, to influence witnesses 
improperly, to destroy evidence, or to fabricate testimony. Since an 
exemption is being claimed for subsection (d) of the Act (Access to 
Records), the rules required pursuant to subsections (f)(2) through (5) 
are inapplicable to these systems of records to the extent that these 
systems of records are exempted from subsection (d).

              Appendix A to Part 71--Responsible Officials

    (a)(1) The titles of the responsible officials of the various 
independent agencies in the Department of Labor are listed below. This 
list is provided for information and to assist requesters in locating 
the office most likely to have responsive records. The officials may be 
changed by appropriate designation. Unless otherwise specified, the 
mailing addresses of the officials shall be: U.S. Department of Labor, 
200 Constitution Avenue, NW, Washington, DC 20210-0002.

Secretary of Labor, Attention: Assistant Secretary for Administration 
and Management (OASAM)
Deputy Solicitor, Office of the Solicitor
Chief Administrative Law Judge, Office of the Administrative Law Judges 
(OALJs)
Legal Counsel (OALJs)
Assistant Secretary for Administration and Management (OASAM)
Deputy Assistant Secretary for Administration and Management (OASAM)
Director, Business Operations Center, OASAM
Director, Civil Rights Center, OASAM
Director, Human Resources Center, OASAM
Director, Information Technology Center, OASAM
Director, Worklife Center, OASAM
Director, Reinvention Center, OASAM
Director, Safety and Health Center, OASAM
Director, Conference and Services Center, OASAM
Chief Financial Officer, Office of the Chief Financial Officer
Associate Deputy Secretary for Adjudication
Chairperson, Administrative Review Board (ARB)
Chief Administrative Appeals Judge, Benefits Review Board (BRB)
Chairperson, Employees' Compensation Appeals Board (ECAB)
Executive Director, Office of Adjudicatory Services (OAS)
Director, Office of Small Business Programs
Director, Women's Bureau
Assistant Secretary Office of Congressional and Intergovernmental 
Affairs (OCIA)
Deputy Assistant Secretary, OCIA
Assistant Secretary for Policy (ASP)
Deputy Assistant Secretary, ASP
Assistant Secretary, Office of Public Affairs (OPA)
Deputy Assistant Secretary, OPA
Disclosure Officer, Office of the Inspector General (OIG)
Director, Office of Management, Administration and Planning Bureau of 
International Labor Affairs (ILAB)
Secretary, U.S. National Administrative Office (USNAO)
Assistant Secretary for Employment Standards, Employment Standards
Administration (ESA)
Director, Office of Management,
Administration and Planning (OMAP), ESA
Director, Equal Employment Opportunity Unit, ESA
Director, Office of Public Affairs, OMAP, ESA
Director, Division of Human Resources Management, OMAP, ESA
Director, Division of Legislative and Regulatory Analysis, OMAP, ESA
Director, Office of Workers' Compensation Programs (OWCP), ESA
Special Assistant to the Director, OWCP, ESA
Director for Federal Employees' Compensation, OWCP, ESA
Director for Longshore and Harbor Workers' Compensation, OWCP, ESA
Director for Coal Mine Workers' Compensation, OWCP, ESA
Administrator, Wage and Hour Division, ESA
Deputy Administrator, Wage and Hour Division, ESA
National Office Program Administrator, Wage and Hour Division, ESA
Deputy National Office Program Administrator, Wage and Hour Division, 
ESA
Director, Office of Enforcement Policy, Wage and Hour Division, ESA
Deputy Director, Office of Enforcement Policy, Wage and Hour Division, 
ESA
Director, Office of Planning and Analysis, Wage and Hour Division ESA
Director, Office of Wage Determinations, Wage and Hour Division ESA
Director, Office of External Affairs, Wage and Hour Division, ESA
Director, Office of Quality and Human Resources, Wage and Hour Division, 
ESA

[[Page 459]]

Deputy Assistant Secretary for Federal Contract Compliance Programs 
(OFCCP), ESA
Deputy Director, Office of Federal Contract Compliance Programs, OFCCP, 
ESA
Director, Division of Policy, Planning and Program Development, OFCCP, 
ESA
Deputy Director, Division of Policy, Planning and Program Development, 
OFCCP, ESA
Director, Division of Program Operations, OFCCP, ESA
Deputy Director, Division of Program Operations, OFCCP, ESA
Director, Division of Management and Administrative Programs, OFCCP, ESA
Deputy Assistant Secretary for Labor-Management Standards, ESA
Assistant Secretary of Labor, Employment and Training Administration 
(ETA)
Deputy Assistant Secretary of Labor, Employment and Training 
Administration (ETA)
Administrator, Office of Financial and Administrative Management, ETA
Director, Office of Management, Information, and Support, ETA
Director, Office of Human Resources, ETA
Director, Office of the Comptroller, ETA
Director, Office of Grants and Contracts Management, ETA
Chief, Division of Resolution and Appeals, ETA
Chief, Division of Acquisition and Assistance, ETA
Chief, Division of Financial and Grant Management Policy and Review, ETA
Director, Office of Regional Management, ETA
Administrator, Office of Policy and Research, ETA
Director, Unemployment Insurance Service, ETA
Director, United States Employment Service, ETA
Chief, Division of Foreign Labor Certifications, ETA
Administrator, Office of Job Training Programs, ETA
Director, Office of Welfare-to-Work Programs, ETA
Director, Office of Employment and Training Programs, ETA
Director, National Office of School to Work Opportunities, ETA
Director, Office of Job Corps, ETA
Director, Office of National Programs, ETA
Director, Bureau of Apprenticeship and Training, ETA
Administrator, Office of Work-Based Learning, ETA
Program Manager, Division of Policy and Analysis, Office of Worker 
Retraining and Adjustment Programs, ETA
Program Manager, Division of Program Implementation, Office of Worker 
Retraining and Adjustment Programs, ETA
Director, Office of Trade Adjustment Assistance, ETA
Director, Office of One-Stop/LMI, ETA
Director, Office of Equal Employment Opportunity, Occupational Safety 
and Health Administration (OSHA)
Director, Office of Information and Consumer Affairs, OSHA
Director, Directorate Office of Construction, OSHA
Director, Directorate of Federal-State Operations, OSHA
Director, Directorate of Policy, OSHA
Director, Directorate of Administrative Programs, OSHA
Director, Personnel Programs, OSHA
Director, Office of Administrative Services, OSHA
Director, Office of Management Data Systems, OSHA
Director, Office of Management Systems and Organization, OSHA
Director, Office of Program Budgeting, Planning and Financial 
Management, OSHA
Director, Directorate of Compliance Programs, OSHA
Director, Directorate of Technical Support, OSHA
Director, Directorate of Safety Standards Programs, OSHA
Director, Directorate of Health Standards Programs, OSHA
Director, Office of Statistics, OSHA
Director, Office of Program Services, Pension and Welfare Benefits 
Administration
Assistant Secretary for Veterans' Employment and Training (VETS)
Deputy Assistant Secretary for Veterans' Employment and Training, VETS
Director, Office of Operations and Programs, VETS
Chair, Benefits Review Board
Commissioner, Bureau of Labor Statistics (BLS)
Associate Commissioner, Office of Administration, BLS

    The mailing address for responsible officials in the Bureau of Labor 
Statistics is: Rm. 4040--Postal Square Bldg., 2 Massachusetts Ave., NE, 
Washington, DC 20212-0001.

Director of Program Evaluation and Information Resources Mine Safety and 
Health Administration (MSHA)

    The mailing address for responsible official in the Mine Safety and 
Health Administration (MSHA) is: 4015 Wilson Boulevard, Arlington, 
Virginia 22203.
    The mailing address for the Office of Administrative Law Judges is: 
Chief, Office of Administrative Law Judges, 800 K Street, NW, Suite N-
400, Washington, DC 20001-8002.
    (2) The titles of the responsible officials in the regional offices 
of the various independent agencies are listed below: Unless otherwise 
specified, the mailing address for these officials by region, shall be:

[[Page 460]]

                                Region I

U.S. Department of Labor, John F. Kennedy Federal Building, Boston, 
Massachusetts 02203 (For Wage and Hour only: Contact Region III)

    In Region I, Only, the mailing address for OSHA is:

133 Portland Street, 1st Floor, Boston, Massachusetts 02114

                                Region II

201 Varick Street, New York, New York 10014, (For Wage and Hour only: 
Contact Region III)

                               Region III

Gateway Building, 3535 Market Street, Philadelphia, Pennsylvania 19104

                                Region IV

U.S. Department of Labor, Atlanta Federal Center, 61 Forsyth Street, SW, 
Atlanta, Georgia 30303
214 N. Hogan Street, Suite 1006, Jacksonville, Florida 32202 (OWCP Only)

                                Region V

Kluczynski Federal Building, 230 South Dearborn Street, Chicago, 
Illinois 60604
1240 East Ninth Street, Room 851, Cleveland, Ohio 44199 (FEC only)

                                Region VI

525 Griffin Square Building, Griffin & Young Streets, Dallas, Texas 
75202

                               Region VII

City Center Square Building, 1100 Main Street, Kansas City, Missouri 
64105-2112 (For Wage and Hour only: Contact Region V)
801 Walnut Street, Room 200, Kansas City, Missouri 64106 (OFCCP only)

                               Region VIII

1999 Broadway Street, Denver, Colorado 80202 (For Wage and Hour only: 
Contact Region VI)
1801 California Street, Suite 915, Denver, Colorado 80202 (OWCP only)

    The mailing address for the Director of the Regional Bureau of 
Apprentice and Training in Region VIII is: Room 465, U.S. Custom House, 
721--19th Street, Denver, CO 80202

                                Region IX

71 Stevenson Street, San Francisco, California 94105

                                Region X

1111 Third Avenue, Seattle, Washington 98101-3212 (For Wage and Hour 
only: Contact Region IX)

Regional Administrator for Administration and Management (OASAM)
Regional Personnel Officer, OASAM
Regional Director for Information and Public Affairs, OASAM
Regional Administrator for Occupational Safety and Health and Safety 
(OSHA)
Regional Commissioner, Bureau of Labor Statistics (BLS)
Regional Administrator for Employment and Training Administration (ETA)
Regional Director, Job Corps, ETA
Director, Regional Bureau of Apprenticeship and Training, ETA
Regional Management Analyst, ETA-Atlanta, Georgia
Regional Administrator for Wage and Hour, ESA
Regional Director for Federal Contract Compliance Programs, ESA
Regional Director for the Office of Workers' Compensation Programs, ESA
District Director, Office of Workers' Compensation Programs, ESA

Office of Federal Contract Compliance Programs ESA, Responsible Offices, 
                            Regional Offices

JFK Federal Building, Room E-235, Boston, Massachusetts 02203
201 Varick Street, Room 750, New York, New York 10014
Gateway Building, Room 15340, 3535 Market Street, Philadelphia, 
Pennsylvania 19104
61 Forsyth Street, SW, Suite 7B75, Atlanta, Georgia 30303
Klucynski Federal Building, Room 570, 230 South Dearborn Street, 
Chicago, Illinois 60604
Federal Building, Room 840, 525 South Griffin Street, Dallas, Texas 
75202
71 Stevenson Street, Suite 1700, San Francisco, California 94105-2614
1111 Third Avenue, Suite 610, Seattle, Washington 98101-3212

  Office of Workers' Compensation Programs ESA, Responsible Officials, 
                           District Directors

John F. Kennedy, Federal Building, Boston, Massachusetts 02203 (FECA and 
LHWCA Only)
201 Varick Street, Seventh Floor, New York, New York 10014 (FECA and 
LHWCA only)
3535 Market Street, Philadelphia, Pennsylvania 19104 (FECA and LHWCA 
only)
Penn Traffic Building, 319 Washington Street, Johnstown, Pennsylvania 
15901 (BLBA only)
105 North Main Street, Suite 100, Wilkes-Barre, Pennsylvania 18701 (BLBA 
Only)
Wellington Square, 1225 South Main Street, Greensburg, Pennsylvania 
15601 (BLBA only)
300 West Pratt Street, Suite 240, Baltimore, Maryland 21201 (LHWCA Only)
Federal Building, 200 Granby Mall, Room #212, Norfolk, Virginia 23510 
(LHWCA only)

[[Page 461]]

2 Hale Street, Suite 304, Charleston, West Virginia 25301 (BLBA Only)
609 Market Street, Parkersburg, West Virginia 26101 (BLBA Only)
800 North Capitol Street NW, Washington, DC 20211 (FECA Only)
1200 Upshur Street, NW, Washington, DC 20210 (DCCA Only)
334 Main Street, Fifth Floor, Pikeville, Kentucky 41501 (BLBA only)
500 Springdale Plaza,
Spring Street, Mt. Sterling, Kentucky 40353 (BLBA Only)
214 N. Hogan Street, 10th Floor, Jacksonville, Florida 32201 (FECA and 
LHWCA only)
230 South Dearborn Street, 8th Floor, Chicago, Illinois 60604 (FECA and 
LHWCA)
1240 East 9th Street, Cleveland, Ohio 44199 (FECA Only)
274 Marconi Boulevard, 3rd Floor, Columbus, Ohio 43215 (BLBA Only)
525 Griffin Street, Federal Building, Dallas, Texas 75202 (FECA Only)
701 Loyola Avenue, Room 13032, New Orleans, Louisiana 70113 (LHWCA Only)
8866 Gulf Freeway, Suite 140, Houston, Texas 77017 (LHWCA Only)
City Center Square, Suite 750, 1100 Main Street, Kansas City, Missouri 
64105 (FECA Only)
1801 California Street, Denver, Colorado 80202 (FECA and BLBA Only)
71 Stevenson Street, 2nd Floor, San Francisco, California 94105 (LHWCA 
and FECA Only)
401 E. Ocean Boulevard, Suite 720, Long Beach, California 90802 (LHWCA 
Only)
300 Ala Moana Boulevard, Room 5119, Honolulu, Hawaii 96850 (LHWCA Only)
1111 3rd Avenue, Seattle, Washington 98101-3212 (LHWCA and FECA only)

 Regional Administrator, Occupational Safety and Health Administration 
                                 (OSHA)

                           Area Director, OSHA

639 Granite Street, 4th Floor, Braintree, Massachusetts 02184
279 Pleasant Street, Suite 201, Concord, New Hampshire 03301
202 Harlow Street, Room 211, Bangor, Maine 04401
Federal Office Building, 450 Main Street, Room 508, Hartford, 
Connecticut 06103
One LaFayette Square, Suite 202, Bridgeport, Connecticut 06604
1145 Main Street, Room 108, Springfield, Massachusetts 01103-1493
Federal Office Building, 380 Westminister Mall, Room 243, Providence, 
Rhode Island 02903
Valley Office Park, 13 Branch Street, Methuen, Massachusetts 01844
6 World Trade Center, Room 881, New York, New York 10048
990 Westbury Road, Westbury, New York 11590
42-40 Bell Boulevard, Bayside, New York 11361
401 New Karner Road, Suite 300, Albany, New York 12205-3809
Plaza 35, Suite 205, 1030 St. Georges Avenue, Avenel, New Jersey 07001
299 Cherry Hill Road, Suite 304, Parsippany, New Jersey 07054
3300 Vikery Road, North Syracuse, New York 13212
5360 Genesee Street, Bowmansville, New York 14026
BBV Plaza Building, 1510 F.D. Roosevelt Avenue, Suite 5B, Guaynabo, 
Puerto Rico 00968
500 Route 17 South, 2nd Floor, Hasbrouck Heights, New Jersey 07604
Marlton Executive Park, Building 2, Suite 120, 701 Route 73 South, 
Marlton, New Jersey 08053
660 White Plains Road, 4th Floor, Tarrytown, New York 10591-5107
US Custom House, Room 242, Second & Chestnut Street, Philadelphia, 
Pennsylvania 19106
One Rodney Square, Suite 402, 920 King Street, Wilmington, Delaware 
19801
Federal Building, 1000 Liberty Avenue, Room 1428, Pittsburgh, 
Pennsylvania 15222
3939 West Ridge Road, Suite B12, Erie, Pennsylvania 16506
Federal Office Building, 200 Granby Street, Room 835, Norfolk, Virginia 
23510
820 First Street, NE, Suite 440, Washington, DC 20002
20 North Pennsylvania Avenue, Penn Place, Room 2005, Wilkes-Barre, 
Pennsylvania 18701-3590
850 North 5th Street, Allentown, Pennsylvania 18102
550 Eagan Street, Room 206, Charleston, West Virginia 25301
Federal Building, Room 1110, 300 W. Pratt St., Baltimore, Maryland 21201
Progress Plaza, 49 Progress Avenue, Harrisburg, Pennsylvania 17109
2400 Herodian Way, Suite 250, Smyrna, Georgia 30080
450 Mall Boulevard, Suite J, Savannah, Georgia 31406
Todd Mall, 2047 Canyon Road, Birmingham, Alabama 35216
8040 Peters Road, Building H-100, Fort Lauderdale, Florida 33324
Ribault Building, Suite 227, 1851 Executive Center Drive, Jacksonville, 
Florida 32207
5807 Breckenridge Parkway, Suite A, Tampa, Florida 33610
1835 Assembly Street, Room 1468, Columbia, South Carolina 29201
3780 I-55 North, Suite 210, Jackson, Mississippi 39211-6323
3737 Government Boulevard, Suite 100, Mobile, Alabama 36693

[[Page 462]]

2002 Richard Jones Road, Suite C-205, Nashville, Tennessee 37215
John C. Watts Federal Building, 330 West Broadway, Room 108, Frankfort, 
Kentucky 40601
La Vista Perimeter Office Park, 2183 N. Lake Parkway, Building 7, Suite 
110, Tucker, Georgia 30084
Century Station Federal Office Building, 300 Fayetteville Mall, Room 
438, Raleigh, North Carolina 27601
1600 167th Street, Suite 9, Calumet City, Illinois 60409
O'Hara Lake Plaza, 2360 East Devon Avenue, Suite 1010, Des Plaines, 
Illinois 60018
344 Smoke Tree Business Park, North Aurora, Illinois 60542
Federal Office Building, 1240 East 9th Street, Room 899, Cleveland, Ohio 
44199
Federal Office Building, 200 N. High Street, Room 620, Columbus, Ohio 
43215
US P.O. & Courthouse Building, 46 East Ohio Street, Room 423, 
Indianapolis, Indiana 46204
36 Triangle Park Drive, Cincinnati, Ohio 45246
2618 North Ballard Road, Appleton, Wisconsin 54915
Henry S. Reuss Building, Room 1180, 310 West Wisconsin Avenue, 
Milwaukee, Wisconsin 53203
110 South 4th Street, Suite 1220, Minneapolis, Minnesota 55401
234 North Summit Street, Room 734, Toledo, Ohio 43604
801 South Waverly Road, Suite 306, Lansing, Michigan 48917-4200
4802 East Broadway, Madison, Wisconsin 53716
2918 W. Willow Knolls Road, Peoria, Illinois 61614
8344 East R.L. Thornton Freeway, Suite 420, Dallas, Texas 75228
903 San Jacinto Boulevard, Suite 319, Austin, Texas 78701
Westbank Building, Suite 820, 505 Marquette Avenue, NW, Albuquerque, New 
Mexico 87102
2156 Wooddale Boulevard, Hoover Annex, Suite 200, Baton Rouge, Louisiana 
70806
Wilson Plaza, 606 N. Carancahua, Suite 700, Corpus Christi, Texas 78401
Federal Office Building, 1205 Texas Avenue, Room 806, Lubbock, Texas 
79401
350 North Sam Houston Parkway East, Suite 120, Houston, Texas 77060
17625 El Camino Real, Suite 400, Houston, Texas 77058
420 West Main Place, Suite 300, Oklahoma City, Oklahoma 73102
North Starr II, Suite 430, 8713 Airport Freeway, Fort Worth, Texas 
76180-7604
TCBY Building, Suite 450, 425 West Capitol Avenue, Little Rock, Arkansas 
72201
4171 North Mesa Street, Room C119, El Paso, Texas 79902
6200 Connecticut Avenue, Suite 100, Kansas City, Missouri 64120
911 Washington Avenue, Room 420, St. Louis, Missouri 63101
210 Walnut Street, Room 815, Des Moines, Iowa 50309
300 Epic Center, 301 North Main, Wichita, Kansas 67202
Overland--Wolf Building, Room 100, 6910 Pacific Street, Omaha, Nebraska 
68106
8600 Farley, Suite 105, Overland Park, Kansas 66212-4677
2900 Fourth Avenue, North, Suite 303, Billings, Montana 59101
220 E. Rosser, Room 348, P.O. Box 2439, Bismarck, North Dakota 58501
7935 East Prentice Avenue, Suite 209, Englewood, Colorado 80011-2714
1391 Speer Boulevard, Suite 210, Denver, Colorado 80204
1781 South 300 West, P.O. Box 65200, Salt Lake City, Utah 84165-0200
71 Stevenson Street, Room 420, San Francisco, California 94105
101 El Camino Plaza, Suite 105, Sacramento, California 95815
5675 Ruffin Road, Suite 330, San Diego, California 92123
300 Ala Moana Boulevard, Suite 5122, P.O. Box 50072, Honolulu, Hawaii 
96850
3221 North 16th Street, Suite 100, Phoenix, Arizona 85016
705 North Plaza, Room 204, Carson City, Nevada 89701
301 West Northern Lights Boulevard, Suite 407, Anchorage, Alaska 99503
3050 North Lakeharbor Lane, Suite 134, Boise, Idaho 83703
505 106th Avenue, Northeast, Suite 302, Belleview, Washington 98004
1220 Southwest Third Avenue, Room 640, Portland, Oregon 97204

    Pension and Welfare Benefits Administration Regional Director or 
                           District Supervisor

Regional Director, J.F.K. Federal Bldg., Room 575, Boston, Massachusetts 
22203
Regional Director, 1633 Broadway, Rm. 226, New York, N.Y. 10019
Regional Director, 3535 Market Street, Room M300, Gateway Building, 
Philadelphia, Pennsylvania 19104
District Supervisor, 1730 K Street N.W., Suite 556, Washington, DC 20006
Regional Director, 61 Forsyth Street, S.W., Room 7B54, Atlanta, Georgia 
30303
District Supervisor, 8040 Peters Road, Building H, Suite 104, 
Plantation, Florida 33324
Regional Director, 1885 Dixie Highway, Suite 210, Ft. Wright, Kentucky 
41011
District Supervisor, 211 West Fort Street, Suite 1310, Detroit, Michigan 
48226-3211
Regional Director, 200 West Adams Street, Suite 1600, Chicago, Illinois 
60606
Regional Director, City Center Square, 1100 Main Street, Suite 1200, 
Kansas City, Missouri 64105

[[Page 463]]

District Supervisor, 815 Olive Street, Room 338, St. Louis, Missouri 
63101
Regional Director, 525 Griffin Street, Room 707, Dallas, Texas 75202
Regional Director, 71 Stevenson Street, Suite 915, P.O. Box 190250, San 
Francisco, California 94119-0250
District Director, 1111 Third Avenue, Room 860, Seattle, Washington 
98101-3212
Regional Director, Suite 514, 790 E. Colorado Blvd, Pasadena, CA 91101

   Regional Administrators, Veterans' Employment and Training Service 
                                 (VETS)

                                Region I

J.F. Kennedy Federal Building, Government Center, Room E-315, Boston, 
Massachusetts 02203

                                Region II

201 Varick Street, Room 766, New York, New York 10014

                               Region III

U.S. Customs House, Room 802, Second and Chestnut Streets, Philadelphia, 
Pennsylvania 19106

                                Region IV

Atlanta Federal Center, 61 Forsyth Street, SW., Room 6T85, Atlanta, 
Georgia 30303

                                Region V

230 South Dearborn, Room 1064, Chicago, Illinois 60604

                                Region VI

525 Griffin Street, Room 858, Dallas, Texas 75202

                               Region VII

Center City Square, 1100 Main Street, Suite 850, Kansas City, Missouri 
64105-2112

                               Region VIII

1801 California Street, Suite 910, Denver, Colorado 80202-2614

                                Region IX

71 Stevenson Street, Suite 705, San Francisco, California 94105

                                Region X

1111 Third Avenue, Suite 800, Seattle, Washington 98101-3212



   PART 75--DEPARTMENT OF LABOR REVIEW AND CERTIFICATION PROCEDURES FOR RURAL INDUSTRIALIZATION LOAN AND GRANT PROGRAMS UNDER THE CONSOLIDATED FARM AND RURAL 
DEVELOPMENT ACT OF 1972--Table of Contents




Sec.
75.1  Introduction.
75.11  Standards for the review of applications.

    Authority: Sec. 118, Pub. L. 92-419, 86 Stat. 663 (7 U.S.C. 1932).



Sec. 75.1  Introduction.

    (a) Section 118 of the Consolidated Farm and Rural Development Act 
authorizes the Farmers Home Administration (FmHA) of the U.S. Department 
of Agriculture to make or guarantee loans to finance industrial and 
business activities in rural areas (broadly defined to include any place 
with a population of less than 50,000), 7 U.S.C. 1932(d). The Act also 
permits FmHA to make grants to public bodies for measures designed to 
facilitate the development of private business enterprises and for 
pollution control and abatement projects.
    (b) As a prior condition for the approval of such loans, guarantees 
and grants, the Act further specifies that the Secretary of Labor must 
certify to the Secretary of Agriculture within 60 days after referral, 
that the loan or grant is not calculated to or likely to result in the 
transfer from one area to another of any employment or business activity 
provided by operations of the applicant and is not calculated to or 
likely to result in an increase in the production of goods, materials, 
or commodities, or the availability of services or facilities in the 
area, when there is not sufficient demand for such goods, materials, 
commodities, services, or facilities, to employ the efficient capacity 
of existing competitive commercial or industrial enterprises, unless 
such financial or other assistance will not have an adverse effect upon 
existing competitive enterprises in the area. Responsibility within the 
Department of Labor (DOL) for the review and certification process has 
been assigned to the Manpower Administration (MA).

[[Page 464]]

    (c) The following procedures have been established by the Department 
of Labor in consultation with the Department of Agriculture for the 
issuance of labor certifications under this program. These procedures 
are designed to insure the orderly and expeditious review of the 
applications, with the objective of complying with the intent of the 
Congress that most applications will be acted upon by the Department of 
Labor (DOL) within 30 days after they have been received from the 
Department of Agriculture. It is anticipated that the procedure will 
permit completion of all cases within the 60-day legal maximum 
processing period permitted under the law.

[40 FR 4394, Jan. 29, 1975]



Sec. 75.11  Standards for the review of applications.

    (a) Applications to be routinely approved without field review. The 
following types of applications will be routinely approved and certified 
by the Manpower Administration (MA), provided that the required 
information is submitted by the applicant:
    (1) Loans which involve the change of ownership from one person or 
group to another or the refinancing of an existing loan. Provided, That 
such loans will not result in any transfer from one area to another of 
any employment or business activity provided by operations of the 
applicant and are not calculated to or likely to result in an increase 
in the production of goods, materials, or commodities, or the 
availability of services, or facilities, to employ the efficient 
capacity of existing competitive commercial or industrial enterprise. In 
transmitting such applications to MA, FmHA will include:
    (i) A letter of transmittal stating the name and location of the 
applicant and the amount of the loan, and certifying that the loan is 
either for the purpose of financing the sale of the business or for the 
purpose of refinancing a loan and is not calculated to or likely to 
result in the transfer or expansion of employment or operations:
    (ii) Three copies of Form FHA 449-22, Certification of Non-
Relocation; and
    (iii) Three copies of Form FHA 449-23, Data Information Sheet. MA 
will issue an affirmative certification on such applications, without 
further review, within 10 working days.
    (2) Loans of less than $100,000 where the loan proceeds are expected 
to result in the employment of not more than five workers. In such 
instances, the FmHA transmittal letter will call attention to the fact 
that the application involved falls within this category. This should be 
supported by data in the revised Forms FHA 449-22 and 449-23 to be 
forwarded in triplicate to the DOL. For loan applications in this 
category, the FmHA will also attach a certification signed by the State 
FmHA director indicating that he has reviewed the loan application and 
certifying that such a loan is not calculated to or likely to result in 
the transfer from one area to another of any employment or business 
activity provided by operations of the applicant and is not calculated 
to or likely to result in an increase in the production of goods, 
materials, or commodities, or the availability of services or 
facilities, when there is not sufficient demand for such goods, 
materials, commodities, services, or facilities in the area, to employ 
the efficient capacity of existing competitive commercial or industrial 
enterprises, unless such financial or other assistance will not have an 
adverse effect upon existing competitive enterprises in the area. Unless 
there is other evidence to indicate an adverse effect on unemployment or 
competitive business enterprises, MA will accept this certificate and 
accompanying forms as the basis for an affirmative certification without 
further review and will so certify within 10 working days after receipt.
    (3) Grants where there are no known current or future occupants. In 
the case of such applications, e.g., a county's proposal to build an 
industrial park, FmHA will send a transmittal letter to MA stating the 
name and location of the applicant, and the amount and purpose of the 
grant, and certifying that there are no known current or future 
occupations. FmHA will also forward with the letter a resolution or 
other statement from the local governing body agreeing to a prior review 
and certification by MA of any person or organization which may occupy 
all or part of the facility within 3 years from the date of the 
certification, to insure that

[[Page 465]]

the requirements of the Act are being complied with. MA will, within 10 
days after receipt of such applications, issue an affirmative 
certification conditional upon the right of review and certification of 
each potential occupant within the 3-year period.
    (4) Grants where the occupants are known, and the improvement will 
not result in a transfer or increase in operations or employment by the 
occupants. The FmHA transmittal letter shall provide, in addition to the 
information specified in paragraph (a)(3) of this section, the names of 
the occupants and a statement that this grant is not calculated to or 
likely to result in a transfer or increase in operations or employment. 
The applicant shall also be required to submit the same type of 
resolution as that specified in paragraph (a)(3) of this section. On the 
receipt of such data, MA will issue a certification on the grant 
application and will certify the known occupants as well. The 
certification may require, however, that additional occupants or a 
change in occupants within the first 3 years after certification is 
subject to review and a redetermination.
    (b) Applications which will require field or other review. (1) All 
loan and grant applications other than those specified in paragraph (a) 
of this section will be subject to a full review by the MA prior to the 
issuance of a certification. For each loan application, the FmHA shall 
submit to MA:
    (i) A letter of transmittal stating the name and location of the 
applicant and the amount of the loan;
    (ii) Six copies of the Certificate of Non-Relocation (Form FHA 449-
22);
    (iii) Six copies of the Data Information Sheet (Form FHA 449-23); 
and
    (iv) Any supplemental information, including A-95 Clearinghouse 
reports, which FmHA believes may be of value to MA in evaluating the 
application.

For grant applications, the letter of transmittal shall also provide 
information about the purpose of the grant. Two copies of a resolution 
or other statement of the type specified under paragraph (a)(3) of this 
section shall also be submitted with each grant application.
    (2) Upon receipt of applications, MA will review the materials for 
completeness and will inform FmHA in writing of any missing items within 
2 working days after the date of receipt. It is agreed that in such 
instances the statutory 60-day period will not begin until the file is 
complete. State Employment Security Agencies will be requested, through 
the MA regional offices, to provide labor market information needed to 
determine whether the loan would result in adverse competitive effect 
upon existing competitive enterprises in the area. Comments will be due 
in the MA national office 3 weeks after receipt of the request in the MA 
regional offices.
    (3) To assist in the review process, DOL will publish in the Federal 
Register a weekly listing of applications received (other than those to 
be routinely certified). The listing will include the name and location 
(City and State) of the applicant and the principal product or type of 
business activity. In the case of grant applications, the listing will 
also include the name and principal product or business activity of the 
occupant(s) of the facility for which the grant is being made. All 
interested parties will be afforded a 2-week period from the date of 
publication to comment in writing to MA. In the event that adverse 
comments are received, the applicant will be sent copies of such 
comments by certified mail, and afforded an opportunity to provide such 
additional information as the applicant deems appropriate within 2 weeks 
from the date of transmittal. The Farmers Home Administration will also 
be provided with copies of such adverse comments.
    (4) In some instances, involving particularly complex situations, MA 
may request the Economic Development Administration (EDA) in the 
Department of Commerce, or other agencies to provide supplemental data. 
The number of such requests will depend upon the extent to which the DOL 
is capable of making resources available to EDA or other agencies to 
perform this function.
    (5) When all the data have been assembled, a determination will be 
made by MA of whether the requested certifications may be certified or 
denied. FmHA will be notified in writing of the determination. If DOL's 
investigation

[[Page 466]]

indicates the need for additional information, all material will be 
returned to FmHA with instructions indicating the additional information 
needed to make a certification. Continuation of the 60-day time limit 
will begin again when the additional material is returned to Labor.
    (6) All denials will be given additional consideration if the 
applicant or the Department of Agriculture provides additional evidence 
which they believe merits further consideration. If the DOL reaffirms 
its denial after a review of all available facts and such additional 
investigation as it may make, such denial shall be considered as final.

[40 FR 4394, Jan. 29, 1975]



PART 90--CERTIFICATION OF ELIGIBILITY TO APPLY FOR WORKER ADJUSTMENT ASSISTANCE--Table of Contents




                           Subpart A--General

Sec.
90.1  Purpose.
90.2  Definitions.
90.3  Applicability of part.

  Subpart B--Petitions and Determinations of Eligibility to Apply for 
                          Adjustment Assistance

90.11  Petitions.
90.12  Investigation.
90.13  Public hearings.
90.14  Subpoena power.
90.15  [Reserved]
90.16  Determinations and certifications of eligibility to apply for 
          adjustment assistance.
90.17  Termination of certification of eligibility.
90.18  Reconsideration of determinations.
90.19  Judicial review of determinations.

 Subpart C--Initiation and Conduct of Study With Respect to Workers in 
 Industry Which is the Subject of an Investigation for Industry Import 
                                 Relief

90.21  Study.
90.22  Dissemination of program knowledge and assistance to workers.

                      Subpart D--General Provisions

90.31  Filing of documents.
90.32  Availability of information.
90.33  Confidential business information.
90.34  Notice procedures.
90.35  Transitional provisions.
90.36  Computation of time.

    Authority: 19 U.S.C. 2320; Secretary's Order No. 3-81, 46 FR 31117.

    Source: 42 FR 32772, June 28, 1977, unless otherwise noted.



                           Subpart A--General



Sec. 90.1  Purpose.

    The purpose of this part 90 is to set forth regulations relating to 
the responsibilities vested in the Secretary of Labor by the Trade Act 
of 1974 (Pub. L. 93-618), as amended, concerning petitions and 
determinations of eligibility to apply for worker adjustment assistance. 
Section 248 of the Act directs the Secretary of Labor to prescribe 
regulations which will implement the provisions relating to adjustment 
assistance for workers. This part will provide for the prompt and 
effective disposition of workers' petitions for certification of 
eligibility to apply for adjustment assistance.

[52 FR 23401, June 19, 1987]



Sec. 90.2  Definitions.

    As used in this part, the term:
    Act means the Trade Act of 1974, Public Law 93-618, 88 Stat. 1978, 
2011-2030 (19 U.S.C. 2271-2321, 2395), as amended.
    Appropriate subdivision means an establishment in a multi-
establishment firm which produces the domestic articles in question or a 
distinct part or section of an establishment (whether or not the firm 
has more than one establishment) where the articles are produced. The 
term appropriate subdivision includes auxiliary facilities operated in 
conjunction with (whether or not physically separate from) production 
facilities.
    Certifying officer means an official, including the Director, Office 
of Trade Adjustment Assistance, in the Employment and Training 
Administration, United States Department of Labor, who has been 
delegated responsibility to make determinations and issue certifications 
of eligibility to apply for adjustment assistance, and to perform such 
further duties as may be required by the Secretary or by this part 90.

[[Page 467]]

    Commission means the United States International Trade Commission, 
formerly named the United States Tariff Commission.
    Date of filing means the date on which petitions and other documents 
are received by the Office of Trade Adjustment Assistance, Employment 
and Training Administration, United States Department of Labor, 601 D 
Street, NW., Washington, DC 20213.
    Date of issuance means the date on which a certification of 
eligibility to apply for adjustment assistance is signed by the 
certifying officer.
    Date of the petition means the date thereon, but which in no event 
shall be more than 30 days before the date of filing.
    Deputy Director means the Deputy Director of the Office of Trade 
Adjustment Assistance, Employment and Training Administration, United 
States Department of Labor, Washington, DC.
    Director means the Director of the Office of Trade Adjustment 
Assistance, Employment and Training Administration, United States 
Department of Labor, Washington, DC.
    Firm includes an individual proprietorship, partnership, joint 
venture, association, corporation (including a development corporation), 
business trust, cooperative, trustee in bankruptcy, and receiver under 
decree of any court. A firm, together with any predecessor or successor-
in-interest, or together with any affiliated firm controlled or 
substantially beneficially owned by substantially the same persons, may 
be considered a single firm.
    Group means three or more workers in a firm or an appropriate 
subdivision thereof.
    Increased imports means that imports have increased either 
absolutely or relative to domestic production compared to a 
representative base period. The representative base period shall be one 
year consisting of the four quarters immediately preceding the date 
which is twelve months prior to the date of the petition.
    Layoff means a suspension from pay status for lack of work initiated 
by the employer and expected to last for no less than seven (7) 
consecutive calendar days.
    Like or directly competitive means that like articles are those 
which are substantially identical in inherent or intrinsic 
characteristics (i.e., materials from which the articles are made, 
appearance, quality, texture, etc.); and directly competitive articles 
are those which, although not substantially identical in their inherent 
or intrinsic characteristics, are substantially equivalent for 
commercial purposes (i.e., adapted to the same uses and essentially 
interchangeable therefor).

An imported article is directly competitive with a domestic article at 
an earlier or later stage of processing, and a domestic article is 
directly competitive with an imported article at an earlier or later 
stage of processing, if the importation of the article has an economic 
effect on producers of the domestic article comparable to the effect of 
importation of articles in the same stage of processing as the domestic 
article.
    Partial separation means, with respect to an individual who has not 
been totally separated, that:
    (a) The worker's hours of work have been reduced to 80 percent or 
less of the worker's average weekly hours at the firm or appropriate 
subdivision thereof, and
    (b) The worker's wages have been reduced to 80 percent or less of 
the worker's average weekly wage at the firm or appropriate subdivision 
thereof.
    Secretary means the Secretary of Labor, U.S. Department of Labor.
    Significant number or proportion of the workers means that:
    (a) In most cases the total or partial separations, or both, in a 
firm or appropriate subdivision thereof, are the equivalent to a total 
unemployment of five percent (5 percent) of the workers or 50 workers, 
whichever is less; or
    (b) At least three workers in a firm (or appropriate subdivision 
thereof) with a work force of fewer than 50 workers would ordinarily 
have to be affected.
    Threatened to begin means, in the context of impending total or 
partial separations, the date on which it could reasonably be predicted 
that separations were imminent.

[[Page 468]]

    Total separation means the layoff or severance of an individual from 
a firm or an appropriate subdivision thereof.

[42 FR 32772, June 28, 1977, as amended at 52 FR 23401, June 19, 1987]



Sec. 90.3  Applicability of part.

    This part 90 generally relates to certifications of eligibility made 
under the Act. Subpart B specifically applies to the initiation and 
conduct of worker investigations and the issuance of determinations and 
certifications of eligibility to apply for adjustment assistance. 
Subpart C applies to studies of workers in industries which are the 
subject of investigations for industry import relief. Subpart D contains 
general provisions with respect to filing of documents and public 
availability of documents.



  Subpart B--Petitions and Determinations of Eligibility To Apply for 
                          Adjustment Assistance



Sec. 90.11  Petitions.

    (a) Who may file petitions. A petition under section 221(a) of the 
Act and this subpart B shall be filed by a group of workers for a 
certification of eligibility to apply for adjustment assistance or by 
their certified or recognized union or other duly authorized 
representative.
    (b) Identification of petitioners. Every petition filed with the 
Department shall clearly state the group of workers on whose behalf the 
petition is filed and the name(s) and address(es) of the person(s) by 
whom the petition is filed. Every petition shall be signed by at least 
three individuals of the petitioning group or by an official of a 
certified or recognized union or other duly authorized representative. 
Signing of a petition shall constitute acknowledgement that each signer 
has read the entire petition, that to the best of the signer's knowledge 
and belief the statements therein are true, and that each signer is duly 
authorized to sign such a petition.
    (c) Contents. Petitions may be filed on a U.S. Department of Labor 
form. Copies of the form may be obtained at a local office of a State 
Employment Security Agency or by writing to the Office of Trade 
Adjustment Assistance, Employment and Training Administration, U.S. 
Department of Labor, 601 D Street, NW., Washington, DC 20213. Every 
petition shall include:
    (1) The name(s), address(es), and telephone number(s) of the 
petitioner(s);
    (2) The name or a description of the group of workers on whose 
behalf the petition is filed (e.g., all hourly and salaried employees of 
the XYZ plant of ABC corporation);
    (3) The name and address of the workers' firm or appropriate 
subdivision thereof;
    (4) The name, address, telephone number, and title of an official of 
the firm;
    (5) The approximate date(s) on which the total or partial separation 
of a significant number or proportion of the workers in the workers' 
firm or subdivision began and continued, or threatened to begin, and the 
approximate number of workers affected by such actual or threatened 
total or partial separations;
    (6) A statement of reasons for believing that increases of like or 
directly competitive imports contributed importantly to total or partial 
separations and to the decline in the sales or production (or both) of 
the firm or subdivision (e.g., company statements, articles in trade 
association publications, etc.); and
    (7) A description of the articles produced by the workers' firm or 
appropriate subdivision, the production or sales of which are adversely 
affected by increased imports, and a description of the imported 
articles concerned.

If available, the petition also should include information concerning 
the method of manufacture, end uses, and wholesale or retail value of 
the domestic articles produced and the United States tariff provision 
under which the imported articles are classified.
    (d) Number of copies. One (1) signed original and two (2) clear 
copies of the petition shall be filed. The name(s) of the person(s) 
signing the petition shall

[[Page 469]]

be typewritten or otherwise clearly reproduced.

(Approved by the Office of Management and Budget under control number 
1205-0192)

[42 FR 32772, June 28, 1977, as amended at 49 FR 18295, Apr. 30, 1984; 
52 FR 23401, June 19, 1987]



Sec. 90.12  Investigation.

    Upon receipt of a petition, properly filed and verified, the 
Director of the Office of Trade Adjustment Assistance shall promptly 
publish notice in the Federal Register that the petition has been 
received. The Director shall initiate, or order to be initiated, such 
investigation as he determines to be necessary and appropriate. The 
investigation may include one or more field visits to confirm 
information furnished by the petitioner(s) and to elicit other relevant 
information. In the course of any investigation, representatives of the 
Department shall be authorized to contact and meet with responsible 
officials of firms, union officials, employees, and any other persons, 
or organizations, both private and public, as may be necessary to 
marshal all relevant facts to make a determination on the petition.

(Approved by the Office of Management and Budget under control numbers 
1205-0197, 1205-0190, 1205-0191)

[52 FR 23401, June 19, 1987]



Sec. 90.13  Public hearings.

    (a) When held. A public hearing shall be held in connection with an 
investigation instituted under Sec. 90.12 whenever, not later than ten 
(10) days after the date of publication in the Federal Register of the 
notice of receipt of the petition, such a hearing is requested in 
writing by:
    (1) The petitioner; or
    (2) Any other person found by the Director or Deputy Director to 
have a substantial interest in the proceedings. Such petitioner and 
other interested persons shall be afforded an opportunity to be present, 
to produce evidence, and to be heard.
    (b) Form of request. A request for public hearing shall be filed in 
the same manner as provided for filing of petitions and other documents 
under Sec. 90.31(a). A request by a person other than the petitioner 
shall contain:
    (1) The name, address, and telephone number of the person, 
organization, or group requesting the hearing; and
    (2) A complete statement of the relationship of the person, 
organization, or group requesting the hearing to the petitioner or the 
subject matter of the petition and a statement of the nature of its 
interest in the proceeding.
    (c) Time and place. Public hearings will be held at the time and 
place specified in a notice published in the Federal Register. Such 
notice shall be published at least seven (7) calendar days before the 
scheduled hearing.
    (d) Presiding officer. The Director or Deputy Director shall conduct 
and preside over public hearings.
    (e) Order of testimony. Witnesses will testify in the order 
designated by the presiding officer. Each witness, after being duly 
sworn, will proceed with testimony. After testifying, a witness may be 
questioned by the presiding officer or an agent designated by the 
presiding officer. Any person who has entered an appearance in 
accordance with paragraph (j) of this section may direct questions to 
the witness, but only for the purpose of assisting the presiding officer 
in obtaining relevant and material facts with respect to the subject 
matter of the hearing.
    (f) Evidence. Witnesses may produce evidence of a relevant and 
material nature to the subject matter of the hearing.
    (g) Briefs. Briefs of the evidence produced at the hearing and 
arguments thereon may be presented to the presiding officer by parties 
who have entered an appearance. Three (3) copies of such briefs shall be 
filed with the presiding officer within ten (10) days of the completion 
of the hearing.
    (h) Oral argument. The presiding officer shall provide opportunity 
for oral argument after conclusion of the testimony in a hearing. The 
presiding officer will determine in each instance the time to be allowed 
for argument and the allocation thereof.
    (i) Authentication of evidence. Evidence, oral or written, submitted 
at hearings, will upon order of the presiding officer be subject to 
verification from books, papers, and records of the

[[Page 470]]

parties submitting such evidence and from any other available sources.
    (j) Transcripts. All hearings will be stenographically reported. 
Persons interested in transcripts of the hearings may inspect them at 
the U.S. Department of Labor in Washington, DC, or purchase copies as 
provided in 29 CFR 70.62(c).
    (k) Appearances. The petitioner or any other person showing a 
substantial interest in the proceedings may enter an appearance at a 
hearing, either in person or by a duly authorized representative.

[42 FR 32772, June 28, 1977, as amended at 52 FR 23401, June 19, 1987]



Sec. 90.14  Subpoena power.

    (a) The Director or Deputy Director may require, by subpoena, in 
connection with any investigation or hearing, the attendance and 
testimony of witnesses and the production of evidence the issuing 
official in his or her discretion deems necessary to make a 
determination.
    (b) If a person refuses to obey a subpoena issued under paragraph 
(a) of this section, the Director or Deputy Director may petition the 
United States District Court within the jurisdiction of which the 
proceeding is being conducted requesting an order requiring compliance 
with such subpoena.
    (c) Witnesses subpoenaed under this section shall be paid the same 
fees and mileage as are paid for like services in the District Court of 
the United States. The witness fees and mileage shall be paid by the 
United States Department of Labor.
    (d) Subpoenas issued under paragraph (a) of this section shall be 
signed by the Director or Deputy Director and shall be served either in 
person by an authorized representative of the Department of Labor or by 
certified mail, return receipt requested. The date for compliance shall 
be not earlier than seven (7) calendar days following service of the 
subpoena.

[42 FR 32772, June 28, 1977, as amended at 52 FR 23401, June 19, 1987]



Sec. 90.15  [Reserved]



Sec. 90.16  Determinations and certifications of eligibility to apply for adjustment assistance.

    (a) General. Within 60 days after the date of filing of a petition, 
a certifying officer shall make a determination on the petition. If, 
however, for any reason, a certifying officer has not made a 
determination in 60 days after the date of filing of the petition, the 
certifying officer shall make the determination as soon thereafter as 
possible. If the determination is affirmative, the certifying officer 
shall issue a certification of eligibility as provided in paragraphs 
(b), (c), (d) and (g) of this section. If the determination is negative, 
the certifying officer shall issue a notice of negative determination as 
provided in paragraphs (b) and (f) of this section.
    (b) Requirements for determinations. After reviewing the relevant 
information necessary to make a determination, the certifying officer 
shall make findings of fact concerning whether:
    (1) A significant number or proportion of the workers in such 
workers' firm (or an appropriate subdivision of the firm) have become, 
or are threatened to become, totally or partially separated;
    (2) Sales or production, or both, of such firm or subdivision have 
decreased absolutely; and
    (3) Increases (absolute or relative) of imports of articles like or 
directly competitive with articles produced by such workers' firm or an 
appropriate subdivision thereof contributed importantly to such total or 
partial separation, or threat thereof, and to such decline in sales or 
production. For purposes of this paragraph and part, the term 
contributed importantly means a cause which is important but not 
necessarily more important than any other cause.
    (c) Notice of affirmative determination and certification of 
eligibility. Upon reaching a determination on a petition that a group of 
workers has met all the requirements set forth in section 222 of the Act 
and paragraph (b) of this section, the certifying officer shall issue a 
certification of eligibility to apply for adjustment assistance and 
shall

[[Page 471]]

promptly publish in the Federal Register a summary of the determination 
together with the reasons for making such determination (with the 
exception of information which the certifying officer determines to be 
confidential). Such summary shall include the certification of 
eligibility and shall constitute a Notice of Determination and 
Certification of Eligibility.
    (d) Contents of certification of eligibility. The certification 
shall specify in detail:
    (1) The firm or subdivision thereof at which the workers covered by 
the certification have been employed (which need not be limited to the 
unit specified in the petition), and may identify individual workers by 
name; and
    (2) The impact date(s) on which the total or partial separations of 
the workers covered by the certification began or threatened to begin. 
When applicable, the certification shall specify the date(s) after which 
the total or partial separations of the petitioning group of workers 
from the firm or subdivision thereof specified in the certification are 
no longer attributable to the conditions set forth in paragraph (b) of 
this section. For purposes of this section, the impact date is the 
earliest date on which any part of the total or partial separations 
involving a significant number or proportion of workers began or 
threatened to begin.
    (e) Exclusions from coverage of a certification of eligibility. A 
certification of eligibility to apply for adjustment assistance shall 
not apply to any worker:
    (1) Whose last total or partial separation from the firm or 
appropriate subdivision occurred more than one (1) year before the date 
of the petition; or
    (2) Whose last total or partial separation from the firm or 
appropriate subdivision occurred before October 3, 1974.
    (f) Notice of negative determination. Upon reaching a determination 
that a group of workers has not met all the requirements set forth in 
section 222 of the Act and paragraph (b) of this section, the certifying 
officer shall promptly publish in the Federal Register a summary of the 
determination together with the reasons for making such determinations 
(with the exception of information which the certifying officer 
determines to be confidential). Such summary shall constitute a Notice 
of Negative Determination.
    (g) Notice of Determinations. A notice of certification may contain 
a notice of negative determination with respect to certain seqments of 
workers. Such notice shall constitute a Notice of Determinations.

[42 FR 32772, June 28, 1977, as amended at 52 FR 23402, June 19, 1987]



Sec. 90.17  Termination of certification of eligibility.

    (a) Investigation. Whenever the Director of the Office of Trade 
Adjustment Assistance has reason to believe, with respect to any 
certification of eligibility, that the total or partial separations from 
a firm or appropriate subdivision thereof are no longer attributable to 
the conditions specified in section 222 of the Act and Sec. 90.16(b), 
the Director shall promptly make an investigation. Notice of the 
initiation of the investigation shall be published in the Federal 
Register and shall be transmitted to the group of workers concerned.
    (b) Opportunity for comment and hearing. Within 10 days after 
publication of the notice under paragraph (a) of this section, the group 
of workers or other persons showing a substantial interest in the 
proceedings may request a public hearing or may make written submissions 
to show why the certification should not be terminated. If a hearing is 
requested under this paragraph, such hearing shall be conducted in 
accordance with Sec. 90.13.
    (c) [Reserved]
    (d) Notice of termination. A certifying officer shall determine 
whether or not such certification shall be terminated. Upon reaching a 
determination that the certification of eligibility shall be terminated, 
the certifying officer shall make findings of fact and shall promptly 
have published in the Federal Register a summary of the determination 
and the reasons therefor (with the exception of information which the 
certifying officer determines to be confidential). Such summary shall 
constitute a Notice of Termination. Such termination shall apply only 
with respect to total or partial separations occurring after the 
termination date specified by the certifying officer. The termination

[[Page 472]]

date specified by the certifying officer shall be not sooner than the 
date on which notice of such termination is published in the Federal 
Register.
    (e) Notice of partial termination. A notice of termination may cover 
only a portion of the group of workers specified in the certification. 
Such notice shall constitute a Notice of Partial Termination.
    (f) Notice of continuation of certification. Upon reaching a 
determination that the certification of eligibility should be continued, 
the certifying officer shall promptly publish in the Federal Register a 
summary of the determination with the reasons therefor. Such summary 
shall constitute a Notice of Continuation of Certification.

[42 FR 32772, June 28, 1977, as amended at 52 FR 23402, June 19, 1987]



Sec. 90.18  Reconsideration of determinations.

    (a) Determinations subject to reconsideration; time for filing. Any 
worker, group of workers, certified or recognized union, or authorized 
representative of such worker or group, aggrieved by a determination 
issued pursuant to the Act and Sec. 90.16 paragraphs (c), (f), and (g), 
or Sec. 90.17(d) may file an application for reconsideration of the 
determination with the Office of Trade Adjustment Assistance, Employment 
and Training Administration, U.S. Department of Labor, 601 D Street, 
NW., Washington, DC 20213. All applications must be in writing and must 
be filed no later than thirty (30) days after the notice of the 
determination has been published in the Federal Register.
    (b) Contents of application for reconsideration. An application for 
reconsideration shall include: (1) Name(s), address(es), and telephone 
number of the applicant(s); (2) The name or a description of the group 
of workers on whose behalf the application for reconsideration is filed; 
(3) The name and case number of the determination complained of; and (4) 
A statement of reasons for believing that the determination complained 
of is erroneous. If the application is based, in whole or in part, on 
facts not previously considered in the determination, such facts shall 
be specifically set forth. If the application is based, in whole or in 
part, on an allegation that the determination complained of was based on 
mistake of facts which were previously considered, such mistake of facts 
shall be specifically set forth. If the application is based, in whole 
or in part, on an allegation as to a misinterpretation of facts or of 
the law, such misinterpretation shall be specifically set forth.
    (c) Determination regarding application for reconsideration. Not 
later than fifteen (15) days after receipt of the application for 
reconsideration, the certifying officer shall make and issue a 
determination granting or denying reconsideration. The certifying 
officer may grant an application for reconsideration under the following 
circumstances:
    (1) If it appears on the basis of facts not previously considered 
that the determination complained of was erroneous;
    (2) If it appears that the determination complained of was based on 
mistake in the determination of facts previously considered; or
    (3) If, in the opinion of the certifying officer, a 
misinterpretation of facts or of the law justifies reconsideration of 
the determination.
    (d) Notice of affirmative determination regarding application for 
reconsideration. Upon reaching a determination that an application for 
reconsideration meets the requirements of paragraph (c) of this section, 
the certifying officer shall issue an affirmative determination 
regarding the application and shall promptly publish notice in the 
Federal Register that the application for reconsideration has been 
received and granted. Such notice shall constitute a Notice of 
Affirmative Determination Regarding Application for Reconsideration.
    (e) Notice of negative determination regarding application for 
reconsideration. Upon reaching a determination that an application for 
reconsideration does not meet the requirements of paragraph (c) of this 
section, the certifying officer shall issue a negative determination 
regarding the application and shall promptly publish in the Federal 
Register a summary of the determination, including the reasons therefor.

[[Page 473]]

Such summary shall constitute a Notice of Negative Determination 
Regarding Application for Reconsideration. A determination issued 
pursuant to this paragraph shall constitute a final determination for 
purposes of judicial review pursuant to section 284 of the Act, 19 
U.S.C. 2395, and Sec. 90.19(a).
    (f) Opportunity for comment. Within ten (10) days after publication 
of a notice under paragraph (d) of this section, the group of workers or 
other persons showing an interest in the proceedings may make written 
submissions to show why the determination under reconsideration should 
or should not be modified.
    (g) Determinations on reconsideration. Not later than forty-five 
(45) days after reaching an Affirmative Determination Regarding 
Application for Reconsideration, the certifying officer shall make a 
determination on the reconsideration.
    (h) Notice of revised certification of eligibility and notice of 
revised determination. Upon reaching a determination on reconsideration 
that a group of workers has met all the requirements set forth in 
section 222 of the Act and paragraph (b) of Sec. 90.16, the certifying 
officer shall issue a revised determination concerning certification of 
eligibility to apply for adjustment assistance and shall promptly 
publish in the Federal Register a summary of the revised determination 
together with the reasons for making such revised determination (with 
the exception of information which the certifying officer determines to 
be confidential). Such summary shall include a certification of 
eligibility in accordance with paragraph (d) of Sec. 90.16. The summary 
shall constitute a Notice of Revised Certification of Eligibility when 
the determination under reconsideration was a certification of 
eligibility. The summary shall constitute a Notice of Revised 
Determination when the determination under reconsideration was a 
negative determination or a certification containing a negative 
determination. A determination issued pursuant to this paragraph shall 
constitute a final determination for purposes of judicial review 
pursuant to section 284 of the Act, 19 U.S.C. 2395, and Sec. 90.19(a).
    (i) Notice of negative determination on reconsideration. Upon 
reaching a determination on reconsideration that a group of workers has 
not met all the requirements set forth in section 222 of the Act and 
paragraph (b) of Sec. 90.16, the certifying officer shall issue a 
negative determination on reconsideration and shall promptly publish in 
the Federal Register a summary of the determination together with the 
reasons for making such determination (with the exception of information 
which the certifying officer determines to be confidential). Such 
summary shall constitute a Notice of Negative Determination on 
Reconsideration. A determination issued pursuant to this paragraph shall 
constitute a final determination for purposes of judicial review 
pursuant to section 284 of the Act, 19 U.S.C. 2395, and Sec. 90.19(a).

[42 FR 32772, June 28, 1977, as amended at 52 FR 23402, June 19, 1987]



Sec. 90.19  Judicial review of determinations.

    (a) General. Pursuant to section 284 of the Act, 19 U.S.C. 2395, any 
worker, group of workers, certified or recognized union, or authorized 
representative of such worker or group, aggrieved by a final 
determination issued pursuant to the Act and Sec. 90.16(c), 
Sec. 90.16(f), Sec. 90.16(g), Sec. 90.17(d), Sec. 90.18(e), 
Sec. 90.18(h) or Sec. 90.18(i) may commence a civil action for review of 
such determination with the United States Court of International Trade. 
The party seeking judicial review must file for review in the Court of 
International Trade within sixty (60) days after the notice of 
determination has been published in the Federal Register.
    (b) Certified record of the Secretary. Upon receiving a copy of the 
summons and complaint from the clerk of the Court of International 
Trade, the certifying officer shall promptly certify and file in such 
court the record on which the determination was based. The record shall 
include transcripts of any public hearings, the findings of fact made 
pursuant to Sec. 90.16(b), Sec. 90.18(e), Sec. 90.18(h) or 
Sec. 90.18(i), and other documents on which the determination was based.
    (c) Further proceedings. If a case is remanded to the Secretary by 
the Court

[[Page 474]]

of International Trade for the taking of further evidence, the Director 
or Deputy Director shall direct that further proceedings be conducted in 
accordance with the provisions of subpart B of this part, including the 
taking of further evidence. A certifying officer, after the conduct of 
such further proceedings, may make new or modified findings of fact and 
may modify or affirm the previous determination. Upon the completion of 
such further proceedings, the certifying officer shall certify and file 
in the Court of International Trade the record of such further 
proceedings.
    (d) Substantial evidence. The findings of fact by the certifying 
officer shall be conclusive if the Court of International Trade 
determines that such findings of fact are supported by substantial 
evidence.

[52 FR 23402, June 19, 1987]



 Subpart C--Initiation and Conduct of Study With Respect to Workers in 
 Industry Which is the Subject of an Investigation for Industry Import 
                                 Relief



Sec. 90.21  Study.

    (a) Initiation. Upon notification by the Commission, pursuant to 
section 224 of the Act, that the Commission has begun an investigation 
under section 201 with respect to an industry import relief action, the 
Secretary shall direct the Director of the Office of Trade Adjustment 
Assistance to immediately begin a study of
    (1) The number of workers in the domestic industry producing the 
like or directly competitive article(s) who have been or are likely to 
be certified eligible for adjustment assistance; and
    (2) The extent to which the adjustment of such workers to the import 
competition may be facilitated through the use of existing programs.
    (b) Report. The report of the Secretary of the study under section 
224(a) of the Act and paragraph (a) of this section shall be made to the 
President not later than fifteen (15) days after the day on which the 
Commission makes its report under section 201.
    (c) Release of report. Upon making the report of the study to the 
President, the Secretary shall also promptly make the report public 
(with the exception of information which the Secretary determines to be 
confidential) and shall have a summary of it published in the Federal 
Register.

(Information collection requirements in paragraph (a) were approved by 
the Office of Management and Budget under control number 1205-0194)

[42 FR 32772, June 28, 1977, as amended at 49 FR 18295, Apr. 30, 1984]



Sec. 90.22  Dissemination of program knowledge and assistance to workers.

    Whenever the Commission makes an affirmative finding under section 
201(b) of the Act that increased imports are a substantial cause of 
serious injury or threat thereof with respect to an industry, the 
Secretary shall, to the extent feasible, make available to the workers 
in such industry full information about programs which may facilitate 
their adjustment to the import competition. He shall provide assistance 
to such workers in the preparation and processing of petitions and 
applications for program benefits.



                      Subpart D--General Provisions



Sec. 90.31  Filing of documents.

    (a) Where to file; date of filing. Petitions and all other documents 
shall be filed at the Office of Trade Adjustment Assistance, Employment 
and Training Administration, U.S. Department of Labor, 601 D Street, 
NW., Washington, DC 20213. If properly filed, such documents shall be 
deemed filed on the date on which they are actually received in the 
Office of Trade Adjustment Assistance.
    (b) Conformity with rules. Documents filed in support of the 
initiation of an investigation by the Director of the Office of Trade 
Adjustment Assistance shall be considered properly filed if they conform 
with the pertinent rules prescribed in this part 90. The Director may 
accept documents in substantial compliance with the pertinent rules of 
this part provided good and sufficient reason is stated in the document 
for inability to comply fully with the pertinent rules. The Director 
cannot waive

[[Page 475]]

full compliance with a rule which is required by the Act.

[42 FR 32772, June 28, 1977, as amended at 52 FR 23403, June 19, 1987]



Sec. 90.32  Availability of information.

    (a) Information available to the public. Upon request to the 
Director of the Office of Trade Adjustment Assistance, members of the 
public may inspect petitions and other documents filed with the Director 
under the provisions of this part 90, transcripts of testimony taken and 
exhibits submitted at public hearings held under the provisions of this 
part 90, public notices concerning worker assistance under the Act and 
other reports and documents issued for general distribution.
    (b) Information not available to the public. Confidential business 
information, defined in Sec. 90.33 of this part, shall not be available 
to the public.

[42 FR 32772, June 28, 1977, as amended at 52 FR 23403, June 19, 1987]



Sec. 90.33  Confidential business information.

    (a) Definition. Confidential business information means trade 
secrets and commercial or financial information which are obtained from 
a person and are privileged or confidential, as set forth in 5 U.S.C. 
552(b) and 29 CFR part 70.
    (b) Identification of information submitted in confidence. Business 
information which is to be treated as confidential shall be submitted on 
separate sheets each clearly marked at the top, ``Business 
Confidential.'' When submitted at hearings, such business information 
shall be offered as a confidential exhibit with a brief description of 
the nature of the information.
    (c) Acceptance of information in confidence. The Director of the 
Office of Trade Adjustment Assistance may refuse to accept in confidence 
any information which he determines is not entitled to confidential 
treatment under this section. In the event of such refusal, the person 
submitting such information shall be notified and shall be permitted to 
withdraw such information.



Sec. 90.34  Notice procedures.

    Formal notice of a certification, negative determination, or 
termination shall be transmitted promptly to the group of workers 
concerned and to all State Employment Security Agencies concerned 
whenever such notices are published in the Federal Register.



Sec. 90.35  Transitional provisions.

    As more particularly provided in section 246 of the Act, a group of 
workers, their certified or recognized union, or other duly authorized 
representative who filed a petition under section 301(a)(2) of the Trade 
Expansion Act of 1962 before December 3, 1974, may file a new petition 
under section 221 of this Act if:
    (a) The Commission has not rejected such previous petition before 
April 3, 1975; and
    (b) No certification has been issued to the petitioning group under 
section 302(c) of the Trade Expansion Act of 1962 before April 3, 1975; 
and
    (c) The new petition under section 221 of the Act is filed not later 
than July 2, 1975.



Sec. 90.36  Computation of time.

    (a) The time periods specified in Secs. 90.13(a), 90.18(a), and 
90.19(a) will be computed by counting the day after publication in the 
Federal Register as one, and by counting each succeeding day, including 
Saturdays, Sundays, and holidays. However, when the final day would fall 
on a Saturday, Sunday or holiday, the time period will terminate at the 
end of the next succeeding Federal business day.
    (b) The 60-day time period specified in section 223(a) of the Act 
will be computed in the same manner as set forth in paragraph (a) of 
this section, except that the day after the date of filing of the 
petition shall be counted as the first day.



PART 93--NEW RESTRICTIONS ON LOBBYING--Table of Contents




                           Subpart A--General

Sec.
93.100  Conditions on use of funds.
93.105  Definitions.
93.110  Certification and disclosure.

[[Page 476]]

                 Subpart B--Activities by Own Employees

93.200  Agency and legislative liaison.
93.205  Professional and technical services.
93.210  Reporting.

            Subpart C--Activities by Other Than Own Employees

93.300  Professional and technical services.

                  Subpart D--Penalties and Enforcement

93.400  Penalties.
93.405  Penalty procedures.
93.410  Enforcement.

                          Subpart E--Exemptions

93.500  Secretary of Defense.

                        Subpart F--Agency Reports

93.600  Semi-annual compilation.
93.605  Inspector General Report.

Appendix A to Part 93--Certification Regarding Lobbying
Appendix B to Part 93--Disclosure Form to Report Lobbying

    Authority: Section 319, Public Law 101-121 (31 U.S.C. 1352); 5 
U.S.C. 301, Reorganization Plan Number 6 of 1950.

    Cross reference: See also Office of Management and Budget notice 
published at 54 FR 52306, December 20, 1989.

    Source: 55 FR 6737 and 6751, Feb. 26, 1990 (interim).



                           Subpart A--General



Sec. 93.100  Conditions on use of funds.

    (a) No appropriated funds may be expended by the recipient of a 
Federal contract, grant, loan, or cooperative ageement to pay any person 
for influencing or attempting to influence an officer or employee of any 
agency, a Member of Congress, an officer or employee of Congress, or an 
employee of a Member of Congress in connection with any of the following 
covered Federal actions: the awarding of any Federal contract, the 
making of any Federal grant, the making of any Federal loan, the 
entering into of any cooperative agreement, and the extension, 
continuation, renewal, amendment, or modification of any Federal 
contract, grant, loan, or cooperative agreement.
    (b) Each person who requests or receives from an agency a Federal 
contract, grant, loan, or cooperative agreement shall file with that 
agency a certification, set forth in appendix A, that the person has not 
made, and will not make, any payment prohibited by paragraph (a) of this 
section.
    (c) Each person who requests or receives from an agency a Federal 
contract, grant, loan, or a cooperative agreement shall file with that 
agency a disclosure form, set forth in appendix B, if such person has 
made or has agreed to make any payment using nonappropriated funds (to 
include profits from any covered Federal action), which would be 
prohibited under paragraph (a) of this section if paid for with 
appropriated funds.
    (d) Each person who requests or receives from an agency a commitment 
providing for the United States to insure or guarantee a loan shall file 
with that agency a statement, set forth in appendix A, whether that 
person has made or has agreed to make any payment to influence or 
attempt to influence an officer or employee of any agency, a Member of 
Congress, an officer or employee of Congress, or an employee of a Member 
of Congress in connection with that loan insurance or guarantee.
    (e) Each person who requests or receives from an agency a commitment 
providing for the United States to insure or guarantee a loan shall file 
with that agency a disclosure form, set forth in appendix B, if that 
person has made or has agreed to make any payment to influence or 
attempt to influence an officer or employee of any agency, a Member of 
Congress, an officer or employee of Congress, or an employee of a Member 
of Congress in connection with that loan insurance or guarantee.



Sec. 93.105  Definitions.

    For purposes of this part:
    (a) Agency, as defined in 5 U.S.C. 552(f), includes Federal 
executive departments and agencies as well as independent regulatory 
commissions and Government corporations, as defined in 31 U.S.C. 
9101(1).
    (b) Covered Federal action means any of the following Federal 
actions:
    (1) The awarding of any Federal contract;
    (2) The making of any Federal grant;
    (3) The making of any Federal loan;

[[Page 477]]

    (4) The entering into of any cooperative agreement; and,
    (5) The extension, continuation, renewal, amendment, or modification 
of any Federal contract, grant, loan, or cooperative agreement.

Covered Federal action does not include receiving from an agency a 
commitment providing for the United States to insure or guarantee a 
loan. Loan guarantees and loan insurance are addressed independently 
within this part.
    (c) Federal contract means an acquisition contract awarded by an 
agency, including those subject to the Federal Acquisition Regulation 
(FAR), and any other acquisition contract for real or personal property 
or services not subject to the FAR.
    (d) Federal cooperative agreement means a cooperative agreement 
entered into by an agency.
    (e) Federal grant means an award of financial assistance in the form 
of money, or property in lieu of money, by the Federal Government or a 
direct appropriation made by law to any person. The term does not 
include technical assistance which provides services instead of money, 
or other assistance in the form of revenue sharing, loans, loan 
guarantees, loan insurance, interest subsidies, insurance, or direct 
United States cash assistance to an individual.
    (f) Federal loan means a loan made by an agency. The term does not 
include loan guarantee or loan insurance.
    (g) Indian tribe and tribal organization have the meaning provided 
in section 4 of the Indian Self-Determination and Education Assistance 
Act (25 U.S.C. 450B). Alaskan Natives are included under the definitions 
of Indian tribes in that Act.
    (h) Influencing or attempting to influence means making, with the 
intent to influence, any communication to or appearance before an 
officer or employee or any agency, a Member of Congress, an officer or 
employee of Congress, or an employee of a Member of Congress in 
connection with any covered Federal action.
    (i) Loan guarantee and loan insurance means an agency's guarantee or 
insurance of a loan made by a person.
    (j) Local government means a unit of government in a State and, if 
chartered, established, or otherwise recognized by a State for the 
performance of a governmental duty, including a local public authority, 
a special district, an intrastate district, a council of governments, a 
sponsor group representative organization, and any other instrumentality 
of a local government.
    (k) Officer or employee of an agency includes the following 
individuals who are employed by an agency:
    (1) An individual who is appointed to a position in the Government 
under title 5, U.S.C., including a position under a temporary 
appointment;
    (2) A member of the uniformed services as defined in section 101(3), 
title 37, U.S.C.;
    (3) A special Government employee as defined in section 202, title 
18, U.S.C.; and,
    (4) An individual who is a member of a Federal advisory committee, 
as defined by the Federal Advisory Committee Act, title 5, U.S.C. 
appendix 2.
    (l) Person means an individual, corporation, company, association, 
authority, firm, partnership, society, State, and local government, 
regardless of whether such entity is operated for profit or not for 
profit. This term excludes an Indian tribe, tribal organization, or any 
other Indian organization with respect to expenditures specifically 
permitted by other Federal law.
    (m) Reasonable compensation means, with respect to a regularly 
employed officer or employee of any person, compensation that is 
consistent with the normal compensation for such officer or employee for 
work that is not furnished to, not funded by, or not furnished in 
cooperation with the Federal Government.
    (n) Reasonable payment means, with respect to perfessional and other 
technical services, a payment in an amount that is consistent with the 
amount normally paid for such services in the private sector.
    (o) Recipient includes all contractors, subcontractors at any tier, 
and subgrantees at any tier of the recipient of funds received in 
connection with a Federal contract, grant, loan, or cooperative 
agreement. The term excludes

[[Page 478]]

an Indian tribe, tribal organization, or any other Indian organization 
with respect to expenditures specifically permitted by other Federal 
law.
    (p) Regularly employed means, with respect to an officer or employee 
of a person requesting or receiving a Federal contract, grant, loan, or 
cooperative agreement or a commitment providing for the United States to 
insure or guarantee a loan, an officer or employee who is employed by 
such person for at least 130 working days within one year immediately 
preceding the date of the submission that initiates agency consideration 
of such person for receipt of such contract, grant, loan, cooperative 
agreement, loan insurance commitment, or loan guarantee commitment. An 
officer or employee who is employed by such person for less than 130 
working days within one year immediately preceding the date of the 
submission that initiates agency consideration of such person shall be 
considered to be regularly employed as soon as he or she is employed by 
such person for 130 working days.
    (q) State means a State of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, a territory or possession of 
the United States, an agency or instrumentality of a State, and a multi-
State, regional, or interstate entity having governmental duties and 
powers.



Sec. 93.110  Certification and disclosure.

    (a) Each person shall file a certification, and a disclosure form, 
if required, with each submission that initiates agency consideration of 
such person for:
    (1) Award of a Federal contract, grant, or cooperative agreement 
exceeding $100,000; or
    (2) An award of a Federal loan or a commitment providing for the 
United States to insure or guarantee a loan exceeding $150,000.
    (b) Each person shall file a certification, and a disclosure form, 
if required, upon receipt by such person of:
    (1) A Federal contract, grant, or cooperative agreement exceeding 
$100,000; or
    (2) A Federal loan or a commitment providing for the United States 
to insure or guarantee a loan exceeding $150,000,

Unless such person previously filed a certification, and a disclosure 
form, if required, under paragraph (a) of this section.
    (c) Each person shall file a disclosure form at the end of each 
calendar quarter in which there occurs any event that requires 
disclosure or that materially affects the accuracy of the information 
contained in any disclosure form previously filed by such person under 
paragraphs (a) or (b) of this section. An event that materially affects 
the accuracy of the information reported includes:
    (1) A cumulative increase of $25,000 or more in the amount paid or 
expected to be paid for influencing or attempting to influence a covered 
Federal action; or
    (2) A change in the person(s) or individual(s) influencing or 
attempting to influence a covered Federal action; or,
    (3) A change in the officer(s), employee(s), or Member(s) contacted 
to influence or attempt to influence a covered Federal action.
    (d) Any person who requests or receives from a person referred to in 
paragraphs (a) or (b) of this section:
    (1) A subcontract exceeding $100,000 at any tier under a Federal 
contract;
    (2) A subgrant, contract, or subcontract exceeding $100,000 at any 
tier under a Federal grant;
    (3) A contract or subcontract exceeding $100,000 at any tier under a 
Federal loan exceeding $150,000; or,
    (4) A contract or subcontract exceeding $100,000 at any tier under a 
Federal cooperative agreement,

Shall file a certification, and a disclosure form, if required, to the 
next tier above.
    (e) All disclosure forms, but not certifications, shall be forwarded 
from tier to tier until received by the person referred to in paragraphs 
(a) or (b) of this section. That person shall forward all disclosure 
forms to the agency.
    (f) Any certification or disclosure form filed under paragraph (e) 
of this section shall be treated as a material representation of fact 
upon which all receiving tiers shall rely. All liability arising from an 
erroneous representation shall be borne solely by the tier

[[Page 479]]

filing that representation and shall not be shared by any tier to which 
the erroneous representation is forwarded. Submitting an erroneous 
certification or disclosure constitutes a failure to file the required 
certification or disclosure, respectively. If a person fails to file a 
required certification or disclosure, the United States may pursue all 
available remedies, including those authorized by section 1352, title 
31, U.S.C.
    (g) For awards and commitments in process prior to December 23, 
1989, but not made before that date, certifications shall be required at 
award or commitment, covering activities occurring between December 23, 
1989, and the date of award or commitment. However, for awards and 
commitments in process prior to the December 23, 1989 effective date of 
these provisions, but not made before December 23, 1989, disclosure 
forms shall not be required at time of award or commitment but shall be 
filed within 30 days.
    (h) No reporting is required for an activity paid for with 
appropriated funds if that activity is allowable under either subpart B 
or C.



                 Subpart B--Activities by Own Employees



Sec. 93.200  Agency and legislative liaison.

    (a) The prohibition on the use of appropriated funds, in Sec. 93.100 
(a), does not apply in the case of a payment of reasonable compensation 
made to an officer or employee of a person requesting or receiving a 
Federal contract, grant, loan, or cooperative agreement if the payment 
is for agency and legislative liaison activities not directly related to 
a covered Federal action.
    (b) For purposes of paragraph (a) of this section, providing any 
information specifically requested by an agency or Congress is allowable 
at any time.
    (c) For purposes of paragraph (a) of this section, the following 
agency and legislative liaison activities are allowable at any time only 
where they are not related to a specific solicitation for any covered 
Federal action:
    (1) Discussing with an agency (including individual demonstrations) 
the qualities and characteristics of the person's products or services, 
conditions or terms of sale, and service capabilities; and,
    (2) Technical discussions and other activities regarding the 
application or adaptation of the person's products or services for an 
agency's use.
    (d) For purposes of paragraph (a) of this section, the following 
agencies and legislative liaison activities are allowable only where 
they are prior to formal solicitation of any covered Federal action:
    (1) Providing any information not specifically requested but 
necessary for an agency to make an informed decision about initiation of 
a covered Federal action;
    (2) Technical discussions regarding the preparation of an 
unsolicited proposal prior to its official submission; and,
    (3) Capability presentations by persons seeking awards from an 
agency pursuant to the provisions of the Small Business Act, as amended 
by Public Law 95-507 and other subsequent amendments.
    (e) Only those activities expressly authorized by this section are 
allowable under this section.



Sec. 93.205  Professional and technical services.

    (a) The prohibition on the use of appropriated funds, in Sec. 93.100 
(a), does not apply in the case of a payment of reasonable compensation 
made to an officer or employee of a person requesting or receiving a 
Federal contract, grant, loan, or cooperative agreement or an extension, 
continuation, renewal, amendment, or modification of a Federal contract, 
grant, loan, or cooperative agreement if payment is for professional or 
technical services rendered directly in the preparation, submission, or 
negotiation of any bid, proposal, or application for that Federal 
contract, grant, loan, or cooperative agreement or for meeting 
requirements imposed by or pursuant to law as a condition for receiving 
that Federal contract, grant, loan, or cooperative agreement.
    (b) For purposes of paragraph (a) of this section, professional and 
technical services shall be limited to advice and

[[Page 480]]

analysis directly applying any professional or technical discipline. For 
example, drafting of a legal document accompanying a bid or proposal by 
a lawyer is allowable. Similarly, technical advice provided by an 
engineer on the performance or operational capability of a piece of 
equipment rendered directly in the negotiation of a contract is 
allowable. However, communications with the intent to influence made by 
a professional (such as a licensed lawyer) or a technical person (such 
as a licensed accountant) are not allowable under this section unless 
they provide advice and analysis directly applying their professional or 
technical expertise and unless the advice or analysis is rendered 
directly and solely in the preparation, submission or negotiation of a 
covered Federal action. Thus, for example, communications with the 
intent to influence made by a lawyer that do not provide legal advice or 
analysis directly and solely related to the legal aspects of his or her 
client's proposal, but generally advocate one proposal over another are 
not allowable under this section because the lawyer is not providing 
professional legal services. Similarly, communications with the intent 
to influence made by an engineer providing an engineering analysis prior 
to the preparation or submission of a bid or proposal are not allowable 
under this section since the engineer is providing technical services 
but not directly in the preparation, submission or negotiation of a 
covered Federal action.
    (c) Requirements imposed by or pursuant to law as a condition for 
receiving a covered Federal award include those required by law or 
regulation, or reasonably expected to be required by law or regulation, 
and any other requirements in the actual award documents.
    (d) Only those services expressly authorized by this section are 
allowable under this section.



Sec. 93.210  Reporting.

    No reporting is required with respect to payments of reasonable 
compensation made to regularly employed officers or employees of a 
person.



            Subpart C--Activities by Other Than Own Employees



Sec. 93.300  Professional and technical services.

    (a) The prohibition on the use of appropriated funds, in Sec. 93.100 
(a), does not apply in the case of any reasonable payment to a person, 
other than an officer or employee of a person requesting or receiving a 
covered Federal action, if the payment is for professional or technical 
services rendered directly in the preparation, submission, or 
negotiation of any bid, proposal, or application for that Federal 
contract, grant, loan, or cooperative agreement or for meeting 
requirements imposed by or pursuant to law as a condition for receiving 
that Federal contract, grant, loan, or cooperative agreement.
    (b) The reporting requirements in Sec. 93.110 (a) and (b) regarding 
filing a disclosure form by each person, if required, shall not apply 
with respect to professional or technical services rendered directly in 
the preparation, submission, or negotiation of any commitment providing 
for the United States to insure or guarantee a loan.
    (c) For purposes of paragraph (a) of this section, professional and 
technical services shall be limited to advice and analysis directly 
applying any professional or technical discipline. For example, drafting 
or a legal document accompanying a bid or proposal by a lawyer is 
allowable. Similarly, technical advice provided by an engineer on the 
performance or operational capability of a piece of equipment rendered 
directly in the negotiation of a contract is allowable. However, 
communications with the intent to influence made by a professional (such 
as a licensed lawyer) or a technical person (such as a licensed 
accountant) are not allowable under this section unless they provide 
advice and analysis directly applying their professional or technical 
expertise and unless the advice or analysis is rendered directly and 
solely in the preparation, submission or negotiation of a covered 
Federal action. Thus, for example, communications with the intent to 
influence made by a lawyer that do not provide legal advice or analysis 
directly and solely related to the legal aspects of his or her client's

[[Page 481]]

proposal, but generally advocate one proposal over another are not 
allowable under this section because the lawyer is not providing 
professional legal services. Similarly, communications with the intent 
to influence made by an engineer providing an engineering analysis prior 
to the preparation or submission of a bid or proposal are not allowable 
under this section since the engineer is providing technical services 
but not directly in the preparation, submission or negotiation of a 
covered Federal action.
    (d) Requirements imposed by or pursuant to law as a condition for 
receiving a covered Federal award include those required by law or 
regulation, or reasonably expected to be required by law or regulation, 
and any other requirements in the actual award documents.
    (e) Persons other than officers or employees of a person requesting 
or receiving a covered Federal action include consultants and trade 
associations.
    (f) Only those services expressly authorized by this section are 
allowable under this section.



                  Subpart D--Penalties and Enforcement



Sec. 93.400  Penalties.

    (a) Any person who makes an expenditure prohibited herein shall be 
subject to a civil penalty of not less than $10,000 and not more than 
$100,000 for each such expenditure.
    (b) Any person who fails to file or amend the disclosure form (see 
appendix B) to be filed or amended if required herein, shall be subject 
to a civil penalty of not less than $10,000 and not more than $100,000 
for each such failure.
    (c) A filing or amended filing on or after the date on which an 
administrative action for the imposition of a civil penalty is commenced 
does not prevent the imposition of such civil penalty for a failure 
occurring before that date. An administrative action is commenced with 
respect to a failure when an investigating official determines in 
writing to commence an investigation of an allegation of such failure.
    (d) In determining whether to impose a civil penalty, and the amount 
of any such penalty, by reason of a violation by any person, the agency 
shall consider the nature, circumstances, extent, and gravity of the 
violation, the effect on the ability of such person to continue in 
business, any prior violations by such person, the degree of culpability 
of such person, the ability of the person to pay the penalty, and such 
other matters as may be appropriate.
    (e) First offenders under paragraphs (a) or (b) of this section 
shall be subject to a civil penalty of $10,000, absent aggravating 
circumstances. Second and subsequent offenses by persons shall be 
subject to an appropriate civil penalty between $10,000 and $100,000, as 
determined by the agency head or his or her designee.
    (f) An imposition of a civil penalty under this section does not 
prevent the United States from seeking any other remedy that may apply 
to the same conduct that is the basis for the imposition of such civil 
penalty.



Sec. 93.405  Penalty procedures.

    Agencies shall impose and collect civil penalties pursuant to the 
provisions of the Program Fraud and Civil Remedies Act, 31 U.S.C. 3803 
(except subsection (c)), 3804, 3805, 3806, 3807, 3808, and 3812, insofar 
as these provisions are not inconsistent with the requirements herein.



Sec. 93.410  Enforcement.

    The head of each agency shall take such actions as are necessary to 
ensure that the provisions herein are vigorously implemented and 
enforced in that agency.



                          Subpart E--Exemptions



Sec. 93.500  Secretary of Defense.

    (a) The Secretary of Defense may exempt, on a case-by-case basis, a 
covered Federal action from the prohibition whenever the Secretary 
determines, in writing, that such an exemption is in the national 
interest. The Secretary shall transmit a copy of each such written 
exemption to Congress immediately after making such a determination.

[[Page 482]]

    (b) The Department of Defense may issue supplemental regulations to 
implement paragraph (a) of this section.



                        Subpart F--Agency Reports



Sec. 93.600  Semi-annual compilation.

    (a) The head of each agency shall collect and compile the disclosure 
reports (see appendix B) and, on May 31 and November 30 of each year, 
submit to the Secretary of the Senate and the Clerk of the House of 
Representatives a report containing a compilation of the information 
contained in the disclosure reports received during the six-month period 
ending on March 31 or September 30, respectively, of that year.
    (b) The report, including the compilation, shall be available for 
public inspection 30 days after receipt of the report by the Secretary 
and the Clerk.
    (c) Information that involves intelligence matters shall be reported 
only to the Select Committee on Intelligence of the Senate, the 
Permanent Select Committee on Intelligence of the House of 
Representatives, and the Committees on Appropriations of the Senate and 
the House of Representatives in accordance with procedures agreed to by 
such committees. Such information shall not be available for public 
inspection.
    (d) Information that is classified under Executive Order 12356 or 
any successor order shall be reported only to the Committee on Foreign 
Relations of the Senate and the Committee on Foreign Affairs of the 
House of Representatives or the Committees on Armed Services of the 
Senate and the House of Representatives (whichever such committees have 
jurisdiction of matters involving such information) and to the 
Committees on Appropriations of the Senate and the House of 
Representatives in accordance with procedures agreed to by such 
committees. Such information shall not be available for public 
inspection.
    (e) The first semi-annual compilation shall be submitted on May 31, 
1990, and shall contain a compilation of the disclosure reports received 
from December 23, 1989 to March 31, 1990.
    (f) Major agencies, designated by the Office of Management and 
Budget (OMB), are required to provide machine-readable compilations to 
the Secretary of the Senate and the Clerk of the House of 
Representatives no later than with the compilations due on May 31, 1991. 
OMB shall provide detailed specifications in a memorandum to these 
agencies.
    (g) Non-major agencies are requested to provide machine-readable 
compilations to the Secretary of the Senate and the Clerk of the House 
of Representatives.
    (h) Agencies shall keep the originals of all disclosure reports in 
the official files of the agency.



Sec. 93.605  Inspector General Report.

    (a) The Inspector General, or other official as specified in 
paragraph (b) of this section, of each agency shall prepare and submit 
to Congress each year, commencing with submission of the President's 
Budget in 1991, an evaluation of the compliance of that agency with, and 
the effectiveness of, the requirements herein. The evaluation may 
include any recommended changes that may be necessary to strengthen or 
improve the requirements.
    (b) In the case of an agency that does not have an Inspector 
General, the agency official comparable to an Inspector General shall 
prepare and submit the annual report, or, if there is no such comparable 
official, the head of the agency shall prepare and submit the annual 
report.
    (c) The annual report shall be submitted at the same time the agency 
submits its annual budget justifications to Congress.
    (d) The annual report shall include the following: All alleged 
violations relating to the agency's covered Federal actions during the 
year covered by the report, the actions taken by the head of the agency 
in the year covered by the report with respect to those alleged 
violations and alleged violations in previous years, and the amounts of 
civil penalties imposed by the agency in the year covered by the report.

[[Page 483]]

         Appendix A to Part 93--Certification Regarding Lobbying

 Certification for Contracts, Grants, Loans, and Cooperative Agreements

    The undersigned certifies, to the best of his or her knowledge and 
belief, that:
    (1) No Federal appropriated funds have been paid or will be paid, by 
or on behalf of the undersigned, to any person for influencing or 
attempting to influence an officer or employee of an agency, a Member of 
Congress, an officer or employee of Congress, or an employee of a Member 
of Congress in connection with the awarding of any Federal contract, the 
making of any Federal grant, the making of any Federal loan, the 
entering into of any cooperative agreement, and the extension, 
continuation, renewal, amendment, or modification of any Federal 
contract, grant, loan, or cooperative agreement.
    (2) If any funds other than Federal appropriated funds have been 
paid or will be paid to any person for influencing or attempting to 
influence an officer or employee of any agency, a Member of Congress, an 
officer or employee of Congress, or an employee of a Member of Congress 
in connection with this Federal contract, grant, loan, or cooperative 
agreement, the undersigned shall complete and submit Standard Form-LLL, 
``Disclosure Form to Report Lobbying,'' in accordance with its 
instructions.
    (3) The undersigned shall require that the language of this 
certification be included in the award documents for all subawards at 
all tiers (including subcontracts, subgrants, and contracts under 
grants, loans, and cooperative agreements) and that all subrecipients 
shall certify and disclose accordingly.
    This certification is a material representation of fact upon which 
reliance was placed when this transaction was made or entered into. 
Submission of this certification is a prerequisite for making or 
entering into this transaction imposed by section 1352, title 31, U.S.C. 
Any person who fails to file the required certification shall be subject 
to a civil penalty of not less than $10,000 and not more than $100,000 
for each such failure.

            Statement for Loan Guarantees and Loan Insurance

    The undersigned states, to the best of his or her knowledge and 
belief, that:
    If any funds have been paid or will be paid to any person for 
influencing or attempting to influence an officer or employee of any 
agency, a Member of Congress, an officer or employee of Congress, or an 
employee of a Member of Congress in connection with this commitment 
providing for the United States to insure or guarantee a loan, the 
undersigned shall complete and submit Standard Form-LLL, ``Disclosure 
Form to Report Lobbying,'' in accordance with its instructions.
    Submission of this statement is a prerequisite for making or 
entering into this transaction imposed by section 1352, title 31, U.S.C. 
Any person who fails to file the required statement shall be subject to 
a civil penalty of not less than $10,000 and not more than $100,000 for 
each such failure.

[[Page 484]]

        Appendix B to Part 93--Disclosure Form to Report Lobbying
      [GRAPHIC] [TIFF OMITTED] TC21OC91.005
      

[[Page 485]]


[GRAPHIC] [TIFF OMITTED] TC21OC91.006


[[Page 486]]


[GRAPHIC] [TIFF OMITTED] TC21OC91.007


[[Page 487]]





PART 95--GRANTS AND AGREEMENTS WITH INSTITUTIONS OF HIGHER EDUCATION, HOSPITALS, AND OTHER NON-PROFIT ORGANIZATIONS, AND WITH COMMERCIAL ORGANIZATIONS, FOREIGN
 
GOVERNMENTS, ORGANIZATIONS UNDER THE JURISDICTION OF FOREIGN GOVERNMENTS, AND INTERNATIONAL ORGANIZATIONS--Table of Contents




                           Subpart A--General

Sec.
95.1  Purpose.
95.2  Definitions.
95.3  Effect on other issuances.
95.4  Deviations.
95.5  Subawards.

                    Subpart B--Pre-Award Requirements

95.10  Purpose.
95.11  Pre-award policies.
95.12  Forms for applying for Federal assistance.
95.13  Debarment and suspension.
95.14  Special award conditions.
95.15  Metric system of measurement.
95.16  Resource Conservation and Recovery Act.
95.17  Certifications and representations.

                   Subpart C--Post-Award Requirements

                    Financial and Program Management

95.20  Purpose of financial and program management.
95.21  Standards for financial management systems.
95.22  Payment.
95.23  Cost sharing or matching.
95.24  Program income.
95.25  Revision of budget and program plans.
95.26  Non-Federal audits.
95.27  Allowable costs.
95.28  Period of availability of funds.

                           Property Standards

95.30  Purpose of property standards.
95.31  Insurance coverage.
95.32  Real property.
95.33  Federally-owned and exempt property.
95.34  Equipment.
95.35  Supplies and other expendable property.
95.36  Intangible property.
95.37  Property trust relationship.

                          Procurement Standards

95.40  Purpose of procurement standards.
95.41  Recipient responsibilities.
95.42  Codes of conduct.
95.43  Competition.
95.44  Procurement procedures.
95.45  Cost and price analysis.
95.46  Procurement records.
95.47  Contract administration.
95.48  Contract provisions.

                           Reports and Records

95.50  Purpose of reports and records.
95.51  Monitoring and reporting program performance.
95.52  Financial reporting.
95.53  Retention and access requirements for records.

                       Termination and Enforcement

95.60  Purpose of termination and enforcement.
95.61  Termination.
95.62  Enforcement.

                 Subpart D--After-the-Award Requirements

95.70  Purpose.
95.71  Closeout procedures.
95.72  Subsequent adjustments and continuing responsibilities.
95.73  Collection of amounts due.

               Appendix A to Part 95--Contract Provisions

    Authority: 5 U.S.C. 301; OMB Circular A-110 (64 FR 54926, October 8, 
1999); Secretary of Labor's Order 4-76.

    Source: 59 FR 38271, July 27, 1994, unless otherwise noted.



                           Subpart A--General



Sec. 95.1  Purpose.

    This part establishes uniform administrative requirements for 
Federal grants and agreements awarded to institutions of higher 
education, hospitals, other non-profit organizations, commercial 
organizations, foreign governments, organizations under the jurisdiction 
of foreign governments, and international organizations. DOL shall not 
impose additional or inconsistent requirements, except as provided in 
Secs. 95.4 and 95.14 or unless specifically required by Federal statute 
or executive order. Non-profit and commercial organizations that 
implement Federal programs for the States are also subject to State 
requirements.

[[Page 488]]



Sec. 95.2  Definitions.

    (a) Accrued expenditures means the charges incurred by the recipient 
during a given period requiring the provision of funds for:
    (1) Goods and other tangible property received;
    (2) Services performed by employees, contractors, subrecipients, and 
other payees; and,
    (3) Other amounts becoming owed under programs for which no current 
services or performance is required.
    (b) Accrued income means the sum of:
    (1) Earnings during a given period from
    (i) Services performed by the recipient, and
    (ii) Goods and other tangible property delivered to purchasers, and
    (2) Amounts becoming owed to the recipient for which no current 
services or performance is required by the recipient.
    (c) Acquisition cost of equipment means the net invoice price of the 
equipment, including the cost of modifications, attachments, 
accessories, or auxiliary apparatus necessary to make the property 
usable for the purpose for which it was acquired. Other charges, such as 
the cost of installation, transportation, taxes, duty or protective in-
transit insurance, shall be included or excluded from the unit 
acquisition cost in accordance with the recipient's regular accounting 
practices.
    (d) Advance means a payment made by Treasury check or other 
appropriate payment mechanism to a recipient upon its request either 
before outlays are made by the recipient or through the use of 
predetermined payment schedules.
    (e) Award means financial assistance that provides support or 
stimulation to accomplish a public purpose. Awards include grants and 
other agreements in the form of money or property in lieu of money, by 
DOL to an eligible recipient. The term does not include: technical 
assistance, which provides services instead of money; other assistance 
in the form of loans, loan guarantees, interest subsidies, or insurance; 
direct payments of any kind to individuals; and, contracts which are 
required to be entered into and administered under procurement laws and 
regulations.
    (f) Cash contributions means the recipient's cash outlay, including 
the outlay of money contributed to the recipient by third parties.
    (g) Closeout means the process by which DOL determines that all 
applicable administrative actions and all required work of the award 
have been completed by the recipient and DOL.
    (h) Commercial organization means any business entity organized 
primarily for profit (even if its ownership is in the hands of a 
nonprofit entity) with a place of business located in or outside the 
United States. The term includes, but is not limited to, an individual, 
partnership, corporation, joint venture, association, or cooperative.
    (i) Contract means a procurement contract under an award or 
subaward, and a procurement subcontract under a recipient's or 
subrecipient's contract.
    (j) Cost sharing or matching means that portion of project or 
program costs not borne by DOL.
    (k) Date of completion means the date on which all work under an 
award is completed or the date on the award document, or any supplement 
or amendment thereto, on which DOL sponsorship ends.
    (l) Disallowed costs means those charges to an award that DOL 
determines to be unallowable, in accordance with the applicable Federal 
cost principles or other terms and conditions contained in the award.
    (m) DOL means the U.S. Department of Labor, including its agencies 
and organizational units.
    (n) Equipment means tangible nonexpendable personal property 
including exempt property charged directly to the award having a useful 
life of more than one year and an acquisition cost of $5,000 or more per 
unit. However, consistent with recipient policy, lower limits may be 
established. Equipment includes, but is not limited to, equipment 
acquired before the publication of these regulations and equipment 
transferred from prior years.
    (o) Excess property means property under the control of DOL that, as 
determined by the Secretary of Labor, is no longer required for its 
needs or the discharge of its responsibilities.
    (p) Exempt property means tangible personal property acquired in 
whole or

[[Page 489]]

in part with Federal funds, where DOL has statutory authority to vest 
title in the recipient without further obligation to the Federal 
Government.
    (q) Federal agency means any United States executive department, 
military department, government corporation, government controlled 
corporation, any other establishment in the executive branch (including 
the Executive Office of the President), or any independent regulatory 
agency.
    (r) Federal awarding grantor agency means the Federal agency that 
provides an award to the recipient.
    (s) Federal funds authorized means the total amount of Federal funds 
obligated by DOL for use by the recipient. This amount may include any 
authorized carryover of unobligated funds from prior funding periods 
when permitted by DOL's regulations or DOL's implementing instructions.
    (t) Federal share of real property, equipment, or supplies means 
that percentage of the property's acquisition costs and any improvement 
expenditures paid with Federal funds.
    (u) Funding period means the period of time when Federal funding is 
available for obligation by the recipient.
    (v) Grant officer means any person authorized to enter into, modify 
or terminate any financial assistance awards and make related 
determinations and findings. DOL grant officers shall be designated by 
name on a ``Certificate of Appointment.''
    (w) Intangible property and debt instruments means, but is not 
limited to, trademarks, copyrights, patents and patent applications and 
such property as loans, notes and other debt instruments, lease 
agreements, stock and other instruments of property ownership, whether 
considered tangible or intangible.
    (x) Obligations means the amounts of orders placed, contracts and 
grants awarded, services received and similar transactions during a 
given period that require payment by the recipient during the same or a 
future period.
    (y) Outlays or expenditures means charges made to the project or 
program. They may be reported on a cash or accrual basis. For reports 
prepared on a cash basis, outlays are the sum of cash disbursements for 
direct charges for goods and services, the amount of indirect expense 
charged, the value of third party in-kind contributions applied and the 
amount of cash advances and payments made to subrecipients. For reports 
prepared on an accrual basis, outlays are the sum of cash disbursements 
for direct charges for goods and services, the amount of indirect 
expense incurred, the value of in-kind contributions applied, and the 
net increase (or decrease) in the amounts owed by the recipient for 
goods and other property received, for services performed by employees, 
contractors, subrecipients and other payees and other amounts becoming 
owed under programs for which no current services or performance are 
required.
    (z) Personal property means property of any kind except real 
property. It may be tangible, having physical existence, or intangible, 
having no physical existence, such as copyrights, patents, or 
securities.
    (aa) Prior approval means written approval by an authorized official 
evidencing prior consent.
    (bb) Program income means gross income earned by the recipient that 
is directly generated by a supported activity or earned as a result of 
the award (see exclusions in Sec. 95.24(e) and (h)). Program income 
includes, but is not limited to, income from fees for services 
performed, the use or rental of real or personal property acquired under 
federally-funded projects, the sale of commodities or items fabricated 
under an award, license fees and royalties on patents and copyrights, 
and interest on loans made with award funds. Interest earned on advances 
of Federal funds is not program income. Except as otherwise provided in 
Federal awarding agency regulations or the terms and conditions of the 
award, program income does not include the receipt of principal on 
loans, rebates, credits, discounts, etc., or interest earned on any of 
them.
    (cc) Project costs means all allowable costs, as set forth in the 
applicable Federal cost principles, incurred by a recipient and the 
value of the contributions made by third parties in accomplishing the 
objectives of the award during the project period.

[[Page 490]]

    (dd) Project period means the period established in the award 
document during which Federal sponsorship begins and ends.
    (ee) Property means, unless otherwise stated, real property, 
equipment, intangible property and debt instruments.
    (ff) Real property means land, including land improvements, 
structures and appurtenances thereto, but excludes movable machinery and 
equipment. Real property includes, but is not limited to, real property 
acquired before publication of these regulations and real property 
transferred from prior years.
    (gg) Recipient means an organization receiving financial assistance 
directly from DOL to carry out a project or program. The term includes 
public and private institutions of higher education, public and private 
hospitals, and other quasi-public and private non-profit organizations 
such as, but not limited to, community action agencies, research 
institutes, educational associations, and health centers. The term also 
includes commercial organizations, foreign or international 
organizations (such as agencies of the United Nations) which are 
recipients, subrecipients, or contractors or subcontractors of 
recipients or subrecipients. The term does not include government-owned 
contractor-operated facilities or research centers providing continued 
support for mission-oriented, large-scale programs that are government-
owned or controlled, or are designated as federally-funded research and 
development centers.
    (hh) Research and development means all research activities, both 
basic and applied, and all development activities that are supported at 
universities, colleges, and other non-profit institutions. ``Research'' 
is defined as a systematic study directed toward fuller scientific 
knowledge or understanding of the subject studied. ``Development'' is 
the systematic use of knowledge and understanding gained from research 
directed toward the production of useful materials, devices, systems, or 
methods, including design and development of prototypes and processes. 
The term research also includes activities involving the training of 
individuals in research techniques where such activities utilize the 
same facilities as other research and development activities and where 
such activities are not included in the instruction function.
    (ii) Small awards means a grant or cooperative agreement not 
exceeding the small purchase threshold fixed at 41 U.S.C. Sec. 403(11) 
(currently $25,000).
    (jj) Subaward means an award of financial assistance in the form of 
money, or property in lieu of money, made under an award by a recipient 
to an eligible subrecipient or by a subrecipient to a lower tier 
subrecipient. The term includes financial assistance when provided by 
any legal agreement, even if the agreement is called a contract, but 
does not include procurement of goods and services nor does it include 
any form of assistance which is excluded from the definition of 
``award'' in paragraph (e) of this section.
    (kk) Subrecipient means the legal entity to which a subaward is made 
and which is accountable to the recipient for the use of the funds 
provided. The term includes foreign organizations and international 
organizations (such as agencies of the United Nations).
    (ll) Supplies means all personal property excluding equipment, 
intangible property, and debt instruments as defined in this section, 
and inventions of a contractor conceived or first actually reduced to 
practice in the performance of work under a funding agreement (``subject 
inventions''), as defined in 37 CFR part 401, ``Rights to Inventions 
Made by Nonprofit Organizations and Small Business Firms Under 
Government Grants, Contracts, and Cooperative Agreements.''
    (mm) Suspension means an action by DOL that temporarily withdraws 
Federal sponsorship under an award, pending corrective action by the 
recipient or pending a decision to terminate the award by the Federal 
awarding agency. Suspension of an award is a separate action from 
suspension under DOL's regulations at 29 CFR part 98, implementing 
E.O.'s 12549 and 12689, ``Debarment and Suspension.'' See 29 CFR part 
98, subpart D.
    (nn) Termination means the cancellation of Federal sponsorship, in 
whole or

[[Page 491]]

in part, under an agreement at any time prior to the date of completion.
    (oo) Third party in-kind contributions means the value of non-cash 
contributions provided by non-Federal third parties. Third party in-kind 
contributions may be in the form of real property, equipment, supplies 
and other expendable property, and the value of goods and services 
directly benefiting and specifically identifiable to the project or 
program.
    (pp) Unliquidated obligations, for financial reports prepared on a 
cash basis, means the amount of obligations incurred by the recipient 
that have not been paid. For reports prepared on an accrued expenditure 
basis, they represent the amount of obligations incurred by the 
recipient for which an outlay has not been recorded.
    (qq) Unobligated balance means the portion of the funds authorized 
by DOL that has not been obligated by the recipient and is determined by 
deducting the cumulative obligations from the cumulative funds 
authorized.
    (rr) Unrecovered indirect cost means the difference between the 
amount awarded and the amount which could have been awarded under the 
recipient's approved negotiated indirect cost rate.
    (ss) Working capital advance means a procedure whereby funds are 
advanced to the recipient to cover its estimated disbursement needs for 
a given initial period.



Sec. 95.3  Effect on other issuances.

    For awards subject to this part, all administrative requirements of 
codified program regulations, program manuals, handbooks and other 
nonregulatory materials which are inconsistent with the requirements of 
this part shall be superseded, except to the extent they are required by 
statute, or authorized in accordance with the deviations provision in 
Sec. 95.4.



Sec. 95.4  Deviations.

    The Office of Management and Budget (OMB) may grant exceptions for 
classes of grants or recipients subject to the requirements of this part 
when exceptions are not prohibited by statute. However, in the interest 
of maximum grant-wide uniformity, exceptions from the requirements of 
this part shall be permitted only in unusual circumstances. DOL may 
apply more restrictive requirements to a class of recipients when 
approved by OMB. DOL may apply less restrictive requirements when 
awarding small awards, except for those requirements which are 
statutory. Exceptions on a case-by-case basis may also be made by DOL.



Sec. 95.5  Subawards.

    Unless sections of this part specifically exclude subrecipients from 
coverage, the provisions of this part shall be applied to subrecipients 
performing work under awards if such subrecipients are institutions of 
higher education, hospitals, other non-profit organizations, commercial 
organizations, foreign governments, organizations under the jurisdiction 
of foreign governments, and international organizations. State and local 
government subrecipients are subject to the provisions of regulations 
implementing the grants management common rule, ``Uniform Administrative 
Requirements for Grants and Cooperative Agreements to State and Local 
Governments,'' and codified by DOL at 29 CFR part 97 or its successor.



                    Subpart B--Pre-Award Requirements



Sec. 95.10  Purpose.

    Sections 95.11 through 95.17 prescribe forms and instructions and 
other pre-award matters to be used in applying for Federal awards.



Sec. 95.11  Pre-award policies.

    Public Notice and Priority Setting. Federal awarding agencies shall 
notify the public of its intended funding priorities for discretionary 
grant programs, unless funding priorities are established by Federal 
statute.



Sec. 95.12  Forms for applying for Federal assistance.

    (a) Applicants shall use the SF-424 series or those forms and 
instructions prescribed by DOL.
    (b) The applicant shall complete the appropriate sections of the SF-
424 (Application for Federal Assistance) indicating whether the 
application was

[[Page 492]]

subject to review by the State Single Point of Contact (SPOC). The name 
and address of the SPOC for a particular State can be obtained from DOL 
or the Catalog of Federal Domestic Assistance. The SPOC shall advise the 
applicant whether the program for which application is made has been 
selected by that State for review.



Sec. 95.13  Debarment and suspension.

    Recipients shall comply with the nonprocurement debarment and 
suspension common rule implementing E.O.'s 12549 and 12689, ``Debarment 
and Suspension'' codified by DOL at 29 CFR part 98. This common rule 
restricts subawards and contracts with certain parties that are 
debarred, suspended or otherwise excluded from or ineligible for 
participation in Federal assistance programs or activities.



Sec. 95.14  Special award conditions.

    If an applicant or recipient:
    (a) Has a history of poor performance,
    (b) Is not financially stable,
    (c) Has a management system that does not meet the standards 
prescribed in this part,
    (d) Has not conformed to the terms and conditions of a previous 
award, or
    (e) Is not otherwise responsible,

DOL may impose additional requirements as needed, provided that such 
applicant or recipient is notified in writing as to: The nature of the 
additional requirements, the reason why the additional requirements are 
being imposed, the nature of the corrective action needed, the time 
allowed for completing the corrective actions, and the method for 
requesting reconsideration of the additional requirements imposed. Any 
special conditions shall be promptly removed once the conditions that 
prompted them have been corrected.



Sec. 95.15  Metric system of measurement.

    The Metric Conversion Act, as amended by the Omnibus Trade and 
Competitiveness Act (15 U.S.C. 205), declares that the metric system is 
the preferred measurement system for U.S. trade and commerce. The Act 
requires each Federal agency to establish a date or dates in 
consultation with the Secretary of Commerce, when the metric system of 
measurement will be used in the agency's procurements, grants, and other 
business-related activities. Metric implementation may take longer where 
the use of the system is initially impractical or likely to cause 
significant inefficiencies in the accomplishment of federally-funded 
activities. DOL shall follow the provisions of E.O. 12770, ``Metric 
Usage in Federal Government Programs.''



Sec. 95.16  Resource Conservation and Recovery Act.

    Under the Resource Conservation and Recovery Act (RCRA) (Pub. L. 94-
580 codified at 42 U.S.C. 6962), any State agency or agency of a 
political subdivision of a State which is using appropriated Federal 
funds must comply with Section 6002. Section 6002 requires that 
preference be given in procurement programs to the purchase of specific 
products containing recycled materials identified in guidelines 
developed by the Environmental Protection Agency (EPA) (40 CFR parts 
247-254). Accordingly, State and local institutions of higher education, 
hospitals, and non-profit organizations that receive direct Federal 
awards or other Federal funds shall give preference in their procurement 
programs funded with Federal funds to the purchase of recycled products 
pursuant to the EPA guidelines.



Sec. 95.17  Certifications and representations.

    Unless prohibited by statute or codified regulation, DOL requires 
recipients to submit certifications and representations required by 
statute, executive order, or regulation on an annual basis only, if the 
recipients have ongoing and continuing relationships with the agency. 
Annual certifications and representations shall be signed by responsible 
officials with the authority to ensure recipients' compliance with the 
pertinent requirements.

[[Page 493]]



                   Subpart C--Post-Award Requirements

                    Financial and Program Management



Sec. 95.20  Purpose of financial and program management.

    Sections 95.21 through 95.28 prescribe standards for financial 
management systems, methods for making payments and rules for: 
Satisfying cost sharing and matching requirements, accounting for 
program income, budget revision approvals, making audits, determining 
allowability of cost, and establishing fund availability.



Sec. 95.21  Standards for financial management systems.

    (a) Recipients shall relate financial data to performance data and 
develop unit cost information whenever practical.
    (b) Recipients' financial management systems shall provide for the 
following:
    (1) Accurate, current and complete disclosure of the financial 
results of each federally-sponsored project or program in accordance 
with the reporting requirements set forth in Sec. 95.52. Though DOL 
requires reporting on an accrual basis from a recipient that maintains 
its records on other than an accrual basis, the recipient shall not be 
required to establish an accrual accounting system. These recipients may 
develop such accrual data for its reports on the basis of an analysis of 
the documentation on hand.
    (2) Records that identify adequately the source and application of 
funds for federally-sponsored activities. These records shall contain 
information pertaining to Federal awards, authorizations, obligations, 
unobligated balances, assets, outlays, income and interest.
    (3) Effective control over and accountability for all funds, 
property and other assets. Recipients shall adequately safeguard all 
such assets and assure they are used solely for authorized purposes.
    (4) Comparison of outlays with budget amounts for each award. 
Whenever appropriate, financial information should be related to 
performance and unit cost data.
    (5) Written procedures to minimize the time elapsing between the 
transfer of funds to the recipient from the U.S. Treasury and the 
issuance or redemption of checks, warrants or payments by other means 
for program purposes by the recipient. To the extent that the provisions 
of the Cash Management Improvement Act (CMIA) (Pub. L. 101-453) govern, 
payment methods of State agencies, instrumentalities, and fiscal agents 
shall be consistent with CMIA Treasury-State Agreements or the CMIA 
default procedures codified at 31 CFR part 205, ``Withdrawal of Cash 
from the Treasury for Advances under Federal Grant and Other Programs.''
    (6) Written procedures for determining the reasonableness, 
allocability and allowability of costs in accordance with the provisions 
of the applicable Federal cost principles and the terms and conditions 
of the award.
    (7) Accounting records including cost accounting records that are 
supported by source documentation.
    (c) Where the Federal Government guarantees or insures the repayment 
of money borrowed by the recipient, DOL, at its discretion, may require 
adequate bonding and insurance if the bonding and insurance requirements 
of the recipient are not deemed adequate to protect the interest of the 
Federal Government.
    (d) DOL may require adequate fidelity bond coverage where the 
recipient lacks sufficient coverage to protect the Federal Government's 
interest.
    (e) Where bonds are required in the situations described above, the 
bonds shall be obtained from companies holding certificates of authority 
as acceptable sureties, as prescribed in 31 CFR part 223, ``Surety 
Companies Doing Business with the United States.''



Sec. 95.22  Payment.

    (a) Payment methods shall minimize the time elapsing between the 
transfer of funds from the United States Treasury and the issuance or 
redemption of checks, warrants, or payment by other means by the 
recipients. Payment methods of State agencies or instrumentalities shall 
be consistent with Treasury-State CMIA agreements or default procedures 
codified at 31 CFR part 205.

[[Page 494]]

    (b) Recipients are to be paid in advance, provided they maintain or 
demonstrate the willingness to maintain:
    (1) Written procedures that minimize the time elapsing between the 
transfer of funds and disbursement by the recipient, and
    (2) Financial management systems that meet the standards for fund 
control and accountability as established in Sec. 95.21.

Cash advances to a recipient organization shall be limited to the 
minimum amounts needed and be timed to be in accordance with the actual, 
immediate cash requirements of the recipient organization in carrying 
out the purpose of the approved program or project. The timing and 
amount of cash advances shall be as close as is administratively 
feasible to the actual disbursements by the recipient organization for 
direct program or project costs and the proportionate share of any 
allowable indirect costs.
    (c) Whenever possible, advances shall be consolidated to cover 
anticipated cash needs for all awards made by DOL to the recipient.
    (1) Advance payment mechanisms include, but are not limited to, 
Treasury check and electronic funds transfer.
    (2) Advance payment mechanisms are subject to 31 CFR part 205.
    (3) Recipients are authorized to submit requests for advances 
monthly when electronic fund transfers are not used.
    (d) Requests for Treasury check advance payment shall be submitted 
on SF-270, ``Request for Advance or Reimbursement,'' or other forms as 
may be authorized by OMB. This form is not to be used when Treasury 
check advance payments are made to the recipient automatically through 
the use of a predetermined payment schedule or if precluded by special 
DOL instructions for electronic funds transfer.
    (e) Reimbursement is the preferred method when the requirements in 
paragraph (b) of this section cannot be met. DOL may also use this 
method on any construction agreement, or if the major portion of the 
construction project is accomplished through private market financing or 
Federal loans, and the Federal assistance constitutes a minor portion of 
the project.
    (1) When the reimbursement method is used, DOL shall make payment 
within 30 days after receipt of the billing, unless the billing is 
improper.
    (2) Recipients are authorized to submit requests for reimbursement 
monthly when electronic funds transfers are not used.
    (f) If a recipient cannot meet the criteria for advance payments and 
DOL has determined that reimbursement is not feasible because the 
recipient lacks sufficient working capital, DOL may provide cash on a 
working capital advance basis. Under this procedure, DOL shall advance 
cash to the recipient to cover its estimated disbursement needs for an 
initial period generally geared to the awardee's disbursing cycle. 
Thereafter, DOL shall reimburse the recipient for its actual cash 
disbursements. The working capital advance method of payment shall not 
be used for recipients unwilling or unable to provide timely advances to 
their subrecipient to meet the subrecipient's actual cash disbursements.
    (g) To the extent available, recipients shall disburse funds 
available from repayments to and interest earned on a revolving fund, 
program income, rebates, refunds, contract settlements, audit recoveries 
and interest earned on such funds before requesting additional cash 
payments.
    (h) Unless otherwise required by statute, DOL shall not withhold 
payments for proper charges made by recipients at any time during the 
project period unless paragraphs (h)(1) or (h)(2) of this section apply.
    (1) A recipient has failed to comply with the project objectives, 
the terms and conditions of the award, or Federal reporting 
requirements.
    (2) The recipient or subrecipient is delinquent in a debt to the 
United States as defined in OMB Circular A-129, ``Managing Federal 
Credit Programs.'' Under such conditions, DOL may, upon reasonable 
notice, inform the recipient that payments shall not be made for 
obligations incurred after a specified date until the conditions are 
corrected or the indebtedness to the Federal Government is liquidated.

[[Page 495]]

    (i) Standards governing the use of banks and other institutions as 
depositories of funds advanced under awards are as follows:
    (1) Except for situations described in paragraph (i)(2) of this 
section, DOL shall not require separate depository accounts for funds 
provided to a recipient or establish any eligibility requirements for 
depositories for funds provided to a recipient. However, recipients must 
be able to account for the receipt, obligation and expenditure of funds.
    (2) Advances of Federal funds shall be deposited and maintained in 
insured accounts whenever possible.
    (j) Consistent with the national goal of expanding the opportunities 
for women-owned and minority-owned business enterprises, recipients 
shall be encouraged to use women-owned and minority-owned banks (a bank 
which is owned at least 50 percent by women or minority group members).
    (k) Recipients shall maintain advances of Federal funds in interest 
bearing accounts, unless paragraph (k)(1), (k)(2), or (k)(3) of this 
section apply.
    (1) The recipient receives less than $120,000 in Federal awards per 
year.
    (2) The best reasonably available interest bearing account would not 
be expected to earn interest in excess of $250 per year on Federal cash 
balances.
    (3) The depository would require an average or minimum balance so 
high that it would not be feasible within the expected Federal and non-
Federal cash resources.

In keeping with Electronic Funds Transfer rules, (31 CFR Part 206), 
interest should be remitted to the HHS Payment Management System through 
an electronic medium such as the FEDWIRE Deposit system. Recipients who 
do not have this capability should use a check.
    (l) For those entities where CMIA and its implementing regulations 
do not apply, interest earned on Federal advances deposited in interest 
bearing accounts shall be remitted annually to Department of Health and 
Human Services, Payment Management System, P.O. Box 6021, Rockville, MD 
20852. Interest amounts up to $250 per year may be retained by the 
recipient for administrative expense. State universities and hospitals 
shall comply with CMIA, as it pertains to interest. If an entity subject 
to CMIA uses its own funds to pay pre-award costs for discretionary 
awards without prior written approval from DOL, it waives its right to 
recover the interest under CMIA.
    (m) Except as noted elsewhere in this part, only the following forms 
shall be authorized for the recipients in requesting advances and 
reimbursements. DOL shall not require more than an original and two 
copies of these forms.
    (1) SF-270, Request for Advance or Reimbursement. The SF-270 is the 
standard form for all nonconstruction programs when electronic funds 
transfer or predetermined advance methods are not used. DOL, however, 
has the option of using this form for construction programs in lieu of 
the SF-271, ``Outlay Report and Request for Reimbursement for 
Construction Programs.''
    (2) SF-271, Outlay Report and Request for Reimbursement for 
Construction Programs. The SF-271 is the standard form to be used for 
requesting reimbursement for construction programs. However, DOL may 
substitute the SF-270 when DOL determines that it provides adequate 
information to meet Federal needs.



Sec. 95.23  Cost sharing or matching.

    (a) All contributions, including cash and third party in-kind, shall 
be accepted as part of the recipient's cost sharing or matching when 
such contributions meet all of the following criteria:
    (1) Are verifiable from the recipient's records.
    (2) Are not included as contributions for any other Federally-
assisted project or program.
    (3) Are necessary and reasonable for proper and efficient 
accomplishment of project or program objectives.
    (4) Are allowable under the applicable cost principles.
    (5) Are not paid by the Federal Government under another award, 
except where authorized by Federal statute to be used for cost sharing 
or matching.
    (6) Are provided for in the approved budget when required by DOL.

[[Page 496]]

    (7) Conform to other provisions of this part, as applicable.
    (b) Unrecovered indirect costs may be included as part of cost 
sharing or matching only with prior written approval of the grant 
officer.
    (c) Values for recipient contributions of services and property 
shall be established in accordance with the applicable cost principles. 
If DOL authorizes recipients to donate buildings or land for 
construction/facilities acquisition projects or long-term use, the value 
of the donated property for cost sharing or matching shall be the lesser 
of the value determined under paragraph (c)(1) or paragraph (c)(2) of 
this section.
    (1) The certified value of the remaining life of the property 
recorded in the recipient's accounting records at the time of donation.
    (2) The current fair market value. However, when there is sufficient 
justification, the grant officer may approve the use of the current fair 
market value of the donated property, even if it exceeds the certified 
value at the time of donation to the project.
    (d) Volunteer services furnished by professional and technical 
personnel, consultants, and other skilled and unskilled labor may be 
counted as cost sharing or matching if the service is an integral and 
necessary part of an approved project or program. Rates for volunteer 
services shall be consistent with those paid for similar work in the 
recipient's organization. In those instances in which the required 
skills are not found in the recipient organization, rates shall be 
consistent with those paid for similar work in the labor market in which 
the recipient competes for the kind of services involved. In either 
case, paid fringe benefits that are reasonable, allowable, and allocable 
may be included in the valuation.
    (e) When an employer other than the recipient furnishes the services 
of an employee, these services shall be valued at the employee's regular 
rate of pay (plus an amount of fringe benefits that are reasonable, 
allowable, and allocable, but exclusive of overhead costs), provided 
these services are in the same skill for which the employee is normally 
paid.
    (f) Donated supplies may include such items as expendable equipment, 
office supplies, laboratory supplies or workshop and classroom supplies. 
Value assessed to donated supplies included in the cost sharing or 
matching share shall be reasonable and shall not exceed the fair market 
value of the property at the time of the donation.
    (g) The method used for determining cost sharing or matching for 
donated equipment, buildings and land for which title passes to the 
recipient may differ according to the purpose of the award, if paragraph 
(g)(1) or (g)(2) of this section apply.
    (1) If the purpose of the award is to assist the recipient in the 
acquisition of equipment, buildings or land, the total value of the 
donated property may be claimed as cost sharing or matching.
    (2) If the purpose of the award is to support activities that 
require the use of equipment, buildings or land, normally only 
depreciation or use charges for equipment and buildings may be made. 
However, the full value of equipment or other capital assets and fair 
rental charges for land may be allowed, provided that the grant officer 
has approved the charges.
    (h) The value of donated property shall be determined in accordance 
with the usual accounting policies of the recipient, with the following 
qualifications:
    (1) The value of donated land and buildings shall not exceed its 
fair market value at the time of donation to the recipient as 
established by an independent appraiser (e.g., certified real property 
appraiser or General Services Administration representative) and 
certified by a responsible official of the recipient.
    (2) The value of donated equipment shall not exceed the fair market 
value of equipment of the same age and condition at the time of 
donation.
    (3) The value of donated space shall not exceed the fair rental 
value of comparable space as established by an independent appraisal of 
comparable space and facilities in a privately-owned building in the 
same locality.
    (4) The value of loaned equipment shall not exceed its fair rental 
value.
    (5) The following requirements pertain to the recipient's supporting

[[Page 497]]

records for in-kind contributions from third parties:
    (i) Volunteer services shall be documented and, to the extent 
feasible, supported by the same methods used by the recipient for its 
own employees.
    (ii) The basis for determining the valuation for personal service, 
material, equipment, buildings and land shall be documented.



Sec. 95.24  Program income.

    (a) Except as provided in paragraph (e) of this section, program 
income earned during the project period shall be retained by the 
recipient and added to funds committed to the project by DOL and 
recipient, and used to further eligible project or program objectives.
    (b) Recipients shall have no obligation to the Federal Government 
regarding program income earned after the end of the project period.
    (c) Costs incident to the generation of program income may be 
deducted from gross income to determine program income, provided these 
costs have not been charged to the award.
    (d) Proceeds from the sale of property are not program income and 
shall be handled in accordance with the requirements of the Property 
Standards (See Secs. 95.30 through 95.37).
    (e) Unless DOL's regulations or the terms and condition of the award 
provide otherwise, recipients shall have no obligation to the Federal 
Government with respect to program income earned from license fees and 
royalties for copyrighted material, patents, patent applications, 
trademarks, and inventions produced under an award. However, Patent and 
Trademark Amendments (35 U.S.C. 18) apply to inventions made under an 
experimental, developmental, or research award.



Sec. 95.25  Revision of budget and program plans.

    (a) The budget plan is the financial expression of the project or 
program as approved during the award process. It may include either the 
Federal and non-Federal share, or only the Federal share, depending upon 
DOL's requirements. It shall be related to performance for program 
evaluation purposes whenever appropriate.
    (b) Recipients are required to report deviations from budget and 
program plans, and request prior approvals for budget and program plan 
revisions, in accordance with this section.
    (c) For nonconstruction awards, recipients shall request prior 
written approvals from the grant officer for one or more of the 
following program or budget changes:
    (1) Change in the scope or the objective of the project or program 
(even if there is no associated budget revision requiring prior written 
approval).
    (2) Change in a key person specified in the application or award 
document.
    (3) The absence for more than three months, or a 25-percent 
reduction in time devoted to the project, by the approved project 
director or principal investigator.
    (4) The need for additional Federal funding.
    (5) The transfer of amounts budgeted for indirect costs to absorb 
increases in direct costs, or vice versa.
    (6) The inclusion, unless waived by the grant officer, of costs that 
require prior approval in accordance with OMB Circular A-21, ``Cost 
Principles for Institutions of Higher Education,'' OMB Circular A 122, 
``Cost Principles for Non-Profit Organizations,'' or 45 CFR part 74, 
Appendix E, ``Principles for Determining Costs Applicable to Research 
and Development under Grants and Contracts with Hospitals,'' or 48 CFR 
part 31, ``Contract Cost Principles and Procedures,'' as applicable.
    (7) The transfer of funds allotted for training allowances (direct 
payment to trainees) to other categories of expense.
    (8) Unless described in the application and funded in the approved 
awards, the subaward, transfer or contracting out of any work under an 
award. This provision does not apply to the purchase of supplies, 
material, equipment or general support services.
    (d) No other prior approval requirements for specific items may be 
imposed unless a deviation has been approved by OMB.
    (e) Except for requirements listed in paragraphs (c)(1) and (c)(4) 
of this section, the grant officer may waive cost-related and 
administrative prior written approvals required by this part and

[[Page 498]]

OMB Circulars A-21 and A-122. Such waivers may include authorizing 
recipients to do any one or more of the following:
    (1) Incur pre-award costs 90 calendar days prior to award or more 
than 90 calendar days with the prior written approval of the grant 
officer. All pre-award costs are incurred at the recipient's risk (i.e., 
the grant officer is under no obligation to reimburse such costs if for 
any reason the recipient does not receive an award or if the award is 
less than anticipated and inadequate to cover such costs).
    (2) Initiate a one-time extension of the expiration date of the 
award of up to 12 months unless one or more of the following conditions 
apply. For one-time extensions, the recipient must notify the grant 
officer in writing with the supporting reasons and revised expiration 
date at least 10 days before the expiration date specified in the award. 
This one-time extension may not be exercised merely for the purpose of 
using unobligated balances. The one-time extension may not be initiated 
if:
    (i) The terms and conditions of award prohibit the extension.
    (ii) The extension requires additional Federal funds.
    (iii) The extension involves any change in the approved objectives 
or scope of the project.
    (3) Carry forward unobligated balances to subsequent funding 
periods.
    (4) For awards that support research, unless the grant officer 
provides otherwise in the award or in DOL's regulations, the prior 
written approval requirements described in paragraph (e) are 
automatically waived (i.e., recipients need not obtain such prior 
written approvals) unless one of the conditions included in paragraph 
(e)(2) applies.
    (f) DOL may, at its option, restrict the transfer of funds among 
direct cost categories or programs, functions and activities for awards 
in which the Federal share of the project exceeds $100,000 and the 
cumulative amount of such transfers exceeds or is expected to exceed 10 
percent of the total budget as last approved by DOL. DOL shall not 
permit a transfer that would cause any Federal appropriation or part 
thereof to be used for purposes other than those consistent with the 
original intent of the appropriation.
    (g) All other changes to nonconstruction budgets, except for the 
changes described in paragraph (j), do not require prior approval.
    (h) For construction awards, recipients shall request prior written 
approval promptly from the grant officer for budget revisions whenever 
paragraphs (h)(1), (h)(2) or (h)(3) of this section apply.
    (1) The revision results from changes in the scope or the objective 
of the project or program.
    (2) The need arises for additional Federal funds to complete the 
project.
    (3) A revision is desired which involves specific costs for which 
prior written approval requirements may be imposed consistent with 
applicable OMB cost principles listed in Sec. 95.27.
    (i) No other prior approval requirements for specific items may be 
imposed unless a deviation has been approved by OMB.
    (j) When DOL makes an award that provides support for both 
construction and nonconstruction work, DOL may require the recipient to 
request prior written approval before making any fund or budget 
transfers between the two types of work supported.
    (k) For both construction and nonconstruction awards, recipients 
shall notify the grant officer in writing promptly whenever the amount 
of Federal authorized funds is expected to exceed the needs of the 
recipient for the project period by more than $5,000 or five percent of 
the award, whichever is greater. This notification shall not be required 
if an application for additional funding is submitted for a continuation 
award.
    (l) When requesting written approval for budget revisions, 
recipients shall use the budget forms that were used in the application.
    (m) Within 30 calendar days from the date of receipt of the request 
for budget revisions, the grant officer shall review the request and 
notify the recipient whether the budget revisions have been approved. If 
the revision is still under consideration at the end of 30 calendar 
days, the grant officer shall inform the recipient in writing of the

[[Page 499]]

date when the recipient may expect the decision.



Sec. 95.26  Non-Federal audits.

    (a) Recipients and subrecipients that are institutions of higher 
education or other non-profit organizations (including hospitals) shall 
be subject to the audit requirements contained in the Single Audit Act 
Amendments of 1996 (31 U.S.C. 7501-7507) and revised OMB Circular A-133, 
``Audits of States, Local Governments, and Non-Profit Organizations.''
    (b) State and local governments shall be subject to the audit 
requirements contained in the Single Audit Act Amendments of 1996 (31 
U.S.C. 7501-7507) and revised OMB Circular A-133, ``Audits of States, 
Local Governments, and Non-Profit Organizations.''
    (c) For-profit hospitals not covered by the audit provisions of 
revised OMB Circular A-133 shall be subject to the audit requirements of 
the Federal awarding agencies.
    (d) Commercial organizations shall be subject to the audit 
requirements specified by the DOL awarding agency or the prime recipient 
as incorporated into the award document. See 29 CFR part 96.

[59 FR 38271, July 27, 1994, as amended at 62 FR 45939, 45942, Aug. 29, 
1997]



Sec. 95.27  Allowable costs.

    For each kind of recipient, there is a set of Federal principles for 
determining allowable costs. Allowability of costs shall be determined 
in accordance with the cost principles applicable to the entity 
incurring the costs. Thus, allowability of costs incurred by State, 
local or federally-recognized Indian tribal governments is determined in 
accordance with the provisions of OMB Circular A-87, ``Cost Principles 
for State and Local Governments.'' The allowability of costs incurred by 
non-profit organizations is determined in accordance with the provisions 
of OMB Circular A-122, ``Cost Principles for Non-Profit Organizations.'' 
The allowability of costs incurred by institutions of higher education 
is determined in accordance with the provisions of OMB Circular A-21, 
``Cost Principles for Educational Institutions.'' The allowability of 
costs incurred by hospitals is determined in accordance with the 
provisions of Appendix E of 45 CFR part 74, ``Principles for Determining 
Costs Applicable to Research and Development Under Grants and Contracts 
with Hospitals.'' The allowability of costs incurred by commercial 
organizations and those non-profit organizations listed in Attachment C 
to Circular A-122 is determined in accordance with the provisions of the 
Federal Acquisition Regulation (FAR) at 48 CFR part 31.



Sec. 95.28  Period of availability of funds.

    Where a funding period is specified, a recipient may charge to the 
grant only allowable costs resulting from obligations incurred during 
the funding period and any pre-award costs authorized by DOL.

                           Property Standards



Sec. 95.30  Purpose of property standards.

    Sections 95.31 through 95.37 set forth uniform standards governing 
management and disposition of property furnished by the Federal 
Government whose cost was charged to a project supported by a Federal 
award. Recipients are required to observe these standards under awards 
and no additional requirements shall be imposed, unless specifically 
required by Federal statute. The recipient may use its own property 
management standards and procedures provided it observes the provisions 
of Secs. 95.31 through 95.37.



Sec. 95.31  Insurance coverage.

    Recipients shall, at a minimum, provide the equivalent insurance 
coverage for real property and equipment acquired with Federal funds as 
provided to property owned by the recipient. Federally-owned property 
need not be insured unless required by the terms and conditions of the 
award.



Sec. 95.32  Real property.

    DOL shall prescribe requirements for recipients concerning the use 
and disposition of real property acquired in whole or in part under 
awards. Unless otherwise provided by statute, such requirements, at a 
minimum, shall contain the following:
    (a) Title to real property shall vest in the recipient subject to 
the condition

[[Page 500]]

that the recipient shall use the real property for the authorized 
purpose of the project as long as it is needed and shall not encumber 
the property without approval of DOL.
    (b) The recipient shall obtain prior written approval from the grant 
officer for the use of real property in other federally-sponsored 
projects when the recipient determines that the property is no longer 
needed for the purpose of the original project. Use in other projects 
shall be limited to those under federally-sponsored projects (i.e., 
awards) or programs that have purposes consistent with those authorized 
for support by DOL.
    (c) When the real property is no longer needed as provided in 
paragraphs (a) and (b) of this section, the recipient shall request 
disposition instructions from the grant officer. The grant officer shall 
issue one or more of the following disposition instructions:
    (1) The recipient may be permitted to retain title without further 
obligation to the Federal Government after it compensates the Federal 
Government for that percentage of the current fair market value of the 
property attributable to the Federal participation in the project.
    (2) The recipient may be directed to sell the property under 
guidelines provided by DOL and pay DOL for that percentage of the 
current fair market value of the property attributable to the Federal 
participation in the project (after deducting actual and reasonable 
selling and fix-up expenses, if any, from the sales proceeds). When the 
recipient is authorized or required to sell the property, proper sales 
procedures shall be established that provide for competition to the 
extent practicable and result in the highest possible return.
    (3) The recipient may be directed to transfer title to the property 
to the Federal Government or to an eligible third party provided that, 
in such cases, the recipient shall be entitled to compensation for its 
attributable percentage of the current fair market value of the 
property.



Sec. 95.33  Federally-owned and exempt property.

    (a) Federally-owned property.
    (1) Title to federally-owned property remains vested in the Federal 
Government. Recipients shall submit annually an inventory listing of 
federally-owned property in their custody to DOL. Upon completion of the 
award or when the property is no longer needed, the recipient shall 
report the property to DOL for further Federal agency utilization.
    (2) If DOL has no further need for the property, it shall be 
declared excess and reported to the General Services Administration, 
unless DOL has statutory authority to dispose of the property by 
alternative methods (e.g., the authority provided by the Federal 
Technology Transfer Act (15 U.S.C. 3710(i)) to donate research equipment 
to educational and non-profit organizations in accordance with E.O. 
12821, ``Improving Mathematics and Science Education in Support of the 
National Education Goals.'') Appropriate instructions shall be issued to 
the recipient by DOL.
    (b) Exempt property.
    When statutory authority exists, DOL has the option to vest title to 
property acquired with Federal funds in the recipient without further 
obligation to the Federal Government and under conditions DOL considers 
appropriate. Such property is ``exempt property.'' Should DOL not 
establish conditions, title to exempt property upon acquisition shall 
vest in the recipient without further obligation to the Federal 
Government.



Sec. 95.34  Equipment.

    (a) Title to equipment acquired by a recipient with Federal funds 
shall vest in the recipient, subject to conditions of this section.
    (b) The recipient shall not use equipment acquired with Federal 
funds to provide services to non-Federal outside organizations for a fee 
that is less than private companies charge for equivalent services, 
unless specifically authorized by Federal statute, for as long as the 
Federal Government retains an interest in the equipment.
    (c) The recipient shall use the equipment in the project or program 
for

[[Page 501]]

which it was acquired as long as needed, whether or not the project or 
program continues to be supported by Federal funds and shall not 
encumber the property without approval of the grant officer. When no 
longer needed for the original project or program, the recipient shall 
use the equipment in connection with its other federally, sponsored 
activities, in the following order of priority:
    (1) Activities sponsored by the DOL agency which funded the original 
project, then
    (2) Activities sponsored by other Federal awarding agencies.
    (d) During the time that equipment is used on the project or program 
for which it was acquired, the recipient shall make it available for use 
on other projects or programs if such other use will not interfere with 
the work on the project or program for which the equipment was 
originally acquired. First preference for such other use shall be given 
to other projects or programs sponsored by the DOL agency that financed 
the equipment; second preference shall be given to projects or programs 
sponsored by other Federal awarding agencies. If the equipment is owned 
by the Federal Government, use on other activities not sponsored by the 
Federal Government shall be permissible if authorized by the grant 
officer. User charges shall be treated as program income.
    (e) When acquiring replacement equipment, the recipient may use the 
equipment to be replaced as trade-in or sell the equipment and use the 
proceeds to offset the costs of the replacement equipment subject to the 
written approval of the grant officer.
    (f) The recipient's property management standards for equipment 
acquired with Federal funds and federally-owned equipment shall include 
all of the following:
    (1) Equipment records shall be maintained accurately and shall 
include the following information:
    (i) A description of the equipment.
    (ii) Manufacturer's serial number, model number, Federal stock 
number, national stock number, or other identification number.
    (iii) Source of the equipment, including the award number.
    (iv) Whether title vests in the recipient or the Federal Government.
    (v) Acquisition date (or date received, if the equipment was 
furnished by the Federal Government) and cost.
    (vi) Information from which one can calculate the percentage of 
Federal participation in the cost of the equipment (not applicable to 
equipment furnished by the Federal Government).
    (vii) Location and condition of the equipment and the date the 
information was reported.
    (viii) Unit acquisition cost.
    (ix) Ultimate disposition data, including date of disposal and sales 
price or the method used to determine current fair market value where a 
recipient compensates DOL for its share.
    (2) Equipment owned by the Federal Government shall be identified to 
indicate Federal ownership.
    (3) A physical inventory of equipment shall be taken and the results 
reconciled with the equipment records at least once every two years. Any 
differences between quantities determined by the physical inspection and 
those shown in the accounting records shall be investigated to determine 
the causes of the difference. The recipient shall, in connection with 
the inventory, verify the existence, current utilization, and continued 
need for the equipment.
    (4) A control system shall be in effect to insure adequate 
safeguards to prevent loss, damage, or theft of the equipment. Any loss, 
damage, or theft of equipment shall be investigated and fully 
documented; if the equipment was owned by the Federal Government, the 
recipient shall promptly notify the grant officer.
    (5) Adequate maintenance procedures shall be implemented to keep the 
equipment in good condition.
    (6) Where the recipient is authorized or required to sell the 
equipment, proper sales procedures shall be established which provide 
for competition to the extent practicable and result in the highest 
possible return.
    (g) When the recipient no longer needs the equipment, the equipment 
may be used for other activities in accordance with the following 
standards. For equipment with a current per unit fair market value of 
$5,000 or more, the

[[Page 502]]

recipient may retain the equipment for other uses provided that 
compensation is made to the original DOL agency. The amount of 
compensation shall be computed by applying the percentage of Federal 
participation in the cost of the original project or program to the 
current fair market value of the equipment. If the recipient has no need 
for the equipment, the recipient shall request disposition instructions 
from DOL. The DOL agency shall determine whether the equipment can be 
used to meet the agency's requirements. If no requirement exists within 
the DOL agency, the availability of the equipment shall be reported to 
the General Services Administration by DOL to determine whether a 
requirement for the equipment exists in other Federal agencies. DOL 
shall issue instructions to the recipient no later than 120 calendar 
days after the recipient's request and the following procedures shall 
govern.
    (1) If so instructed or if disposition instructions are not issued 
within 120 calendar days after the recipient's request, the recipient 
shall sell the equipment and reimburse DOL an amount computed by 
applying to the sales proceeds the percentage of Federal participation 
in the cost of the original project or program. However, the recipient 
shall be permitted to deduct and retain from the Federal share $500 or 
ten percent of the proceeds, whichever is less, for the recipient's 
selling and handling expenses.
    (2) If the recipient is instructed to ship the equipment elsewhere, 
the recipient shall be reimbursed by the Federal Government by an amount 
which is computed by applying the percentage of the recipient's 
participation in the cost of the original project or program to the 
current fair market value of the equipment, plus any reasonable shipping 
or interim storage costs incurred.
    (3) If the recipient is instructed to otherwise dispose of the 
equipment, the recipient shall be reimbursed by the awarding agency for 
such costs incurred in its disposition.
    (4) The DOL agency reserves the right to transfer the title to the 
Federal Government or to a third party named by the Federal Government 
when such third party is otherwise eligible under existing statutes. 
Such transfer shall be subject to the following standards:
    (i) The equipment shall be appropriately identified in the award or 
otherwise made known to the recipient in writing.
    (ii) The DOL agency shall issue disposition instructions within 120 
calendar days after receipt of a final inventory. The final inventory 
shall list all equipment acquired with grant funds and federally-owned 
equipment. If DOL fails to issue disposition instructions within the 120 
calendar day period, the recipient shall apply the standards of this 
section, as appropriate.
    (iii) When DOL exercises its right to take title, the equipment 
shall be subject to the provisions for federally-owned equipment.



Sec. 95.35  Supplies and other expendable property.

    (a) Title to supplies and other expendable property shall vest in 
the recipient upon acquisition. If there is a residual inventory of 
unused supplies exceeding $5,000 in total aggregate value upon 
termination or completion of the project or program and the supplies are 
not needed for any other federally-sponsored project or program, the 
recipient shall retain the supplies for use on non-Federal sponsored 
activities or sell them, but shall, in either case, compensate the 
Federal Government for its share. The amount of compensation shall be 
computed in the same manner as for equipment.
    (b) The recipient shall not use supplies acquired with Federal funds 
to provide services to non-Federal outside organizations for a fee that 
is less than private companies charge for equivalent services, unless 
specifically authorized by Federal statute as long as the Federal 
Government retains an interest in the supplies.



Sec. 95.36  Intangible property.

    (a) The recipient may copyright any work that is subject to 
copyright and was developed, or for which ownership was purchased, under 
an award. DOL reserves a royalty-free, nonexclusive and irrevocable 
right to reproduce,

[[Page 503]]

publish, or otherwise use the work for Federal purposes, and to 
authorize others to do so.
    (b) Recipients are subject to applicable regulations governing 
patents and inventions, including government-wide regulations issued by 
the Department of Commerce at 37 CFR part 401, ``Rights to Inventions 
Made by Nonprofit Organizations and Small Business Firms Under 
Government Grants, Contracts and Cooperative Agreements.''
    (c) DOL has the right to: (1) Obtain, reproduce, publish or 
otherwise use the data first produced under an award; and
    (2) Authorize others to receive, reproduce, publish, or otherwise 
use such data for Federal purposes.
    (d)(1) In addition, in response to a Freedom of Information Act 
(FOIA) request for research data relating to published research findings 
produced under an award that were used by the the Federal government in 
developing an agency action that has the force and effect of law, the 
DOL shall request, and the recipient shall provide, within a reasonable 
time, the research data so that they can be made available to the public 
through the procedures established under the FOIA. If the DOL obtains 
the research data solely in response to a FOIA request, the agency may 
charge the requester a reasonable fee equaling the full incremental cost 
of obtaining the research data. This fee should reflect costs incurred 
by the agency, the recipient, and applicable subrecipients. This fee is 
in addition to any fees the agency may assess under the FOIA (5 U.S.C. 
552(a)(4)(A)).
    (2) The following definitions apply for purposes of this paragraph 
(d):
    (i) Research data is defined as the recorded factual material 
commonly accepted in the scientific community as necessary to validate 
research findings, but not any of the following: preliminary analyses, 
drafts of scientific papers, plans for future research, peer reviews, or 
communications with colleagues. This ``recorded'' material excludes 
physical objects (e.g., laboratory samples). Research data also do not 
include:
    (A) Trade secrets, commercial information, materials necessary to be 
held confidential by a researcher until they are published, or similar 
information which is protected under law; and
    (B) Personnel and medical information and similar information the 
disclosure of which would constitute a clearly unwarranted invasion of 
personal privacy, such as information that could be used to identify a 
particular person in a research study.
    (ii) Published is defined as either when:
    (A) Research findings are published in a peer-reviewed scientific or 
technical journal; or
    (B) A Federal agency publicly and officially cites the research 
findings in support of an agency action that has the force and effect of 
law.
    (iii) Used by the Federal Government in developing an agency action 
that has the force and effect of law is defined as when an agency 
publicly and officially cites the research findings in support of an 
agency action that has the force and effect of law.
    (e) Title to intangible property and debt instruments acquired under 
an award or subaward vests upon acquisition in the recipient. The 
recipient shall use that property for the originally-authorized purpose, 
and the recipient shall not encumber the property without written 
approval of the grant officer. When no longer needed for the originally 
authorized purpose, disposition of the intangible property shall occur 
in accordance with the provisions of Sec. 95.34(g).

[59 FR 38271, July 27, 1994, as amended at 65 FR 14407, 14410, Mar. 16, 
2000]



Sec. 95.37  Property trust relationship.

    Real property, equipment, intangible property and debt instruments 
that are acquired or improved with Federal funds shall be held in trust 
by the recipient as trustee for the beneficiaries of the project or 
program under which the property was acquired or improved. Grant 
officers may require recipients to record liens or other appropriate 
notices of record to indicate that personal or real property has been 
acquired or improved with Federal funds and that use and disposition 
conditions apply to the property.

[[Page 504]]

                          Procurement Standards



Sec. 95.40  Purpose of procurement standards.

    Sections 95.41 through 95.48 set forth standards for use by 
recipients in establishing procedures for the procurement of supplies 
and other expendable property, equipment, real property and other 
services with Federal funds. These standards are furnished to ensure 
that such materials and services are obtained in an effective manner and 
in compliance with the provisions of applicable Federal statutes and 
executive orders. No additional procurement standards or requirements 
shall be imposed by DOL upon recipients, unless specifically required by 
Federal statute or executive order or approved by OMB.



Sec. 95.41  Recipient responsibilities.

    The standards contained in this section do not relieve the recipient 
of the contractual responsibilities arising under its contract(s). The 
recipient is the responsible authority, without recourse to DOL, 
regarding the settlement and satisfaction of all contractual and 
administrative issues arising out of procurements entered into in 
support of an award or other agreement. This includes disputes, claims, 
protests of award, source evaluation or other matters of a contractual 
nature. Matters concerning violation of statute are to be referred to 
such Federal, State or local authority as may have proper jurisdiction.



Sec. 95.42  Codes of conduct.

    The recipient shall maintain written standards of conduct governing 
the performance of its employees engaged in the award and administration 
of contracts. No employee, officer, or agent shall participate in the 
selection, award, or administration of a contract supported by Federal 
funds if a real or apparent conflict of interest would be involved. Such 
a conflict would arise when the employee, officer, or agent, any member 
of his or her immediate family, his or her partner, or an organization 
which employs or is about to employ any of the parties indicated herein, 
has a financial or other interest in the firm selected for an award. The 
officers, employees, and agents of the recipient shall neither solicit 
nor accept gratuities, favors, or anything of monetary value from 
contractors, or parties to subagreements. However, recipients may set 
standards for situations in which the financial interest is not 
substantial or the gift is an unsolicited item of nominal value. The 
standards of conduct shall provide for disciplinary actions to be 
applied for violations of such standards by officers, employees, or 
agents of the recipient.



Sec. 95.43  Competition.

    All procurement transactions shall be conducted in a manner to 
provide, to the maximum extent practical, open and free competition. The 
recipient shall be alert to organizational conflicts of interest as well 
as noncompetitive practices among contractors that may restrict or 
eliminate competition or otherwise restrain trade. In order to ensure 
objective contractor performance and eliminate unfair competitive 
advantage, contractors that develop or draft specifications, 
requirements, statements of work, invitations for bids and/or requests 
for proposals shall be excluded from competing for such procurements. 
Awards shall be made to the bidder or offeror whose bid or offer is 
responsive to the solicitation and is most advantageous to the 
recipient, price, quality and other factors considered. Solicitations 
shall clearly set forth all requirements that the bidder or offeror 
shall fulfill in order for the bid or offer to be evaluated by the 
recipient. Any and all bids or offers may be rejected when it is in the 
recipient's interest to do so.



Sec. 95.44  Procurement procedures.

    (a) All recipients shall establish written procurement procedures. 
These procedures shall provide for, at a minimum, that paragraphs 
(a)(1), (a)(2), and (a)(3) of this section apply.
    (1) Recipients shall avoid purchasing unnecessary items.
    (2) Where appropriate, an analysis shall be made of lease and 
purchase alternatives to determine which would be the most economical 
and practical procurement for the Federal Government.

[[Page 505]]

    (3) Solicitations for goods and services shall provide for all of 
the following:
    (i) A clear and accurate description of the technical requirements 
for the material, product or service to be procured. In competitive 
procurements, such a description shall not contain features which unduly 
restrict competition.
    (ii) Requirements which the bidder/offeror must fulfill and all 
other factors to be used in evaluating bids or proposals.
    (iii) A description, whenever practicable, of technical requirements 
in terms of functions to be performed or performance required, including 
the range of acceptable characteristics or minimum acceptable standards.
    (iv) The specific features of ``brand name or equal'' descriptions 
that bidders are required to meet when such items are included in the 
solicitation.
    (v) The acceptance, to the extent practicable and economically 
feasible, of products and services dimensioned in the metric system of 
measurement.
    (vi) Preference, to the extent practicable and economically 
feasible, for products and services that conserve natural resources and 
protect the environment and are energy efficient.
    (b) Positive efforts shall be made by recipients to utilize small 
businesses, minority-owned firms, and women's business enterprises, 
whenever possible. Recipients of Federal awards shall take all of the 
following steps to further this goal:
    (1) Ensure that small businesses, minority-owned firms, and women's 
business enterprises are used to the fullest extent practicable.
    (2) Make information on forthcoming opportunities available and 
arrange time frames for purchases and contracts to encourage and 
facilitate participation by small businesses, minority-owned firms, and 
women's business enterprises.
    (3) Consider in the contract process whether firms competing for 
larger contracts intend to subcontract with small businesses, minority-
owned firms, and women's business enterprises.
    (4) Encourage contracting with consortiums of small businesses, 
minority-owned firms and women's business enterprises when a contract is 
too large for one of these firms to handle individually.
    (5) Use the services and assistance, as appropriate, of such 
organizations as the Small Business Administration, the Department of 
Commerce's Minority Business Development Agency, and DOL's Office of 
Small Business and Minority Affairs in the solicitation and utilization 
of small businesses, minority-owned firms and women's business 
enterprises.
    (c) The type of procuring instruments used (e.g., fixed price 
contracts, cost reimbursable contracts, purchase orders, and incentive 
contracts) shall be determined by the recipient but shall be appropriate 
for the particular procurement and for promoting the best interest of 
the program or project involved. The ``cost-plus-a-percentage-of-cost'' 
or ``percentage of construction cost'' methods of contracting shall not 
be used.
    (d) Contracts shall be made only with responsible contractors who 
possess the potential ability to perform successfully under the terms 
and conditions of the proposed procurement. Consideration shall be given 
to such matters as contractor integrity, record of past performance, 
financial and technical resources or accessibility to other necessary 
resources. In certain circumstances, contracts with certain parties are 
restricted by agencies' implementation of E.O.'s 12549 and 12689, 
``Debarment and Suspension.'' See 29 CFR part 98.
    (e) Recipients shall, on request, make available to DOL, pre-award 
and procurement documents, such as request for proposals or invitations 
for bids, independent cost estimates, etc., when any of the following 
conditions apply:
    (1) A recipient's procurement procedures or operation fails to 
comply with the procurement standards in this part.
    (2) The procurement is expected to exceed the small purchase 
threshold fixed at 41 U.S.C. 403(11) (currently $25,000) and is to be 
awarded without competition or only one bid or offer is received in 
response to a solicitation.
    (3) The procurement, which is expected to exceed the small purchase

[[Page 506]]

threshold, specifies a ``brand name'' product.
    (4) The proposed award over the small purchase threshold is to be 
awarded to other than the apparent low bidder under a sealed bid 
procurement.
    (5) A proposed contract modification changes the scope of a contract 
or increases the contract amount by more than the amount of the small 
purchase threshold.



Sec. 95.45  Cost and price analysis.

    Some form of cost or price analysis shall be made and documented in 
the procurement files in connection with every procurement action. Price 
analysis may be accomplished in various ways, including the comparison 
of price quotations submitted, market prices and similar indicia, 
together with discounts. Cost analysis is the review and evaluation of 
each element of cost to determine reasonableness, allocability and 
allowability.



Sec. 95.46  Procurement records.

    Procurement records and files for purchases in excess of the small 
purchase threshold shall include the following at a minimum: (a) basis 
for contractor selection, (b) justification for lack of competition when 
competitive bids or offers are not obtained, and (c) basis for award 
cost or price.



Sec. 95.47  Contract administration.

    A system for contract administration shall be maintained to ensure 
contractor conformance with the terms, conditions and specifications of 
the contract and to ensure adequate and timely follow up of all 
purchases. Recipients shall evaluate contractor performance and 
document, as appropriate, whether contractors have met the terms, 
conditions and specifications of the contract.



Sec. 95.48  Contract provisions.

    The recipient shall include, in addition to provisions to define a 
sound and complete agreement, the following provisions in all contracts. 
The following provisions shall also be applied to subcontracts:
    (a) Contracts in excess of the small purchase threshold shall 
contain contractual provisions or conditions that allow for 
administrative, contractual, or legal remedies in instances in which a 
contractor violates or breaches the contract terms, and provide for such 
remedial actions as may be appropriate.
    (b) All contracts in excess of the small purchase threshold shall 
contain suitable provisions for termination by the recipient, including 
the manner by which termination shall be effected and the basis for 
settlement. In addition, such contracts shall describe conditions under 
which the contract may be terminated for default as well as conditions 
where the contract may be terminated because of circumstances beyond the 
control of the contractor.
    (c) Except as otherwise required by statute, an award that requires 
the contracting (or subcontracting) for construction or facility 
improvements shall provide for the recipient to follow its own 
requirements relating to bid guarantees, performance bonds, and payment 
bonds unless the construction contract or subcontract exceeds $100,000. 
For those contracts or subcontracts exceeding $100,000, DOL may accept 
the bonding policy and requirements of the recipient, provided DOL has 
made a determination that the Federal Government's interest is 
adequately protected. If such a determination has not been made, the 
minimum requirements shall be as follows.
    (1) A bid guarantee from each bidder equivalent to five percent of 
the bid price. The ``bid guarantee'' shall consist of a firm commitment 
such as a bid bond, certified check, or other negotiable instrument 
accompanying a bid as assurance that the bidder shall, upon acceptance 
of his bid, execute such contractual documents as may be required within 
the time specified.
    (2) A performance bond on the part of the contractor for 100 percent 
of the contract price. A ``performance bond'' is one executed in 
connection with a contract to secure fulfillment of all the contractor's 
obligations under such contract.
    (3) A payment bond on the part of the contractor for 100 percent of 
the contract price. A ``payment bond'' is one executed in connection 
with a contract

[[Page 507]]

to assure payment as required by statute of all persons supplying labor 
and material in the execution of the work provided for in the contract.
    (4) Where bonds are required in the situations described herein, the 
bonds shall be obtained from companies holding certificates of authority 
as acceptable sureties pursuant to 31 CFR part 223, ``Surety Companies 
Doing Business with the United States.''
    (d) All negotiated contracts (except those for less than the small 
purchase threshold) awarded by recipients shall include a provision to 
the effect that the recipient, DOL, the Comptroller General of the 
United States, or any of their duly authorized representatives, shall 
have access to any books, documents, papers and records of the 
contractor which are directly pertinent to a specific program for the 
purpose of making audits, examinations, excerpts and transcriptions.
    (e) All contracts, including small purchases, awarded by recipients 
and their contractors shall contain the procurement provisions of 
Appendix A to this part, as applicable.

                           Reports and Records



Sec. 95.50  Purpose of reports and records.

    Sections 95.51 through 95.53 set forth the procedures for monitoring 
and reporting on the recipient's financial and program performance and 
the necessary standard reporting forms. They also set forth record 
retention requirements.



Sec. 95.51  Monitoring and reporting program performance.

    (a) Recipients are responsible for managing and monitoring each 
project, program, subaward, function or activity supported by the award. 
Recipients shall monitor subawards to ensure subrecipients have met the 
audit requirements as delineated in Sec. 95.26.
    (b) DOL shall prescribe the frequency with which performance reports 
shall be submitted. Except as provided in paragraph (f) of this section, 
performance reports shall not be required more frequently than quarterly 
or, less frequently than annually. Annual reports shall be due 90 
calendar days after the grant year; quarterly or semi-annual reports 
shall be due 30 days after the reporting period. DOL may require annual 
reports before the anniversary dates of multiple-year awards in lieu of 
these requirements. The final performance reports are due 90 calendar 
days after the expiration or termination of the award.
    (c) If inappropriate, a final technical or performance report shall 
not be required after completion of the project.
    (d) When required, performance reports shall generally contain, for 
each award, brief information on each of the following:
    (1) A comparison of actual accomplishments with the goals and 
objectives established for the period, the findings of the investigator, 
or both. Whenever appropriate and the output of programs or projects can 
be readily quantified, such quantitative data should be related to cost 
data for computation of unit costs.
    (2) Reasons why established goals were not met, if appropriate.
    (3) Other pertinent information including, when appropriate, 
analysis and explanation of cost overruns or high unit costs.
    (e) Recipients shall not be required to submit more than the 
original and two copies of performance reports.
    (f) Recipients shall immediately notify DOL of developments that 
have a significant impact on the award-supported activities. Also, 
notification shall be given in the case of problems, delays, or adverse 
conditions which materially impair the ability to meet the objectives of 
the award. This notification shall include a statement of the action 
taken or contemplated, and any assistance needed to resolve the 
situation.
    (g) DOL may make site visits, as needed.
    (h) DOL shall comply with clearance requirements of 5 CFR part 1320 
when requesting performance data from recipients.

(Approved by the Office of Management and Budget, Approval Number 1225-
0017)



Sec. 95.52  Financial reporting.

    (a) The following forms or such other forms as may be approved by 
OMB are authorized for obtaining financial information from recipients:

[[Page 508]]

    (1) SF-269 or SF-269A, Financial Status Report.
    (i) Recipients shall use the SF-269, SF-269A, or other OMB-approved 
forms to report the status of funds for all nonconstruction projects or 
programs. DOL may, however, have the option of not requiring the SF-269 
or SF-269A when the SF-270, Request for Advance or Reimbursement, or SF-
272, Report of Federal Cash Transactions, is determined to provide 
adequate information to meet its needs, except that a final SF-269 or 
SF-269A shall be required at the completion of the project when the SF-
270 is used only for advances.
    (ii) DOL shall prescribe whether the report shall be on a cash or an 
accrual basis. If DOL requires accrual information and the recipient's 
accounting records are not normally kept on the accrual basis, the 
recipient shall not convert its accounting system, but shall develop 
such accrual information through best estimates based on an analysis of 
the documentation on hand.
    (iii) DOL shall determine the frequency of the Financial Status 
Report for each project or program, considering the size and complexity 
of the particular project or program. However, the report shall not be 
required more frequently than quarterly or less frequently than 
annually. A final report shall be required at the completion of the 
agreement.
    (iv) Recipients shall submit to DOL the SF-269, SF-269A, or other 
OMB-approved forms (an original and no more than two copies) no later 
than 30 days after the end of each specified reporting period for 
quarterly and semi-annual reports, and 90 calendar days for annual and 
final reports. Extensions of reporting due dates may be approved by DOL 
upon request of the recipient.
    (2) SF-272, Report of Federal Cash Transactions.
    (i) When funds are advanced to recipients, the recipient shall 
submit the SF-272 and, when necessary, its continuation sheet, SF-272a. 
DOL shall use this report to monitor cash advanced to recipients and to 
obtain disbursement information for each agreement with the recipients.
    (ii) DOL may require forecasts of Federal cash requirements in the 
``Remarks'' section of the report.
    (iii) When practical and deemed necessary, DOL may require 
recipients to report in the ``Remarks'' section the amount of cash 
advances received in excess of three days. Recipients shall provide 
short narrative explanations of actions taken to reduce the excess 
balances.
    (iv) Recipients shall submit not more than the original and two 
copies of the SF-272 15 calendar days following the end of each quarter. 
The DOL agency may require a monthly report from those recipients 
receiving advances totaling $1 million or more per year.
    (v) DOL may waive the requirement for submission of the SF-272 for 
any one of the following reasons:
    (A) When monthly advances do not exceed $25,000 per recipient, 
provided that such advances are monitored through other forms contained 
in this section;
    (B) If, in DOL's opinion, the recipient's accounting controls are 
adequate to minimize excessive Federal advances; or,
    (C) When the electronic payment mechanisms provide adequate data.
    (b) When DOL needs additional information or more frequent reports, 
the following shall be observed.
    (1) When additional information is needed to comply with legislative 
requirements, DOL shall issue instructions to require recipients to 
submit such information under the ``Remarks'' section of the reports.
    (2) When DOL determines that a recipient's accounting system does 
not meet the standards in Sec. 95.21, additional pertinent information 
to further monitor awards may be obtained upon written notice to the 
recipient until such time as the system is brought up to standard. DOL, 
in obtaining this information, shall comply with report clearance 
requirements of 5 CFR part 1320.
    (3) DOL may shade out any line item on any report if not necessary.
    (4) DOL may accept the identical information from the recipients in 
machine readable format or computer printouts or electronic outputs in 
lieu of prescribed formats.
    (5) DOL may provide computer or electronic outputs to recipients 
when

[[Page 509]]

such expedites or contributes to the accuracy of reporting.

(Approved by the Office of Management and Budget, Approval Number 1225-
0017)



Sec. 95.53  Retention and access requirements for records.

    (a) This section sets forth requirements for record retention and 
access to records for awards to recipients. DOL shall not impose any 
other record retention or access requirements upon recipients.
    (b) Financial records, supporting documents, statistical records, 
and all other records pertinent to an award shall be retained for a 
period of three years from the date of submission of the final 
expenditure report or, for awards that are renewed quarterly or 
annually, from the date of the submission of the quarterly or annual 
financial report, as authorized by DOL. The only exceptions are the 
following:
    (1) If any litigation, claim, or audit is started before the 
expiration of the 3-year period, the records shall be retained until all 
litigation, claims or audit findings involving the records have been 
resolved and final action taken.
    (2) Records for real property and equipment acquired with Federal 
funds shall be retained for 3 years after final disposition.
    (3) When records are transferred to or maintained by DOL, the 3-year 
retention requirement is not applicable to the recipient.
    (4) Indirect cost rate proposals, cost allocations plans, etc., as 
specified in paragraph (g) of this section.
    (c) Copies of original records may be substituted for the original 
records if authorized by DOL.
    (d) DOL shall request transfer of certain records to its custody 
from recipients when it determines that the records possess long term 
retention value. However, in order to avoid duplicate recordkeeping, DOL 
may make arrangements for recipients to retain any records that are 
continuously needed for joint use.
    (e) The Federal grantor awarding agency, the Inspector General, the 
Comptroller General of the United States, or any of their duly 
authorized representatives, have the right of timely and unrestricted 
access to any books, documents, papers, or other records of recipients 
that are pertinent to the awards, in order to make audits, examinations, 
excerpts, transcripts and copies of such documents. This right also 
includes timely and reasonable access to a recipient's personnel for the 
purpose of interview and discussion related to such documents. The 
rights of access in this paragraph are not limited to the required 
retention period, but shall last as long as records are retained.
    (f) Unless required by statute, DOL shall not place restrictions on 
recipients that limit public access to the records of recipients that 
are pertinent to an award, except when DOL can demonstrate that such 
records shall be kept confidential and would have been exempted from 
disclosure pursuant to the Freedom of Information Act (5 U.S.C. 
Sec. 552) if the records had belonged to DOL.
    (g) Indirect cost rate proposals, cost allocations plans, etc. 
Paragraphs (g)(1) and (g)(2) of this section apply to the following 
types of documents, and their supporting records: indirect cost rate 
computations or proposals, cost allocation plans, and any similar 
accounting computations of the rate at which a particular group of costs 
is chargeable (such as computer usage chargeback rates or composite 
fringe benefit rates).
    (1) If submitted for negotiation. If the recipient submits to DOL or 
the subrecipient submits to the recipient the proposal, plan, or other 
computation to form the basis for negotiation of the rate, then the 3-
year retention period for its supporting records starts on the date of 
such submission.
    (2) If not submitted for negotiation. If the recipient is not 
required to submit to DOL or the subrecipient is not required to submit 
to the recipient the proposal, plan, or other computation for 
negotiation purposes, then the 3-year retention period for the proposal, 
plan, or other computation and its supporting records starts at the end 
of the fiscal year (or other accounting period) covered by the proposal, 
plan, or other computation.

(Approved by the Office of Management and Budget, Approval Number 1225-
0017)

[[Page 510]]

                       Termination and Enforcement



Sec. 95.60  Purpose of termination and enforcement.

    Sections 95.61 and 95.62 set forth uniform suspension, termination 
and enforcement procedures.



Sec. 95.61  Termination.

    (a) Awards may be terminated in whole or in part only if paragraphs 
(a) (1), (a)(2), or (a)(3) of this section apply.
    (1) By grant officers, if a recipient materially fails to comply 
with the terms and conditions of an award.
    (2) By grant officers, with the consent of the recipient, in which 
case the two parties shall agree upon the termination conditions, 
including the effective date and, in the case of partial termination, 
the portion to be terminated.
    (3) By the recipient upon sending to the grant officer written 
notification setting forth the reasons for such termination, the 
effective date, and, in the case of partial termination, the portion to 
be terminated. However, if the grant officer determines in the case of 
partial termination that the reduced or modified portion of the grant 
will not accomplish the purposes for which the grant was made, the grant 
officer may terminate the grant in its entirety under either paragraphs 
(a) (1) or (2) of this section.
    (b) If costs are allowed under an award, the responsibilities of the 
recipient referred to in Sec. 95.71(a), including those for property 
management as applicable, shall be considered in the termination of the 
award, and provision shall be made for continuing responsibilities of 
the recipient after termination, as appropriate.



Sec. 95.62  Enforcement.

    (a) Remedies for noncompliance. If a recipient materially fails to 
comply with the terms and conditions of an award, whether stated in a 
Federal statute, regulation, assurance, application, or notice of award, 
DOL may, in addition to imposing any of the special conditions outlined 
in Sec. 95.14, take one or more of the following actions, as appropriate 
in the circumstances:
    (1) Temporarily withhold cash payments pending correction of the 
deficiency by the recipient or more severe enforcement action by DOL.
    (2) Disallow (that is, deny both use of funds and any applicable 
matching credit for) all or part of the cost of the activity or action 
not in compliance.
    (3) Wholly or partly suspend or terminate the current award.
    (4) Withhold further awards for the project or program.
    (5) Take other remedies that may be legally available.
    (b) Hearings and appeals. In taking an enforcement action, DOL shall 
provide the recipient an opportunity for hearing, appeal, or other 
administrative proceeding to which the recipient is entitled under any 
statute or regulation applicable to the action involved.
    (c) Effects of suspension and termination. Costs of a recipient 
resulting from obligations incurred by the recipient during a suspension 
or after termination of an award are not allowable unless DOL expressly 
authorizes them in the notice of suspension or termination or 
subsequently. Other recipient costs during suspension or after 
termination which are necessary and not reasonably avoidable are 
allowable if paragraphs (c)(1) and (c)(2) of this section apply.
    (1) The costs result from obligations which were properly incurred 
by the recipient before the effective date of suspension or termination, 
are not in anticipation of it, and in the case of a termination, are 
noncancellable.
    (2) The costs would be allowable if the award were not suspended or 
expired normally at the end of the funding period in which the 
termination takes effect.
    (d) Relationship to debarment and suspension. The enforcement 
remedies identified in this section, including suspension and 
termination, do not preclude a recipient from being subject to debarment 
and suspension under E.O.'s 12549 and 12689 and DOL's implementing 
regulations. See Sec. 95.13 and 29 CFR part 98.

[[Page 511]]



                 Subpart D--After-the-Award Requirements



Sec. 95.70  Purpose.

    Sections 95.71 through 95.73 contain closeout procedures and other 
procedures for subsequent disallowances and adjustments.



Sec. 95.71  Closeout procedures.

    (a) Recipients shall submit, within 90 calendar days after the date 
of completion of the award, all financial, performance, and other 
reports as required by the terms and conditions of the award. DOL may 
approve extensions when requested by the recipient.
    (b) Unless DOL authorizes an extension, a recipient shall liquidate 
all obligations incurred under the award not later than 90 calendar days 
after the funding period or the date of completion as specified in the 
terms and conditions of the award or in agency implementing 
instructions.
    (c) DOL shall make prompt payments to a recipient for allowable 
reimbursable costs under the award being closed out.
    (d) The recipient shall promptly refund any balances of unobligated 
cash that DOL has advanced or paid and that is not authorized to be 
retained by the recipient for use in other projects. OMB Circular A-129 
governs unreturned amounts that become delinquent debts.
    (e) When authorized by the terms and conditions of the award, DOL 
shall make a settlement for any upward or downward adjustments to the 
Federal share of costs after closeout reports are received.
    (f) The recipient shall account for any real and personal property 
acquired with Federal funds or received from the Federal Government in 
accordance with Secs. 95.31 through 95.37.
    (g) In the event a final audit has not been performed prior to the 
closeout of an award, DOL retains the right to recover an appropriate 
amount after fully considering the recommendations on disallowed costs 
resulting from the final audit.



Sec. 95.72  Subsequent adjustments and continuing responsibilities.

    (a) The closeout of an award does not affect any of the following:
    (1) The right of DOL to disallow costs and recover funds on the 
basis of a later audit or other review.
    (2) The obligation of the recipient to return any funds due as a 
result of later refunds, corrections, or other transactions.
    (3) Audit requirements in Sec. 95.26.
    (4) Property management requirements in Secs. 95.31 through 95.37.
    (5) Records retention as required in Sec. 95.53.
    (b) After closeout of an award, a relationship created under an 
award may be modified or ended in whole or in part with the consent of 
DOL and the recipient, provided the responsibilities of the recipient 
referred to in Sec. 95.73(a), including those for property management as 
applicable, are considered and provisions made for continuing 
responsibilities of the recipient, as appropriate.



Sec. 95.73  Collection of amounts due.

    (a) Any funds paid to a recipient in excess of the amount to which 
the recipient is finally determined to be entitled under the terms and 
conditions of the award constitute a debt to the Federal Government. If 
not paid within a reasonable period after the demand for payment, DOL 
may reduce the debt by paragraphs (a)(1), (a)(2), or (a)(3) of this 
section.
    (1) Making an administrative offset against other requests for 
reimbursements.
    (2) Withholding advance payments otherwise due to the recipient.
    (3) Taking other action permitted by statute.
    (b) Except as otherwise provided by law, DOL shall charge interest 
on an overdue debt in accordance with 4 CFR Chapter II, ``Federal Claims 
Collection Standards.''

               Appendix A to Part 95--Contract Provisions

    All contracts, awarded by a recipient including small purchases, 
shall contain the following provisions as applicable:
    1. Equal Employment Opportunity--All contracts shall contain a 
provision requiring

[[Page 512]]

compliance with E.O. 11246, ``Equal Employment Opportunity,'' as amended 
by E.O. 11375, ``Amending Executive Order 11246 Relating to Equal 
Employment Opportunity,'' and as supplemented by regulations at 41 CFR 
part 60, ``Office of Federal Contract Compliance Programs, Equal 
Employment Opportunity, Department of Labor.''
    2. Copeland ``Anti-Kickback'' Act (18 U.S.C. 874 and 40 U.S.C. 
276c)-- All contracts and subgrants in excess of $2000 for construction 
or repair awarded by recipients and subrecipients shall include a 
provision for compliance with the Copeland ``Anti-Kickback'' Act (18 
U.S.C. Sec. 874), as supplemented by Department of Labor regulations (29 
CFR part 3, ``Contractors and Subcontractors on Public Building or 
Public Work Financed in Whole or in Part by Loans or Grants from the 
United States''). The Act provides that each contractor or subrecipient 
shall be prohibited from inducing, by any means, any person employed in 
the construction, completion, or repair of public work, to give up any 
part of the compensation to which one is otherwise entitled. The 
recipient shall report all suspected or reported violations to the 
Federal awarding agency.
    3. Davis-Bacon Act, as amended (40 U.S.C. 276a to a-7)--When 
required by Federal program legislation, all construction contracts 
awarded by the recipients and subrecipients of more than $2000 shall 
include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 
Sec. 276a to a-7) and as supplemented by Department of Labor regulations 
(29 CFR part 5, ``Labor Standards Provisions Applicable to Contracts 
Governing Federally Financed and Assisted Construction''). Under this 
Act, contractors shall be required to pay wages to laborers and 
mechanics at a rate not less than the minimum wages specified in a wage 
determination made by the Secretary of Labor. In addition, contractors 
shall be required to pay wages not less than once a week. The recipient 
shall place a copy of the current prevailing wage determination issued 
by the Department of Labor in each solicitation and the award of a 
contract shall be conditioned upon the acceptance of the wage 
determination. The recipient shall report all suspected or reported 
violations to the Federal awarding agency.
    4. Contract Work Hours and Safety Standards Act (40 U.S.C. Sec. 327-
333)--Where applicable, all contracts awarded by recipients in excess of 
$2,000 for construction contracts and in excess of $2,500 for other 
contracts that involve the employment of mechanics or laborers shall 
include a provision for compliance with sections 102 and 107 of the 
Contract Work Hours and Safety Standards Act (40 U.S.C. Sec. 327-333), 
as supplemented by Department of Labor regulations (29 CFR part 5). 
Under section 102 of the Act, each contractor shall be required to 
compute the wages of every mechanic and laborer on the basis of a 
standard work week of 40 hours. Work in excess of the standard work week 
is permissible provided that the worker is compensated at a rate of not 
less than 1\1/2\ times the basic rate of pay for all hours worked in 
excess of 40 hours in the work week. Section 107 of the Act is 
applicable to construction work and provides that no laborer or mechanic 
shall be required to work in surroundings or under working conditions 
which are unsanitary, hazardous or dangerous. These requirements do not 
apply to the purchases of supplies or materials or articles ordinarily 
available on the open market, or contracts for transportation or 
transmission of intelligence.
    5. Rights to Inventions Made Under a Contract or Agreement--
Contracts or agreements for the performance of experimental, 
developmental, or research work shall provide for the rights of the 
Federal Government and the recipient in any resulting invention in 
accordance with 37 CFR part 401, ``Rights to Inventions Made by 
Nonprofit Organizations and Small Business Firms Under Government 
Grants, Contracts and Cooperative Agreements,'' and any implementing 
regulations issued by the awarding agency.
    6. Clean Air Act (42 U.S.C. Sec. 7401 et seq.) and the Federal Water 
Pollution Control Act (33 U.S.C. Sec. 1251 et seq.), as amended--
Contracts and subgrants of amounts in excess of $100,000 shall contain a 
provision that requires the recipient to agree to comply with all 
applicable standards, orders or regulations issued pursuant to the Clean 
Air Act (42 U.S.C. Sec. 7401 et seq.) and the Federal Water Pollution 
Control Act as amended (33 U.S.C. Sec. 1251 et seq.). Violations shall 
be reported to the Federal awarding agency and the Regional Office of 
the Environmental Protection Agency (EPA).
    7. Byrd Anti-Lobbying Amendment (31 U.S.C. Sec. 1352)--Contractors 
who apply or bid for an award of $100,000 or more shall file the 
required certification. Each tier certifies to the tier above that it 
will not and has not used Federal appropriated funds to pay any person 
or organization for influencing or attempting to influence an officer or 
employee of any agency, a member of Congress, officer or employee of 
Congress, or an employee of a member of Congress in connection with 
obtaining any Federal contract, grant or any other award covered by 31 
U.S.C. Sec. 1352. Each tier shall also disclose any lobbying with non-
Federal funds that takes place in connection with obtaining any Federal 
award. Such disclosures are forwarded from tier to tier up to the 
recipient. See 29 CFR part 98.
    8. Debarment and Suspension (E.O.'s 12549 and 12689)--No contract 
shall be made to parties listed on the General Services Administration's 
List of Parties Excluded from Federal Procurement or Nonprocurement 
Programs in accordance with E.O.'s 12549 and 12689, ``Debarment and 
Suspension.'' This list

[[Page 513]]

contains the names of parties debarred, suspended, or otherwise excluded 
by agencies, and contractors declared ineligible under statutory or 
regulatory authority other than E.O. 12549. Contractors with awards that 
exceed the small purchase threshold shall provide the required 
certification regarding its exclusion status and that of its principal 
employees.



PART 96--AUDIT REQUIREMENTS FOR GRANTS, CONTRACTS, AND OTHER AGREEMENTS--Table of Contents




Sec.
96.0  Purpose and scope of part.
96.1  Terminology.

     Subpart A--Audits of States, Local Governments, and Non-profit 
                              Organizations

96.11  Purpose and scope of subpart.
96.12  Audit requirements.

Subpart B  [Reserved]

         Subpart C--Audits of Entities Not Covered by Subpart A

96.31  Purpose and scope of subpart.
96.32  Audit requirement.

     Subpart D--Access to Records, Audit Standards, and Relation of 
          Organization-wide Audits to Other Audit Requirements

96.41  Access to records.
96.42  Audit standards.
96.43  Relation of organization-wide audits to other audit requirements.

                       Subpart E--Audit Resolution

96.51  Purpose and scope of subpart.
96.52  Pre-resolution phase activities.
96.53  Audit resolution generally.
96.54  Responsibility for subrecipient audits.

                           Subpart F--Appeals

96.61  Purpose and scope of subpart.
96.62  Contracts.
96.63  Federal financial assistance.

    Authority: 31 U.S.C. 7500 et seq.; and OMB Circular No. A-133.

    Source: 64 FR 14539, Mar. 25, 1999, unless otherwise noted.



Sec. 96.0  Purpose and scope of part.

    This part identifies the audit requirements for recipients and 
subrecipients of Department of Labor (DOL) awards and contains DOL's 
procedures for the resolution of audits. It applies to all grants and 
contracts and other Federal awards provided by or on behalf of the DOL.



Sec. 96.1  Terminology.

    As used in this part, the terms ``Federal award,'' ``Federal 
financial assistance,'' ``recipient,'' and ``subrecipient'' have the 
same meanings as the definitions in 29 CFR 99.105 of this title.



     Subpart A--Audits of States, Local Governments, and Non-profit 
                              Organizations



Sec. 96.11  Purpose and scope of subpart.

    The regulations in this subpart and in 29 CFR part 99 implement 
Office of Management and Budget (OMB) Circular A-133, ``Audits of 
States, Local Governments, and Non-Profit Organizations,'' which was 
issued pursuant to The Single Audit Act Amendments of 1996 (Act). The 
Act builds upon earlier efforts to improve audits of Federal financial 
assistance programs. This subpart establishes uniform audit requirements 
and policy for recipients and subrecipients that receive Federal 
financial assistance from DOL.



Sec. 96.12  Audit requirements.

    (a) Organizations covered by this subpart are responsible for 
arranging for independent audits that meet the requirements of this 
section.
    (b) The audit requirements contained in 29 CFR part 99 shall be 
followed for audits of all fiscal years beginning after June 30, 1996.
    (c) Except as provided in paragraph (d) of this section, the audit 
requirements applicable to earlier fiscal years under regulations and 
award conditions in force when the awards were made shall continue in 
force.
    (d) The Secretary or his/her designee may provide written notice to 
recipients/subrecipients subject to paragraph (c) of this section 
directing them to follow the requirements of 29 CFR 99.320, which 
provides for submission of audit data collection forms and reporting 
packages to a Federal clearinghouse designated by OMB.

Subpart B  [Reserved]

[[Page 514]]



         Subpart C--Audits of Entities Not Covered by Subpart A



Sec. 96.31  Purpose and scope of subpart.

    This subpart prescribes the requirement for audits of recipients, 
subrecipients, contractors, and subcontractors that receive funds from 
the DOL and are not covered by subpart A.



Sec. 96.32  Audit requirement.

    The Secretary of Labor is responsible for the survey, audit or 
examination of recipients, subrecipients, contractors, and 
subcontractors covered by this subpart. Such surveys, audits, or 
examinations shall be conducted at the Secretary's discretion.



     Subpart D--Access to Records, Audit Standards and Relation of 
          Organization-wide Audits to Other Audit Requirements



Sec. 96.41  Access to records.

    The Secretary of Labor, the DOL Inspector General, the Comptroller 
General of the United States, or any of their duly authorized 
representatives (including certified public accountants under contract), 
shall have access to any books, documents, papers, and records (manual 
and automated) of the entity receiving funds from DOL and its 
subrecipients/subcontractors for the purpose of making surveys, audits, 
examinations, excerpts, and transcripts.



Sec. 96.42  Audit standards.

    Surveys, audits, and examinations will conform to the Government 
auditing standards, issued by the Comptroller General of the United 
States, and guides issued by the Secretary. For purposes of meeting 
audit requirements under subparts A and C, only the standards for 
financial and compliance audits need apply.



Sec. 96.43  Relation of organization-wide audits to other audit requirements.

    To the extent that audits conducted in accordance with subpart A 
provide DOL officials with the information needed to carry out their 
responsibilities under Federal law or DOL regulations, the Secretary 
shall rely upon and use the information. Additional audit efforts are 
not precluded, but such efforts must build upon the organization-wide 
audit and not duplicate it. The provisions of subpart A do not authorize 
a covered entity, after having complied with those requirements, to 
constrain, in any manner, the Secretary from carrying out additional 
surveys, audits, or examinations as deemed necessary.



                       Subpart E--Audit Resolution



Sec. 96.51  Purpose and scope of subpart.

    This subpart prescribes standards for resolution of audit findings, 
including, but not limited to, questioned costs and administrative 
deficiencies, identified as a result of the audit of grant agreements, 
contracts, and other agreements awarded by or on behalf of DOL. In cases 
where these standards conflict with statutes or other DOL regulations, 
the latter shall be controlling. The DOL Office of Inspector General 
(OIG) is available to assist agencies in the audit resolution process.



Sec. 96.52  Pre-resolution phase activities.

    (a) Submission of reports. Recipients and subrecipients of DOL funds 
that are audited in accordance with the requirements of subpart A shall 
comply in all respects with the report submission requirements of 29 CFR 
part 99. Failure to submit a complete audit package will result in the 
return of the submitted package by the Clearinghouse, which will assign 
a delinquency classification until the completed package is submitted.
    (b) Quality control. The Office of Inspector General, in conjunction 
with other Federal agencies, will implement an audit quality program 
which may include random, planned, or directed reviews of audits 
submitted in compliance with OMB Circular A-133. When audits are found 
not to be performed in compliance with the requirements, the OIG may 
share the findings with the auditor, the auditee, and the funding 
agencies, and may work with the local licensing authorities to achieve 
corrective action.

[[Page 515]]



Sec. 96.53  Audit resolution generally.

    The DOL official(s) responsible for audit resolution shall promptly 
evaluate findings and recommendations reported by auditors and the 
corrective action plan developed by the recipient to determine proper 
actions in response to audit findings and recommendations. The process 
of audit resolution includes at a minimum an initial determination, an 
informal resolution period, and a final determination.
    (a) Initial determination. After the conclusion of any comment 
period for audits provided the recipient/contractor, the responsible DOL 
official(s) shall make an initial determination on the allowability of 
questioned costs or activities, administrative or systemic findings, and 
the corrective actions outlined by the recipient. Such determination 
shall be based on applicable statutes, regulations, administrative 
directives, or terms and conditions of the grant/contract award 
instrument.
    (b) Informal resolution. The recipient/contractor shall have a 
reasonable period of time (as determined by the DOL official(s) 
responsible for audit resolution) from the date of issuance of the 
initial determination to informally resolve those matters in which the 
recipient/contractor disagrees with the decisions of the responsible DOL 
official(s).
    (c) Final determination. After the conclusion of the informal 
resolution period, the responsible DOL official(s) shall issue a final 
determination that:
    (1) As appropriate, indicate that efforts to informally resolve 
matters contained in the initial determination have either been 
successful or unsuccessful;
    (2) Lists those matters upon which the parties continue to disagree;
    (3) Lists any modifications to the factual findings and conclusions 
set forth in the initial determination;
    (4) Lists any sanctions and required corrective actions; and
    (5) Sets forth any appeal rights.
    (d) Time limit. Insofar as possible, the requirements of this 
section should be met within 180 days of the date the final approved 
audit report is received by the DOL official(s) responsible for audit 
resolution.



Sec. 96.54  Responsibility for subrecipient audits.

    Recipients of Federal assistance from DOL are responsible for 
ensuring that subrecipient organizations who expend $300,000 or more in 
a fiscal year are audited and that any audit findings are resolved in 
accordance with this part. The recipient shall:
    (a) Determine whether appropriate audit requirements outlined in 
subpart A have been met;
    (b) Determine whether the subrecipient spent Federal assistance 
funds provided in accordance with applicable laws and regulations;
    (c) Ensure that appropriate corrective action is taken within six 
months after receipt of the audit report in instances of non-compliance 
with Federal law and regulations;
    (d) Consider whether subrecipient audits necessitate adjustment of 
the recipient's own records; and
    (e) Require that each subrecipient permit independent auditors to 
have access to the records and financial statements necessary to comply 
with this part.



                           Subpart F--Appeals



Sec. 96.61  Purpose and scope of subpart.

    (a) The purpose of this subpart is to set forth procedures by which 
recipients and contractors may appeal final determinations by the DOL 
officials responsible for audit resolution as a result of audits.
    (b) Subrecipients and subcontractors shall have only such appeal 
rights as may exist in subgrants or subcontracts with the respective 
recipients or contractors.



Sec. 96.62  Contracts.

    (a) For the purpose of this subpart, the term ``contract'' includes 
all agreements described in sec. 602(a) of the Contract Disputes Act 
(Applicability of Law--Executive agency contracts) (41 U.S.C. 602(a)).
    (b) Upon a contractor's receipt of the DOL contracting officer's 
final determination as a result of an audit, the contractor may appeal 
the final determination to the DOL Board of Contract Appeals, pursuant 
to 41 CFR part 29-60

[[Page 516]]

and 48 CFR part 2933 or pursue such other remedies as may be available 
under the Contract Disputes Act.



Sec. 96.63  Federal financial assistance.

    The DOL grantor agencies shall determine which of the two appeal 
options set forth in paragraphs (a) and (b) of this section the 
recipient may use to appeal the final determination of the grant 
officer. All awards within the same Federal financial assistance program 
shall follow the same appeal procedure.
    (a) Appeal to the head of the grantor agency, or his/her designee, 
for which the audit was conducted.
    (1) Jurisdiction. (i) Request for hearing. Within 21 days of receipt 
of the grant officer's final determination, the recipient may transmit, 
by certified mail, return receipt requested, a request for hearing to 
the head of the grantor agency, or his/her designee, as noted in the 
final determination. A copy must also be sent to the grant officer who 
signed the final determination.
    (ii) Statement of issues. The request for a hearing shall be 
accompanied by a copy of the final determination, if issued, and shall 
specifically state those portions of the final determination upon which 
review is requested. Those portions of the final determination not 
specified for review shall be considered resolved and not subject to 
further review.
    (iii) Failure to request review. When no timely request for a 
hearing is made, the final determination shall constitute final action 
by the Secretary of Labor and shall not be subject to further review.
    (2) Conduct of hearings. The grantor agency shall establish 
procedures for the conduct of hearings by the head of the grantor 
agency, or his/her designee.
    (3) Decision of the head of the grantor agency, or his/her designee. 
The head of the grantor agency, or his/her designee, should render a 
written decision no later than 90 days after the closing of the record. 
This decision constitutes final action of the Secretary.
    (b) Appeal to the DOL Office of Administrative Law Judges.
    (1) Jurisdiction. (i) Request for hearing. Within 21 days of receipt 
of the grant officer's final determination, the recipient may transmit 
by certified mail, return receipt requested, a request for hearing to 
the Chief Administrative Law Judge, United States Department of Labor, 
800 K Street NW, Suite 400, Washington, DC 20001, with a copy to the 
grant officer who signed the final determination. The Chief 
Administrative Law Judge shall designate an administrative law judge to 
hear the appeal.
    (ii) Statement of issues. The request for a hearing shall be 
accompanied by a copy of the final determination, if issued, and shall 
specifically state those portions of the final determination upon which 
review is requested. Those portions of the final determination not 
specified for review shall be considered resolved and not subject to 
further review.
    (iii) Failure to request review. When no timely request for a 
hearing is made, the final determination shall constitute final action 
by the Secretary and shall not be subject to further review.
    (2) Conduct of hearings. The DOL Rules of Practice and Procedure for 
Administrative Hearings Before the Office of Administrative Law Judges, 
set forth at 29 CFR part 18, shall govern the conduct of hearings under 
paragraph (b) of this section.
    (3) Decision of the administrative law judge. The administrative law 
judge should render a written decision no later than 90 days after the 
closing of the record.
    (4) Filing exceptions to decision. The decision of the 
administrative law judge shall constitute final action by the Secretary 
of Labor, unless, within 21 days after receipt of the decision of the 
administrative law judge, a party dissatisfied with the decision or any 
part thereof has filed exceptions with the Secretary, specifically 
identifying the procedure or finding of fact, law, or policy with which 
exception is taken. Any exceptions not specifically urged shall be 
deemed to have been waived. Thereafter, the decision of the 
administrative law judge shall become the decision of the Secretary, 
unless the Secretary, within 30 days of such filing, has notified the 
parties that the case has been accepted for review.

[[Page 517]]

    (5) Review by the Secretary of Labor. Any case accepted for review 
by the Secretary shall be decided within 180 days of such acceptance. If 
not so decided, the decision of the administrative law judge shall 
become the final decision of the Secretary.



PART 97--UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND COOPERATIVE AGREEMENTS TO STATE AND LOCAL GOVERNMENTS--Table of Contents




                           Subpart A--General

97.1  Purpose and scope of this part.
97.2  Scope of subpart.
97.3  Definitions.
97.4  Applicability.
97.5  Effect on other issuances.
97.6  Additions and exceptions.

                    Subpart B--Pre-Award Requirements

97.10  Forms for applying for grants.
97.11  State plans.
97.12  Special grant or subgrant conditions for ``high-risk'' grantees.

                   Subpart C--Post-Award Requirements

                        Financial Administration

97.20  Standards for financial management systems.
97.21  Payment.
97.22  Allowable costs.
97.23  Period of availability of funds.
97.24  Matching or cost sharing.
97.25  Program income.
97.26  Non-Federal audit.

                    Changes, Property, and Subawards

97.30  Changes.
97.31  Real property.
97.32  Equipment.
97.33  Supplies.
97.34  Copyrights.
97.35  Subawards to debarred and suspended parties.
97.36  Procurement.
97.37  Subgrants.

               Reports, Records Retention, and Enforcement

97.40  Monitoring and reporting program performance.
97.41  Financial reporting.
97.42  Retention and access requirements for records.
97.43  Enforcement.
97.44  Termination for convenience.

                 Subpart D--After-the-Grant Requirements

97.50  Closeout.
97.51  Later disallowances and adjustments.
97.52  Collection of amounts due.

Subpart E--Entitlement  [Reserved]

    Authority: 5 U.S.C. 301; OMB Circular A-102.

    Source: 53 FR 8069, 8087, Mar. 11, 1988, unless otherwise noted.



                           Subpart A--General



Sec. 97.1  Purpose and scope of this part.

    This part establishes uniform administrative rules for Federal 
grants and cooperative agreements and subawards to State, local and 
Indian tribal governments.



Sec. 97.2  Scope of subpart.

    This subpart contains general rules pertaining to this part and 
procedures for control of exceptions from this part.



Sec. 97.3  Definitions.

    As used in this part:
    Accrued expenditures mean the charges incurred by the grantee during 
a given period requiring the provision of funds for:
    (1) Goods and other tangible property received;
    (2) Services performed by employees, contractors, subgrantees, 
subcontractors, and other payees; and
    (3) Other amounts becoming owed under programs for which no current 
services or performance is required, such as annuities, insurance 
claims, and other benefit payments.
    Accrued income means the sum of:
    (1) Earnings during a given period from services performed by the 
grantee and goods and other tangible property delivered to purchasers, 
and
    (2) Amounts becoming owed to the grantee for which no current 
services or performance is required by the grantee.
    Acquisition cost of an item of purchased equipment means the net 
invoice unit price of the property including the cost of modifications, 
attachments, accessories, or auxiliary apparatus necessary to make the 
property usable for the purpose for which it was

[[Page 518]]

acquired. Other charges such as the cost of installation, 
transportation, taxes, duty or protective in-transit insurance, shall be 
included or excluded from the unit acquisition cost in accordance with 
the grantee's regular accounting practices.
    Administrative requirements mean those matters common to grants in 
general, such as financial management, kinds and frequency of reports, 
and retention of records. These are distinguished from programmatic 
requirements, which concern matters that can be treated only on a 
program-by-program or grant-by-grant basis, such as kinds of activities 
that can be supported by grants under a particular program.
    Awarding agency means:
    (1) With respect to a grant, the Federal agency, and
    (2) With respect to a subgrant, the party that awarded the subgrant.
    Cash contributions means the grantee's cash outlay, including the 
outlay of money contributed to the grantee or subgrantee by other public 
agencies and institutions, and private organizations and individuals. 
When authorized by Federal legislation, Federal funds received from 
other assistance agreements may be considered as grantee or subgrantee 
cash contributions.
    Contract means (except as used in the definitions for grant and 
subgrant in this section and except where qualified by Federal) a 
procurement contract under a grant or subgrant, and means a procurement 
subcontract under a contract.
    Cost sharing or matching means the value of the third party in-kind 
contributions and the portion of the costs of a federally assisted 
project or program not borne by the Federal Government.
    Cost-type contract means a contract or subcontract under a grant in 
which the contractor or subcontractor is paid on the basis of the costs 
it incurs, with or without a fee.
    Equipment means tangible, nonexpendable, personal property having a 
useful life of more than one year and an acquisition cost of $5,000 or 
more per unit. A grantee may use its own definition of equipment 
provided that such definition would at least include all equipment 
defined above.
    Expenditure report means:
    (1) For nonconstruction grants, the SF-269 ``Financial Status 
Report'' (or other equivalent report);
    (2) For construction grants, the SF-271 ``Outlay Report and Request 
for Reimbursement'' (or other equivalent report).
    Federally recognized Indian tribal government means the governing 
body or a governmental agency of any Indian tribe, band, nation, or 
other organized group or community (including any Native village as 
defined in section 3 of the Alaska Native Claims Settlement Act, 85 Stat 
688) certified by the Secretary of the Interior as eligible for the 
special programs and services provided by him through the Bureau of 
Indian Affairs.
    Government means a State or local government or a federally 
recognized Indian tribal government.
    Grant means an award of financial assistance, including cooperative 
agreements, in the form of money, or property in lieu of money, by the 
Federal Government to an eligible grantee. The term does not include 
technical assistance which provides services instead of money, or other 
assistance in the form of revenue sharing, loans, loan guarantees, 
interest subsidies, insurance, or direct appropriations. Also, the term 
does not include assistance, such as a fellowship or other lump sum 
award, which the grantee is not required to account for.
    Grantee means the government to which a grant is awarded and which 
is accountable for the use of the funds provided. The grantee is the 
entire legal entity even if only a particular component of the entity is 
designated in the grant award document.
    Local government means a county, municipality, city, town, township, 
local public authority (including any public and Indian housing agency 
under the United States Housing Act of 1937) school district, special 
district, intrastate district, council of governments (whether or not 
incorporated as a nonprofit corporation under state law), any other 
regional or interstate government entity, or any agency or 
instrumentality of a local government.

[[Page 519]]

    Obligations means the amounts of orders placed, contracts and 
subgrants awarded, goods and services received, and similar transactions 
during a given period that will require payment by the grantee during 
the same or a future period.
    OMB means the United States Office of Management and Budget.
    Outlays (expenditures) mean charges made to the project or program. 
They may be reported on a cash or accrual basis. For reports prepared on 
a cash basis, outlays are the sum of actual cash disbursement for direct 
charges for goods and services, the amount of indirect expense incurred, 
the value of in-kind contributions applied, and the amount of cash 
advances and payments made to contractors and subgrantees. For reports 
prepared on an accrued expenditure basis, outlays are the sum of actual 
cash disbursements, the amount of indirect expense incurred, the value 
of inkind contributions applied, and the new increase (or decrease) in 
the amounts owed by the grantee for goods and other property received, 
for services performed by employees, contractors, subgrantees, 
subcontractors, and other payees, and other amounts becoming owed under 
programs for which no current services or performance are required, such 
as annuities, insurance claims, and other benefit payments.
    Percentage of completion method refers to a system under which 
payments are made for construction work according to the percentage of 
completion of the work, rather than to the grantee's cost incurred.
    Prior approval means documentation evidencing consent prior to 
incurring specific cost.
    Real property means land, including land improvements, structures 
and appurtenances thereto, excluding movable machinery and equipment.
    Share, when referring to the awarding agency's portion of real 
property, equipment or supplies, means the same percentage as the 
awarding agency's portion of the acquiring party's total costs under the 
grant to which the acquisition costs under the grant to which the 
acquisition cost of the property was charged. Only costs are to be 
counted--not the value of third-party in-kind contributions.
    State means any of the several States of the United States, the 
District of Columbia, the Commonwealth of Puerto Rico, any territory or 
possession of the United States, or any agency or instrumentality of a 
State exclusive of local governments. The term does not include any 
public and Indian housing agency under United States Housing Act of 
1937.
    Subgrant means an award of financial assistance in the form of 
money, or property in lieu of money, made under a grant by a grantee to 
an eligible subgrantee. The term includes financial assistance when 
provided by contractual legal agreement, but does not include 
procurement purchases, nor does it include any form of assistance which 
is excluded from the definition of grant in this part.
    Subgrantee means the government or other legal entity to which a 
subgrant is awarded and which is accountable to the grantee for the use 
of the funds provided.
    Supplies means all tangible personal property other than equipment 
as defined in this part.
    Suspension means depending on the context, either
    (1) Temporary withdrawal of the authority to obligate grant funds 
pending corrective action by the grantee or subgrantee or a decision to 
terminate the grant, or
    (2) An action taken by a suspending official in accordance with 
agency regulations implementing E.O. 12549 to immediately exclude a 
person from participating in grant transactions for a period, pending 
completion of an investigation and such legal or debarment proceedings 
as may ensue.
    Termination means permanent withdrawal of the authority to obligate 
previously-awarded grant funds before that authority would otherwise 
expire. It also means the voluntary relinquishment of that authority by 
the grantee or subgrantee. Termination does not include:
    (1) Withdrawal of funds awarded on the basis of the grantee's 
underestimate of the unobligated balance in a prior period;
    (2) Withdrawal of the unobligated balance as of the expiration of a 
grant;

[[Page 520]]

    (3) Refusal to extend a grant or award additional funds, to make a 
competing or noncompeting continuation, renewal, extension, or 
supplemental award; or
    (4) Voiding of a grant upon determination that the award was 
obtained fraudulently, or was otherwise illegal or invalid from 
inception.
    Terms of a grant or subgrant mean all requirements of the grant or 
subgrant, whether in statute, regulations, or the award document.
    Third party in-kind contributions mean property or services which 
benefit a federally assisted project or program and which are 
contributed by non-Federal third parties without charge to the grantee, 
or a cost-type contractor under the grant agreement.
    Unliquidated obligations for reports prepared on a cash basis mean 
the amount of obligations incurred by the grantee that has not been 
paid. For reports prepared on an accrued expenditure basis, they 
represent the amount of obligations incurred by the grantee for which an 
outlay has not been recorded.
    Unobligated balance means the portion of the funds authorized by the 
Federal agency that has not been obligated by the grantee and is 
determined by deducting the cumulative obligations from the cumulative 
funds authorized.



Sec. 97.4  Applicability.

    (a) General. Subparts A-D of this part apply to all grants and 
subgrants to governments, except where inconsistent with Federal 
statutes or with regulations authorized in accordance with the exception 
provision of Sec. 97.6, or:
    (1) Grants and subgrants to State and local institutions of higher 
education or State and local hospitals.
    (2) The block grants authorized by the Omnibus Budget Reconciliation 
Act of 1981 (Community Services; Preventive Health and Health Services; 
Alcohol, Drug Abuse, and Mental Health Services; Maternal and Child 
Health Services; Social Services; Low-Income Home Energy Assistance; 
States' Program of Community Development Block Grants for Small Cities; 
and Elementary and Secondary Education other than programs administered 
by the Secretary of Education under title V, subtitle D, chapter 2, 
Section 583--the Secretary's discretionary grant program) and titles I-
III of the Job Training Partnership Act of 1982 and under the Public 
Health Services Act (section 1921), Alcohol and Drug Abuse Treatment and 
Rehabilitation Block Grant and part C of title V, Mental Health Service 
for the Homeless Block Grant).
    (3) Entitlement grants to carry out the following programs of the 
Social Security Act:
    (i) Aid to Needy Families with Dependent Children (title IV-A of the 
Act, not including the Work Incentive Program (WIN) authorized by 
section 402(a)19(G); HHS grants for WIN are subject to this part);
    (ii) Child Support Enforcement and Establishment of Paternity (title 
IV-D of the Act);
    (iii) Foster Care and Adoption Assistance (title IV-E of the Act);
    (iv) Aid to the Aged, Blind, and Disabled (titles I, X, XIV, and 
XVI-AABD of the Act); and
    (v) Medical Assistance (Medicaid) (title XIX of the Act) not 
including the State Medicaid Fraud Control program authorized by section 
1903(a)(6)(B).
    (4) Entitlement grants under the following programs of The National 
School Lunch Act:
    (i) School Lunch (section 4 of the Act),
    (ii) Commodity Assistance (section 6 of the Act),
    (iii) Special Meal Assistance (section 11 of the Act),
    (iv) Summer Food Service for Children (section 13 of the Act), and
    (v) Child Care Food Program (section 17 of the Act).
    (5) Entitlement grants under the following programs of The Child 
Nutrition Act of 1966:
    (i) Special Milk (section 3 of the Act), and
    (ii) School Breakfast (section 4 of the Act).
    (6) Entitlement grants for State Administrative expenses under The 
Food Stamp Act of 1977 (section 16 of the Act).
    (7) A grant for an experimental, pilot, or demonstration project 
that is also

[[Page 521]]

supported by a grant listed in paragraph (a)(3) of this section;
    (8) Grant funds awarded under subsection 412(e) of the Immigration 
and Nationality Act (8 U.S.C. 1522(e)) and subsection 501(a) of the 
Refugee Education Assistance Act of 1980 (Pub. L. 96-422, 94 Stat. 
1809), for cash assistance, medical assistance, and supplemental 
security income benefits to refugees and entrants and the administrative 
costs of providing the assistance and benefits;
    (9) Grants to local education agencies under 20 U.S.C. 236 through 
241-1(a), and 242 through 244 (portions of the Impact Aid program), 
except for 20 U.S.C. 238(d)(2)(c) and 240(f) (Entitlement Increase for 
Handicapped Children); and
    (10) Payments under the Veterans Administration's State Home Per 
Diem Program (38 U.S.C. 641(a)).
    (b) Entitlement programs. Entitlement programs enumerated above in 
Sec. 97.4(a)(3) through (8) are subject to subpart E.



Sec. 97.5  Effect on other issuances.

    All other grants administration provisions of codified program 
regulations, program manuals, handbooks and other nonregulatory 
materials which are inconsistent with this part are superseded, except 
to the extent they are required by statute, or authorized in accordance 
with the exception provision in Sec. 97.6.



Sec. 97.6  Additions and exceptions.

    (a) For classes of grants and grantees subject to this part, Federal 
agencies may not impose additional administrative requirements except in 
codified regulations published in the Federal Register.
    (b) Exceptions for classes of grants or grantees may be authorized 
only by OMB.
    (c) Exceptions on a case-by-case basis and for subgrantees may be 
authorized by the affected Federal agencies.



                    Subpart B--Pre-Award Requirements



Sec. 97.10  Forms for applying for grants.

    (a) Scope. (1) This section prescribes forms and instructions to be 
used by governmental organizations (except hospitals and institutions of 
higher education operated by a government) in applying for grants. This 
section is not applicable, however, to formula grant programs which do 
not require applicants to apply for funds on a project basis.
    (2) This section applies only to applications to Federal agencies 
for grants, and is not required to be applied by grantees in dealing 
with applicants for subgrants. However, grantees are encouraged to avoid 
more detailed or burdensome application requirements for subgrants.
    (b) Authorized forms and instructions for governmental 
organizations. (1) In applying for grants, applicants shall only use 
standard application forms or those prescribed by the granting agency 
with the approval of OMB under the Paperwork Reduction Act of 1980.
    (2) Applicants are not required to submit more than the original and 
two copies of preapplications or applications.
    (3) Applicants must follow all applicable instructions that bear OMB 
clearance numbers. Federal agencies may specify and describe the 
programs, functions, or activities that will be used to plan, budget, 
and evaluate the work under a grant. Other supplementary instructions 
may be issued only with the approval of OMB to the extent required under 
the Paperwork Reduction Act of 1980. For any standard form, except the 
SF-424 facesheet, Federal agencies may shade out or instruct the 
applicant to disregard any line item that is not needed.
    (4) When a grantee applies for additional funding (such as a 
continuation or supplemental award) or amends a previously submitted 
application, only the affected pages need be submitted. Previously 
submitted pages with information that is still current need not be 
resubmitted.



Sec. 97.11  State plans.

    (a) Scope. The statutes for some programs require States to submit 
plans before receiving grants. Under regulations implementing Executive 
Order 12372, ``Intergovernmental Review of Federal Programs,'' States 
are allowed to simplify, consolidate and substitute plans. This section 
contains additional

[[Page 522]]

provisions for plans that are subject to regulations implementing the 
Executive Order.
    (b) Requirements. A State need meet only Federal administrative or 
programmatic requirements for a plan that are in statutes or codified 
regulations.
    (c) Assurances. In each plan the State will include an assurance 
that the State shall comply with all applicable Federal statutes and 
regulations in effect with respect to the periods for which it receives 
grant funding. For this assurance and other assurances required in the 
plan, the State may:
    (1) Cite by number the statutory or regulatory provisions requiring 
the assurances and affirm that it gives the assurances required by those 
provisions,
    (2) Repeat the assurance language in the statutes or regulations, or
    (3) Develop its own language to the extent permitted by law.
    (d) Amendments. A State will amend a plan whenever necessary to 
reflect: (1) New or revised Federal statutes or regulations or (2) a 
material change in any State law, organization, policy, or State agency 
operation. The State will obtain approval for the amendment and its 
effective date but need submit for approval only the amended portions of 
the plan.



Sec. 97.12  Special grant or subgrant conditions for ``high-risk'' grantees.

    (a) A grantee or subgrantee may be considered ``high risk'' if an 
awarding agency determines that a grantee or subgrantee:
    (1) Has a history of unsatisfactory performance, or
    (2) Is not financially stable, or
    (3) Has a management system which does not meet the management 
standards set forth in this part, or
    (4) Has not conformed to terms and conditions of previous awards, or
    (5) Is otherwise not responsible; and if the awarding agency 
determines that an award will be made, special conditions and/or 
restrictions shall correspond to the high risk condition and shall be 
included in the award.
    (b) Special conditions or restrictions may include:
    (1) Payment on a reimbursement basis;
    (2) Withholding authority to proceed to the next phase until receipt 
of evidence of acceptable performance within a given funding period;
    (3) Requiring additional, more detailed financial reports;
    (4) Additional project monitoring;
    (5) Requiring the grantee or subgrantee to obtain technical or 
management assistance; or
    (6) Establishing additional prior approvals.
    (c) If an awarding agency decides to impose such conditions, the 
awarding official will notify the grantee or subgrantee as early as 
possible, in writing, of:
    (1) The nature of the special conditions/restrictions;
    (2) The reason(s) for imposing them;
    (3) The corrective actions which must be taken before they will be 
removed and the time allowed for completing the corrective actions and
    (4) The method of requesting reconsideration of the conditions/
restrictions imposed.



                   Subpart C--Post-Award Requirements

                        Financial Administration



Sec. 97.20  Standards for financial management systems.

    (a) A State must expand and account for grant funds in accordance 
with State laws and procedures for expending and accounting for its own 
funds. Fiscal control and accounting procedures of the State, as well as 
its subgrantees and cost-type contractors, must be sufficient to--
    (1) Permit preparation of reports required by this part and the 
statutes authorizing the grant, and
    (2) Permit the tracing of funds to a level of expenditures adequate 
to establish that such funds have not been used in violation of the 
restrictions and prohibitions of applicable statutes.
    (b) The financial management systems of other grantees and 
subgrantees must meet the following standards:
    (1) Financial reporting. Accurate, current, and complete disclosure 
of the financial results of financially assisted

[[Page 523]]

activities must be made in accordance with the financial reporting 
requirements of the grant or subgrant.
    (2) Accounting records. Grantees and subgrantees must maintain 
records which adequately identify the source and application of funds 
provided for financially-assisted activities. These records must contain 
information pertaining to grant or subgrant awards and authorizations, 
obligations, unobligated balances, assets, liabilities, outlays or 
expenditures, and income.
    (3) Internal control. Effective control and accountability must be 
maintained for all grant and subgrant cash, real and personal property, 
and other assets. Grantees and subgrantees must adequately safeguard all 
such property and must assure that it is used solely for authorized 
purposes.
    (4) Budget control. Actual expenditures or outlays must be compared 
with budgeted amounts for each grant or subgrant. Financial information 
must be related to performance or productivity data, including the 
development of unit cost information whenever appropriate or 
specifically required in the grant or subgrant agreement. If unit cost 
data are required, estimates based on available documentation will be 
accepted whenever possible.
    (5) Allowable cost. Applicable OMB cost principles, agency program 
regulations, and the terms of grant and subgrant agreements will be 
followed in determining the reasonableness, allowability, and 
allocability of costs.
    (6) Source documentation. Accounting records must be supported by 
such source documentation as cancelled checks, paid bills, payrolls, 
time and attendance records, contract and subgrant award documents, etc.
    (7) Cash management. Procedures for minimizing the time elapsing 
between the transfer of funds from the U.S. Treasury and disbursement by 
grantees and subgrantees must be followed whenever advance payment 
procedures are used. Grantees must establish reasonable procedures to 
ensure the receipt of reports on subgrantees' cash balances and cash 
disbursements in sufficient time to enable them to prepare complete and 
accurate cash transactions reports to the awarding agency. When advances 
are made by letter-of-credit or electronic transfer of funds methods, 
the grantee must make drawdowns as close as possible to the time of 
making disbursements. Grantees must monitor cash drawdowns by their 
subgrantees to assure that they conform substantially to the same 
standards of timing and amount as apply to advances to the grantees.
    (c) An awarding agency may review the adequacy of the financial 
management system of any applicant for financial assistance as part of a 
preaward review or at any time subsequent to award.



Sec. 97.21  Payment.

    (a) Scope. This section prescribes the basic standard and the 
methods under which a Federal agency will make payments to grantees, and 
grantees will make payments to subgrantees and contractors.
    (b) Basic standard. Methods and procedures for payment shall 
minimize the time elapsing between the transfer of funds and 
disbursement by the grantee or subgrantee, in accordance with Treasury 
regulations at 31 CFR part 205.
    (c) Advances. Grantees and subgrantees shall be paid in advance, 
provided they maintain or demonstrate the willingness and ability to 
maintain procedures to minimize the time elapsing between the transfer 
of the funds and their disbursement by the grantee or subgrantee.
    (d) Reimbursement. Reimbursement shall be the preferred method when 
the requirements in paragraph (c) of this section are not met. Grantees 
and subgrantees may also be paid by reimbursement for any construction 
grant. Except as otherwise specified in regulation, Federal agencies 
shall not use the percentage of completion method to pay construction 
grants. The grantee or subgrantee may use that method to pay its 
construction contractor, and if it does, the awarding agency's payments 
to the grantee or subgrantee will be based on the grantee's or 
subgrantee's actual rate of disbursement.
    (e) Working capital advances. If a grantee cannot meet the criteria 
for

[[Page 524]]

advance payments described in paragraph (c) of this section, and the 
Federal agency has determined that reimbursement is not feasible because 
the grantee lacks sufficient working capital, the awarding agency may 
provide cash or a working capital advance basis. Under this procedure 
the awarding agency shall advance cash to the grantee to cover its 
estimated disbursement needs for an initial period generally geared to 
the grantee's disbursing cycle. Thereafter, the awarding agency shall 
reimburse the grantee for its actual cash disbursements. The working 
capital advance method of payment shall not be used by grantees or 
subgrantees if the reason for using such method is the unwillingness or 
inability of the grantee to provide timely advances to the subgrantee to 
meet the subgrantee's actual cash disbursements.
    (f) Effect of program income, refunds, and audit recoveries on 
payment. (1) Grantees and subgrantees shall disburse repayments to and 
interest earned on a revolving fund before requesting additional cash 
payments for the same activity.
    (2) Except as provided in paragraph (f)(1) of this section, grantees 
and subgrantees shall disburse program income, rebates, refunds, 
contract settlements, audit recoveries and interest earned on such funds 
before requesting additional cash payments.
    (g) Withholding payments. (1) Unless otherwise required by Federal 
statute, awarding agencies shall not withhold payments for proper 
charges incurred by grantees or subgrantees unless--
    (i) The grantee or subgrantee has failed to comply with grant award 
conditions or
    (ii) The grantee or subgrantee is indebted to the United States.
    (2) Cash withheld for failure to comply with grant award condition, 
but without suspension of the grant, shall be released to the grantee 
upon subsequent compliance. When a grant is suspended, payment 
adjustments will be made in accordance with Sec. 97.43(c).
    (3) A Federal agency shall not make payment to grantees for amounts 
that are withheld by grantees or subgrantees from payment to contractors 
to assure satisfactory completion of work. Payments shall be made by the 
Federal agency when the grantees or subgrantees actually disburse the 
withheld funds to the contractors or to escrow accounts established to 
assure satisfactory completion of work.
    (h) Cash depositories. (1) Consistent with the national goal of 
expanding the opportunities for minority business enterprises, grantees 
and subgrantees are encouraged to use minority banks (a bank which is 
owned at least 50 percent by minority group members). A list of minority 
owned banks can be obtained from the Minority Business Development 
Agency, Department of Commerce, Washington, DC 20230.
    (2) A grantee or subgrantee shall maintain a separate bank account 
only when required by Federal-State agreement.
    (i) Interest earned on advances. Except for interest earned on 
advances of funds exempt under the Intergovernmental Cooperation Act (31 
U.S.C. 6501 et seq.) and the Indian Self-Determination Act (23 U.S.C. 
450), grantees and subgrantees shall promptly, but at least quarterly, 
remit interest earned on advances to the Federal agency. The grantee or 
subgrantee may keep interest amounts up to $100 per year for 
administrative expenses.



Sec. 97.22  Allowable costs.

    (a) Limitation on use of funds. Grant funds may be used only for:
    (1) The allowable costs of the grantees, subgrantees and cost-type 
contractors, including allowable costs in the form of payments to fixed-
price contractors; and
    (2) Reasonable fees or profit to cost-type contractors but not any 
fee or profit (or other increment above allowable costs) to the grantee 
or subgrantee.
    (b) Applicable cost principles. For each kind of organization, there 
is a set of Federal principles for determining allowable costs. 
Allowable costs will be determined in accordance with the cost 
principles applicable to the organization incurring the costs. The 
following chart lists the kinds of organizations and the applicable cost 
principles.

[[Page 525]]



------------------------------------------------------------------------
           For the costs of a--                Use the principles in--
------------------------------------------------------------------------
State, local or Indian tribal government..  OMB Circular A-87.
Private nonprofit organization other than   OBM Circular A-122.
 an (1) institution of higher education,
 (2) hospital, or (3) organization named
 in OMB Circular A-122 as not subject to
 that circular.
Educational institutions..................  OMB Circular A-21.
For-profit organization other than a        48 CFR part 31. Contract
 hospital and an organization named in OBM   Cost Principles and
 Circular A-122 as not subject to that       Procedures, or uniform cost
 circular.                                   accounting standards that
                                             comply with cost principles
                                             acceptable to the Federal
                                             agency.
------------------------------------------------------------------------



Sec. 97.23  Period of availability of funds.

    (a) General. Where a funding period is specified, a grantee may 
charge to the award only costs resulting from obligations of the funding 
period unless carryover of unobligated balances is permitted, in which 
case the carryover balances may be charged for costs resulting from 
obligations of the subsequent funding period.
    (b) Liquidation of obligations. A grantee must liquidate all 
obligations incurred under the award not later than 90 days after the 
end of the funding period (or as specified in a program regulation) to 
coincide with the submission of the annual Financial Status Report (SF-
269). The Federal agency may extend this deadline at the request of the 
grantee.



Sec. 97.24  Matching or cost sharing.

    (a) Basic rule: Costs and contributions acceptable. With the 
qualifications and exceptions listed in paragraph (b) of this section, a 
matching or cost sharing requirement may be satisfied by either or both 
of the following:
    (1) Allowable costs incurred by the grantee, subgrantee or a cost-
type contractor under the assistance agreement. This includes allowable 
costs borne by non-Federal grants or by others cash donations from non-
Federal third parties.
    (2) The value of third party in-kind contributions applicable to the 
period to which the cost sharing or matching requirements applies.
    (b) Qualifications and exceptions--(1) Costs borne by other Federal 
grant agreements. Except as provided by Federal statute, a cost sharing 
or matching requirement may not be met by costs borne by another Federal 
grant. This prohibition does not apply to income earned by a grantee or 
subgrantee from a contract awarded under another Federal grant.
    (2) General revenue sharing. For the purpose of this section, 
general revenue sharing funds distributed under 31 U.S.C. 6702 are not 
considered Federal grant funds.
    (3) Cost or contributions counted towards other Federal costs-
sharing requirements. Neither costs nor the values of third party in-
kind contributions may count towards satisfying a cost sharing or 
matching requirement of a grant agreement if they have been or will be 
counted towards satisfying a cost sharing or matching requirement of 
another Federal grant agreement, a Federal procurement contract, or any 
other award of Federal funds.
    (4) Costs financed by program income. Costs financed by program 
income, as defined in Sec. 97.25, shall not count towards satisfying a 
cost sharing or matching requirement unless they are expressly permitted 
in the terms of the assistance agreement. (This use of general program 
income is described in Sec. 97.25(g).)
    (5) Services or property financed by income earned by contractors. 
Contractors under a grant may earn income from the activities carried 
out under the contract in addition to the amounts earned from the party 
awarding the contract. No costs of services or property supported by 
this income may count toward satisfying a cost sharing or matching 
requirement unless other provisions of the grant agreement expressly 
permit this kind of income to be used to meet the requirement.
    (6) Records. Costs and third party in-kind contributions counting 
towards satisfying a cost sharing or matching requirement must be 
verifiable from the records of grantees and subgrantee or cost-type 
contractors. These records must show how the value placed on third party 
in-kind contributions was derived. To the extent feasible, volunteer 
services will be supported by the same methods that the organization 
uses to support the allocability of regular personnel costs.

[[Page 526]]

    (7) Special standards for third party in-kind contributions. (i) 
Third party in-kind contributions count towards satisfying a cost 
sharing or matching requirement only where, if the party receiving the 
contributions were to pay for them, the payments would be allowable 
costs.
    (ii) Some third party in-kind contributions are goods and services 
that, if the grantee, subgrantee, or contractor receiving the 
contribution had to pay for them, the payments would have been an 
indirect costs. Costs sharing or matching credit for such contributions 
shall be given only if the grantee, subgrantee, or contractor has 
established, along with its regular indirect cost rate, a special rate 
for allocating to individual projects or programs the value of the 
contributions.
    (iii) A third party in-kind contribution to a fixed-price contract 
may count towards satisfying a cost sharing or matching requirement only 
if it results in:
    (A) An increase in the services or property provided under the 
contract (without additional cost to the grantee or subgrantee) or
    (B) A cost savings to the grantee or subgrantee.
    (iv) The values placed on third party in-kind contributions for cost 
sharing or matching purposes will conform to the rules in the succeeding 
sections of this part. If a third party in-kind contribution is a type 
not treated in those sections, the value placed upon it shall be fair 
and reasonable.
    (c) Valuation of donated services--(1) Volunteer services. Unpaid 
services provided to a grantee or subgrantee by individuals will be 
valued at rates consistent with those ordinarily paid for similar work 
in the grantee's or subgrantee's organization. If the grantee or 
subgrantee does not have employees performing similar work, the rates 
will be consistent with those ordinarily paid by other employers for 
similar work in the same labor market. In either case, a reasonable 
amount for fringe benefits may be included in the valuation.
    (2) Employees of other organizations. When an employer other than a 
grantee, subgrantee, or cost-type contractor furnishes free of charge 
the services of an employee in the employee's normal line of work, the 
services will be valued at the employee's regular rate of pay exclusive 
of the employee's fringe benefits and overhead costs. If the services 
are in a different line of work, paragraph (c)(1) of this section 
applies.
    (d) Valuation of third party donated supplies and loaned equipment 
or space. (1) If a third party donates supplies, the contribution will 
be valued at the market value of the supplies at the time of donation.
    (2) If a third party donates the use of equipment or space in a 
building but retains title, the contribution will be valued at the fair 
rental rate of the equipment or space.
    (e) Valuation of third party donated equipment, buildings, and land. 
If a third party donates equipment, buildings, or land, and title passes 
to a grantee or subgrantee, the treatment of the donated property will 
depend upon the purpose of the grant or subgrant, as follows:
    (1) Awards for capital expenditures. If the purpose of the grant or 
subgrant is to assist the grantee or subgrantee in the acquisition of 
property, the market value of that property at the time of donation may 
be counted as cost sharing or matching,
    (2) Other awards. If assisting in the acquisition of property is not 
the purpose of the grant or subgrant, paragraphs (e)(2) (i) and (ii) of 
this section apply:
    (i) If approval is obtained from the awarding agency, the market 
value at the time of donation of the donated equipment or buildings and 
the fair rental rate of the donated land may be counted as cost sharing 
or matching. In the case of a subgrant, the terms of the grant agreement 
may require that the approval be obtained from the Federal agency as 
well as the grantee. In all cases, the approval may be given only if a 
purchase of the equipment or rental of the land would be approved as an 
allowable direct cost. If any part of the donated property was acquired 
with Federal funds, only the non-federal share of the property may be 
counted as cost-sharing or matching.
    (ii) If approval is not obtained under paragraph (e)(2)(i) of this 
section, no amount may be counted for donated

[[Page 527]]

land, and only depreciation or use allowances may be counted for donated 
equipment and buildings. The depreciation or use allowances for this 
property are not treated as third party in-kind contributions. Instead, 
they are treated as costs incurred by the grantee or subgrantee. They 
are computed and allocated (usually as indirect costs) in accordance 
with the cost principles specified in Sec. 97.22, in the same way as 
depreciation or use allowances for purchased equipment and buildings. 
The amount of depreciation or use allowances for donated equipment and 
buildings is based on the property's market value at the time it was 
donated.
    (f) Valuation of grantee or subgrantee donated real property for 
construction/acquisition. If a grantee or subgrantee donates real 
property for a construction or facilities acquisition project, the 
current market value of that property may be counted as cost sharing or 
matching. If any part of the donated property was acquired with Federal 
funds, only the non-federal share of the property may be counted as cost 
sharing or matching.
    (g) Appraisal of real property. In some cases under paragraphs (d), 
(e) and (f) of this section, it will be necessary to establish the 
market value of land or a building or the fair rental rate of land or of 
space in a building. In these cases, the Federal agency may require the 
market value or fair rental value be set by an independent appraiser, 
and that the value or rate be certified by the grantee. This requirement 
will also be imposed by the grantee on subgrantees.



Sec. 97.25  Program income.

    (a) General. Grantees are encouraged to earn income to defray 
program costs. Program income includes income from fees for services 
performed, from the use or rental of real or personal property acquired 
with grant funds, from the sale of commodities or items fabricated under 
a grant agreement, and from payments of principal and interest on loans 
made with grant funds. Except as otherwise provided in regulations of 
the Federal agency, program income does not include interest on grant 
funds, rebates, credits, discounts, refunds, etc. and interest earned on 
any of them.
    (b) Definition of program income. Program income means gross income 
received by the grantee or subgrantee directly generated by a grant 
supported activity, or earned only as a result of the grant agreement 
during the grant period. During the grant period is the time between the 
effective date of the award and the ending date of the award reflected 
in the final financial report.
    (c) Cost of generating program income. If authorized by Federal 
regulations or the grant agreement, costs incident to the generation of 
program income may be deducted from gross income to determine program 
income.
    (d) Governmental revenues. Taxes, special assessments, levies, 
fines, and other such revenues raised by a grantee or subgrantee are not 
program income unless the revenues are specifically identified in the 
grant agreement or Federal agency regulations as program income.
    (e) Royalties. Income from royalties and license fees for 
copyrighted material, patents, and inventions developed by a grantee or 
subgrantee is program income only if the revenues are specifically 
identified in the grant agreement or Federal agency regulations as 
program income. (See Sec. 97.34.)
    (f) Property. Proceeds from the sale of real property or equipment 
will be handled in accordance with the requirements of Secs. 97.31 and 
97.32.
    (g) Use of program income. Program income shall be deducted from 
outlays which may be both Federal and non-Federal as described below, 
unless the Federal agency regulations or the grant agreement specify 
another alternative (or a combination of the alternatives). In 
specifying alternatives, the Federal agency may distinguish between 
income earned by the grantee and income earned by subgrantees and 
between the sources, kinds, or amounts of income. When Federal agencies 
authorize the alternatives in paragraphs (g) (2) and (3) of this 
section, program income in excess of any limits stipulated shall also be 
deducted from outlays.
    (1) Deduction. Ordinarily program income shall be deducted from 
total allowable costs to determine the net allowable costs. Program 
income shall be

[[Page 528]]

used for current costs unless the Federal agency authorizes otherwise. 
Program income which the grantee did not anticipate at the time of the 
award shall be used to reduce the Federal agency and grantee 
contributions rather than to increase the funds committed to the 
project.
    (2) Addition. When authorized, program income may be added to the 
funds committed to the grant agreement by the Federal agency and the 
grantee. The program income shall be used for the purposes and under the 
conditions of the grant agreement.
    (3) Cost sharing or matching. When authorized, program income may be 
used to meet the cost sharing or matching requirement of the grant 
agreement. The amount of the Federal grant award remains the same.
    (h) Income after the award period. There are no Federal requirements 
governing the disposition of program income earned after the end of the 
award period (i.e., until the ending date of the final financial report, 
see paragraph (a) of this section), unless the terms of the agreement or 
the Federal agency regulations provide otherwise.



Sec. 97.26  Non-Federal audit.

    (a) Basic rule. Grantees and subgrantees are responsible for 
obtaining audits in accordance with the Single Audit Act Amendments of 
1996 (31 U.S.C. 7501-7507) and revised OMB Circular A-133, ``Audits of 
States, Local Governments, and Non-Profit Organizations.'' The audits 
shall be made by an independent auditor in accordance with generally 
accepted government auditing standards covering financial audits.
    (b) Subgrantees. State or local governments, as those terms are 
defined for purposes of the Single Audit Act Amendments of 1996, that 
provide Federal awards to a subgrantee, which expends $300,000 or more 
(or other amount as specified by OMB) in Federal awards in a fiscal 
year, shall:
    (1) Determine whether State or local subgrantees have met the audit 
requirements of the Act and whether subgrantees covered by OMB Circular 
A-110, ``Uniform Administrative Requirements for Grants and Agreements 
with Institutions of Higher Education, Hospitals, and Other Non-Profit 
Organizations,'' have met the audit requirements of the Act. Commercial 
contractors (private for-profit and private and governmental 
organizations) providing goods and services to State and local 
governments are not required to have a single audit performed. State and 
local governments should use their own procedures to ensure that the 
contractor has complied with laws and regulations affecting the 
expenditure of Federal funds;
    (2) Determine whether the subgrantee spent Federal assistance funds 
provided in accordance with applicable laws and regulations. This may be 
accomplished by reviewing an audit of the subgrantee made in accordance 
with the Act, Circular A-110, or through other means (e.g., program 
reviews) if the subgrantee has not had such an audit;
    (3) Ensure that appropriate corrective action is taken within six 
months after receipt of the audit report in instance of noncompliance 
with Federal laws and regulations;
    (4) Consider whether subgrantee audits necessitate adjustment of the 
grantee's own records; and
    (5) Require each subgrantee to permit independent auditors to have 
access to the records and financial statements.
    (c) Auditor selection. In arranging for audit services, Sec. 97.36 
shall be followed.

[53 FR 8069, 8087, Mar. 11, 1988, as amended at 62 FR 45939, 45942, Aug. 
29, 1997]

                    Changes, Property, and Subawards



Sec. 97.30  Changes.

    (a) General. Grantees and subgrantees are permitted to rebudget 
within the approved direct cost budget to meet unanticipated 
requirements and may make limited program changes to the approved 
project. However, unless waived by the awarding agency, certain types of 
post-award changes in budgets and projects shall require the prior 
written approval of the awarding agency.
    (b) Relation to cost principles. The applicable cost principles (see 
Sec. 97.22) contain requirements for prior approval of certain types of 
costs. Except where waived, those requirements apply to all

[[Page 529]]

grants and subgrants even if paragraphs (c) through (f) of this section 
do not.
    (c) Budget changes--(1) Nonconstruction projects. Except as stated 
in other regulations or an award document, grantees or subgrantees shall 
obtain the prior approval of the awarding agency whenever any of the 
following changes is anticipated under a nonconstruction award:
    (i) Any revision which would result in the need for additional 
funding.
    (ii) Unless waived by the awarding agency, cumulative transfers 
among direct cost categories, or, if applicable, among separately 
budgeted programs, projects, functions, or activities which exceed or 
are expected to exceed ten percent of the current total approved budget, 
whenever the awarding agency's share exceeds $100,000.
    (iii) Transfer of funds allotted for training allowances (i.e., from 
direct payments to trainees to other expense categories).
    (2) Construction projects. Grantees and subgrantees shall obtain 
prior written approval for any budget revision which would result in the 
need for additional funds.
    (3) Combined construction and nonconstruction projects. When a grant 
or subgrant provides funding for both construction and nonconstruction 
activities, the grantee or subgrantee must obtain prior written approval 
from the awarding agency before making any fund or budget transfer from 
nonconstruction to construction or vice versa.
    (d) Programmatic changes. Grantees or subgrantees must obtain the 
prior approval of the awarding agency whenever any of the following 
actions is anticipated:
    (1) Any revision of the scope or objectives of the project 
(regardless of whether there is an associated budget revision requiring 
prior approval).
    (2) Need to extend the period of availability of funds.
    (3) Changes in key persons in cases where specified in an 
application or a grant award. In research projects, a change in the 
project director or principal investigator shall always require approval 
unless waived by the awarding agency.
    (4) Under nonconstruction projects, contracting out, subgranting (if 
authorized by law) or otherwise obtaining the services of a third party 
to perform activities which are central to the purposes of the award. 
This approval requirement is in addition to the approval requirements of 
Sec. 97.36 but does not apply to the procurement of equipment, supplies, 
and general support services.
    (e) Additional prior approval requirements. The awarding agency may 
not require prior approval for any budget revision which is not 
described in paragraph (c) of this section.
    (f) Requesting prior approval. (1) A request for prior approval of 
any budget revision will be in the same budget formal the grantee used 
in its application and shall be accompanied by a narrative justification 
for the proposed revision.
    (2) A request for a prior approval under the applicable Federal cost 
principles (see Sec. 97.22) may be made by letter.
    (3) A request by a subgrantee for prior approval will be addressed 
in writing to the grantee. The grantee will promptly review such request 
and shall approve or disapprove the request in writing. A grantee will 
not approve any budget or project revision which is inconsistent with 
the purpose or terms and conditions of the Federal grant to the grantee. 
If the revision, requested by the subgrantee would result in a change to 
the grantee's approved project which requires Federal prior approval, 
the grantee will obtain the Federal agency's approval before approving 
the subgrantee's request.



Sec. 97.31  Real property.

    (a) Title. Subject to the obligations and conditions set forth in 
this section, title to real property acquired under a grant or subgrant 
will vest upon acquisition in the grantee or subgrantee respectively.
    (b) Use. Except as otherwise provided by Federal statutes, real 
property will be used for the originally authorized purposes as long as 
needed for that purposes, and the grantee or subgrantee shall not 
dispose of or encumber its title or other interests.

[[Page 530]]

    (c) Disposition. When real property is no longer needed for the 
originally authorized purpose, the grantee or subgrantee will request 
disposition instructions from the awarding agency. The instructions will 
provide for one of the following alternatives:
    (1) Retention of title. Retain title after compensating the awarding 
agency. The amount paid to the awarding agency will be computed by 
applying the awarding agency's percentage of participation in the cost 
of the original purchase to the fair market value of the property. 
However, in those situations where a grantee or subgrantee is disposing 
of real property acquired with grant funds and acquiring replacement 
real property under the same program, the net proceeds from the 
disposition may be used as an offset to the cost of the replacement 
property.
    (2) Sale of property. Sell the property and compensate the awarding 
agency. The amount due to the awarding agency will be calculated by 
applying the awarding agency's percentage of participation in the cost 
of the original purchase to the proceeds of the sale after deduction of 
any actual and reasonable selling and fixing-up expenses. If the grant 
is still active, the net proceeds from sale may be offset against the 
original cost of the property. When a grantee or subgrantee is directed 
to sell property, sales procedures shall be followed that provide for 
competition to the extent practicable and result in the highest possible 
return.
    (3) Transfer of title. Transfer title to the awarding agency or to a 
third-party designated/approved by the awarding agency. The grantee or 
subgrantee shall be paid an amount calculated by applying the grantee or 
subgrantee's percentage of participation in the purchase of the real 
property to the current fair market value of the property.



Sec. 97.32  Equipment.

    (a) Title. Subject to the obligations and conditions set forth in 
this section, title to equipment acquired under a grant or subgrant will 
vest upon acquisition in the grantee or subgrantee respectively.
    (b) States. A State will use, manage, and dispose of equipment 
acquired under a grant by the State in accordance with State laws and 
procedures. Other grantees and subgrantees will follow paragraphs (c) 
through (e) of this section.
    (c) Use. (1) Equipment shall be used by the grantee or subgrantee in 
the program or project for which it was acquired as long as needed, 
whether or not the project or program continues to be supported by 
Federal funds. When no longer needed for the original program or 
project, the equipment may be used in other activities currently or 
previously supported by a Federal agency.
    (2) The grantee or subgrantee shall also make equipment available 
for use on other projects or programs currently or previously supported 
by the Federal Government, providing such use will not interfere with 
the work on the projects or program for which it was originally 
acquired. First preference for other use shall be given to other 
programs or projects supported by the awarding agency. User fees should 
be considered if appropriate.
    (3) Notwithstanding the encouragement in Sec. 97.25(a) to earn 
program income, the grantee or subgrantee must not use equipment 
acquired with grant funds to provide services for a fee to compete 
unfairly with private companies that provide equivalent services, unless 
specifically permitted or contemplated by Federal statute.
    (4) When acquiring replacement equipment, the grantee or subgrantee 
may use the equipment to be replaced as a trade-in or sell the property 
and use the proceeds to offset the cost of the replacement property, 
subject to the approval of the awarding agency.
    (d) Management requirements. Procedures for managing equipment 
(including replacement equipment), whether acquired in whole or in part 
with grant funds, until disposition takes place will, as a minimum, meet 
the following requirements:
    (1) Property records must be maintained that include a description 
of the property, a serial number or other identification number, the 
source of property, who holds title, the acquisition date, and cost of 
the property, percentage of Federal participation in the cost of the 
property, the location, use

[[Page 531]]

and condition of the property, and any ultimate disposition data 
including the date of disposal and sale price of the property.
    (2) A physical inventory of the property must be taken and the 
results reconciled with the property records at least once every two 
years.
    (3) A control system must be developed to ensure adequate safeguards 
to prevent loss, damage, or theft of the property. Any loss, damage, or 
theft shall be investigated.
    (4) Adequate maintenance procedures must be developed to keep the 
property in good condition.
    (5) If the grantee or subgrantee is authorized or required to sell 
the property, proper sales procedures must be established to ensure the 
highest possible return.
    (e) Disposition. When original or replacement equipment acquired 
under a grant or subgrant is no longer needed for the original project 
or program or for other activities currently or previously supported by 
a Federal agency, disposition of the equipment will be made as follows:
    (1) Items of equipment with a current per-unit fair market value of 
less than $5,000 may be retained, sold or otherwise disposed of with no 
further obligation to the awarding agency.
    (2) Items of equipment with a current per unit fair market value in 
excess of $5,000 may be retained or sold and the awarding agency shall 
have a right to an amount calculated by multiplying the current market 
value or proceeds from sale by the awarding agency's share of the 
equipment.
    (3) In cases where a grantee or subgrantee fails to take appropriate 
disposition actions, the awarding agency may direct the grantee or 
subgrantee to take excess and disposition actions.
    (f) Federal equipment. In the event a grantee or subgrantee is 
provided federally-owned equipment:
    (1) Title will remain vested in the Federal Government.
    (2) Grantees or subgrantees will manage the equipment in accordance 
with Federal agency rules and procedures, and submit an annual inventory 
listing.
    (3) When the equipment is no longer needed, the grantee or 
subgrantee will request disposition instructions from the Federal 
agency.
    (g) Right to transfer title. The Federal awarding agency may reserve 
the right to transfer title to the Federal Government or a third part 
named by the awarding agency when such a third party is otherwise 
eligible under existing statutes. Such transfers shall be subject to the 
following standards:
    (1) The property shall be identified in the grant or otherwise made 
known to the grantee in writing.
    (2) The Federal awarding agency shall issue disposition instruction 
within 120 calendar days after the end of the Federal support of the 
project for which it was acquired. If the Federal awarding agency fails 
to issue disposition instructions within the 120 calendar-day period the 
grantee shall follow Sec. 97.32(e).
    (3) When title to equipment is transferred, the grantee shall be 
paid an amount calculated by applying the percentage of participation in 
the purchase to the current fair market value of the property.



Sec. 97.33  Supplies.

    (a) Title. Title to supplies acquired under a grant or subgrant will 
vest, upon acquisition, in the grantee or subgrantee respectively.
    (b) Disposition. If there is a residual inventory of unused supplies 
exceeding $5,000 in total aggregate fair market value upon termination 
or completion of the award, and if the supplies are not needed for any 
other federally sponsored programs or projects, the grantee or 
subgrantee shall compensate the awarding agency for its share.



Sec. 97.34  Copyrights.

    The Federal awarding agency reserves a royalty-free, nonexclusive, 
and irrevocable license to reproduce, publish or otherwise use, and to 
authorize others to use, for Federal Government purposes:
    (a) The copyright in any work developed under a grant, subgrant, or 
contract under a grant or subgrant; and
    (b) Any rights of copyright to which a grantee, subgrantee or a 
contractor purchases ownership with grant support.

[[Page 532]]



Sec. 97.35  Subawards to debarred and suspended parties.

    Grantees and subgrantees must not make any award or permit any award 
(subgrant or contract) at any tier to any party which is debarred or 
suspended or is otherwise excluded from or ineligible for participation 
in Federal assistance programs under Executive Order 12549, ``Debarment 
and Suspension.''



Sec. 97.36  Procurement.

    (a) States. When procuring property and services under a grant, a 
State will follow the same policies and procedures it uses for 
procurements from its non-Federal funds. The State will ensure that 
every purchase order or other contract includes any clauses required by 
Federal statutes and executive orders and their implementing 
regulations. Other grantees and subgrantees will follow paragraphs (b) 
through (i) in this section.
    (b) Procurement standards. (1) Grantees and subgrantees will use 
their own procurement procedures which reflect applicable State and 
local laws and regulations, provided that the procurements conform to 
applicable Federal law and the standards identified in this section.
    (2) Grantees and subgrantees will maintain a contract administration 
system which ensures that contractors perform in accordance with the 
terms, conditions, and specifications of their contracts or purchase 
orders.
    (3) Grantees and subgrantees will maintain a written code of 
standards of conduct governing the performance of their employees 
engaged in the award and administration of contracts. No employee, 
officer or agent of the grantee or subgrantee shall participate in 
selection, or in the award or administration of a contract supported by 
Federal funds if a conflict of interest, real or apparent, would be 
involved. Such a conflict would arise when:
    (i) The employee, officer or agent,
    (ii) Any member of his immediate family,
    (iii) His or her partner, or
    (iv) An organization which employs, or is about to employ, any of 
the above, has a financial or other interest in the firm selected for 
award. The grantee's or subgrantee's officers, employees or agents will 
neither solicit nor accept gratuities, favors or anything of monetary 
value from contractors, potential contractors, or parties to 
subagreements. Grantee and subgrantees may set minimum rules where the 
financial interest is not substantial or the gift is an unsolicited item 
of nominal intrinsic value. To the extent permitted by State or local 
law or regulations, such standards or conduct will provide for 
penalties, sanctions, or other disciplinary actions for violations of 
such standards by the grantee's and subgrantee's officers, employees, or 
agents, or by contractors or their agents. The awarding agency may in 
regulation provide additional prohibitions relative to real, apparent, 
or potential conflicts of interest.
    (4) Grantee and subgrantee procedures will provide for a review of 
proposed procurements to avoid purchase of unnecessary or duplicative 
items. Consideration should be given to consolidating or breaking out 
procurements to obtain a more economical purchase. Where appropriate, an 
analysis will be made of lease versus purchase alternatives, and any 
other appropriate analysis to determine the most economical approach.
    (5) To foster greater economy and efficiency, grantees and 
subgrantees are encouraged to enter into State and local 
intergovernmental agreements for procurement or use of common goods and 
services.
    (6) Grantees and subgrantees are encouraged to use Federal excess 
and surplus property in lieu of purchasing new equipment and property 
whenever such use is feasible and reduces project costs.
    (7) Grantees and subgrantees are encouraged to use value engineering 
clauses in contracts for construction projects of sufficient size to 
offer reasonable opportunities for cost reductions. Value engineering is 
a systematic and creative anaylsis of each contract item or task to 
ensure that its essential function is provided at the overall lower 
cost.
    (8) Grantees and subgrantees will make awards only to responsible 
contractors possessing the ability to perform successfully under the 
terms and

[[Page 533]]

conditions of a proposed procurement. Consideration will be given to 
such matters as contractor integrity, compliance with public policy, 
record of past performance, and financial and technical resources.
    (9) Grantees and subgrantees will maintain records sufficient to 
detail the significant history of a procurement. These records will 
include, but are not necessarily limited to the following: rationale for 
the method of procurement, selection of contract type, contractor 
selection or rejection, and the basis for the contract price.
    (10) Grantees and subgrantees will use time and material type 
contracts only--
    (i) After a determination that no other contract is suitable, and
    (ii) If the contract includes a ceiling price that the contractor 
exceeds at its own risk.
    (11) Grantees and subgrantees alone will be responsible, in 
accordance with good administrative practice and sound business 
judgment, for the settlement of all contractual and administrative 
issues arising out of procurements. These issues include, but are not 
limited to source evaluation, protests, disputes, and claims. These 
standards do not relieve the grantee or subgrantee of any contractual 
responsibilities under its contracts. Federal agencies will not 
substitute their judgment for that of the grantee or subgrantee unless 
the matter is primarily a Federal concern. Violations of law will be 
referred to the local, State, or Federal authority having proper 
jurisdiction.
    (12) Grantees and subgrantees will have protest procedures to handle 
and resolve disputes relating to their procurements and shall in all 
instances disclose information regarding the protest to the awarding 
agency. A protestor must exhaust all administrative remedies with the 
grantee and subgrantee before pursuing a protest with the Federal 
agency. Reviews of protests by the Federal agency will be limited to:
    (i) Violations of Federal law or regulations and the standards of 
this section (violations of State or local law will be under the 
jurisdiction of State or local authorities) and
    (ii) Violations of the grantee's or subgrantee's protest procedures 
for failure to review a complaint or protest. Protests received by the 
Federal agency other than those specified above will be referred to the 
grantee or subgrantee.
    (c) Competition. (1) All procurement transactions will be conducted 
in a manner providing full and open competition consistent with the 
standards of Sec. 97.36. Some of the situations considered to be 
restrictive of competition include but are not limited to:
    (i) Placing unreasonable requirements on firms in order for them to 
qualify to do business,
    (ii) Requiring unnecessary experience and excessive bonding,
    (iii) Noncompetitive pricing practices between firms or between 
affiliated companies,
    (iv) Noncompetitive awards to consultants that are on retainer 
contracts,
    (v) Organizational conflicts of interest,
    (vi) Specifying only a ``brand name'' product instead of allowing 
``an equal'' product to be offered and describing the performance of 
other relevant requirements of the procurement, and
    (vii) Any arbitrary action in the procurement process.
    (2) Grantees and subgrantees will conduct procurements in a manner 
that prohibits the use of statutorily or administratively imposed in-
State or local geographical preferences in the evaluation of bids or 
proposals, except in those cases where applicable Federal statutes 
expressly mandate or encourage geographic preference. Nothing in this 
section preempts State licensing laws. When contracting for 
architectural and engineering (A/E) services, geographic location may be 
a selection criteria provided its application leaves an appropriate 
number of qualified firms, given the nature and size of the project, to 
compete for the contract.
    (3) Grantees will have written selection procedures for procurement 
transactions. These procedures will ensure that all solicitations:
    (i) Incorporate a clear and accurate description of the technical 
requirements for the material, product, or service to be procured. Such 
description shall not, in competitive procurements, contain features 
which unduly

[[Page 534]]

restrict competition. The description may include a statement of the 
qualitative nature of the material, product or service to be procured, 
and when necessary, shall set forth those minimum essential 
characteristics and standards to which it must conform if it is to 
satisfy its intended use. Detailed product specifications should be 
avoided if at all possible. When it is impractical or uneconomical to 
make a clear and accurate description of the technical requirements, a 
``brand name or equal'' description may be used as a means to define the 
performance or other salient requirements of a procurement. The specific 
features of the named brand which must be met by offerors shall be 
clearly stated; and
    (ii) Identify all requirements which the offerors must fulfill and 
all other factors to be used in evaluating bids or proposals.
    (4) Grantees and subgrantees will ensure that all prequalified lists 
of persons, firms, or products which are used in acquiring goods and 
services are current and include enough qualified sources to ensure 
maximum open and free competition. Also, grantees and subgrantees will 
not preclude potential bidders from qualifying during the solicitation 
period.
    (d) Methods of procurement to be followed--(1) Procurement by small 
purchase procedures. Small purchase procedures are those relatively 
simple and informal procurement methods for securing services, supplies, 
or other property that do not cost more than the simplified acquisition 
threshold fixed at 41 U.S.C. 403(11) (currently set at $100,000). If 
small purchase procedures are used, price or rate quotations shall be 
obtained from an adequate number of qualified sources.
    (2) Procurement by sealed bids (formal advertising). Bids are 
publicly solicited and a firm-fixed-price contract (lump sum or unit 
price) is awarded to the responsible bidder whose bid, conforming with 
all the material terms and conditions of the invitation for bids, is the 
lowest in price. The sealed bid method is the preferred method for 
procuring construction, if the conditions in Sec. 97.36(d)(2)(i) apply.
    (i) In order for sealed bidding to be feasible, the following 
conditions should be present:
    (A) A complete, adequate, and realistic specification or purchase 
description is available;
    (B) Two or more responsible bidders are willing and able to compete 
effectively and for the business; and
    (C) The procurement lends itself to a firm fixed price contract and 
the selection of the successful bidder can be made principally on the 
basis of price.
    (ii) If sealed bids are used, the following requirements apply:
    (A) The invitation for bids will be publicly advertised and bids 
shall be solicited from an adequate number of known suppliers, providing 
them sufficient time prior to the date set for opening the bids;
    (B) The invitation for bids, which will include any specifications 
and pertinent attachments, shall define the items or services in order 
for the bidder to properly respond;
    (C) All bids will be publicly opened at the time and place 
prescribed in the invitation for bids;
    (D) A firm fixed-price contract award will be made in writing to the 
lowest responsive and responsible bidder. Where specified in bidding 
documents, factors such as discounts, transportation cost, and life 
cycle costs shall be considered in determining which bid is lowest. 
Payment discounts will only be used to determine the low bid when prior 
experience indicates that such discounts are usually taken advantage of; 
and
    (E) Any or all bids may be rejected if there is a sound documented 
reason.
    (3) Procurement by competitive proposals. The technique of 
competitive proposals is normally conducted with more than one source 
submitting an offer, and either a fixed-price or cost-reimbursement type 
contract is awarded. It is generally used when conditions are not 
appropriate for the use of sealed bids. If this method is used, the 
following requirements apply:
    (i) Requests for proposals will be publicized and identify all 
evaluation factors and their relative importance. Any response to 
publicized requests for proposals shall be honored to the maximum extent 
practical;

[[Page 535]]

    (ii) Proposals will be solicited from an adequate number of 
qualified sources;
    (iii) Grantees and subgrantees will have a method for conducting 
technical evaluations of the proposals received and for selecting 
awardees;
    (iv) Awards will be made to the responsible firm whose proposal is 
most advantageous to the program, with price and other factors 
considered; and
    (v) Grantees and subgrantees may use competitive proposal procedures 
for qualifications-based procurement of architectural/engineering (A/E) 
professional services whereby competitors' qualifications are evaluated 
and the most qualified competitor is selected, subject to negotiation of 
fair and reasonable compensation. The method, where price is not used as 
a selection factor, can only be used in procurement of A/E professional 
services. It cannot be used to purchase other types of services though 
A/E firms are a potential source to perform the proposed effort.
    (4) Procurement by noncompetitive proposals is procurement through 
solicitation of a proposal from only one source, or after solicitation 
of a number of sources, competition is determined inadequate.
    (i) Procurement by noncompetitive proposals may be used only when 
the award of a contract is infeasible under small purchase procedures, 
sealed bids or competitive proposals and one of the following 
circumstances applies:
    (A) The item is available only from a single source;
    (B) The public exigency or emergency for the requirement will not 
permit a delay resulting from competitive solicitation;
    (C) The awarding agency authorizes noncompetitive proposals; or
    (D) After solicitation of a number of sources, competition is 
determined inadequate.
    (ii) Cost analysis, i.e., verifying the proposed cost data, the 
projections of the data, and the evaluation of the specific elements of 
costs and profits, is required.
    (iii) Grantees and subgrantees may be required to submit the 
proposed procurement to the awarding agency for pre-award review in 
accordance with paragraph (g) of this section.
    (e) Contracting with small and minority firms, women's business 
enterprise and labor surplus area firms. (1) The grantee and subgrantee 
will take all necessary affirmative steps to assure that minority firms, 
women's business enterprises, and labor surplus area firms are used when 
possible.
    (2) Affirmative steps shall include:
    (i) Placing qualified small and minority businesses and women's 
business enterprises on solicitation lists;
    (ii) Assuring that small and minority businesses, and women's 
business enterprises are solicited whenever they are potential sources;
    (iii) Dividing total requirements, when economically feasible, into 
smaller tasks or quantities to permit maximum participation by small and 
minority business, and women's business enterprises;
    (iv) Establishing delivery schedules, where the requirement permits, 
which encourage participation by small and minority business, and 
women's business enterprises;
    (v) Using the services and assistance of the Small Business 
Administration, and the Minority Business Development Agency of the 
Department of Commerce; and
    (vi) Requiring the prime contractor, if subcontracts are to be let, 
to take the affirmative steps listed in paragraphs (e)(2) (i) through 
(v) of this section.
    (f) Contract cost and price. (1) Grantees and subgrantees must 
perform a cost or price analysis in connection with every procurement 
action including contract modifications. The method and degree of 
analysis is dependent on the facts surrounding the particular 
procurement situation, but as a starting point, grantees must make 
independent estimates before receiving bids or proposals. A cost 
analysis must be performed when the offeror is required to submit the 
elements of his estimated cost, e.g., under professional, consulting, 
and architectural engineering services contracts. A cost analysis will 
be necessary when adequate price competition is lacking, and for sole 
source procurements, including contract modifications or change orders,

[[Page 536]]

unless price resonableness can be established on the basis of a catalog 
or market price of a commercial product sold in substantial quantities 
to the general public or based on prices set by law or regulation. A 
price analysis will be used in all other instances to determine the 
reasonableness of the proposed contract price.
    (2) Grantees and subgrantees will negotiate profit as a separate 
element of the price for each contract in which there is no price 
competition and in all cases where cost analysis is performed. To 
establish a fair and reasonable profit, consideration will be given to 
the complexity of the work to be performed, the risk borne by the 
contractor, the contractor's investment, the amount of subcontracting, 
the quality of its record of past performance, and industry profit rates 
in the surrounding geographical area for similar work.
    (3) Costs or prices based on estimated costs for contracts under 
grants will be allowable only to the extent that costs incurred or cost 
estimates included in negotiated prices are consistent with Federal cost 
principles (see Sec. 97.22). Grantees may reference their own cost 
principles that comply with the applicable Federal cost principles.
    (4) The cost plus a percentage of cost and percentage of 
construction cost methods of contracting shall not be used.
    (g) Awarding agency review. (1) Grantees and subgrantees must make 
available, upon request of the awarding agency, technical specifications 
on proposed procurements where the awarding agency believes such review 
is needed to ensure that the item and/or service specified is the one 
being proposed for purchase. This review generally will take place prior 
to the time the specification is incorporated into a solicitation 
document. However, if the grantee or subgrantee desires to have the 
review accomplished after a solicitation has been developed, the 
awarding agency may still review the specifications, with such review 
usually limited to the technical aspects of the proposed purchase.
    (2) Grantees and subgrantees must on request make available for 
awarding agency pre-award review procurement documents, such as requests 
for proposals or invitations for bids, independent cost estimates, etc. 
when:
    (i) A grantee's or subgrantee's procurement procedures or operation 
fails to comply with the procurement standards in this section; or
    (ii) The procurement is expected to exceed the simplified 
acquisition threshold and is to be awarded without competition or only 
one bid or offer is received in response to a solicitation; or
    (iii) The procurement, which is expected to exceed the simplified 
acquisition threshold, specifies a ``brand name'' product; or
    (iv) The proposed award is more than the simplified acquisition 
threshold and is to be awarded to other than the apparent low bidder 
under a sealed bid procurement; or
    (v) A proposed contract modification changes the scope of a contract 
or increases the contract amount by more than the simplified acquisition 
threshold.
    (3) A grantee or subgrantee will be exempt from the pre-award review 
in paragraph (g)(2) of this section if the awarding agency determines 
that its procurement systems comply with the standards of this section.
    (i) A grantee or subgrantee may request that its procurement system 
be reviewed by the awarding agency to determine whether its system meets 
these standards in order for its system to be certified. Generally, 
these reviews shall occur where there is a continuous high-dollar 
funding, and third-party contracts are awarded on a regular basis.
    (ii) A grantee or subgrantee may self-certify its procurement 
system. Such self-certification shall not limit the awarding agency's 
right to survey the system. Under a self-certification procedure, 
awarding agencies may wish to rely on written assurances from the 
grantee or subgrantee that it is complying with these standards. A 
grantee or subgrantee will cite specific procedures, regulations, 
standards, etc., as being in compliance with these requirements and have 
its system available for review.

[[Page 537]]

    (h) Bonding requirements. For construction or facility improvement 
contracts or subcontracts exceeding the simplified acquisition 
threshold, the awarding agency may accept the bonding policy and 
requirements of the grantee or subgrantee provided the awarding agency 
has made a determination that the awarding agency's interest is 
adequately protected. If such a determination has not been made, the 
minimum requirements shall be as follows:
    (1) A bid guarantee from each bidder equivalent to five percent of 
the bid price. The ``bid guarantee'' shall consist of a firm commitment 
such as a bid bond, certified check, or other negotiable instrument 
accompanying a bid as assurance that the bidder will, upon acceptance of 
his bid, execute such contractual documents as may be required within 
the time specified.
    (2) A performance bond on the part of the contractor for 100 percent 
of the contract price. A ``performance bond'' is one executed in 
connection with a contract to secure fulfillment of all the contractor's 
obligations under such contract.
    (3) A payment bond on the part of the contractor for 100 percent of 
the contract price. A ``payment bond'' is one executed in connection 
with a contract to assure payment as required by law of all persons 
supplying labor and material in the execution of the work provided for 
in the contract.
    (i) Contract provisions. A grantee's and subgrantee's contracts must 
contain provisions in paragraph (i) of this section. Federal agencies 
are permitted to require changes, remedies, changed conditions, access 
and records retention, suspension of work, and other clauses approved by 
the Office of Federal Procurement Policy.
    (1) Administrative, contractual, or legal remedies in instances 
where contractors violate or breach contract terms, and provide for such 
sanctions and penalties as may be appropriate. (Contracts more than the 
simplified acquisition threshold)
    (2) Termination for cause and for convenience by the grantee or 
subgrantee including the manner by which it will be effected and the 
basis for settlement. (All contracts in excess of $10,000)
    (3) Compliance with Executive Order 11246 of September 24, 1965, 
entitled ``Equal Employment Opportunity,'' as amended by Executive Order 
11375 of October 13, 1967, and as supplemented in Department of Labor 
regulations (41 CFR chapter 60). (All construction contracts awarded in 
excess of $10,000 by grantees and their contractors or subgrantees)
    (4) Compliance with the Copeland ``Anti-Kickback'' Act (18 U.S.C. 
874) as supplemented in Department of Labor regulations (29 CFR Part 3). 
(All contracts and subgrants for construction or repair)
    (5) Compliance with the Davis-Bacon Act (40 U.S.C. 276a to 276a-7) 
as supplemented by Department of Labor regulations (29 CFR Part 5). 
(Construction contracts in excess of $2000 awarded by grantees and 
subgrantees when required by Federal grant program legislation)
    (6) Compliance with Sections 103 and 107 of the Contract Work Hours 
and Safety Standards Act (40 U.S.C. 327-330) as supplemented by 
Department of Labor regulations (29 CFR Part 5). (Construction contracts 
awarded by grantees and subgrantees in excess of $2000, and in excess of 
$2500 for other contracts which involve the employment of mechanics or 
laborers)
    (7) Notice of awarding agency requirements and regulations 
pertaining to reporting.
    (8) Notice of awarding agency requirements and regulations 
pertaining to patent rights with respect to any discovery or invention 
which arises or is developed in the course of or under such contract.
    (9) Awarding agency requirements and regulations pertaining to 
copyrights and rights in data.
    (10) Access by the grantee, the subgrantee, the Federal grantor 
agency, the Comptroller General of the United States, or any of their 
duly authorized representatives to any books, documents, papers, and 
records of the contractor which are directly pertinent to that specific 
contract for the purpose of making audit, examination, excerpts, and 
transcriptions.

[[Page 538]]

    (11) Retention of all required records for three years after 
grantees or subgrantees make final payments and all other pending 
matters are closed.
    (12) Compliance with all applicable standards, orders, or 
requirements issued under section 306 of the Clean Air Act (42 U.S.C. 
1857(h)), section 508 of the Clean Water Act (33 U.S.C. 1368), Executive 
Order 11738, and Environmental Protection Agency regulations (40 CFR 
part 15). (Contracts, subcontracts, and subgrants of amounts in excess 
of $100,000)
    (13) Mandatory standards and policies relating to energy efficiency 
which are contained in the state energy conservation plan issued in 
compliance with the Energy Policy and Conservation Act (Pub. L. 94-163, 
89 Stat. 871).

[53 FR 8069, Mar. 11, 1988, as amended at 60 FR 19639, 19643, Apr. 19. 
1995]



Sec. 97.37  Subgrants.

    (a) States. States shall follow state law and procedures when 
awarding and administering subgrants (whether on a cost reimbursement or 
fixed amount basis) of financial assistance to local and Indian tribal 
governments. States shall:
    (1) Ensure that every subgrant includes any clauses required by 
Federal statute and executive orders and their implementing regulations;
    (2) Ensure that subgrantees are aware of requirements imposed upon 
them by Federal statute and regulation;
    (3) Ensure that a provision for compliance with Sec. 97.42 is placed 
in every cost reimbursement subgrant; and
    (4) Conform any advances of grant funds to subgrantees substantially 
to the same standards of timing and amount that apply to cash advances 
by Federal agencies.
    (b) All other grantees. All other grantees shall follow the 
provisions of this part which are applicable to awarding agencies when 
awarding and administering subgrants (whether on a cost reimbursement or 
fixed amount basis) of financial assistance to local and Indian tribal 
governments. Grantees shall:
    (1) Ensure that every subgrant includes a provision for compliance 
with this part;
    (2) Ensure that every subgrant includes any clauses required by 
Federal statute and executive orders and their implementing regulations; 
and
    (3) Ensure that subgrantees are aware of requirements imposed upon 
them by Federal statutes and regulations.
    (c) Exceptions. By their own terms, certain provisions of this part 
do not apply to the award and administration of subgrants:
    (1) Section 97.10;
    (2) Section 97.11;
    (3) The letter-of-credit procedures specified in Treasury 
Regulations at 31 CFR part 205, cited in Sec. 97.21; and
    (4) Section 97.50.

               Reports, Records Retention, and Enforcement



Sec. 97.40  Monitoring and reporting program performance.

    (a) Monitoring by grantees. Grantees are responsible for managing 
the day-to-day operations of grant and subgrant supported activities. 
Grantees must monitor grant and subgrant supported activities to assure 
compliance with applicable Federal requirements and that performance 
goals are being achieved. Grantee monitoring must cover each program, 
function or activity.
    (b) Nonconstruction performance reports. The Federal agency may, if 
it decides that performance information available from subsequent 
applications contains sufficient information to meet its programmatic 
needs, require the grantee to submit a performance report only upon 
expiration or termination of grant support. Unless waived by the Federal 
agency this report will be due on the same date as the final Financial 
Status Report.
    (1) Grantees shall submit annual performance reports unless the 
awarding agency requires quarterly or semi-annual reports. However, 
performance reports will not be required more frequently than quarterly. 
Annual reports shall be due 90 days after the grant year, quarterly or 
semi-annual reports shall be due 30 days after the reporting period. The 
final performance report will be due 90 days after the expiration or 
termination of grant support. If a

[[Page 539]]

justified request is submitted by a grantee, the Federal agency may 
extend the due date for any performance report. Additionally, 
requirements for unnecessary performance reports may be waived by the 
Federal agency.
    (2) Performance reports will contain, for each grant, brief 
information on the following:
    (i) A comparison of actual accomplishments to the objectives 
established for the period. Where the output of the project can be 
quantified, a computation of the cost per unit of output may be required 
if that information will be useful.
    (ii) The reasons for slippage if established objectives were not 
met.
    (iii) Additional pertinent information including, when appropriate, 
analysis and explanation of cost overruns or high unit costs.
    (3) Grantees will not be required to submit more than the original 
and two copies of performance reports.
    (4) Grantees will adhere to the standards in this section in 
prescribing performance reporting requirements for subgrantees.
    (c) Construction performance reports. For the most part, on-site 
technical inspections and certified percentage-of-completion data are 
relied on heavily by Federal agencies to monitor progress under 
construction grants and subgrants. The Federal agency will require 
additional formal performance reports only when considered necessary, 
and never more frequently than quarterly.
    (d) Significant developments. Events may occur between the scheduled 
performance reporting dates which have significant impact upon the grant 
or subgrant supported activity. In such cases, the grantee must inform 
the Federal agency as soon as the following types of conditions become 
known:
    (1) Problems, delays, or adverse conditions which will materially 
impair the ability to meet the objective of the award. This disclosure 
must include a statement of the action taken, or contemplated, and any 
assistance needed to resolve the situation.
    (2) Favorable developments which enable meeting time schedules and 
objectives sooner or at less cost than anticipated or producing more 
beneficial results than originally planned.
    (e) Federal agencies may make site visits as warranted by program 
needs.
    (f) Waivers, extensions. (1) Federal agencies may waive any 
performance report required by this part if not needed.
    (2) The grantee may waive any performance report from a subgrantee 
when not needed. The grantee may extend the due date for any performance 
report from a subgrantee if the grantee will still be able to meet its 
performance reporting obligations to the Federal agency.



Sec. 97.41  Financial reporting.

    (a) General. (1) Except as provided in paragraphs (a)(2) and (5) of 
this section, grantees will use only the forms specified in paragraphs 
(a) through (e) of this section, and such supplementary or other forms 
as may from time to time be authorized by OMB, for:
    (i) Submitting financial reports to Federal agencies, or
    (ii) Requesting advances or reimbursements when letters of credit 
are not used.
    (2) Grantees need not apply the forms prescribed in this section in 
dealing with their subgrantees. However, grantees shall not impose more 
burdensome requirements on subgrantees.
    (3) Grantees shall follow all applicable standard and supplemental 
Federal agency instructions approved by OMB to the extend required under 
the Paperwork Reduction Act of 1980 for use in connection with forms 
specified in paragraphs (b) through (e) of this section. Federal 
agencies may issue substantive supplementary instructions only with the 
approval of OMB. Federal agencies may shade out or instruct the grantee 
to disregard any line item that the Federal agency finds unnecessary for 
its decisionmaking purposes.
    (4) Grantees will not be required to submit more than the original 
and two copies of forms required under this part.
    (5) Federal agencies may provide computer outputs to grantees to 
expedite or contribute to the accuracy of reporting. Federal agencies 
may accept the required information from grantees

[[Page 540]]

in machine usable format or computer printouts instead of prescribed 
forms.
    (6) Federal agencies may waive any report required by this section 
if not needed.
    (7) Federal agencies may extend the due date of any financial report 
upon receiving a justified request from a grantee.
    (b) Financial Status Report--(1) Form. Grantees will use Standard 
Form 269 or 269A, Financial Status Report, to report the status of funds 
for all nonconstruction grants and for construction grants when required 
in accordance with Sec. 97.41(e)(2)(iii) of this section.
    (2) Accounting basis. Each grantee will report program outlays and 
program income on a cash or accrual basis as prescribed by the awarding 
agency. If the Federal agency requires accrual information and the 
grantee's accounting records are not normally kept on the accural basis, 
the grantee shall not be required to convert its accounting system but 
shall develop such accrual information through and analysis of the 
documentation on hand.
    (3) Frequency. The Federal agency may prescribe the frequency of the 
report for each project or program. However, the report will not be 
required more frequently than quarterly. If the Federal agency does not 
specify the frequency of the report, it will be submitted annually. A 
final report will be required upon expiration or termination of grant 
support.
    (4) Due date. When reports are required on a quarterly or semiannual 
basis, they will be due 30 days after the reporting period. When 
required on an annual basis, they will be due 90 days after the grant 
year. Final reports will be due 90 days after the expiration or 
termination of grant support.
    (c) Federal Cash Transactions Report--(1) Form. (i) For grants paid 
by letter or credit, Treasury check advances or electronic transfer of 
funds, the grantee will submit the Standard Form 272, Federal Cash 
Transactions Report, and when necessary, its continuation sheet, 
Standard Form 272a, unless the terms of the award exempt the grantee 
from this requirement.
    (ii) These reports will be used by the Federal agency to monitor 
cash advanced to grantees and to obtain disbursement or outlay 
information for each grant from grantees. The format of the report may 
be adapted as appropriate when reporting is to be accomplished with the 
assistance of automatic data processing equipment provided that the 
information to be submitted is not changed in substance.
    (2) Forecasts of Federal cash requirements. Forecasts of Federal 
cash requirements may be required in the ``Remarks'' section of the 
report.
    (3) Cash in hands of subgrantees. When considered necessary and 
feasible by the Federal agency, grantees may be required to report the 
amount of cash advances in excess of three days' needs in the hands of 
their subgrantees or contractors and to provide short narrative 
explanations of actions taken by the grantee to reduce the excess 
balances.
    (4) Frequency and due date. Grantees must submit the report no later 
than 15 working days following the end of each quarter. However, where 
an advance either by letter of credit or electronic transfer of funds is 
authorized at an annualized rate of one million dollars or more, the 
Federal agency may require the report to be submitted within 15 working 
days following the end of each month.
    (d) Request for advance or reimbursement--(1) Advance payments. 
Requests for Treasury check advance payments will be submitted on 
Standard Form 270, Request for Advance or Reimbursement. (This form will 
not be used for drawdowns under a letter of credit, electronic funds 
transfer or when Treasury check advance payments are made to the grantee 
automatically on a predetermined basis.)
    (2) Reimbursements. Requests for reimbursement under nonconstruction 
grants will also be submitted on Standard Form 270. (For reimbursement 
requests under construction grants, see paragraph (e)(1) of this 
section.)
    (3) The frequency for submitting payment requests is treated in 
Sec. 97.41(b)(3).
    (e) Outlay report and request for reimbursement for construction 
programs. (1) Grants that support construction activities paid by 
reimbursement method.

[[Page 541]]

    (i) Requests for reimbursement under construction grants will be 
submitted on Standard Form 271, Outlay Report and Request for 
Reimbursement for Construction Programs. Federal agencies may, however, 
prescribe the Request for Advance or Reimbursement form, specified in 
Sec. 97.41(d), instead of this form.
    (ii) The frequency for submitting reimbursement requests is treated 
in Sec. 97.41(b)(3).
    (2) Grants that support construction activities paid by letter of 
credit, electronic funds transfer or Treasury check advance.
    (i) When a construction grant is paid by letter of credit, 
electronic funds transfer or Treasury check advances, the grantee will 
report its outlays to the Federal agency using Standard Form 271, Outlay 
Report and Request for Reimbursement for Construction Programs. The 
Federal agency will provide any necessary special instruction. However, 
frequency and due date shall be governed by Sec. 97.41(b) (3) and (4).
    (ii) When a construction grant is paid by Treasury check advances 
based on periodic requests from the grantee, the advances will be 
requested on the form specified in Sec. 97.41(d).
    (iii) The Federal agency may substitute the Financial Status Report 
specified in Sec. 97.41(b) for the Outlay Report and Request for 
Reimbursement for Construction Programs.
    (3) Accounting basis. The accounting basis for the Outlay Report and 
Request for Reimbursement for Construction Programs shall be governed by 
Sec. 97.41(b)(2).



Sec. 97.42  Retention and access requirements for records.

    (a) Applicability. (1) This section applies to all financial and 
programmatic records, supporting documents, statistical records, and 
other records of grantees or subgrantees which are:
    (i) Required to be maintained by the terms of this part, program 
regulations or the grant agreement, or
    (ii) Otherwise reasonably considered as pertinent to program 
regulations or the grant agreement.
    (2) This section does not apply to records maintained by contractors 
or subcontractors. For a requirement to place a provision concerning 
records in certain kinds of contracts, see Sec. 97.36(i)(10).
    (b) Length of retention period. (1) Except as otherwise provided, 
records must be retained for three years from the starting date 
specified in paragraph (c) of this section.
    (2) If any litigation, claim, negotiation, audit or other action 
involving the records has been started before the expiration of the 3-
year period, the records must be retained until completion of the action 
and resolution of all issues which arise from it, or until the end of 
the regular 3-year period, whichever is later.
    (3) To avoid duplicate recordkeeping, awarding agencies may make 
special arrangements with grantees and subgrantees to retain any records 
which are continuously needed for joint use. The awarding agency will 
request transfer of records to its custody when it determines that the 
records possess long-term retention value. When the records are 
transferred to or maintained by the Federal agency, the 3-year retention 
requirement is not applicable to the grantee or subgrantee.
    (c) Starting date of retention period--(1) General. When grant 
support is continued or renewed at annual or other intervals, the 
retention period for the records of each funding period starts on the 
day the grantee or subgrantee submits to the awarding agency its single 
or last expenditure report for that period. However, if grant support is 
continued or renewed quarterly, the retention period for each year's 
records starts on the day the grantee submits its expenditure report for 
the last quarter of the Federal fiscal year. In all other cases, the 
retention period starts on the day the grantee submits its final 
expenditure report. If an expenditure report has been waived, the 
retention period starts on the day the report would have been due.
    (2) Real property and equipment records. The retention period for 
real property and equipment records starts from the date of the 
disposition or replacement or transfer at the direction of the awarding 
agency.
    (3) Records for income transactions after grant or subgrant support. 
In some cases grantees must report income

[[Page 542]]

after the period of grant support. Where there is such a requirement, 
the retention period for the records pertaining to the earning of the 
income starts from the end of the grantee's fiscal year in which the 
income is earned.
    (4) Indirect cost rate proposals, cost allocations plans, etc. This 
paragraph applies to the following types of documents, and their 
supporting records: indirect cost rate computations or proposals, cost 
allocation plans, and any similar accounting computations of the rate at 
which a particular group of costs is chargeable (such as computer usage 
chargeback rates or composite fringe benefit rates).
    (i) If submitted for negotiation. If the proposal, plan, or other 
computation is required to be submitted to the Federal Government (or to 
the grantee) to form the basis for negotiation of the rate, then the 3-
year retention period for its supporting records starts from the date of 
such submission.
    (ii) If not submitted for negotiation. If the proposal, plan, or 
other computation is not required to be submitted to the Federal 
Government (or to the grantee) for negotiation purposes, then the 3-year 
retention period for the proposal plan, or computation and its 
supporting records starts from end of the fiscal year (or other 
accounting period) covered by the proposal, plan, or other computation.
    (d) Substitution of microfilm. Copies made by microfilming, 
photocopying, or similar methods may be substituted for the original 
records.
    (e) Access to records--(1) Records of grantees and subgrantees. The 
awarding agency and the Comptroller General of the United States, or any 
of their authorized representatives, shall have the right of access to 
any pertinent books, documents, papers, or other records of grantees and 
subgrantees which are pertinent to the grant, in order to make audits, 
examinations, excerpts, and transcripts.
    (2) Expiration of right of access. The rights of access in this 
section must not be limited to the required retention period but shall 
last as long as the records are retained.
    (f) Restrictions on public access. The Federal Freedom of 
Information Act (5 U.S.C. 552) does not apply to records Unless required 
by Federal, State, or local law, grantees and subgrantees are not 
required to permit public access to their records.



Sec. 97.43  Enforcement.

    (a) Remedies for noncompliance. If a grantee or subgrantee 
materially fails to comply with any term of an award, whether stated in 
a Federal statute or regulation, an assurance, in a State plan or 
application, a notice of award, or elsewhere, the awarding agency may 
take one or more of the following actions, as appropriate in the 
circumstances:
    (1) Temporarily withhold cash payments pending correction of the 
deficiency by the grantee or subgrantee or more severe enforcement 
action by the awarding agency,
    (2) Disallow (that is, deny both use of funds and matching credit 
for) all or part of the cost of the activity or action not in 
compliance,
    (3) Wholly or partly suspend or terminate the current award for the 
grantee's or subgrantee's program,
    (4) Withhold further awards for the program, or
    (5) Take other remedies that may be legally available.
    (b) Hearings, appeals. In taking an enforcement action, the awarding 
agency will provide the grantee or subgrantee an opportunity for such 
hearing, appeal, or other administrative proceeding to which the grantee 
or subgrantee is entitled under any statute or regulation applicable to 
the action involved.
    (c) Effects of suspension and termination. Costs of grantee or 
subgrantee resulting from obligations incurred by the grantee or 
subgrantee during a suspension or after termination of an award are not 
allowable unless the awarding agency expressly authorizes them in the 
notice of suspension or termination or subsequently. Other grantee or 
subgrantee costs during suspension or after termination which are 
necessary and not reasonably avoidable are allowable if:
    (1) The costs result from obligations which were properly incurred 
by the grantee or subgrantee before the effective date of suspension or 
termination, are not in anticipation of it, and, in the

[[Page 543]]

case of a termination, are noncancell- able, and,
    (2) The costs would be allowable if the award were not suspended or 
expired normally at the end of the funding period in which the 
termination takes effect.
    (d) Relationship to debarment and suspension. The enforcement 
remedies identified in this section, including suspension and 
termination, do not preclude grantee or subgrantee from being subject to 
``Debarment and Suspension'' under E.O. 12549 (see Sec. 97.35).



Sec. 97.44  Termination for convenience.

    Except as provided in Sec. 97.43 awards may be terminated in whole 
or in part only as follows:
    (a) By the awarding agency with the consent of the grantee or 
subgrantee in which case the two parties shall agree upon the 
termination conditions, including the effective date and in the case of 
partial termination, the portion to be terminated, or
    (b) By the grantee or subgrantee upon written notification to the 
awarding agency, setting forth the reasons for such termination, the 
effective date, and in the case of partial termination, the portion to 
be terminated. However, if, in the case of a partial termination, the 
awarding agency determines that the remaining portion of the award will 
not accomplish the purposes for which the award was made, the awarding 
agency may terminate the award in its entirety under either Sec. 97.43 
or paragraph (a) of this section.



                 Subpart D--After-The-Grant Requirements



Sec. 97.50  Closeout.

    (a) General. The Federal agency will close out the award when it 
determines that all applicable administrative actions and all required 
work of the grant has been completed.
    (b) Reports. Within 90 days after the expiration or termination of 
the grant, the grantee must submit all financial, performance, and other 
reports required as a condition of the grant. Upon request by the 
grantee, Federal agencies may extend this timeframe. These may include 
but are not limited to:
    (1) Final performance or progress report.
    (2) Financial Status Report (SF 269) or Outlay Report and Request 
for Reimbursement for Construction Programs (SF-271) (as applicable.)
    (3) Final request for payment (SF-270) (if applicable).
    (4) Invention disclosure (if applicable).
    (5) Federally-owned property report:

In accordance with Sec. 97.32(f), a grantee must submit an inventory of 
all federally owned property (as distinct from property acquired with 
grant funds) for which it is accountable and request disposition 
instructions from the Federal agency of property no longer needed.
    (c) Cost adjustment. The Federal agency will, within 90 days after 
receipt of reports in paragraph (b) of this section, make upward or 
downward adjustments to the allowable costs.
    (d) Cash adjustments. (1) The Federal agency will make prompt 
payment to the grantee for allowable reimbursable costs.
    (2) The grantee must immediately refund to the Federal agency any 
balance of unobligated (unencumbered) cash advanced that is not 
authorized to be retained for use on other grants.



Sec. 97.51  Later disallowances and adjustments.

    The closeout of a grant does not affect:
    (a) The Federal agency's right to disallow costs and recover funds 
on the basis of a later audit or other review;
    (b) The grantee's obligation to return any funds due as a result of 
later refunds, corrections, or other transactions;
    (c) Records retention as required in Sec. 97.42;
    (d) Property management requirements in Secs. 97.31 and 97.32; and
    (e) Audit requirements in Sec. 97.26.



Sec. 97.52  Collection of amounts due.

    (a) Any funds paid to a grantee in excess of the amount to which the 
grantee is finally determined to be entitled under the terms of the 
award constitute a debt to the Federal Government. If not paid within a 
reasonable period after demand, the Federal agency may reduce the debt 
by:

[[Page 544]]

    (1) Making an adminstrative offset against other requests for 
reimbursements,
    (2) Withholding advance payments otherwise due to the grantee, or
    (3) Other action permitted by law.
    (b) Except where otherwise provided by statutes or regulations, the 
Federal agency will charge interest on an overdue debt in accordance 
with the Federal Claims Collection Standards (4 CFR Ch. II). The date 
from which interest is computed is not extended by litigation or the 
filing of any form of appeal.

Subpart E--Entitlement [Reserved]



PART 98--GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT) AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (GRANTS)--Table of Contents




                           Subpart A--General

Sec.
98.100  Purpose.
98.105  Definitions.
98.110  Coverage.
98.115  Policy.

                       Subpart B--Effect of Action

98.200  Debarment or suspension.
98.205  Ineligible persons.
98.210  Voluntary exclusion.
98.215  Exception provision.
98.220  Continuation of covered transactions.
98.225  Failure to adhere to restrictions.

                          Subpart C--Debarment

98.300  General.
98.305  Causes for debarment.
98.310  Procedures.
98.311  Investigation and referral.
98.312  Notice of proposed debarment.
98.313  Opportunity to contest proposed debarment.
98.314  Debarring official's decision.
98.315  Settlement and voluntary exclusion.
98.320  Period of debarment.
98.325  Scope of debarment.

                          Subpart D--Suspension

98.400  General.
98.405  Causes for suspension.
98.410  Procedures.
98.411  Notice of suspension.
98.412  Opportunity to contest suspension.
98.413  Suspending official's decision.
98.415  Period of suspension.
98.420  Scope of suspension.

Subpart E--Responsibilities of GSA, Department of Labor and Participants

98.500  GSA responsibilities.
98.505  Department of Labor responsibilities.
98.510  Participants' responsibilities.

          Subpart F--Drug-Free Workplace Requirements (Grants)

98.600  Purpose.
98.605  Definitions.
98.610  Coverage.
98.615  Grounds for suspension of payments, suspension or termination of 
          grants, or suspension or debarment.
98.620  Effect of violation.
98.625  Exception provision.
98.630  Certification requirements and procedures.
98.635  Reporting of and employee sanctions for convictions of criminal 
          drug offenses.

Appendix A to Part 98--Certification Regarding Debarment, Suspension, 
          and Other Responsibility Matters--Primary Covered Transactions
Appendix B to Part 98--Certification Regarding Debarment, Suspension, 
          Ineligibility and Voluntary Exclusion--Lower Tier Covered 
          Transactions
Appendix C to Part 98--Certification Regarding Drug-Free Workplace 
          Requirements

    Authority: E.O. 12549; sec. 5151-5160 of the Drug-Free Workplace Act 
of 1988 (Pub L., 100-690, title V, subtitle D; 41 U.S.C. 701 et seq.); 5 
U.S.C. 552-556.

    Source: 53 FR 19188, 19189, 19204, May 26, 1988, unless otherwise 
noted.

    Cross Reference: See also Office of Management and Budget notice 
published at 55 FR 21679, May 25, 1990, and 60 FR 33036, June 26, 1995.



                           Subpart A--General



Sec. 98.100  Purpose.

    (a) Executive Order (E.O.) 12549 provides that, to the extent 
permitted by law, Executive departments and agencies shall participate 
in a governmentwide system for nonprocurement debarment and suspension. 
A person who is debarred or suspended shall be excluded from Federal 
financial and nonfinancial assistance and benefits under Federal 
programs and activities. Debarment or suspension of a participant

[[Page 545]]

in a program by one agency shall have governmentwide effect.
    (b) These regulations implement section 3 of E.O. 12549 and the 
guidelines promulgated by the Office of Management and Budget under 
section 6 of the E.O. by:
    (1) Prescribing the programs and activities that are covered by the 
governmentwide system;
    (2) Prescribing the governmentwide criteria and governmentwide 
minimum due process procedures that each agency shall use;
    (3) Providing for the listing of debarred and suspended 
participants, participants declared ineligible (see definition of 
``ineligible'' in Sec. 98.105), and participants who have voluntarily 
excluded themselves from participation in covered transactions;
    (4) Setting forth the consequences of a debarment, suspension, 
determination of ineligibility, or voluntary exclusion; and
    (5) Offering such other guidance as necessary for the effective 
implementation and administration of the governmentwide system.
    (c) These regulations also implement Executive Order 12689 (3 CFR, 
1989 Comp., p. 235) and 31 U.S.C. 6101 note (Public Law 103-355, sec. 
2455, 108 Stat. 3327) by--
    (1) Providing for the inclusion in the List of Parties Excluded from 
Federal Procurement and Nonprocurement Programs all persons proposed for 
debarment, debarred or suspended under the Federal Acquisition 
Regulation, 48 CFR Part 9, subpart 9.4; persons against which 
governmentwide exclusions have been entered under this part; and persons 
determined to be ineligible; and
    (2) Setting forth the consequences of a debarment, suspension, 
determination of ineligibility, or voluntary exclusion.
    (d) Although these regulations cover the listing of ineligible 
participants and the effect of such listing, they do not prescribe 
policies and procedures governing declarations of ineligibility.

[60 FR 33040, 33052, June 26, 1995]



Sec. 98.105  Definitions.

    The following definitions apply to this part:
    Adequate evidence. Information sufficient to support the reasonable 
belief that a particular act or omission has occurred.
    Affiliate. Persons are affiliates of each other if, directly or 
indirectly, either one controls or has the power to control the other, 
or, a third person controls or has the power to control both. Indicia of 
control include, but are not limited to: interlocking management or 
ownership, identity of interests among family members, shared facilities 
and equipment, common use of employees, or a business entity organized 
following the suspension or debarment of a person which has the same or 
similar management, ownership, or principal employees as the suspended, 
debarred, ineligible, or voluntarily excluded person.
    Agency. Any executive department, military department or defense 
agency or other agency of the executive branch, excluding the 
independent regulatory agencies.
    Civil judgment. The disposition of a civil action by any court of 
competent jurisdiction, whether entered by verdict, decision, 
settlement, stipulation, or otherwise creating a civil liability for the 
wrongful acts complained of; or a final determination of liability under 
the Program Fraud Civil Remedies Act of 1988 (31 U.S.C. 3801-12).
    Conviction. A judgment or conviction of a criminal offense by any 
court of competent jurisdiction, whether entered upon a verdict or a 
plea, including a plea of nolo contendere.
    Debarment. An action taken by a debarring official in accordance 
with these regulations to exclude a person from participating in covered 
transactions. A person so excluded is debarred.
    Debarring official. An official authorized to impose debarment. The 
debarring official is either:
    (1) The agency head, or
    (2) An official designated by the agency head.
    Indictment. Indictment for a criminal offense. An information or 
other filing by competent authority charging a criminal offense shall be 
given the same effect as an indictment.

[[Page 546]]

    Ineligible. Excluded from participation in Federal nonprocurement 
programs pursuant to a determination of ineligibility under statutory, 
executive order, or regulatory authority, other than Executive Order 
12549 and its agency implementing regulations; for exemple, excluded 
pursuant to the Davis-Bacon Act and its implementing regulations, the 
equal employment opportunity acts and executive orders, or the 
environmental protection acts and executive orders. A person is 
ineligible where the determination of ineligibility affects such 
person's eligibility to participate in more than one covered 
transaction.
    Legal proceedings. Any criminal proceeding or any civil judicial 
proceeding to which the Federal Government or a State or local 
government or quasi-governmental authority is a party. The term includes 
appeals from such proceedings.
    List of Parties Excluded from Federal Procurement and Nonprocurement 
Programs. A list compiled, maintained and distributed by the General 
Services Administration (GSA) containing the names and other information 
about persons who have been debarred, suspended, or voluntarily excluded 
under Executive Orders 12549 and 12689 and these regulations or 48 CFR 
part 9, subpart 9.4, persons who have been proposed for debarment under 
48 CFR part 9, subpart 9.4, and those persons who have been determined 
to be ineligible.
    Notice. A written communication served in person or sent by 
certified mail, return receipt requested, or its equivalent, to the last 
known address of a party, its identified counsel, its agent for service 
of process, or any partner, officer, director, owner, or joint venturer 
of the party. Notice, if undeliverable, shall be considered to have been 
received by the addressee five days after being properly sent to the 
last address known by the agency.
    Participant. Any person who submits a proposal for, enters into, or 
reasonably may be expected to enter into a covered transaction. This 
term also includes any person who acts on behalf of or is authorized to 
commit a participant in a covered transaction as an agent or 
representative of another participant.
    Person. Any individual, corporation, partnership, association, unit 
of government or legal entity, however organized, except: foreign 
governments or foreign governmental entities, public international 
organizations, foreign government owned (in whole or in part) or 
controlled entities, and entities consisting wholly or partially of 
foreign governments or foreign governmental entities.
    Preponderance of the evidence. Proof by information that, compared 
with that opposing it, leads to the conclusion that the fact at issue is 
more probably true than not.
    Principal. Officer, director, owner, partner, key employee, or other 
person within a participant with primary management or supervisory 
responsibilities; or a person who has a critical influence on or 
substantive control over a covered transaction, whether or not employed 
by the participant. Persons who have a critical influence on or 
substantive control over a covered transaction are:
    (1) Principal investigators.
    Proposal. A solicited or unsolicited bid, application, request, 
invitation to consider or similar communication by or on behalf of a 
person seeking to participate or to receive a benefit, directly or 
indirectly, in or under a covered transaction.
    Respondent. A person against whom a debarment or suspension action 
has been initiated.
    State. Any of the States of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, any territory or possession 
of the United States, or any agency of a State, exclusive of 
institutions of higher education, hospitals, and units of local 
government. A State instrumentality will be considered part of the State 
government if it has a written determination from a State government 
that such State considers that instrumentality to be an agency of the 
State government.
    Suspending official. An official authorized to impose suspension. 
The suspending official is either:
    (1) The agency head, or
    (2) An official designated by the agency head.

[[Page 547]]

    Suspension. An action taken by a suspending official in accordance 
with these regulations that immediately excludes a person from 
participating in covered transactions for a temporary period, pending 
completion of an investigation and such legal, debarment, or Program 
Fraud Civil Remedies Act proceedings as may ensue. A person so excluded 
is suspended.
    Voluntary exclusion or voluntarily excluded. A status of 
nonparticipation or limited participation in covered transactions 
assumed by a person pursuant to the terms of a settlement.

[53 FR 19188, 19189, 19204, May 26, 1988, as amended at 60 FR 33040, 
33052, June 26, 1995]



Sec. 98.110  Coverage.

    (a) These regulations apply to all persons who have participated, 
are currently participating or may reasonably be expected to participate 
in transactions under Federal nonprocurement programs. For purposes of 
these regulations such transactions will be referred to as covered 
transactions.
    (1) Covered transaction. For purposes of these regulations, a 
covered transaction is a primary covered transaction or a lower tier 
covered transaction. Covered transactions at any tier need not involve 
the transfer of Federal funds.
    (i) Primary covered transaction. Except as noted in paragraph (a)(2) 
of this section, a primary covered transaction is any nonprocurement 
transaction between an agency and a person, regardless of type, 
including: grants, cooperative agreements, scholarships, fellowships, 
contracts of assistance, loans, loan guarantees, subsidies, insurance, 
payments for specified use, donation agreements and any other 
nonprocurement transactions between a Federal agency and a person. 
Primary covered transactions also include those transactions specially 
designated by the U.S. Department of Housing and Urban Development in 
such agency's regulations governing debarment and suspension.
    (ii) Lower tier covered transaction. A lower tier covered 
transaction is:
    (A) Any transaction between a participant and a person other than a 
procurement contract for goods or services, regardless of type, under a 
primary covered transaction.
    (B) Any procurement contract for goods or services between a 
participant and a person, regardless of type, expected to equal or 
exceed the Federal procurement small purchase threshold fixed at 10 
U.S.C. 2304(g) and 41 U.S.C. 253(g) (currently $25,000) under a primary 
covered transaction.
    (C) Any procurement contract for goods or services between a 
participant and a person under a covered transaction, regardless of 
amount, under which that person will have a critical influence on or 
substantive control over that covered transaction. Such persons are:
    (1) Principal investigators.
    (2) Providers of federally-required audit services.
    (2) Exceptions. The following transactions are not covered:
    (i) Statutory entitlements or mandatory awards (but not subtier 
awards thereunder which are not themselves mandatory), including 
deposited funds insured by the Federal Government;
    (ii) Direct awards to foreign governments or public international 
organizations, or transactions with foreign governments or foreign 
governmental entities, public international organizations, foreign 
government owned (in whole or in part) or controlled entities, entities 
consisting wholly or partially of foreign governments or foreign 
governmental entities;
    (iii) Benefits to an individual as a personal entitlement without 
regard to the individual's present responsibility (but benefits received 
in an individual's business capacity are not excepted);
    (iv) Federal employment;
    (v) Transactions pursuant to national or agency-recognized 
emergencies or disasters;
    (vi) Incidental benefits derived from ordinary governmental 
operations; and
    (vii) Other transactions where the application of these regulations 
would be prohibited by law.
    (b) Relationship to other sections. This section describes the types 
of transactions to which a debarment or suspension under the regulations 
will apply. Subpart B, ``Effect of Action,'' Sec. 98.200, ``Debarment or 
suspension,''

[[Page 548]]

sets forth the consequences of a debarment or suspension. Those 
consequences would obtain only with respect to participants and 
principals in the covered transactions and activities described in 
Sec. 98.110(a). Sections 98.325, ``Scope of debarment,'' and 98.420, 
``Scope of suspension,'' govern the extent to which a specific 
participant or organizational elements of a participant would be 
automatically included within a debarment or suspension action, and the 
conditions under which affiliates or persons associated with a 
participant may also be brought within the scope of the action.
    (c) Relationship to Federal procurement activities. In accordance 
with E.O. 12689 and section 2455 of Public Law 103-355, any debarment, 
suspension, proposed debarment or other governmentwide exclusion 
initiated under the Federal Acquisition Regulation (FAR) on or after 
August 25, 1995 shall be recognized by and effective for Executive 
Branch agencies and participants as an exclusion under this regulation. 
Similarly, any debarment, suspension or other governmentwide exclusion 
initiated under this regulation on or after August 25, 1995 shall be 
recognized by and effective for those agencies as a debarment or 
suspension under the FAR.

[53 FR 19188, 19189, 19204, May 26, 1988, as amended at 60 FR 33041, 
33052, June 26, 1995]



Sec. 98.115  Policy.

    (a) In order to protect the public interest, it is the policy of the 
Federal Government to conduct business only with responsible persons. 
Debarment and suspension are discretionary actions that, taken in 
accordance with Executive Order 12549 and these regulations, are 
appropriate means to implement this policy.
    (b) Debarment and suspension are serious actions which shall be used 
only in the public interest and for the Federal Government's protection 
and not for purposes of punishment. Agencies may impose debarment or 
suspension for the causes and in accordance with the procedures set 
forth in these regulations.
    (c) When more than one agency has an interest in the proposed 
debarment or suspension of a person, consideration shall be given to 
designating one agency as the lead agency for making the decision. 
Agencies are encouraged to establish methods and procedures for 
coordinating their debarment or suspension actions.



                       Subpart B--Effect of Action



Sec. 98.200  Debarment or suspension.

    (a) Primary covered transactions. Except to the extent prohibited by 
law, persons who are debarred or suspended shall be excluded from 
primary covered transactions as either participants or principals 
throughout the Executive Branch of the Federal Government for the period 
of their debarment, suspension, or the period they are proposed for 
debarment under 48 CFR part 9, subpart 9.4. Accordingly, no agency shall 
enter into primary covered transactions with such excluded persons 
during such period, except as permitted pursuant to Sec. 98.215.
    (b) Lower tier covered transactions. Except to the extent prohibited 
by law, persons who have been proposed for debarment under 48 CFR part 
9, subpart 9.4, debarred or suspended shall be excluded from 
participating as either participants or principals in all lower tier 
covered transactions (see Sec. 98.110(a)(1)(ii)) for the period of their 
exclusion.
    (c) Exceptions. Debarment or suspension does not affect a person's 
eligibility for--
    (1) Statutory entitlements or mandatory awards (but not subtier 
awards thereunder which are not themselves mandatory), including 
deposited funds insured by the Federal Government;
    (2) Direct awards to foreign governments or public international 
organizations, or transactions with foreign governments or foreign 
governmental entities, public international organizations, foreign 
government owned (in whole or in part) or controlled entities, and 
entities consisting wholly or partially of foreign governments or 
foreign governmental entities;
    (3) Benefits to an individual as a personal entitlement without 
regard to the individual's present responsibility (but benefits received 
in an individual's business capacity are not excepted);
    (4) Federal employment;

[[Page 549]]

    (5) Transactions pursuant to national or agency-recognized 
emergencies or disasters;
    (6) Incidental benefits derived from ordinary governmental 
operations; and
    (7) Other transactions where the application of these regulations 
would be prohibited by law.

[60 FR 33041, 33052, June 26, 1995]



Sec. 98.205  Ineligible persons.

    Persons who are ineligible, as defined in Sec. 98.105(i), are 
excluded in accordance with the applicable statutory, executive order, 
or regulatory authority.



Sec. 98.210  Voluntary exclusion.

    Persons who accept voluntary exclusions under Sec. 98.315 are 
excluded in accordance with the terms of their settlements. Department 
of Labor shall, and participants may, contact the original action agency 
to ascertain the extent of the exclusion.



Sec. 98.215  Exception provision.

    The Department of Labor may grant an exception permitting a 
debarred, suspended, or voluntarily excluded person, or a person 
proposed for debarment under 48 CFR part 9, subpart 9.4, to participate 
in a particular covered transaction upon a written determination by the 
agency head or an authorized designee stating the reason(s) for 
deviating from the Presidential policy established by Executive Order 
12549 and Sec. 98.200. However, in accordance with the President's 
stated intention in the Executive Order, exceptions shall be granted 
only infrequently. Exceptions shall be reported in accordance with 
Sec. 98.505(a).

[60 FR 33041, 33052, June 26, 1995]



Sec. 98.220  Continuation of covered transactions.

    (a) Notwithstanding the debarment, suspension, proposed debarment 
under 48 CFR part 9, subpart 9.4, determination of ineligibility, or 
voluntary exclusion of any person by an agency, agencies and 
participants may continue covered transactions in existence at the time 
the person was debarred, suspended, proposed for debarment under 48 CFR 
part 9, subpart 9.4, declared ineligible, or voluntarily excluded. A 
decision as to the type of termination action, if any, to be taken 
should be made only after thorough review to ensure the propriety of the 
proposed action.
    (b) Agencies and participants shall not renew or extend covered 
transactions (other than no-cost time extensions) with any person who is 
debarred, suspended, proposed for debarment under 48 CFR part 9, subpart 
9.4, ineligible or voluntary excluded, except as provided in 
Sec. 98.215.

[60 FR 33041, 33052, June 26, 1995]



Sec. 98.225  Failure to adhere to restrictions.

    (a) Except as permitted under Sec. 98.215 or Sec. 98.220, a 
participant shall not knowingly do business under a covered transaction 
with a person who is--
    (1) Debarred or suspended;
    (2) Proposed for debarment under 48 CFR part 9, subpart 9.4; or
    (3) Ineligible for or voluntarily excluded from the covered 
transaction.
    (b) Violation of the restriction under paragraph (a) of this section 
may result in disallowance of costs, annulment or termination of award, 
issuance of a stop work order, debarment or suspension, or other 
remedies as appropriate.
    (c) A participant may rely upon the certification of a prospective 
participant in a lower tier covered transaction that it and its 
principals are not debarred, suspended, proposed for debarment under 48 
CFR part 9, subpart 9.4, ineligible, or voluntarily excluded from the 
covered transaction (See Appendix B of these regulations), unless it 
knows that the certification is erroneous. An agency has the burden of 
proof that a participant did knowingly do business with a person that 
filed an erroneous certification.

[60 FR 33041, 33052, June 26, 1995]



                          Subpart C--Debarment



Sec. 98.300  General.

    The debarring official may debar a person for any of the causes in 
Sec. 98.305, using procedures established in Secs. 98.310 through 
98.314. The existence of a cause for debarment, however, does not 
necessarily require that the person be

[[Page 550]]

debarred; the seriousness of the person's acts or omissions and any 
mitigating factors shall be considered in making any debarment decision.



Sec. 98.305  Causes for debarment.

    Debarment may be imposed in accordance with the provisions of 
Secs. 98.300 through 98.314 for:
    (a) Conviction of or civil judgment for:
    (1) Commission of fraud or a criminal offense in connection with 
obtaining, attempting to obtain, or performing a public or private 
agreement or transaction;
    (2) Violation of Federal or State antitrust statutes, including 
those proscribing price fixing between competitors, allocation of 
customers between competitors, and bid rigging;
    (3) Commission of embezzlement, theft, forgery, bribery, 
falsification or destruction of records, making false statements, 
receiving stolen property, making false claims, or obstruction of 
justice; or
    (4) Commission of any other offense indicating a lack of business 
integrity or business honesty that seriously and directly affects the 
present responsibility of a person.
    (b) Violation of the terms of a public agreement or transaction so 
serious as to affect the integrity of an agency program, such as:
    (1) A willful failure to perform in accordance with the terms of one 
or more public agreements or transactions;
    (2) A history of failure to perform or of unsatisfactory performance 
of one or more public agreements or transactions; or
    (3) A willful violation of a statutory or regulatory provision or 
requirement applicable to a public agreement or transaction.
    (c) Any of the following causes:
    (1) A nonprocurement debarment by any Federal agency taken before 
October 1, 1988, the effective date of these regulations, or a 
procurement debarment by any Federal agency taken pursuant to 48 CFR 
subpart 9.4;
    (2) Knowingly doing business with a debarred, suspended, ineligible, 
or voluntarily excluded person, in connection with a covered 
transaction, except as permitted in Sec. 98.215 or Sec. 98.220;
    (3) Failure to pay a single substantial debt, or a number of 
outstanding debts (including disallowed costs and overpayments, but not 
including sums owed the Federal Government under the Internal Revenue 
Code) owed to any Federal agency or instrumentality, provided the debt 
is uncontested by the debtor or, if contested, provided that the 
debtor's legal and administrative remedies have been exhausted;
    (4) Violation of a material provision of a voluntary exclusion 
agreement entered into under Sec. 98.315 or of any settlement of a 
debarment or suspension action; or
    (5) Violation of any requirement of subpart F of this part, relating 
to providing a drug-free workplace, as set forth in Sec. 98.615 of this 
part.
    (d) Any other cause of so serious or compelling a nature that it 
affects the present responsibility of a person.

[53 FR 19188, 19189, 19204, May 26, 1988, as amended at 54 FR 4950, 
4959, Jan. 31, 1989]



Sec. 98.310  Procedures.

    Department of Labor shall process debarment actions as informally as 
practicable, consistent with the principles of fundamental fairness, 
using the procedures in Secs. 98.311 through 98.314.



Sec. 98.311  Investigation and referral.

    Information concerning the existence of a cause for debarment from 
any source shall be promptly reported, investigated, and referred, when 
appropriate, to the debarring official for consideration. After 
consideration, the debarring official may issue a notice of proposed 
debarment.



Sec. 98.312  Notice of proposed debarment.

    A debarment proceeding shall be initiated by notice to the 
respondent advising:
    (a) That debarment is being considered;
    (b) Of the reasons for the proposed debarment in terms sufficient to 
put the respondent on notice of the conduct or transaction(s) upon which 
it is based;
    (c) Of the cause(s) relied upon under Sec. 98.305 for proposing 
debarment;

[[Page 551]]

    (d) Of the provisions of Secs. 98.311 through 98.314, and any other 
Department of Labor procedures, if applicable, governing debarment 
decisionmaking; and
    (e) Of the potential effect of a debarment.



Sec. 98.313  Opportunity to contest proposed debarment.

    (a) Submission in opposition. Within 30 days after receipt of the 
notice of proposed debarment, the respondent may submit, in person, in 
writing, or through a representative, information and argument in 
opposition to the proposed debarment.
    (b) Additional proceedings as to disputed material facts. (1) In 
actions not based upon a conviction or civil judgment, if the debarring 
official finds that the respondent's submission in opposition raises a 
genuine dispute over facts material to the proposed debarment, 
respondent(s) shall be afforded an opportunity to appear with a 
representative, submit documentary evidence, present witnesses, and 
confront any witness the agency presents.
    (2) A transcribed record of any additional proceedings shall be made 
available at cost to the respondent, upon request, unless the respondent 
and the agency, by mutual agreement, waive the requirement for a 
transcript.



Sec. 98.314  Debarring official's decision.

    (a) No additional proceedings necessary. In actions based upon a 
conviction or civil judgment, or in which there is no genuine dispute 
over material facts, the debarring official shall make a decision on the 
basis of all the information in the administrative record, including any 
submission made by the respondent. The decision shall be made within 45 
days after receipt of any information and argument submitted by the 
respondent, unless the debarring official extends this period for good 
cause.
    (b) Additional proceedings necessary. (1) In actions in which 
additional proceedings are necessary to determine disputed material 
facts, written findings of fact shall be prepared. The debarring 
official shall base the decision on the facts as found, together with 
any information and argument submitted by the respondent and any other 
information in the administrative record.
    (2) The debarring official may refer disputed material facts to 
another official for findings of fact. The debarring official may reject 
any such findings, in whole or in part, only after specifically 
determining them to be arbitrary and capricious or clearly erroneous.
    (3) The debarring official's decision shall be made after the 
conclusion of the proceedings with respect to disputed facts.
    (c)(1) Standard of proof. In any debarment action, the cause for 
debarment must be established by a preponderance of the evidence. Where 
the proposed debarment is based upon a conviction or civil judgment, the 
standard shall be deemed to have been met.
    (2) Burden of proof. The burden of proof is on the agency proposing 
debarment.
    (d) Notice of debarring official's decision. (1) If the debarring 
official decides to impose debarment, the respondent shall be given 
prompt notice:
    (i) Referring to the notice of proposed debarment;
    (ii) Specifying the reasons for debarment;
    (iii) Stating the period of debarment, including effective dates; 
and
    (iv) Advising that the debarment is effective for covered 
transactions throughout the executive branch of the Federal Government 
unless an agency head or an authorized designee makes the determination 
referred to in Sec. 98.215.
    (2) If the debarring official decides not to impose debarment, the 
respondent shall be given prompt notice of that decision. A decision not 
to impose debarment shall be without prejudice to a subsequent 
imposition of debarment by any other agency.



Sec. 98.315  Settlement and voluntary exclusion.

    (a) When in the best interest of the Government, Department of Labor 
may, at any time, settle a debarment or suspension action.
    (b) If a participant and the agency agree to a voluntary exclusion 
of the participant, such voluntary exclusion

[[Page 552]]

shall be entered on the Nonprocurement List (see subpart E).



Sec. 98.320  Period of debarment.

    (a) Debarment shall be for a period commensurate with the 
seriousness of the cause(s). If a suspension precedes a debarment, the 
suspension period shall be considered in determining the debarment 
period.
    (1) Debarment for causes other than those related to a violation of 
the requirements of subpart F of this part generally should not exceed 
three years. Where circumstances warrant, a longer period of debarment 
may be imposed.
    (2) In the case of a debarment for a violation of the requirements 
of subpart F of this part (see 98.305(c)(5)), the period of debarment 
shall not exceed five years.
    (b) The debarring official may extend an existing debarment for an 
additional period, if that official determines that an extension is 
necessary to protect the public interest. However, a debarment may not 
be extended solely on the basis of the facts and circumstances upon 
which the initial debarment action was based. If debarment for an 
additional period is determined to be necessary, the procedures of 
Secs. 98.311 through 98.314 shall be followed to extend the debarment.
    (c) The respondent may request the debarring official to reverse the 
debarment decision or to reduce the period or scope of debarment. Such a 
request shall be in writing and supported by documentation. The 
debarring official may grant such a request for reasons including, but 
not limited to:
    (1) Newly discovered material evidence;
    (2) Reversal of the conviction or civil judgment upon which the 
debarment was based;
    (3) Bona fide change in ownership or management;
    (4) Elimination of other causes for which the debarment was imposed; 
or
    (5) Other reasons the debarring official deems appropriate.

[53 FR 19188, 19189, 19204, May 26, 1988, as amended at 54 FR 4950, 
4959, Jan. 31, 1989]



Sec. 98.325  Scope of debarment.

    (a) Scope in general. (1) Debarment of a person under these 
regulations constitutes debarment of all its divisions and other 
organizational elements from all covered transactions, unless the 
debarment decision is limited by its terms to one or more specifically 
identified individuals, divisions or other organizational elements or to 
specific types of transactions.
    (2) The debarment action may include any affiliate of the 
participant that is specifically named and given notice of the proposed 
debarment and an opportunity to respond (see Secs. 98.311 through 
98.314).
    (b) Imputing conduct. For purposes of determining the scope of 
debarment, conduct may be imputed as follows:
    (1) Conduct imputed to participant. The fraudulent, criminal or 
other seriously improper conduct of any officer, director, shareholder, 
partner, employee, or other individual associated with a participant may 
be imputed to the participant when the conduct occurred in connection 
with the individual's performance of duties for or on behalf of the 
participant, or with the participant's knowledge, approval, or 
acquiescence. The participant's acceptance of the benefits derived from 
the conduct shall be evidence of such knowledge, approval, or 
acquiescence.
    (2) Conduct imputed to individuals associated with participant. The 
fraudulent, criminal, or other seriously improper conduct of a 
participant may be imputed to any officer, director, shareholder, 
partner, employee, or other individual associated with the participant 
who participated in, knew of, or had reason to know of the participant's 
conduct.
    (3) Conduct of one participant imputed to other participants in a 
joint venture. The fraudulent, criminal, or other seriously improper 
conduct of one participant in a joint venture, grant pursuant to a joint 
application, or similar arrangement may be imputed to other participants 
if the conduct occurred for or on behalf of the joint venture, grant 
pursuant to a joint application, or similar arrangement may be imputed

[[Page 553]]

to other participants if the conduct occurred for or on behalf of the 
joint venture, grant pursuant to a joint application, or similar 
arrangement or with the knowledge, approval, or acquiescence of these 
participants. Acceptance of the benefits derived from the conduct shall 
be evidence of such knowledge, approval, or acquiescence.



                          Subpart D--Suspension



Sec. 98.400  General.

    (a) The suspending official may suspend a person for any of the 
causes in Sec. 98.405 using procedures established in Secs. 98.410 
through 98.413.
    (b) Suspension is a serious action to be imposed only when:
    (1) There exists adequate evidence of one or more of the causes set 
out in Sec. 98.405, and
    (2) Immediate action is necessary to protect the public interest.
    (c) In assessing the adequacy of the evidence, the agency should 
consider how much information is available, how credible it is given the 
circumstances, whether or not important allegations are corroborated, 
and what inferences can reasonably be drawn as a result. This assessment 
should include an examination of basic documents such as grants, 
cooperative agreements, loan authorizations, and contracts.



Sec. 98.405  Causes for suspension.

    (a) Suspension may be imposed in accordance with the provisions of 
Secs. 98.400 through 98.413 upon adequate evidence:
    (1) To suspect the commission of an offense listed in 
Sec. 98.305(a); or
    (2) That a cause for debarment under Sec. 98.305 may exist.
    (b) Indictment shall constitute adequate evidence for purposes of 
suspension actions.



Sec. 98.410  Procedures.

    (a) Investigation and referral. Information concerning the existence 
of a cause for suspension from any source shall be promptly reported, 
investigated, and referred, when appropriate, to the suspending official 
for consideration. After consideration, the suspending official may 
issue a notice of suspension.
    (b) Decisionmaking process. Department of Labor shall process 
suspension actions as informally as practicable, consistent with 
principles of fundamental fairness, using the procedures in Secs. 98.411 
through 98.413.



Sec. 98.411  Notice of suspension.

    When a respondent is suspended, notice shall immediately be given:
    (a) That suspension has been imposed;
    (b) That the suspension is based on an indictment, conviction, or 
other adequate evidence that the respondent has committed irregularities 
seriously reflecting on the propriety of further Federal Government 
dealings with the respondent;
    (c) Describing any such irregularities in terms sufficient to put 
the respondent on notice without disclosing the Federal Government's 
evidence;
    (d) Of the cause(s) relied upon under Sec. 98.405 for imposing 
suspension;
    (e) That the suspension is for a temporary period pending the 
completion of an investigation or ensuing legal, debarment, or Program 
Fraud Civil Remedies Act proceedings;
    (f) Of the provisions of Secs. 98.411 through 98.413 and any other 
Department of Labor procedures, if applicable, governing suspension 
decisionmaking; and
    (g) Of the effect of the suspension.



Sec. 98.412  Opportunity to contest suspension.

    (a) Submission in opposition. Within 30 days after receipt of the 
notice of suspension, the respondent may submit, in person, in writing, 
or through a representative, information and argument in opposition to 
the suspension.
    (b) Additional proceedings as to disputed material facts. (1) If the 
suspending official finds that the respondent's submission in opposition 
raises a genuine dispute over facts material to the suspension, 
respondent(s) shall be afforded an opportunity to appear with a 
representative, submit documentary evidence, present witnesses, and 
confront any witness the agency presents, unless:
    (i) The action is based on an indictment, conviction or civil 
judgment, or

[[Page 554]]

    (ii) A determination is made, on the basis of Department of Justice 
advice, that the substantial interests of the Federal Government in 
pending or contemplated legal proceedings based on the same facts as the 
suspension would be prejudiced.
    (2) A transcribed record of any additional proceedings shall be 
prepared and made available at cost to the respondent, upon request, 
unless the respondent and the agency, by mutual agreement, waive the 
requirement for a transcript.



Sec. 98.413  Suspending official's decision.

    The suspending official may modify or terminate the suspension (for 
example, see Sec. 98.320(c) for reasons for reducing the period or scope 
of debarment) or may leave it in force. However, a decision to modify or 
terminate the suspension shall be without prejudice to the subsequent 
imposition of suspension by any other agency or debarment by any agency. 
The decision shall be rendered in accordance with the following 
provisions:
    (a) No additional proceedings necessary. In actions: based on an 
indictment, conviction, or civil judgment; in which there is no genuine 
dispute over material facts; or in which additional proceedings to 
determine disputed material facts have been denied on the basis of 
Department of Justice advice, the suspending official shall make a 
decision on the basis of all the information in the administrative 
record, including any submission made by the respondent. The decision 
shall be made within 45 days after receipt of any information and 
argument submitted by the respondent, unless the suspending official 
extends this period for good cause.
    (b) Additional proceedings necessary. (1) In actions in which 
additional proceedings are necessary to determine disputed material 
facts, written findings of fact shall be prepared. The suspending 
official shall base the decision on the facts as found, together with 
any information and argument submitted by the respondent and any other 
information in the administrative record.
    (2) The suspending official may refer matters involving disputed 
material facts to another official for findings of fact. The suspending 
official may reject any such findings, in whole or in part, only after 
specifically determining them to be arbitrary or capricious or clearly 
erroneous.
    (c) Notice of suspending official's decision. Prompt written notice 
of the suspending official's decision shall be sent to the respondent.



Sec. 98.415  Period of suspension.

    (a) Suspension shall be for a temporary period pending the 
completion of an investigation or ensuing legal, debarment, or Program 
Fraud Civil Remedies Act proceedings, unless terminated sooner by the 
suspending official or as provided in paragraph (b) of this section.
    (b) If legal or administrative proceedings are not initiated within 
12 months after the date of the suspension notice, the suspension shall 
be terminated unless an Assistant Attorney General or United States 
Attorney requests its extension in writing, in which case it may be 
extended for an additional six months. In no event may a suspension 
extend beyond 18 months, unless such proceedings have been initiated 
within that period.
    (c) The suspending official shall notify the Department of Justice 
of an impending termination of a suspension, at least 30 days before the 
12-month period expires, to give that Department an opportunity to 
request an extension.



Sec. 98.420  Scope of suspension.

    The scope of a suspension is the same as the scope of a debarment 
(see Sec. 98.325), except that the procedures of Secs. 98.410 through 
98.413 shall be used in imposing a suspension.



Subpart E--Responsibilities of GSA, Department of Labor and Participants



Sec. 98.500  GSA responsibilities.

    (a) In accordance with the OMB guidelines, GSA shall compile, 
maintain, and distribute a list of all persons who have been debarred, 
suspended, or voluntarily excluded by agencies under

[[Page 555]]

Executive Order 12549 and these regulations, and those who have been 
determined to be ineligible.
    (b) At a minimum, this list shall indicate:
    (1) The names and addresses of all debarred, suspended, ineligible, 
and voluntarily excluded persons, in alphabetical order, with cross-
references when more than one name is involved in a single action;
    (2) The type of action;
    (3) The cause for the action;
    (4) The scope of the action;
    (5) Any termination date for each listing; and
    (6) The agency and name and telephone number of the agency point of 
contact for the action.



Sec. 98.505  Department of Labor responsibilities.

    (a) The agency shall provide GSA with current information concerning 
debarments, suspension, determinations of ineligibility, and voluntary 
exclusions it has taken. Until February 18, 1989, the agency shall also 
provide GSA and OMB with information concerning all transactions in 
which Department of Labor has granted exceptions under Sec. 98.215 
permitting participation by debarred, suspended, or voluntarily excluded 
persons.
    (b) Unless an alternative schedule is agreed to by GSA, the agency 
shall advise GSA of the information set forth in Sec. 98.500(b) and of 
the exceptions granted under Sec. 98.215 within five working days after 
taking such actions.
    (c) The agency shall direct inquiries concerning listed persons to 
the agency that took the action.
    (d) Agency officials shall check the Nonprocurement List before 
entering covered transactions to determine whether a participant in a 
primary transaction is debarred, suspended, ineligible, or voluntarily 
excluded (Tel. ).
    (e) Agency officials shall check the Nonprocurement List before 
approving principals or lower tier participants where agency approval of 
the principal or lower tier participant is required under the terms of 
the transaction, to determine whether such principals or participants 
are debarred, suspended, ineligible, or voluntarily excluded.



Sec. 98.510  Participants' responsibilities.

    (a) Certification by participants in primary covered transactions. 
Each participant shall submit the certification in appendix A to this 
part for it and its principals at the time the participant submits its 
proposal in connection with a primary covered transaction, except that 
States need only complete such certification as to their principals. 
Participants may decide the method and frequency by which they determine 
the eligibility of their principals. In addition, each participant may, 
but is not required to, check the Nonprocurement List for its principals 
(Tel. ). Adverse information on the certification will not necessarily 
result in denial of participation. However, the certification, and any 
additional information pertaining to the certification submitted by the 
participant, shall be considered in the administration of covered 
transactions.
    (b) Certification by participants in lower tier covered 
transactions. (1) Each participant shall require participants in lower 
tier covered transactions to include the certification in appendix B to 
this part for it and its principals in any proposal submitted in 
connection with such lower tier covered transactions.
    (2) A participant may rely upon the certification of a prospective 
participant in a lower tier covered transaction that it and its 
principals are not debarred, suspended, ineligible, or voluntarily 
excluded from the covered transaction by any Federal agency, unless it 
knows that the certification is erroneous. Participants may decide the 
method and frequency by which they determine the eligiblity of their 
principals. In addition, a participant may, but is not required to, 
check the Nonprocurement List for its principals and for participants 
(Tel. ).
    (c) Changed circumstances regarding certification. A participant 
shall provide immediate written notice to Department of Labor if at any 
time the participant learns that its certification was erroneous when 
submitted or has become erroneous by reason of changed circumstances. 
Participants in lower tier covered transactions shall provide

[[Page 556]]

the same updated notice to the participant to which it submitted its 
proposals.



          Subpart F--Drug-Free Workplace Requirements (Grants)

    Source: 55 FR 21688, 21696, May 25, 1990, unless otherwise noted.



Sec. 98.600  Purpose.

    (a) The purpose of this subpart is to carry out the Drug-Free 
Workplace Act of 1988 by requiring that--
    (1) A grantee, other than an individual, shall certify to the agency 
that it will provide a drug-free workplace;
    (2) A grantee who is an individual shall certify to the agency that, 
as a condition of the grant, he or she will not engage in the unlawful 
manufacture, distribution, dispensing, possession or use of a controlled 
substance in conducting any activity with the grant.
    (b) Requirements implementing the Drug-Free Workplace Act of 1988 
for contractors with the agency are found at 48 CFR subparts 9.4, 23.5, 
and 52.2.



Sec. 98.605  Definitions.

    (a) Except as amended in this section, the definitions of 
Sec. 98.105 apply to this subpart.
    (b) For purposes of this subpart--
    (1) Controlled substance means a controlled substance in schedules I 
through V of the Controlled Substances Act (21 U.S.C. 812), and as 
further defined by regulation at 21 CFR 1308.11 through 1308.15;
    (2) Conviction means a finding of guilt (including a plea of nolo 
contendere) or imposition of sentence, or both, by any judicial body 
charged with the responsibility to determine violations of the Federal 
or State criminal drug statutes;
    (3) Criminal drug statute means a Federal or non-Federal criminal 
statute involving the manufacture, distribution, dispensing, use, or 
possession of any controlled substance;
    (4) Drug-free workplace means a site for the performance of work 
done in connection with a specific grant at which employees of the 
grantee are prohibited from engaging in the unlawful manufacture, 
distribution, dispensing, possession, or use of a controlled substance;
    (5) Employee means the employee of a grantee directly engaged in the 
performance of work under the grant, including:
    (i) All direct charge employees;
    (ii) All indirect charge employees, unless their impact or 
involvement is insignificant to the performance of the grant; and,
    (iii) Temporary personnel and consultants who are directly engaged 
in the performance of work under the grant and who are on the grantee's 
payroll.

This definition does not include workers not on the payroll of the 
grantee (e.g., volunteers, even if used to meet a matching requirement; 
consultants or independent contractors not on the payroll; or employees 
of subrecipients or subcontractors in covered workplaces);
    (6) Federal agency or agency means any United States executive 
department, military department, government corporation, government 
controlled corporation, any other establishment in the executive branch 
(including the Executive Office of the President), or any independent 
regulatory agency;
    (7) Grant means an award of financial assistance, including a 
cooperative agreement, in the form of money, or property in lieu of 
money, by a Federal agency directly to a grantee. The term grant 
includes block grant and entitlement grant programs, whether or not 
exempted from coverage under the grants management government-wide 
common rule on uniform administrative requirements for grants and 
cooperative agreements. The term does not include technical assistance 
that provides services instead of money, or other assistance in the form 
of loans, loan guarantees, interest subsidies, insurance, or direct 
appropriations; or any veterans' benefits to individuals, i.e., any 
benefit to veterans, their families, or survivors by virtue of the 
service of a veteran in the Armed Forces of the United States;
    (8) Grantee means a person who applies for or receives a grant 
directly from a Federal agency (except another Federal agency);

[[Page 557]]

    (9) Individual means a natural person;
    (10) State means any of the States of the United States, the 
District of Columbia, the Commonwealth of Puerto Rico, any territory or 
possession of the United States, or any agency of a State, exclusive of 
institutions of higher education, hospitals, and units of local 
government. A State instrumentality will be considered part of the State 
government if it has a written determination from a State government 
that such State considers the instrumentality to be an agency of the 
State government.



Sec. 98.610  Coverage.

    (a) This subpart applies to any grantee of the agency.
    (b) This subpart applies to any grant, except where application of 
this subpart would be inconsistent with the international obligations of 
the United States or the laws or regulations of a foreign government. A 
determination of such inconsistency may be made only by the agency head 
or his/her designee.
    (c) The provisions of subparts A, B, C, D and E of this part apply 
to matters covered by this subpart, except where specifically modified 
by this subpart. In the event of any conflict between provisions of this 
subpart and other provisions of this part, the provisions of this 
subpart are deemed to control with respect to the implementation of 
drug-free workplace requirements concerning grants.



Sec. 98.615  Grounds for suspension of payments, suspension or termination of grants, or suspension or debarment.

    A grantee shall be deemed in violation of the requirements of this 
subpart if the agency head or his or her official designee determines, 
in writing, that--
    (a) The grantee has made a false certification under Sec. 98.630;
    (b) With respect to a grantee other than an individual--
    (1) The grantee has violated the certification by failing to carry 
out the requirements of paragraphs (A)(a)-(g) and/or (B) of the 
certification (Alternate I to appendix C) or
    (2) Such a number of employees of the grantee have been convicted of 
violations of criminal drug statutes for violations occurring in the 
workplace as to indicate that the grantee has failed to make a good 
faith effort to provide a drug-free workplace.
    (c) With respect to a grantee who is an individual--
    (1) The grantee has violated the certification by failing to carry 
out its requirements (Alternate II to appendix C); or
    (2) The grantee is convicted of a criminal drug offense resulting 
from a violation occurring during the conduct of any grant activity.



Sec. 98.620  Effect of violation.

    (a) In the event of a violation of this subpart as provided in 
Sec. 98.615, and in accordance with applicable law, the grantee shall be 
subject to one or more of the following actions:
    (1) Suspension of payments under the grant;
    (2) Suspension or termination of the grant; and
    (3) Suspension or debarment of the grantee under the provisions of 
this part.
    (b) Upon issuance of any final decision under this part requiring 
debarment of a grantee, the debarred grantee shall be ineligible for 
award of any grant from any Federal agency for a period specified in the 
decision, not to exceed five years (see Sec. 98.320(a)(2) of this part).



Sec. 98.625  Exception provision.

    The agency head may waive with respect to a particular grant, in 
writing, a suspension of payments under a grant, suspension or 
termination of a grant, or suspension or debarment of a grantee if the 
agency head determines that such a waiver would be in the public 
interest. This exception authority cannot be delegated to any other 
official.



Sec. 98.630  Certification requirements and procedures.

    (a)(1) As a prior condition of being awarded a grant, each grantee 
shall make the appropriate certification to the Federal agency providing 
the

[[Page 558]]

grant, as provided in appendix C to this part.
    (2) Grantees are not required to make a certification in order to 
continue receiving funds under a grant awarded before March 18, 1989, or 
under a no-cost time extension of such a grant. However, the grantee 
shall make a one-time drug-free workplace certification for a non-
automatic continuation of such a grant made on or after March 18, 1989.
    (b) Except as provided in this section, all grantees shall make the 
required certification for each grant. For mandatory formula grants and 
entitlements that have no application process, grantees shall submit a 
one-time certification in order to continue receiving awards.
    (c) A grantee that is a State may elect to make one certification in 
each Federal fiscal year. States that previously submitted an annual 
certification are not required to make a certification for Fiscal Year 
1990 until June 30, 1990. Except as provided in paragraph (d) of this 
section, this certification shall cover all grants to all State agencies 
from any Federal agency. The State shall retain the original of this 
statewide certification in its Governor's office and, prior to grant 
award, shall ensure that a copy is submitted individually with respect 
to each grant, unless the Federal agency has designated a central 
location for submission.
    (d)(1) The Governor of a State may exclude certain State agencies 
from the statewide certification and authorize these agencies to submit 
their own certifications to Federal agencies. The statewide 
certification shall name any State agencies so excluded.
    (2) A State agency to which the statewide certification does not 
apply, or a State agency in a State that does not have a statewide 
certification, may elect to make one certification in each Federal 
fiscal year. State agencies that previously submitted a State agency 
certification are not required to make a certification for Fiscal Year 
1990 until June 30, 1990. The State agency shall retain the original of 
this State agency-wide certification in its central office and, prior to 
grant award, shall ensure that a copy is submitted individually with 
respect to each grant, unless the Federal agency designates a central 
location for submission.
    (3) When the work of a grant is done by more than one State agency, 
the certification of the State agency directly receiving the grant shall 
be deemed to certify compliance for all workplaces, including those 
located in other State agencies.
    (e)(1) For a grant of less than 30 days performance duration, 
grantees shall have this policy statement and program in place as soon 
as possible, but in any case by a date prior to the date on which 
performance is expected to be completed.
    (2) For a grant of 30 days or more performance duration, grantees 
shall have this policy statement and program in place within 30 days 
after award.
    (3) Where extraordinary circumstances warrant for a specific grant, 
the grant officer may determine a different date on which the policy 
statement and program shall be in place.



Sec. 98.635  Reporting of and employee sanctions for convictions of criminal drug offenses.

    (a) When a grantee other than an individual is notified that an 
employee has been convicted for a violation of a criminal drug statute 
occurring in the workplace, it shall take the following actions:
    (1) Within 10 calendar days of receiving notice of the conviction, 
the grantee shall provide written notice, including the convicted 
employee's position title, to every grant officer, or other designee on 
whose grant activity the convicted employee was working, unless a 
Federal agency has designated a central point for the receipt of such 
notifications. Notification shall include the identification number(s) 
for each of the Federal agency's affected grants.
    (2) Within 30 calendar days of receiving notice of the conviction, 
the grantee shall do the following with respect to the employee who was 
convicted.
    (i) Take appropriate personnel action against the employee, up to 
and including termination, consistent with requirements of the 
Rehabilitation Act of 1973, as amended; or

[[Page 559]]

    (ii) Require the employee to participate satisfactorily in a drug 
abuse assistance or rehabilitation program approved for such purposes by 
a Federal, State, or local health, law enforcement, or other appropriate 
agency.
    (b) A grantee who is an individual who is convicted for a violation 
of a criminal drug statute occurring during the conduct of any grant 
activity shall report the conviction, in writing, within 10 calendar 
days, to his or her Federal agency grant officer, or other designee, 
unless the Federal agency has designated a central point for the receipt 
of such notices. Notification shall include the identification number(s) 
for each of the Federal agency's affected grants.

(Approved by the Office of Management and Budget under control number 
0991-0002)

 Appendix A to Part 98--Certification Regarding Debarment, Suspension, 
     and Other Responsibility Matters--Primary Covered Transactions

                     Instructions for Certification

    1. By signing and submitting this proposal, the prospective primary 
participant is providing the certification set out below.
    2. The inability of a person to provide the certification required 
below will not necessarily result in denial of participation in this 
covered transaction. The prospective participant shall submit an 
explanation of why it cannot provide the certification set out below. 
The certification or explanation will be considered in connection with 
the department or agency's determination whether to enter into this 
transaction. However, failure of the prospective primary participant to 
furnish a certification or an explanation shall disqualify such person 
from participation in this transaction.
    3. The certification in this clause is a material representation of 
fact upon which reliance was placed when the department or agency 
determined to enter into this transaction. If it is later determined 
that the prospective primary participant knowingly rendered an erroneous 
certification, in addition to other remedies available to the Federal 
Government, the department or agency may terminate this transaction for 
cause or default.
    4. The prospective primary participant shall provide immediate 
written notice to the department or agency to which this proposal is 
submitted if at any time the prospective primary participant learns that 
its certification was erroneous when submitted or has become erroneous 
by reason of changed circumstances.
    5. The terms covered transaction, debarred, suspended, ineligible, 
lower tier covered transaction, participant, person, primary covered 
transaction, principal, proposal, and voluntarily excluded, as used in 
this clause, have the meanings set out in the Definitions and Coverage 
sections of the rules implementing Executive Order 12549. You may 
contact the department or agency to which this proposal is being 
submitted for assistance in obtaining a copy of those regulations.
    6. The prospective primary participant agrees by submitting this 
proposal that, should the proposed covered transaction be entered into, 
it shall not knowingly enter into any lower tier covered transaction 
with a person who is proposed for debarment under 48 CFR part 9, subpart 
9.4, debarred, suspended, declared ineligible, or voluntarily excluded 
from participation in this covered transaction, unless authorized by the 
department or agency entering into this transaction.
    7. The prospective primary participant further agrees by submitting 
this proposal that it will include the clause titled ``Certification 
Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion-
Lower Tier Covered Transaction,'' provided by the department or agency 
entering into this covered transaction, without modification, in all 
lower tier covered transactions and in all solicitations for lower tier 
covered transactions.
    8. A participant in a covered transaction may rely upon a 
certification of a prospective participant in a lower tier covered 
transaction that it is not proposed for debarment under 48 CFR part 9, 
subpart 9.4, debarred, suspended, ineligible, or voluntarily excluded 
from the covered transaction, unless it knows that the certification is 
erroneous. A participant may decide the method and frequency by which it 
determines the eligibility of its principals. Each participant may, but 
is not required to, check the List of Parties Excluded from Federal 
Procurement and Nonprocurement Programs.
    9. Nothing contained in the foregoing shall be construed to require 
establishment of a system of records in order to render in good faith 
the certification required by this clause. The knowledge and information 
of a participant is not required to exceed that which is normally 
possessed by a prudent person in the ordinary course of business 
dealings.
    10. Except for transactions authorized under paragraph 6 of these 
instructions, if a participant in a covered transaction knowingly enters 
into a lower tier covered transaction with a person who is proposed for 
debarment under 48 CFR part 9, subpart 9.4,

[[Page 560]]

suspended, debarred, ineligible, or voluntarily excluded from 
participation in this transaction, in addition to other remedies 
available to the Federal Government, the department or agency may 
terminate this transaction for cause or default.

Certification Regarding Debarment, Suspension, and Other Responsibility 
                  Matters--Primary Covered Transactions

    (1) The prospective primary participant certifies to the best of its 
knowledge and belief, that it and its principals:
    (a) Are not presently debarred, suspended, proposed for debarment, 
declared ineligible, or voluntarily excluded by any Federal department 
or agency;
    (b) Have not within a three-year period preceding this proposal been 
convicted of or had a civil judgment rendered against them for 
commission of fraud or a criminal offense in connection with obtaining, 
attempting to obtain, or performing a public (Federal, State or local) 
transaction or contract under a public transaction; violation of Federal 
or State antitrust statutes or commission of embezzlement, theft, 
forgery, bribery, falsification or destruction of records, making false 
statements, or receiving stolen property;
    (c) Are not presently indicted for or otherwise criminally or 
civilly charged by a governmental entity (Federal, State or local) with 
commission of any of the offenses enumerated in paragraph (1)(b) of this 
certification; and
    (d) Have not within a three-year period preceding this application/
proposal had one or more public transactions (Federal, State or local) 
terminated for cause or default.
    (2) Where the prospective primary participant is unable to certify 
to any of the statements in this certification, such prospective 
participant shall attach an explanation to this proposal.

[60 FR 33042, 33052, June 26, 1995]

 Appendix B to Part 98--Certification Regarding Debarment, Suspension, 
 Ineligibility and Voluntary Exclusion--Lower Tier Covered Transactions

                     Instructions for Certification

    1. By signing and submitting this proposal, the prospective lower 
tier participant is providing the certification set out below.
    2. The certification in this clause is a material representation of 
fact upon which reliance was placed when this transaction was entered 
into. If it is later determined that the prospective lower tier 
participant knowingly rendered an erroneous certification, in addition 
to other remedies available to the Federal Government the department or 
agency with which this transaction originated may pursue available 
remedies, including suspension and/or debarment.
    3. The prospective lower tier participant shall provide immediate 
written notice to the person to which this proposal is submitted if at 
any time the prospective lower tier participant learns that its 
certification was erroneous when submitted or had become erroneous by 
reason of changed circumstances.
    4. The terms covered transaction, debarred, suspended, ineligible, 
lower tier covered transaction, participant, person, primary covered 
transaction, principal, proposal, and voluntarily excluded, as used in 
this clause, have the meaning set out in the Definitions and Coverage 
sections of rules implementing Executive Order 12549. You may contact 
the person to which this proposal is submitted for assistance in 
obtaining a copy of those regulations.
    5. The prospective lower tier participant agrees by submitting this 
proposal that, should the proposed covered transaction be entered into, 
it shall not knowingly enter into any lower tier covered transaction 
with a person who is proposed for debarment under 48 CFR part 9, subpart 
9.4, debarred, suspended, declared ineligible, or voluntarily excluded 
from participation in this covered transaction, unless authorized by the 
department or agency with which this transaction originated.
    6. The prospective lower tier participant further agrees by 
submitting this proposal that it will include this clause titled 
``Certification Regarding Debarment, Suspension, Ineligibility and 
Voluntary Exclusion-Lower Tier Covered Transaction,'' without 
modification, in all lower tier covered transactions and in all 
solicitations for lower tier covered transactions.
    7. A participant in a covered transaction may rely upon a 
certification of a prospective participant in a lower tier covered 
transaction that it is not proposed for debarment under 48 CFR part 9, 
subpart 9.4, debarred, suspended, ineligible, or voluntarily excluded 
from covered transactions, unless it knows that the certification is 
erroneous. A participant may decide the method and frequency by which it 
determines the eligibility of its principals. Each participant may, but 
is not required to, check the List of Parties Excluded from Federal 
Procurement and Nonprocurement Programs.
    8. Nothing contained in the foregoing shall be construed to require 
establishment of a system of records in order to render in good faith 
the certification required by this clause. The knowledge and information 
of a participant is not required to exceed that which is normally 
possessed by a prudent person in the ordinary course of business 
dealings.

[[Page 561]]

    9. Except for transactions authorized under paragraph 5 of these 
instructions, if a participant in a covered transaction knowingly enters 
into a lower tier covered transaction with a person who is proposed for 
debarment under 48 CFR part 9, subpart 9.4, suspended, debarred, 
ineligible, or voluntarily excluded from participation in this 
transaction, in addition to other remedies available to the Federal 
Government, the department or agency with which this transaction 
originated may pursue available remedies, including suspension and/or 
debarment.

    Certification Regarding Debarment, Suspension, Ineligibility an 
          Voluntary Exclusion--Lower Tier Covered Transactions

    (1) The prospective lower tier participant certifies, by submission 
of this proposal, that neither it nor its principals is presently 
debarred, suspended, proposed for debarment, declared ineligible, or 
voluntarily excluded from participation in this transaction by any 
Federal department or agency.
    (2) Where the prospective lower tier participant is unable to 
certify to any of the statements in this certification, such prospective 
participant shall attach an explanation to this proposal.

[60 FR 33042, 33052, June 26, 1995]

   Appendix C to Part 98--Certification Regarding Drug-Free Workplace 
                              Requirements

                     Instructions for Certification

    1. By signing and/or submitting this application or grant agreement, 
the grantee is providing the certification set out below.
    2. The certification set out below is a material representation of 
fact upon which reliance is placed when the agency awards the grant. If 
it is later determined that the grantee knowingly rendered a false 
certification, or otherwise violates the requirements of the Drug-Free 
Workplace Act, the agency, in addition to any other remedies available 
to the Federal Government, may take action authorized under the Drug-
Free Workplace Act.
    3. For grantees other than individuals, Alternate I applies.
    4. For grantees who are individuals, Alternate II applies.
    5. Workplaces under grants, for grantees other than individuals, 
need not be identified on the certification. If known, they may be 
identified in the grant application. If the grantee does not identify 
the workplaces at the time of application, or upon award, if there is no 
application, the grantee must keep the identity of the workplace(s) on 
file in its office and make the information available for Federal 
inspection. Failure to identify all known workplaces constitutes a 
violation of the grantee's drug-free workplace requirements.
    6. Workplace identifications must include the actual address of 
buildings (or parts of buildings) or other sites where work under the 
grant takes place. Categorical descriptions may be used (e.g., all 
vehicles of a mass transit authority or State highway department while 
in operation, State employees in each local unemployment office, 
performers in concert halls or radio studios).
    7. If the workplace identified to the agency changes during the 
performance of the grant, the grantee shall inform the agency of the 
change(s), if it previously identified the workplaces in question (see 
paragraph five).
    8. Definitions of terms in the Nonprocurement Suspension and 
Debarment common rule and Drug-Free Workplace common rule apply to this 
certification. Grantees' attention is called, in particular, to the 
following definitions from these rules:
    Controlled substance means a controlled substance in Schedules I 
through V of the Controlled Substances Act (21 U.S.C. 812) and as 
further defined by regulation (21 CFR 1308.11 through 1308.15);
    Conviction means a finding of guilt (including a plea of nolo 
contendere) or imposition of sentence, or both, by any judicial body 
charged with the responsibility to determine violations of the Federal 
or State criminal drug statutes;
    Criminal drug statute means a Federal or non-Federal criminal 
statute involving the manufacture, distribution, dispensing, use, or 
possession of any controlled substance;
    Employee means the employee of a grantee directly engaged in the 
performance of work under a grant, including: (i) All direct charge 
employees; (ii) All indirect charge employees unless their impact or 
involvement is insignificant to the performance of the grant; and, (iii) 
Temporary personnel and consultants who are directly engaged in the 
performance of work under the grant and who are on the grantee's 
payroll. This definition does not include workers not on the payroll of 
the grantee (e.g., volunteers, even if used to meet a matching 
requirement; consultants or independent contractors not on the grantee's 
payroll; or employees of subrecipients or subcontractors in covered 
workplaces).

        Certification Regarding Drug-Free Workplace Requirements

             Alternate I. (Grantees Other Than Individuals)

    A. The grantee certifies that it will or will continue to provide a 
drug-free workplace by:
    (a) Publishing a statement notifying employees that the unlawful 
manufacture, distribution, dispensing, possession, or use of a 
controlled substance is prohibited in the

[[Page 562]]

grantee's workplace and specifying the actions that will be taken 
against employees for violation of such prohibition;
    (b) Establishing an ongoing drug-free awareness program to inform 
employees about--
    (1) The dangers of drug abuse in the workplace;
    (2) The grantee's policy of maintaining a drug-free workplace;
    (3) Any available drug counseling, rehabilitation, and employee 
assistance programs; and
    (4) The penalties that may be imposed upon employees for drug abuse 
violations occurring in the workplace;
    (c) Making it a requirement that each employee to be engaged in the 
performance of the grant be given a copy of the statement required by 
paragraph (a);
    (d) Notifying the employee in the statement required by paragraph 
(a) that, as a condition of employment under the grant, the employee 
will--
    (1) Abide by the terms of the statement; and
    (2) Notify the employer in writing of his or her conviction for a 
violation of a criminal drug statute occurring in the workplace no later 
than five calendar days after such conviction;
    (e) Notifying the agency in writing, within ten calendar days after 
receiving notice under paragraph (d)(2) from an employee or otherwise 
receiving actual notice of such conviction. Employers of convicted 
employees must provide notice, including position title, to every grant 
officer or other designee on whose grant activity the convicted employee 
was working, unless the Federal agency has designated a central point 
for the receipt of such notices. Notice shall include the identification 
number(s) of each affected grant;
    (f) Taking one of the following actions, within 30 calendar days of 
receiving notice under paragraph (d)(2), with respect to any employee 
who is so convicted--
    (1) Taking appropriate personnel action against such an employee, up 
to and including termination, consistent with the requirements of the 
Rehabilitation Act of 1973, as amended; or
    (2) Requiring such employee to participate satisfactorily in a drug 
abuse assistance or rehabilitation program approved for such purposes by 
a Federal, State, or local health, law enforcement, or other appropriate 
agency;
    (g) Making a good faith effort to continue to maintain a drug-free 
workplace through implementation of paragraphs (a), (b), (c), (d), (e) 
and (f).
    B. The grantee may insert in the space provided below the site(s) 
for the performance of work done in connection with the specific grant:

Place of Performance (Street address, city, county, state, zip code)
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________

Check {time}  if there are workplaces on file that are not identified 
here.

              Alternate II. (Grantees Who Are Individuals)

    (a) The grantee certifies that, as a condition of the grant, he or 
she will not engage in the unlawful manufacture, distribution, 
dispensing, possession, or use of a controlled substance in conducting 
any activity with the grant;
    (b) If convicted of a criminal drug offense resulting from a 
violation occurring during the conduct of any grant activity, he or she 
will report the conviction, in writing, within 10 calendar days of the 
conviction, to every grant officer or other designee, unless the Federal 
agency designates a central point for the receipt of such notices. When 
notice is made to such a central point, it shall include the 
identification number(s) of each affected grant.

[55 FR 21690, 21696, May 25, 1990]



PART 99--AUDITS OF STATES, LOCAL GOVERNMENTS, AND NON-PROFIT ORGANIZATIONS--Table of Contents




                           Subpart A--General

Sec.
99.100  Purpose.
99.105  Definitions.

                            Subpart B--Audits

99.200  Audit requirements.
99.205  Basis for determining Federal awards expended.
99.210  Subrecipient and vendor determinations.
99.215  Relation to other audit requirements.
99.220  Frequency of audits.
99.225  Sanctions.
99.230  Audit costs.
99.235  Program-specific audits.

                           Subpart C--Auditees

99.300  Auditee responsibilities.
99.305  Auditor selection.
99.310  Financial statements.
99.315  Audit findings follow-up.
99.320  Report submission.

          Subpart D--Federal Agencies and Pass-through Entities

99.400  Responsibilities.
99.405  Management decision.

[[Page 563]]

                           Subpart E--Auditors

99.500  Scope of audit.
99.505  Audit reporting.
99.510  Audit findings.
99.515  Audit working papers.
99.520  Major program determination.
99.525  Criteria for Federal program risk.
99.530  Criteria for a low-risk auditee.

    Authority: Public Law 104-156, 110 Stat. 1396 (31 U.S.C. 7500 et 
seq.), and OMB Circular A-133 revised June 24, 1997.

    Source: 64 FR 14541, Mar. 25, 1999, unless otherwise noted.



                           Subpart A--General



Sec. 99.100  Purpose.

    This part sets forth standards for obtaining consistency and 
uniformity among Federal agencies for the audit of non-Federal entities 
expending Federal awards.



Sec. 99.105  Definitions.

    Audit finding means deficiencies which the auditor is required by 
Sec. 99.510(a) to report in the schedule of findings and questioned 
costs.
    Auditee means any non-Federal entity that expends Federal awards 
which must be audited under this part.
    Auditor means an auditor that is a public accountant or a Federal, 
State, or local government audit organization, which meets the general 
standards specified in generally accepted government auditing standards 
(GAGAS). The term auditor does not include internal auditors of non-
profit organizations.
    CFDA number means the number assigned to a Federal program in the 
Catalog of Federal Domestic Assistance (CFDA).
    Cluster of programs means a grouping of closely related programs 
that share common compliance requirements. The types of clusters of 
programs are research and development (R&D), student financial aid 
(SFA), and other clusters. ``Other clusters'' are as defined by the 
Office of Management and Budget (OMB) in the compliance supplement or as 
designated by a State for Federal awards the State provides to its 
subrecipients that meet the definition of a cluster of programs. When 
designating an ``other cluster,'' a State shall identify the Federal 
awards included in the cluster and advise the subrecipients of 
compliance requirements applicable to the cluster, consistent with 
Sec. 99.400(d)(1) and Sec. 99.400(d)(2), respectively. A cluster of 
programs shall be considered as one program for determining major 
programs, as described in Sec. 99.520, and, with the exception of R&D as 
described in Sec. 99.200(c), whether a program-specific audit may be 
elected.
    Cognizant agency for audit means the Federal agency designated to 
carry out the responsibilities described in Sec. 99.400(a).
    Compliance supplement refers to the Circular A-133 Compliance 
Supplement, included as Appendix B to Circular A-133, or such documents 
as OMB or its designee may issue to replace it. This document is 
available from the Government Printing Office, Superintendent of 
Documents, Washington, DC 20402-9325.
    Corrective action means action taken by the auditee that:
    (1) Corrects identified deficiencies,
    (2) Produces recommended improvements, or
    (3) Demonstrates that audit findings are either invalid or do not 
warrant auditee action.
    Federal agency has the same meaning as the term agency in Section 
551(1) of title 5, United States Code.
    Federal award means Federal financial assistance and Federal cost-
reimbursement contracts that non-Federal entities receive directly from 
Federal awarding agencies or indirectly from pass-through entities. It 
does not include procurement contracts, under grants or contracts, used 
to buy goods or services from vendors. Any audits of such vendors shall 
be covered by the terms and conditions of the contract. Contracts to 
operate Federal Government-owned, contractor-operated (GOCOs) facilities 
are excluded from the requirements of this part.
    Federal awarding agency means the Federal agency that provides an 
award directly to the recipient.
    Federal financial assistance means assistance that non-Federal 
entities receive or administer in the form of grants, loans, loan 
guarantees, property (including donated surplus property), cooperative 
agreements, interest subsidies, insurance, food commodities,

[[Page 564]]

direct appropriations, and other assistance, but does not include 
amounts received as reimbursement for services rendered to individuals 
as described in Sec. 99.205(h) and Sec. 99.205(i).
    Federal program means: (1) All Federal awards to a non-Federal 
entity assigned a single number in the CFDA. (When no CFDA number is 
assigned, all Federal awards from the same agency made for the same 
purpose should be combined and considered one program.)
    (2) Notwithstanding paragraph (1) of this definition, a cluster of 
programs. The types of clusters of programs are:
    (i) Research and development (R&D);
    (ii) Student financial aid (SFA); and
    (iii) ``Other clusters'' as described in the definition of cluster 
of programs in this section.
    GAGAS means generally accepted government auditing standards issued 
by the Comptroller General of the United States, which are applicable to 
financial audits.
    Generally accepted accounting principles has the meaning specified 
in generally accepted auditing standards issued by the American 
Institute of Certified Public Accountants (AICPA).
    Indian tribe means any Indian tribe, band, nation, or other 
organized group or community, including any Alaskan Native village or 
regional or village corporation (as defined in, or established under, 
the Alaskan Native Claims Settlement Act) that is recognized by the 
United States as eligible for the special programs and services provided 
by the United States to Indians because of their status as Indians.
    Internal control means a process, effected by an entity's management 
and other personnel, designed to provide reasonable assurance regarding 
the achievement of objectives in the following categories:
    (1) Effectiveness and efficiency of operations;
    (2) Reliability of financial reporting; and
    (3) Compliance with applicable laws and regulations.
    Internal control pertaining to the compliance requirements for 
Federal programs (Internal control over Federal programs) means a 
process--effected by an entity's management and other personnel--
designed to provide reasonable assurance regarding the achievement of 
the following objectives for Federal programs:
    (1) Transactions are properly recorded and accounted for to:
    (i) Permit the preparation of reliable financial statements and 
Federal reports;
    (ii) Maintain accountability over assets; and
    (iii) Demonstrate compliance with laws, regulations, and other 
compliance requirements;
    (2) Transactions are executed in compliance with:
    (i) Laws, regulations, and the provisions of contracts or grant 
agreements that could have a direct and material effect on a Federal 
program; and
    (ii) Any other laws and regulations that are identified in the 
compliance supplement; and
    (3) Funds, property, and other assets are safeguarded against loss 
from unauthorized use or disposition.
    Loan means a Federal loan or loan guarantee received or administered 
by a non-Federal entity.
    Local government means any unit of local government within a State, 
including a county, borough, municipality, city, town, township, parish, 
local public authority, special district, school district, intrastate 
district, council of governments, and any other instrumentality of local 
government.
    Major program means a Federal program determined by the auditor to 
be a major program in accordance with Sec. 99.520 or a program 
identified as a major program by a Federal agency or pass-through entity 
in accordance with Sec. 99.215(c).
    Management decision means the evaluation by the Federal awarding 
agency or pass-through entity of the audit findings and corrective 
action plan and the issuance of a written decision as to what corrective 
action is necessary.
    Non-Federal entity means a State, local government, or non-profit 
organization.
    Non-profit organization means:
    (1) Any corporation, trust, association, cooperative, or other 
organization that:

[[Page 565]]

    (i) Is operated primarily for scientific, educational, service, 
charitable, or similar purposes in the public interest;
    (ii) Is not organized primarily for profit; and
    (iii) Uses its net proceeds to maintain, improve, or expand its 
operations; and
    (2) The term non-profit organization includes non-profit 
institutions of higher education and hospitals.
    OMB means the Executive Office of the President, Office of 
Management and Budget.
    Oversight agency for audit means the Federal awarding agency that 
provides the predominant amount of direct funding to a recipient not 
assigned a cognizant agency for audit. When there is no direct funding, 
the Federal agency with the predominant indirect funding shall assume 
the oversight responsibilities. The duties of the oversight agency for 
audit are described in Sec. 99.400(b).
    Pass-through entity means a non-Federal entity that provides a 
Federal award to a subrecipient to carry out a Federal program.
    Program-specific audit means an audit of one Federal program as 
provided for in Sec. 99.200(c) and Sec. 99.235.
    Questioned cost means a cost that is questioned by the auditor 
because of an audit finding:
    (1) Which resulted from a violation or possible violation of a 
provision of a law, regulation, contract, grant, cooperative agreement, 
or other agreement or document governing the use of Federal funds, 
including funds used to match Federal funds;
    (2) Where the costs, at the time of the audit, are not supported by 
adequate documentation; or
    (3) Where the costs incurred appear unreasonable and do not reflect 
the actions a prudent person would take in the circumstances.
    Recipient means a non-Federal entity that expends Federal awards 
received directly from a Federal awarding agency to carry out a Federal 
program.
    Research and development (R&D) means all research activities, both 
basic and applied, and all development activities that are performed by 
a non-Federal entity. Research is defined as a systematic study directed 
toward fuller scientific knowledge or understanding of the subject 
studied. The term research also includes activities involving the 
training of individuals in research techniques where such activities 
utilize the same facilities as other research and development activities 
and where such activities are not included in the instruction function. 
Development is the systematic use of knowledge and understanding gained 
from research directed toward the production of useful materials, 
devices, systems, or methods, including design and development of 
prototypes and processes.
    Single audit means an audit which includes both the entity's 
financial statements and the Federal awards as described in Sec. 99.500.
    State means any State of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, 
American Samoa, the Commonwealth of the Northern Mariana Islands, and 
the Trust Territory of the Pacific Islands, any instrumentality thereof, 
any multi-State, regional, or interstate entity which has governmental 
functions, and any Indian tribe as defined in this section.
    Student Financial Aid (SFA) includes those programs of general 
student assistance, such as those authorized by Title IV of the Higher 
Education Act of 1965, as amended, (20 U.S.C. 1070 et seq.), which is 
administered by the U.S. Department of Education, and similar programs 
provided by other Federal agencies. It does not include programs which 
provide fellowships or similar Federal awards to students on a 
competitive basis, or for specified studies or research.
    Subrecipient means a non-Federal entity that expends Federal awards 
received from a pass-through entity to carry out a Federal program, but 
does not include an individual that is a beneficiary of such a program. 
A subrecipient may also be a recipient of other Federal awards directly 
from a Federal awarding agency. Guidance on distinguishing between a 
subrecipient and a vendor is provided in Sec. 99.210.

[[Page 566]]

    Types of compliance requirements refers to the types of compliance 
requirements listed in the compliance supplement. Examples include: 
activities allowed or unallowed; allowable costs/cost principles; cash 
management; eligibility; matching, level of effort, earmarking; and, 
reporting.
    Vendor means a dealer, distributor, merchant, or other seller 
providing goods or services that are required for the conduct of a 
Federal program. These goods or services may be for an organization's 
own use or for the use of beneficiaries of the Federal program. 
Additional guidance on distinguishing between a subrecipient and a 
vendor is provided in Sec. 99.210.



                            Subpart B--Audits



Sec. 99.200  Audit requirements.

    (a) Audit required. Non-Federal entities that expend $300,000 or 
more in a year in Federal awards shall have a single or program-specific 
audit conducted for that year in accordance with the provisions of this 
part. Guidance on determining Federal awards expended is provided in 
Sec. 99.205.
    (b) Single audit. Non-Federal entities that expend $300,000 or more 
in a year in Federal awards shall have a single audit conducted in 
accordance with Sec. 99.500 except when they elect to have a program-
specific audit conducted in accordance with paragraph (c) of this 
section.
    (c) Program-specific audit election. When an auditee expends Federal 
awards under only one Federal program (excluding R&D) and the Federal 
program's laws, regulations, or grant agreements do not require a 
financial statement audit of the auditee, the auditee may elect to have 
a program-specific audit conducted in accordance with Sec. 99.235. A 
program-specific audit may not be elected for R&D unless all of the 
Federal awards expended were received from the same Federal agency, or 
the same Federal agency and the same pass-through entity, and that 
Federal agency, or pass-through entity in the case of a subrecipient, 
approves in advance a program-specific audit.
    (d) Exemption when Federal awards expended are less than $300,000. 
Non-Federal entities that expend less than $300,000 a year in Federal 
awards are exempt from Federal audit requirements for that year, except 
as noted in Sec. 99.215(a), but records must be available for review or 
audit by appropriate officials of the Federal agency, pass-through 
entity, and General Accounting Office (GAO).
    (e) Federally Funded Research and Development Centers (FFRDC). 
Management of an auditee that owns or operates a FFRDC may elect to 
treat the FFRDC as a separate entity for purposes of this part.



Sec. 99.205  Basis for determining Federal awards expended.

    (a) Determining Federal awards expended. The determination of when 
an award is expended should be based on when the activity related to the 
award occurs. Generally, the activity pertains to events that require 
the non-Federal entity to comply with laws, regulations, and the 
provisions of contracts or grant agreements, such as: expenditure/
expense transactions associated with grants, cost-reimbursement 
contracts, cooperative agreements, and direct appropriations; the 
disbursement of funds passed through to subrecipients; the use of loan 
proceeds under loan and loan guarantee programs; the receipt of 
property; the receipt of surplus property; the receipt or use of program 
income; the distribution or consumption of food commodities; the 
disbursement of amounts entitling the non-Federal entity to an interest 
subsidy; and, the period when insurance is in force.
    (b) Loan and loan guarantees (loans). Since the Federal Government 
is at risk for loans until the debt is repaid, the following guidelines 
shall be used to calculate the value of Federal awards expended under 
loan programs, except as noted in paragraphs (c) and (d) of this 
section:
    (1) Value of new loans made or received during the fiscal year; plus
    (2) Balance of loans from previous years for which the Federal 
Government imposes continuing compliance requirements; plus
    (3) Any interest subsidy, cash, or administrative cost allowance 
received.
    (c) Loan and loan guarantees (loans) at institutions of higher 
education. When

[[Page 567]]

loans are made to students of an institution of higher education but the 
institution does not make the loans, then only the value of loans made 
during the year shall be considered Federal awards expended in that 
year. The balance of loans for previous years is not included as Federal 
awards expended because the lender accounts for the prior balances.
    (d) Prior loan and loan guarantees (loans). Loans, the proceeds of 
which were received and expended in prior-years, are not considered 
Federal awards expended under this part when the laws, regulations, and 
the provisions of contracts or grant agreements pertaining to such loans 
impose no continuing compliance requirements other than to repay the 
loans.
    (e) Endowment funds. The cumulative balance of Federal awards for 
endowment funds which are federally restricted are considered awards 
expended in each year in which the funds are still restricted.
    (f) Free rent. Free rent received by itself is not considered a 
Federal award expended under this part. However, free rent received as 
part of an award to carry out a Federal program shall be included in 
determining Federal awards expended and subject to audit under this 
part.
    (g) Valuing non-cash assistance. Federal non-cash assistance, such 
as free rent, food stamps, food commodities, donated property, or 
donated surplus property, shall be valued at fair market value at the 
time of receipt or the assessed value provided by the Federal agency.
    (h) Medicare. Medicare payments to a non-Federal entity for 
providing patient care services to Medicare eligible individuals are not 
considered Federal awards expended under this part.
    (i) Medicaid. Medicaid payments to a subrecipient for providing 
patient care services to Medicaid eligible individuals are not 
considered Federal awards expended under this part unless a State 
requires the funds to be treated as Federal awards expended because 
reimbursement is on a cost-reimbursement basis.
    (j) Certain loans provided by the National Credit Union 
Administration. For purposes of this part, loans made from the National 
Credit Union Share Insurance Fund and the Central Liquidity Facility 
that are funded by contributions from insured institutions are not 
considered Federal awards expended.



Sec. 99.210  Subrecipient and vendor determinations.

    (a) General. An auditee may be a recipient, a subrecipient, and a 
vendor. Federal awards expended as a recipient or a subrecipient would 
be subject to audit under this part. The payments received for goods or 
services provided as a vendor would not be considered Federal awards. 
The guidance in paragraphs (b) and (c) of this section should be 
considered in determining whether payments constitute a Federal award or 
a payment for goods and services.
    (b) Federal award. Characteristics indicative of a Federal award 
received by a subrecipient are when the organization:
    (1) Determines who is eligible to receive what Federal financial 
assistance;
    (2) Has its performance measured against whether the objectives of 
the Federal program are met;
    (3) Has responsibility for programmatic decision making;
    (4) Has responsibility for adherence to applicable Federal program 
compliance requirements; and
    (5) Uses the Federal funds to carry out a program of the 
organization as compared to providing goods or services for a program of 
the pass-through entity.
    (c) Payment for goods and services. Characteristics indicative of a 
payment for goods and services received by a vendor are when the 
organization:
    (1) Provides the goods and services within normal business 
operations;
    (2) Provides similar goods or services to many different purchasers;
    (3) Operates in a competitive environment;
    (4) Provides goods or services that are ancillary to the operation 
of the Federal program; and
    (5) Is not subject to compliance requirements of the Federal 
program.
    (d) Use of judgment in making determination. There may be unusual 
circumstances or exceptions to the listed

[[Page 568]]

characteristics. In making the determination of whether a subrecipient 
or vendor relationship exists, the substance of the relationship is more 
important than the form of the agreement. It is not expected that all of 
the characteristics will be present and judgment should be used in 
determining whether an entity is a subrecipient or vendor.
    (e) For-profit subrecipient. Since this part does not apply to for-
profit subrecipients, the pass-through entity is responsible for 
establishing requirements, as necessary, to ensure compliance by for-
profit subrecipients. The contract with the for-profit subrecipient 
should describe applicable compliance requirements and the for-profit 
subrecipient's compliance responsibility. Methods to ensure compliance 
for Federal awards made to for-profit subrecipients may include pre-
award audits, monitoring during the contract, and post-award audits.
    (f) Compliance responsibility for vendors. In most cases, the 
auditee's compliance responsibility for vendors is only to ensure that 
the procurement, receipt, and payment for goods and services comply with 
laws, regulations, and the provisions of contracts or grant agreements. 
Program compliance requirements normally do not pass through to vendors. 
However, the auditee is responsible for ensuring compliance for vendor 
transactions which are structured such that the vendor is responsible 
for program compliance or the vendor's records must be reviewed to 
determine program compliance. Also, when these vendor transactions 
relate to a major program, the scope of the audit shall include 
determining whether these transactions are in compliance with laws, 
regulations, and the provisions of contracts or grant agreements.



Sec. 99.215  Relation to other audit requirements.

    (a) Audit under this part in lieu of other audits. An audit made in 
accordance with this part shall be in lieu of any financial audit 
required under individual Federal awards. To the extent this audit meets 
a Federal agency's needs, it shall rely upon and use such audits. The 
provisions of this part neither limit the authority of Federal agencies, 
including their Inspectors General, or GAO to conduct or arrange for 
additional audits (e.g., financial audits, performance audits, 
evaluations, inspections, or reviews) nor authorize any auditee to 
constrain Federal agencies from carrying out additional audits. Any 
additional audits shall be planned and performed in such a way as to 
build upon work performed by other auditors.
    (b) Federal agency to pay for additional audits. A Federal agency 
that conducts or contracts for additional audits shall, consistent with 
other applicable laws and regulations, arrange for funding the full cost 
of such additional audits.
    (c) Request for a program to be audited as a major program. A 
Federal agency may request an auditee to have a particular Federal 
program audited as a major program in lieu of the Federal agency 
conducting or arranging for the additional audits. To allow for 
planning, such requests should be made at least 180 days prior to the 
end of the fiscal year to be audited. The auditee, after consultation 
with its auditor, should promptly respond to such request by informing 
the Federal agency whether the program would otherwise be audited as a 
major program using the risk-based audit approach described in 
Sec. 99.520 and, if not, the estimated incremental cost. The Federal 
agency shall then promptly confirm to the auditee whether it wants the 
program audited as a major program. If the program is to be audited as a 
major program based upon this Federal agency request, and the Federal 
agency agrees to pay the full incremental costs, then the auditee shall 
have the program audited as a major program. A pass-through entity may 
use the provisions of this paragraph for a subrecipient.



Sec. 99.220  Frequency of audits.

    Except for the provisions for biennial audits provided in paragraphs 
(a) and (b) of this section, audits required by this part shall be 
performed annually. Any biennial audit shall cover both years within the 
biennial period.
    (a) A State or local government that is required by constitution or 
statute, in effect on January 1, 1987, to undergo

[[Page 569]]

its audits less frequently than annually, is permitted to undergo its 
audits pursuant to this part biennially. This requirement must still be 
in effect for the biennial period under audit.
    (b) Any non-profit organization that had biennial audits for all 
biennial periods ending between July 1, 1992, and January 1, 1995, is 
permitted to undergo its audits pursuant to this part biennially.



Sec. 99.225  Sanctions.

    No audit costs may be charged to Federal awards when audits required 
by this part have not been made or have been made but not in accordance 
with this part. In cases of continued inability or unwillingness to have 
an audit conducted in accordance with this part, Federal agencies and 
pass-through entities shall take appropriate action using sanctions such 
as:
    (a) Withholding a percentage of Federal awards until the audit is 
completed satisfactorily;
    (b) Withholding or disallowing overhead costs;
    (c) Suspending Federal awards until the audit is conducted; or
    (d) Terminating the Federal award.



Sec. 99.230  Audit costs.

    (a) Allowable costs. Unless prohibited by law, the cost of audits 
made in accordance with the provisions of this part are allowable 
charges to Federal awards. The charges may be considered a direct cost 
or an allocated indirect cost, as determined in accordance with the 
provisions of applicable OMB cost principles circulars, the Federal 
Acquisition Regulation (FAR)(48 CFR parts 30 and 31), or other 
applicable cost principles or regulations.
    (b) Unallowable costs. A non-Federal entity shall not charge the 
following to a Federal award:
    (1) The cost of any audit under the Single Audit Act Amendments of 
1996 (31 U.S.C. 7501 et seq.) not conducted in accordance with this 
part.
    (2) The cost of auditing a non-Federal entity which has Federal 
awards expended of less than $300,000 per year and is thereby exempted 
under Sec. 99.200(d) from having an audit conducted under this part. 
However, this does not prohibit a pass-through entity from charging 
Federal awards for the cost of limited scope audits to monitor its 
subrecipients in accordance with Sec. 99.400(d)(3), provided the 
subrecipient does not have a single audit. For purposes of this part, 
limited scope audits only include agreed-upon procedures engagements 
conducted in accordance with either the AICPA's generally accepted 
auditing standards or attestation standards, that are paid for and 
arranged by a pass-through entity and address only one or more of the 
following types of compliance requirements: activities allowed or 
unallowed; allowable costs/cost principles; eligibility; matching; level 
of effort; earmarking; and, reporting.



Sec. 99.235  Program-specific audits.

    (a) Program-specific audit guide available. In many cases, a 
program-specific audit guide will be available to provide specific 
guidance to the auditor with respect to internal control, compliance 
requirements, suggested audit procedures, and audit reporting 
requirements. The auditor should contact the Office of Inspector General 
of the Federal agency to determine whether such a guide is available. 
When a current program-specific audit guide is available, the auditor 
shall follow GAGAS and the guide when performing a program-specific 
audit.
    (b) Program-specific audit guide not available. (1) When a program-
specific audit guide is not available, the auditee and auditor shall 
have basically the same responsibilities for the Federal program as they 
would have for an audit of a major program in a single audit.
    (2) The auditee shall prepare the financial statement(s) for the 
Federal program that includes, at a minimum, a schedule of expenditures 
of Federal awards for the program and notes that describe the 
significant accounting policies used in preparing the schedule, a 
summary schedule of prior audit findings consistent with the 
requirements of Sec. 99.315(b), and a corrective action plan consistent 
with the requirements of Sec. 99.315(c).
    (3) The auditor shall:
    (i) Perform an audit of the financial statement(s) for the Federal 
program in accordance with GAGAS;

[[Page 570]]

    (ii) Obtain an understanding of internal control and perform tests 
of internal control over the Federal program consistent with the 
requirements of Sec. 99.500(c) for a major program;
    (iii) Perform procedures to determine whether the auditee has 
complied with laws, regulations, and the provisions of contracts or 
grant agreements that could have a direct and material effect on the 
Federal program consistent with the requirements of Sec. 99.500(d) for a 
major program; and
    (iv) Follow up on prior audit findings, perform procedures to assess 
the reasonableness of the summary schedule of prior audit findings 
prepared by the auditee, and report, as a current year audit finding, 
when the auditor concludes that the summary schedule of prior audit 
findings materially misrepresents the status of any prior audit finding 
in accordance with the requirements of Sec. 99.500(e).
    (4) The auditor's report(s) may be in the form of either combined or 
separate reports and may be organized differently from the manner 
presented in this section. The auditor's report(s) shall state that the 
audit was conducted in accordance with this part and include the 
following:
    (i) An opinion (or disclaimer of opinion) as to whether the 
financial statement(s) of the Federal program is presented fairly in all 
material respects in conformity with the stated accounting policies;
    (ii) A report on internal control related to the Federal program, 
which shall describe the scope of testing of internal control and the 
results of the tests;
    (iii) A report on compliance which includes an opinion (or 
disclaimer of opinion) as to whether the auditee complied with laws, 
regulations, and the provisions of contracts or grant agreements which 
could have a direct and material effect on the Federal program; and
    (iv) A schedule of findings and questioned costs for the Federal 
program that includes a summary of the auditor's results relative to the 
Federal program in a format consistent with Sec. 99.505(d)(1), and 
findings and questioned costs consistent with the requirements of 
Sec. 99.505(d)(3).
    (c) Report submission for program-specific audits. (1) The audit 
shall be completed and the reporting required by paragraph (c)(2) or 
(c)(3) of this section submitted within the earlier of 30 days after 
receipt of the auditor's report(s), or nine months after the end of the 
audit period, unless a longer period is agreed to in advance by the 
Federal agency that provided the funding or a different period is 
specified in a program-specific audit guide. (However, for fiscal years 
beginning on or before June 30, 1998, the audit shall be completed and 
the required reporting shall be submitted within the earlier of 30 days 
after receipt of the auditor's report(s), or 13 months after the end of 
the audit period, unless a different period is specified in a program-
specific audit guide.) Unless restricted by law or regulation, the 
auditee shall make report copies available for public inspection.
    (2) When a program-specific audit guide is available, the auditee 
shall submit to the Federal clearinghouse designated by the OMB, the 
data collection form prepared in accordance with Sec. 99.320(b), as 
applicable to a program-specific audit, and the reporting required by 
the program-specific audit guide to be retained as an archival copy. 
Also, the auditee shall submit to the Federal awarding agency or pass-
through entity the reporting required by the program-specific audit 
guide.
    (3) When a program-specific audit guide is not available, the 
reporting package for a program-specific audit shall consist of the 
financial statement(s) of the Federal program, a summary schedule of 
prior audit findings, and a corrective action plan as described in 
paragraph (b)(2) of this section, and the auditor's report(s) described 
in paragraph (b)(4) of this section. The data collection form prepared 
in accordance with Sec. 99.320(b), as applicable to a program-specific 
audit, and one copy of this reporting package shall be submitted to the 
Federal clearinghouse designated by the OMB to be retained as an 
archival copy. Also, when the schedule of findings and questioned costs 
disclosed audit findings or the summary schedule of prior audit findings 
reported the status of any audit findings, the auditee shall

[[Page 571]]

submit one copy of the reporting package to the Federal clearinghouse on 
behalf of the Federal awarding agency, or directly to the pass-through 
entity in the case of a subrecipient. Instead of submitting the 
reporting package to the pass-through entity, when a subrecipient is not 
required to submit a reporting package to the pass-through entity, the 
subrecipient shall provide written notification to the pass-through 
entity, consistent with the requirements of Sec. 99.320(e)(2). A 
subrecipient may submit a copy of the reporting package to the pass-
through entity to comply with this notification requirement.
    (d) Other sections of this part may apply. Program-specific audits 
are subject to Sec. 99.100 through Sec. 99.215(b), Sec. 99.220 through 
Sec. 99.230, Sec. 99.300 through Sec. 99.305, Sec. 99.315, 
Sec. 99.320(f) through Sec. 99.320(j), Sec. 99.400 through Sec. 99.405, 
Sec. 99.510 through Sec. 99.515, and other referenced provisions of this 
part unless contrary to the provisions of this section, a program-
specific audit guide, or program laws and regulations.



                           Subpart C--Auditees



Sec. 99.300  Auditee responsibilities.

    The auditee shall:
    (a) Identify, in its accounts, all Federal awards received and 
expended and the Federal programs under which they were received. 
Federal program and award identification shall include, as applicable, 
the CFDA title and number, award number and year, name of the Federal 
agency, and name of the pass-through entity.
    (b) Maintain internal control over Federal programs that provides 
reasonable assurance that the auditee is managing Federal awards in 
compliance with laws, regulations, and the provisions of contracts or 
grant agreements that could have a material effect on each of its 
Federal programs.
    (c) Comply with laws, regulations, and the provisions of contracts 
or grant agreements related to each of its Federal programs.
    (d) Prepare appropriate financial statements, including the schedule 
of expenditures of Federal awards in accordance with Sec. 99.310.
    (e) Ensure that the audits required by this part are properly 
performed and submitted when due. When extensions to the report 
submission due date required by Sec. 99.320(a) are granted by the 
cognizant or oversight agency for audit, promptly notify the Federal 
clearinghouse designated by OMB and each pass-through entity providing 
Federal awards of the extension.
    (f) Follow up and take corrective action on audit findings, 
including preparation of a summary schedule of prior audit findings and 
a corrective action plan in accordance with Sec. 99.315(b) and 
Sec. 99.315(c), respectively.



Sec. 99.305  Auditor selection.

    (a) Auditor procurement. In procuring audit services, auditees shall 
follow the procurement standards prescribed by the Grants Management 
Common Rule (hereinafter referred to as the ``A-102 Common Rule'') 
published March 11, 1988, and amended April 19, 1995; 29 CFR part 97, 
Uniform Administrative Requirements for Grants and Cooperative 
Agreements to State and Local Governments; Circular A-110, ``Uniform 
Administrative Requirements for Grants and Agreements with Institutions 
of Higher Education, Hospitals and Other Non-Profit Organizations;'' or 
the FAR (48 CFR part 42), as applicable (OMB Circulars are available 
from the Office of Administration, Publications Office, Room 2200, New 
Executive Office Building, Washington, DC 20503). Whenever possible, 
auditees shall make positive efforts to utilize small businesses, 
minority-owned firms, and women's business enterprises, in procuring 
audit services as stated in the A-102 Common Rule, OMB Circular A-110, 
or the FAR (48 CFR part 42), as applicable. In requesting proposals for 
audit services, the objectives and scope of the audit should be made 
clear. Factors to be considered in evaluating each proposal for audit 
services include the responsiveness to the request for proposal, 
relevant experience, availability of staff with professional 
qualifications and technical abilities, the results of external quality 
control reviews, and price.
    (b) Restriction on auditor preparing indirect cost proposals. An 
auditor who prepares the indirect cost proposal or

[[Page 572]]

cost allocation plan may not also be selected to perform the audit 
required by this part when the indirect costs recovered by the auditee 
during the prior year exceeded $1 million. This restriction applies to 
the base year used in the preparation of the indirect cost proposal or 
cost allocation plan and any subsequent years in which the resulting 
indirect cost agreement or cost allocation plan is used to recover 
costs. To minimize any disruption in existing contracts for audit 
services, this paragraph applies to audits of fiscal years beginning 
after June 30, 1998.
    (c) Use of Federal auditors. Federal auditors may perform all or 
part of the work required under this part if they comply fully with the 
requirements of this part.



Sec. 99.310  Financial statements.

    (a) Financial statements. The auditee shall prepare financial 
statements that reflect its financial position, results of operations or 
changes in net assets, and, where appropriate, cash flows for the fiscal 
year audited. The financial statements shall be for the same 
organizational unit and fiscal year that is chosen to meet the 
requirements of this part. However, organization-wide financial 
statements may also include departments, agencies, and other 
organizational units that have separate audits in accordance with 
Sec. 99.500(a) and prepare separate financial statements.
    (b) Schedule of expenditures of Federal awards. The auditee shall 
also prepare a schedule of expenditures of Federal awards for the period 
covered by the auditee's financial statements. While not required, the 
auditee may choose to provide information requested by Federal awarding 
agencies and pass-through entities to make the schedule easier to use. 
For example, when a Federal program has multiple award years, the 
auditee may list the amount of Federal awards expended for each award 
year separately. At a minimum, the schedule shall:
    (1) List individual Federal programs by Federal agency. For Federal 
programs included in a cluster of programs, list individual Federal 
programs within a cluster of programs. For R&D, total Federal awards 
expended shall be shown either by individual award or by Federal agency 
and major subdivision within the Federal agency. For example, the 
National Institutes of Health is a major subdivision in the Department 
of Health and Human Services.
    (2) For Federal awards received as a subrecipient, the name of the 
pass-through entity and identifying number assigned by the pass-through 
entity shall be included.
    (3) Provide total Federal awards expended for each individual 
Federal program and the CFDA number or other identifying number when the 
CFDA information is not available.
    (4) Include notes that describe the significant accounting policies 
used in preparing the schedule.
    (5) To the extent practical, pass-through entities should identify 
in the schedule the total amount provided to subrecipients from each 
Federal program.
    (6) Include, in either the schedule or a note to the schedule, the 
value of the Federal awards expended in the form of non-cash assistance, 
the amount of insurance in effect during the year, and loans or loan 
guarantees outstanding at year end. While not required, it is preferable 
to present this information in the schedule.



Sec. 99.315  Audit findings follow-up.

    (a) General. The auditee is responsible for follow-up and corrective 
action on all audit findings. As part of this responsibility, the 
auditee shall prepare a summary schedule of prior audit findings. The 
auditee shall also prepare a corrective action plan for current year 
audit findings. The summary schedule of prior audit findings and the 
corrective action plan shall include the reference numbers the auditor 
assigns to audit findings under Sec. 99.510(c). Since the summary 
schedule may include audit findings from multiple years, it shall 
include the fiscal year in which the finding initially occurred.
    (b) Summary schedule of prior audit findings. The summary schedule 
of prior audit findings shall report the status of all audit findings 
included in the prior audit's schedule of findings and questioned costs 
relative to Federal awards. The summary schedule

[[Page 573]]

shall also include audit findings reported in the prior audit's summary 
schedule of prior audit findings except audit findings listed as 
corrected in accordance with paragraph (b)(1) of this section, or no 
longer valid or not warranting further action in accordance with 
paragraph (b)(4) of this section.
    (1) When audit findings were fully corrected, the summary schedule 
need only list the audit findings and state that corrective action was 
taken.
    (2) When audit findings were not corrected or were only partially 
corrected, the summary schedule shall describe the planned corrective 
action as well as any partial corrective action taken.
    (3) When corrective action taken is significantly different from 
corrective action previously reported in a corrective action plan or in 
the Federal agency's or pass-through entity's management decision, the 
summary schedule shall provide an explanation.
    (4) When the auditee believes the audit findings are no longer valid 
or do not warrant further action, the reasons for this position shall be 
described in the summary schedule. A valid reason for considering an 
audit finding as not warranting further action is that all of the 
following have occurred:
    (i) Two years have passed since the audit report in which the 
finding occurred was submitted to the Federal clearinghouse;
    (ii) The Federal agency or pass-through entity is not currently 
following up with the auditee on the audit finding; and
    (iii) A management decision was not issued.
    (c) Corrective action plan. At the completion of the audit, the 
auditee shall prepare a corrective action plan to address each audit 
finding included in the current year auditor's reports. The corrective 
action plan shall provide the name(s) of the contact person(s) 
responsible for corrective action, the corrective action planned, and 
the anticipated completion date. If the auditee does not agree with the 
audit findings or believes corrective action is not required, then the 
corrective action plan shall include an explanation and specific 
reasons.



Sec. 99.320  Report submission.

    (a) General. The audit shall be completed and the data collection 
form described in paragraph (b) of this section and reporting package 
described in paragraph (c) of this section shall be submitted within the 
earlier of 30 days after receipt of the auditor's report(s), or nine 
months after the end of the audit period, unless a longer period is 
agreed to in advance by the cognizant or oversight agency for audit. 
(However, for fiscal years beginning on or before June 30, 1998, the 
audit shall be completed and the data collection form and reporting 
package shall be submitted within the earlier of 30 days after receipt 
of the auditor's report(s), or 13 months after the end of the audit 
period.) Unless restricted by law or regulation, the auditee shall make 
copies available for public inspection.
    (b) Data collection. (1) The auditee shall submit a data collection 
form which states whether the audit was completed in accordance with 
this part and provides information about the auditee, its Federal 
programs, and the results of the audit. The form shall be approved by 
OMB, available from the Federal clearinghouse designated by OMB, and 
include data elements similar to those presented in this paragraph. A 
senior level representative of the auditee (e.g., State controller, 
director of finance, chief executive officer, or chief financial 
officer) shall sign a statement to be included as part of the form 
certifying that: the auditee complied with the requirements of this 
part, the form was prepared in accordance with this part (and the 
instructions accompanying the form), and the information included in the 
form, in its entirety, are accurate and complete.
    (2) The data collection form shall include the following data 
elements:
    (i) The type of report the auditor issued on the financial 
statements of the auditee (i.e., unqualified opinion, qualified opinion, 
adverse opinion, or disclaimer of opinion).
    (ii) Where applicable, a statement that reportable conditions in 
internal control were disclosed by the audit of the financial statements 
and whether any such conditions were material weaknesses.

[[Page 574]]

    (iii) A statement as to whether the audit disclosed any 
noncompliance which is material to the financial statements of the 
auditee.
    (iv) Where applicable, a statement that reportable conditions in 
internal control over major programs were disclosed by the audit and 
whether any such conditions were material weaknesses.
    (v) The type of report the auditor issued on compliance for major 
programs (i.e., unqualified opinion, qualified opinion, adverse opinion, 
or disclaimer of opinion).
    (vi) A list of the Federal awarding agencies which will receive a 
copy of the reporting package pursuant to Sec. 99.320(d)(2).
    (vii) A yes or no statement as to whether the auditee qualified as a 
low-risk auditee under Sec. 99.530.
    (viii) The dollar threshold used to distinguish between Type A and 
Type B programs as defined in Sec. 99.520(b).
    (ix) The Catalog of Federal Domestic Assistance (CFDA) number for 
each Federal program, as applicable.
    (x) The name of each Federal program and identification of each 
major program. Individual programs within a cluster of programs should 
be listed in the same level of detail as they are listed in the schedule 
of expenditures of Federal awards.
    (xi) The amount of expenditures in the schedule of expenditures of 
Federal awards associated with each Federal program.
    (xii) For each Federal program, a yes or no statement as to whether 
there are audit findings in each of the following types of compliance 
requirements and the total amount of any questioned costs:
    (A) Activities allowed or unallowed.
    (B) Allowable costs/cost principles.
    (C) Cash management.
    (D) Davis-Bacon Act.
    (E) Eligibility.
    (F) Equipment and real property management.
    (G) Matching, level of effort, earmarking.
    (H) Period of availability of Federal funds.
    (I) Procurement and suspension and debarment.
    (J) Program income.
    (K) Real property acquisition and relocation assistance.
    (L) Reporting.
    (M) Subrecipient monitoring.
    (N) Special tests and provisions.
    (xiii) Auditee Name, Employer Identification Number(s), Name and 
Title of Certifying Official, Telephone Number, Signature, and Date.
    (xiv) Auditor Name, Name and Title of Contact Person, Auditor 
Address, Auditor Telephone Number, Signature, and Date.
    (xv) Whether the auditee has either a cognizant or oversight agency 
for audit.
    (xvi) The name of the cognizant or oversight agency for audit 
determined in accordance with Sec. 99.400(a) and Sec. 99.400(b), 
respectively.
    (3) Using the information included in the reporting package 
described in paragraph (c) of this section, the auditor shall complete 
the applicable sections of the form. The auditor shall sign a statement 
to be included as part of the data collection form that indicates, at a 
minimum, the source of the information included in the form, the 
auditor's responsibility for the information, that the form is not a 
substitute for the reporting package described in paragraph (c) of this 
section, and that the content of the form is limited to the data 
elements prescribed by OMB.
    (c) Reporting package. The reporting package shall include the:
    (1) Financial statements and schedule of expenditures of Federal 
awards discussed in Sec. 99.310(a) and Sec. 99.310(b), respectively;
    (2) Summary schedule of prior audit findings discussed in 
Sec. 99.315(b);
    (3) Auditor's report(s) discussed in Sec. 99.505; and
    (4) Corrective action plan discussed in Sec. 99.315(c).
    (d) Submission to clearinghouse. All auditees shall submit to the 
Federal clearinghouse designated by OMB the data collection form 
described in paragraph (b) of this section and one copy of the reporting 
package described in paragraph (c) of this section for:
    (1) The Federal clearinghouse to retain as an archival copy; and

[[Page 575]]

    (2) Each Federal awarding agency when the schedule of findings and 
questioned costs disclosed audit findings relating to Federal awards 
that the Federal awarding agency provided directly or the summary 
schedule of prior audit findings reported the status of any audit 
findings relating to Federal awards that the Federal awarding agency 
provided directly.
    (e) Additional submission by subrecipients. (1) In addition to the 
requirements discussed in paragraph (d) of this section, auditees that 
are also subrecipients shall submit to each pass-through entity one copy 
of the reporting package described in paragraph (c) of this section for 
each pass-through entity when the schedule of findings and questioned 
costs disclosed audit findings relating to Federal awards that the pass-
through entity provided or the summary schedule of prior audit findings 
reported the status of any audit findings relating to Federal awards 
that the pass-through entity provided.
    (2) Instead of submitting the reporting package to a pass-through 
entity, when a subrecipient is not required to submit a reporting 
package to a pass-through entity pursuant to paragraph (e)(1) of this 
section, the subrecipient shall provide written notification to the 
pass-through entity that: an audit of the subrecipient was conducted in 
accordance with this part (including the period covered by the audit and 
the name, amount, and CFDA number of the Federal award(s) provided by 
the pass-through entity); the schedule of findings and questioned costs 
disclosed no audit findings relating to the Federal award(s) that the 
pass-through entity provided; and, the summary schedule of prior audit 
findings did not report on the status of any audit findings relating to 
the Federal award(s) that the pass-through entity provided. A 
subrecipient may submit a copy of the reporting package described in 
paragraph (c) of this section to a pass-through entity to comply with 
this notification requirement.
    (f) Requests for report copies. In response to requests by a Federal 
agency or pass-through entity, auditees shall submit the appropriate 
copies of the reporting package described in paragraph (c) of this 
section and, if requested, a copy of any management letters issued by 
the auditor.
    (g) Report retention requirements. Auditees shall keep one copy of 
the data collection form described in paragraph (b) of this section and 
one copy of the reporting package described in paragraph (c) of this 
section on file for three years from the date of submission to the 
Federal clearinghouse designated by OMB. Pass-through entities shall 
keep subrecipients' submissions on file for three years from date of 
receipt.
    (h) Clearinghouse responsibilities. The Federal clearinghouse 
designated by OMB shall distribute the reporting packages received in 
accordance with paragraph (d)(2) of this section and Sec. 99.235(c)(3) 
to applicable Federal awarding agencies, maintain a data base of 
completed audits, provide appropriate information to Federal agencies, 
and follow up with known auditees which have not submitted the required 
data collection forms and reporting packages.
    (i) Clearinghouse address. The address of the Federal clearinghouse 
currently designated by OMB is: Federal Audit Clearinghouse, Bureau of 
the Census, 1201 E. 10th Street, Jeffersonville, IN 47132.
    (j) Electronic filing. Nothing in this part shall preclude 
electronic submissions to the Federal clearinghouse in such manner as 
may be approved by OMB. With OMB approval, the Federal clearinghouse may 
pilot test methods of electronic submissions.



          Subpart D--Federal Agencies and Pass-through Entities



Sec. 99.400  Responsibilities.

    (a) Cognizant agency for audit responsibilities. Recipients 
expending more than $25 million a year in Federal awards shall have a 
cognizant agency for audit. The designated cognizant agency for audit 
shall be the Federal awarding agency that provides the predominant 
amount of direct funding to a recipient unless OMB makes a specific 
cognizant agency for audit assignment. To provide for continuity of 
cognizance, the determination of the predominant amount of direct 
funding

[[Page 576]]

shall be based upon direct Federal awards expended in the recipient's 
fiscal years ending in 1995, 2000, 2005, and every fifth year 
thereafter. For example, audit cognizance for periods ending in 1997 
through 2000 will be determined based on Federal awards expended in 
1995. (However, for States and local governments that expend more than 
$25 million a year in Federal awards and have previously assigned 
cognizant agencies for audit, the requirements of this paragraph are not 
applicable until fiscal years beginning after June 30, 2000.) 
Notwithstanding the manner in which audit cognizance is determined, a 
Federal awarding agency with cognizance for an auditee may reassign 
cognizance to another Federal awarding agency which provides substantial 
direct funding and agrees to be the cognizant agency for audit. Within 
30 days after any reassignment, both the old and the new cognizant 
agency for audit shall notify the auditee, and, if known, the auditor of 
the reassignment. The cognizant agency for audit shall:
    (1) Provide technical audit advice and liaison to auditees and 
auditors.
    (2) Consider auditee requests for extensions to the report 
submission due date required by Sec. 99.320(a). The cognizant agency for 
audit may grant extensions for good cause.
    (3) Obtain or conduct quality control reviews of selected audits 
made by non-Federal auditors, and provide the results, when appropriate, 
to other interested organizations.
    (4) Promptly inform other affected Federal agencies and appropriate 
Federal law enforcement officials of any direct reporting by the auditee 
or its auditor of irregularities or illegal acts, as required by GAGAS 
or laws and regulations.
    (5) Advise the auditor and, where appropriate, the auditee of any 
deficiencies found in the audits when the deficiencies require 
corrective action by the auditor. When advised of deficiencies, the 
auditee shall work with the auditor to take corrective action. If 
corrective action is not taken, the cognizant agency for audit shall 
notify the auditor, the auditee, and applicable Federal awarding 
agencies and pass-through entities of the facts and make recommendations 
for follow-up action. Major inadequacies or repetitive substandard 
performance by auditors shall be referred to appropriate State licensing 
agencies and professional bodies for disciplinary action.
    (6) Coordinate, to the extent practical, audits or reviews made by 
or for Federal agencies that are in addition to the audits made pursuant 
to this part, so that the additional audits or reviews build upon audits 
performed in accordance with this part.
    (7) Coordinate a management decision for audit findings that affect 
the Federal programs of more than one agency.
    (8) Coordinate the audit work and reporting responsibilities among 
auditors to achieve the most cost-effective audit.
    (9) For biennial audits permitted under Sec. 99.220, consider 
auditee requests to qualify as a low-risk auditee under Sec. 99.530(a).
    (b) Oversight agency for audit responsibilities. An auditee which 
does not have a designated cognizant agency for audit will be under the 
general oversight of the Federal agency determined in accordance with 
Sec. 99.105. The oversight agency for audit:
    (1) Shall provide technical advice to auditees and auditors as 
requested.
    (2) May assume all or some of the responsibilities normally 
performed by a cognizant agency for audit.
    (c) Federal awarding agency responsibilities. The Federal awarding 
agency shall perform the following for the Federal awards it makes:
    (1) Identify Federal awards made by informing each recipient of the 
CFDA title and number, award name and number, award year, and if the 
award is for R&D. When some of this information is not available, the 
Federal agency shall provide information necessary to clearly describe 
the Federal award.
    (2) Advise recipients of requirements imposed on them by Federal 
laws, regulations, and the provisions of contracts or grant agreements.
    (3) Ensure that audits are completed and reports are received in a 
timely manner and in accordance with the requirements of this part.
    (4) Provide technical advice and counsel to auditees and auditors as 
requested.

[[Page 577]]

    (5) Issue a management decision on audit findings within six months 
after receipt of the audit report and ensure that the recipient takes 
appropriate and timely corrective action.
    (6) Assign a person responsible for providing annual updates of the 
compliance supplement to OMB.
    (d) Pass-through entity responsibilities. A pass-through entity 
shall perform the following for the Federal awards it makes:
    (1) Identify Federal awards made by informing each subrecipient of 
CFDA title and number, award name and number, award year, if the award 
is R&D, and name of Federal agency. When some of this information is not 
available, the pass-through entity shall provide the best information 
available to describe the Federal award.
    (2) Advise subrecipients of requirements imposed on them by Federal 
laws, regulations, and the provisions of contracts or grant agreements 
as well as any supplemental requirements imposed by the pass-through 
entity.
    (3) Monitor the activities of subrecipients as necessary to ensure 
that Federal awards are used for authorized purposes in compliance with 
laws, regulations, and the provisions of contracts or grant agreements 
and that performance goals are achieved.
    (4) Ensure that subrecipients expending $300,000 or more in Federal 
awards during the subrecipient's fiscal year have met the audit 
requirements of this part for that fiscal year.
    (5) Issue a management decision on audit findings within six months 
after receipt of the subrecipient's audit report and ensure that the 
subrecipient takes appropriate and timely corrective action.
    (6) Consider whether subrecipient audits necessitate adjustment of 
the pass-through entity's own records.
    (7) Require each subrecipient to permit the pass-through entity and 
auditors to have access to the records and financial statements as 
necessary for the pass-through entity to comply with this part.



Sec. 99.405  Management decision.

    (a) General. The management decision shall clearly state whether or 
not the audit finding is sustained, the reasons for the decision, and 
the expected auditee action to repay disallowed costs, make financial 
adjustments, or take other action. If the auditee has not completed 
corrective action, a timetable for follow-up should be given. Prior to 
issuing the management decision, the Federal agency or pass-through 
entity may request additional information or documentation from the 
auditee, including a request for auditor assurance related to the 
documentation, as a way of mitigating disallowed costs. The management 
decision should describe any appeal process available to the auditee.
    (b) Federal agency. As provided in Sec. 99.400(a)(7), the cognizant 
agency for audit shall be responsible for coordinating a management 
decision for audit findings that affect the programs of more than one 
Federal agency. As provided in Sec. 99.400(c)(5), a Federal awarding 
agency is responsible for issuing a management decision for findings 
that relate to Federal awards it makes to recipients. Alternate 
arrangements may be made on a case-by-case basis by agreement among the 
Federal agencies concerned.
    (c) Pass-through entity. As provided in Sec. 99.400(d)(5), the pass-
through entity shall be responsible for making the management decision 
for audit findings that relate to Federal awards it makes to 
subrecipients.
    (d) Time requirements. The entity responsible for making the 
management decision shall do so within six months of receipt of the 
audit report. Corrective action should be initiated within six months 
after receipt of the audit report and proceed as rapidly as possible.
    (e) Reference numbers. Management decisions shall include the 
reference numbers the auditor assigned to each audit finding in 
accordance with Sec. 99.510(c).



                           Subpart E--Auditors



Sec. 99.500  Scope of audit.

    (a) General. The audit shall be conducted in accordance with GAGAS. 
The audit shall cover the entire operations of the auditee; or, at the 
option of the auditee, such audit shall include a series of audits that 
cover departments,

[[Page 578]]

agencies, and other organizational units which expended or otherwise 
administered Federal awards during such fiscal year, provided that each 
such audit shall encompass the financial statements and schedule of 
expenditures of Federal awards for each such department, agency, and 
other organizational unit, which shall be considered to be a non-Federal 
entity. The financial statements and schedule of expenditures of Federal 
awards shall be for the same fiscal year.
    (b) Financial statements. The auditor shall determine whether the 
financial statements of the auditee are presented fairly in all material 
respects in conformity with generally accepted accounting principles. 
The auditor shall also determine whether the schedule of expenditures of 
Federal awards is presented fairly in all material respects in relation 
to the auditee's financial statements taken as a whole.
    (c) Internal control. (1) In addition to the requirements of GAGAS, 
the auditor shall perform procedures to obtain an understanding of 
internal control over Federal programs sufficient to plan the audit to 
support a low assessed level of control risk for major programs.
    (2) Except as provided in paragraph (c)(3) of this section, the 
auditor shall:
    (i) Plan the testing of internal control over major programs to 
support a low assessed level of control risk for the assertions relevant 
to the compliance requirements for each major program; and
    (ii) Perform testing of internal control as planned in paragraph 
(c)(2)(i) of this section.
    (3) When internal control over some or all of the compliance 
requirements for a major program are likely to be ineffective in 
preventing or detecting noncompliance, the planning and performing of 
testing described in paragraph (c)(2) of this section are not required 
for those compliance requirements. However, the auditor shall report a 
reportable condition (including whether any such condition is a material 
weakness) in accordance with Sec. 99.510, assess the related control 
risk at the maximum, and consider whether additional compliance tests 
are required because of ineffective internal control.
    (d) Compliance. (1) In addition to the requirements of GAGAS, the 
auditor shall determine whether the auditee has complied with laws, 
regulations, and the provisions of contracts or grant agreements that 
may have a direct and material effect on each of its major programs.
    (2) The principal compliance requirements applicable to most Federal 
programs and the compliance requirements of the largest Federal programs 
are included in the compliance supplement.
    (3) For the compliance requirements related to Federal programs 
contained in the compliance supplement, an audit of these compliance 
requirements will meet the requirements of this part. Where there have 
been changes to the compliance requirements and the changes are not 
reflected in the compliance supplement, the auditor shall determine the 
current compliance requirements and modify the audit procedures 
accordingly. For those Federal programs not covered in the compliance 
supplement, the auditor should use the types of compliance requirements 
contained in the compliance supplement as guidance for identifying the 
types of compliance requirements to test, and determine the requirements 
governing the Federal program by reviewing the provisions of contracts 
and grant agreements and the laws and regulations referred to in such 
contracts and grant agreements.
    (4) The compliance testing shall include tests of transactions and 
such other auditing procedures necessary to provide the auditor 
sufficient evidence to support an opinion on compliance.
    (e) Audit follow-up. The auditor shall follow-up on prior audit 
findings; perform procedures to assess the reasonableness of the summary 
schedule of prior audit findings prepared by the auditee in accordance 
with Sec. 99.315(b); and report, as a current year audit finding, when 
the auditor concludes that the summary schedule of prior audit findings 
materially misrepresents the status of any prior audit finding. The 
auditor shall perform audit follow-up procedures regardless of

[[Page 579]]

whether a prior audit finding relates to a major program in the current 
year.
    (f) Data collection form. As required in Sec. 99.320(b)(3), the 
auditor shall complete and sign specified sections of the data 
collection form.



Sec. 99.505  Audit reporting.

    The auditor's report(s) may be in the form of either combined or 
separate reports and may be organized differently from the manner 
presented in this section. The auditor's report(s) shall state that the 
audit was conducted in accordance with this part and include the 
following:
    (a) An opinion (or disclaimer of opinion) as to whether the 
financial statements are presented fairly in all material respects in 
conformity with generally accepted accounting principles and an opinion 
(or disclaimer of opinion) as to whether the schedule of expenditures of 
Federal awards is presented fairly in all material respects in relation 
to the financial statements taken as a whole.
    (b) A report on internal control related to the financial statements 
and major programs. This report shall describe the scope of testing of 
internal control and the results of the tests, and, where applicable, 
refer to the separate schedule of findings and questioned costs 
described in paragraph (d) of this section.
    (c) A report on compliance with laws, regulations, and the 
provisions of contracts or grant agreements, noncompliance with which 
could have a material effect on the financial statements. This report 
shall also include an opinion (or disclaimer of opinion) as to whether 
the auditee complied with laws, regulations, and the provisions of 
contracts or grant agreements which could have a direct and material 
effect on each major program, and, where applicable, refer to the 
separate schedule of findings and questioned costs described in 
paragraph (d) of this section.
    (d) A schedule of findings and questioned costs which shall include 
the following three components:
    (1) A summary of the auditor's results which shall include:
    (i) The type of report the auditor issued on the financial 
statements of the auditee (i.e., unqualified opinion, qualified opinion, 
adverse opinion, or disclaimer of opinion);
    (ii) Where applicable, a statement that reportable conditions in 
internal control were disclosed by the audit of the financial statements 
and whether any such conditions were material weaknesses;
    (iii) A statement as to whether the audit disclosed any 
noncompliance which is material to the financial statements of the 
auditee;
    (iv) Where applicable, a statement that reportable conditions in 
internal control over major programs were disclosed by the audit and 
whether any such conditions were material weaknesses;
    (v) The type of report the auditor issued on compliance for major 
programs (i.e., unqualified opinion, qualified opinion, adverse opinion, 
or disclaimer of opinion);
    (vi) A statement as to whether the audit disclosed any audit 
findings which the auditor is required to report under Sec. 99.510(a);
    (vii) An identification of major programs;
    (viii) The dollar threshold used to distinguish between Type A and 
Type B programs, as described in Sec. 99.520(b); and
    (ix) A statement as to whether the auditee qualified as a low-risk 
auditee under Sec. 99.530.
    (2) Findings relating to the financial statements which are required 
to be reported in accordance with GAGAS.
    (3) Findings and questioned costs for Federal awards which shall 
include audit findings as defined in Sec. 99.510(a).
    (i) Audit findings (e.g., internal control findings, compliance 
findings, questioned costs, or fraud) which relate to the same issue 
should be presented as a single audit finding. Where practical, audit 
findings should be organized by Federal agency or pass-through entity.
    (ii) Audit findings which relate to both the financial statements 
and Federal awards, as reported under paragraphs (d)(2) and (d)(3) of 
this section, respectively, should be reported in both sections of the 
schedule. However, the reporting in one section of the schedule

[[Page 580]]

may be in summary form with a reference to a detailed reporting in the 
other section of the schedule.



Sec. 99.510  Audit findings.

    (a) Audit findings reported. The auditor shall report the following 
as audit findings in a schedule of findings and questioned costs:
    (1) Reportable conditions in internal control over major programs. 
The auditor's determination of whether a deficiency in internal control 
is a reportable condition for the purpose of reporting an audit finding 
is in relation to a type of compliance requirement for a major program 
or an audit objective identified in the compliance supplement. The 
auditor shall identify reportable conditions which are individually or 
cumulatively material weaknesses.
    (2) Material noncompliance with the provisions of laws, regulations, 
contracts, or grant agreements related to a major program. The auditor's 
determination of whether a noncompliance with the provisions of laws, 
regulations, contracts, or grant agreements is material for the purpose 
of reporting an audit finding is in relation to a type of compliance 
requirement for a major program or an audit objective identified in the 
compliance supplement.
    (3) Known questioned costs which are greater than $10,000 for a type 
of compliance requirement for a major program. Known questioned costs 
are those specifically identified by the auditor. In evaluating the 
effect of questioned costs on the opinion on compliance, the auditor 
considers the best estimate of total costs questioned (likely questioned 
costs), not just the questioned costs specifically identified (known 
questioned costs). The auditor shall also report known questioned costs 
when likely questioned costs are greater than $10,000 for a type of 
compliance requirement for a major program. In reporting questioned 
costs, the auditor shall include information to provide proper 
perspective for judging the prevalence and consequences of the 
questioned costs.
    (4) Known questioned costs which are greater than $10,000 for a 
Federal program which is not audited as a major program. Except for 
audit follow-up, the auditor is not required under this part to perform 
audit procedures for such a Federal program; therefore, the auditor will 
normally not find questioned costs for a program which is not audited as 
a major program. However, if the auditor does become aware of questioned 
costs for a Federal program which is not audited as a major program 
(e.g., as part of audit follow-up or other audit procedures) and the 
known questioned costs are greater than $10,000, then the auditor shall 
report this as an audit finding.
    (5) The circumstances concerning why the auditor's report on 
compliance for major programs is other than an unqualified opinion, 
unless such circumstances are otherwise reported as audit findings in 
the schedule of findings and questioned costs for Federal awards.
    (6) Known fraud affecting a Federal award, unless such fraud is 
otherwise reported as an audit finding in the schedule of findings and 
questioned costs for Federal awards. This paragraph does not require the 
auditor to make an additional reporting when the auditor confirms that 
the fraud was reported outside of the auditor's reports under the direct 
reporting requirements of GAGAS.
    (7) Instances where the results of audit follow-up procedures 
disclosed that the summary schedule of prior audit findings prepared by 
the auditee in accordance with Sec. 99.315(b) materially misrepresents 
the status of any prior audit finding.
    (b) Audit finding detail. Audit findings shall be presented in 
sufficient detail for the auditee to prepare a corrective action plan 
and take corrective action and for Federal agencies and pass-through 
entities to arrive at a management decision. The following specific 
information shall be included, as applicable, in audit findings:
    (1) Federal program and specific Federal award identification 
including the CFDA title and number, Federal award number and year, name 
of Federal agency, and name of the applicable pass-through entity. When 
information, such as the CFDA title and number or Federal award number, 
is not available, the auditor shall provide the

[[Page 581]]

best information available to describe the Federal award.
    (2) The criteria or specific requirement upon which the audit 
finding is based, including statutory, regulatory, or other citation.
    (3) The condition found, including facts that support the deficiency 
identified in the audit finding.
    (4) Identification of questioned costs and how they were computed.
    (5) Information to provide proper perspective for judging the 
prevalence and consequences of the audit findings, such as whether the 
audit findings represent an isolated instance or a systemic problem. 
Where appropriate, instances identified shall be related to the universe 
and the number of cases examined and be quantified in terms of dollar 
value.
    (6) The possible asserted effect to provide sufficient information 
to the auditee and Federal agency, or pass-through entity in the case of 
a subrecipient, to permit them to determine the cause and effect to 
facilitate prompt and proper corrective action.
    (7) Recommendations to prevent future occurrences of the deficiency 
identified in the audit finding.
    (8) Views of responsible officials of the auditee when there is 
disagreement with the audit findings, to the extent practical.
    (c) Reference numbers. Each audit finding in the schedule of 
findings and questioned costs shall include a reference number to allow 
for easy referencing of the audit findings during follow-up.



Sec. 99.515  Audit working papers.

    (a) Retention of working papers. The auditor shall retain working 
papers and reports for a minimum of three years after the date of 
issuance of the auditor's report(s) to the auditee, unless the auditor 
is notified in writing by the cognizant agency for audit, oversight 
agency for audit, or pass-through entity to extend the retention period. 
When the auditor is aware that the Federal awarding agency, pass-through 
entity, or auditee is contesting an audit finding, the auditor shall 
contact the parties contesting the audit finding for guidance prior to 
destruction of the working papers and reports.
    (b) Access to working papers. Audit working papers shall be made 
available upon request to the cognizant or oversight agency for audit or 
its designee, a Federal agency providing direct or indirect funding, or 
GAO at the completion of the audit, as part of a quality review, to 
resolve audit findings, or to carry out oversight responsibilities 
consistent with the purposes of this part. Access to working papers 
includes the right of Federal agencies to obtain copies of working 
papers, as is reasonable and necessary.



Sec. 99.520  Major program determination.

    (a) General. The auditor shall use a risk-based approach to 
determine which Federal programs are major programs. This risk-based 
approach shall include consideration of: Current and prior audit 
experience, oversight by Federal agencies and pass-through entities, and 
the inherent risk of the Federal program. The process in paragraphs (b) 
through (i) of this section shall be followed.
    (b) Step 1. (1) The auditor shall identify the larger Federal 
programs, which shall be labeled Type A programs. Type A programs are 
defined as Federal programs with Federal awards expended during the 
audit period exceeding the larger of:
    (i) $300,000 or three percent (.03) of total Federal awards expended 
in the case of an auditee for which total Federal awards expended equal 
or exceed $300,000 but are less than or equal to $100 million.
    (ii) $3 million or three-tenths of one percent (.003) of total 
Federal awards expended in the case of an auditee for which total 
Federal awards expended exceed $100 million but are less than or equal 
to $10 billion.
    (iii) $30 million or 15 hundredths of one percent (.0015) of total 
Federal awards expended in the case of an auditee for which total 
Federal awards expended exceed $10 billion.
    (2) Federal programs not labeled Type A under paragraph (b)(1) of 
this section shall be labeled Type B programs.

[[Page 582]]

    (3) The inclusion of large loan and loan guarantees (loans) should 
not result in the exclusion of other programs as Type A programs. When a 
Federal program providing loans significantly affects the number or size 
of Type A programs, the auditor shall consider this Federal program as a 
Type A program and exclude its values in determining other Type A 
programs.
    (4) For biennial audits permitted under Sec. 99.220, the 
determination of Type A and Type B programs shall be based upon the 
Federal awards expended during the two-year period.
    (c) Step 2. (1) The auditor shall identify Type A programs which are 
low-risk. For a Type A program to be considered low-risk, it shall have 
been audited as a major program in at least one of the two most recent 
audit periods (in the most recent audit period in the case of a biennial 
audit), and, in the most recent audit period, it shall have had no audit 
findings under Sec. 99.510(a). However, the auditor may use judgment and 
consider that audit findings from questioned costs under 
Sec. 99.510(a)(3) and Sec. 99.510(a)(4), fraud under Sec. 99.510(a)(6), 
and audit follow-up for the summary schedule of prior audit findings 
under Sec. 99.510(a)(7) do not preclude the Type A program from being 
low-risk. The auditor shall consider: the criteria in Sec. 99.525(c), 
Sec. 99.525(d)(1), Sec. 99.525(d)(2), and Sec. 99.525(d)(3); the results 
of audit follow-up; whether any changes in personnel or systems 
affecting a Type A program have significantly increased risk; and apply 
professional judgment in determining whether a Type A program is low-
risk.
    (2) Notwithstanding paragraph (c)(1) of this section, OMB may 
approve a Federal awarding agency's request that a Type A program at 
certain recipients may not be considered low-risk. For example, it may 
be necessary for a large Type A program to be audited as major each year 
at particular recipients to allow the Federal agency to comply with the 
Government Management Reform Act of 1994 (31 U.S.C. 3515). The Federal 
agency shall notify the recipient and, if known, the auditor at least 
180 days prior to the end of the fiscal year to be audited of OMB's 
approval.
    (d) Step 3. (1) The auditor shall identify Type B programs which are 
high-risk using professional judgment and the criteria in Sec. 99.525. 
However, should the auditor select Option 2 under Step 4 (paragraph 
(e)(2)(i)(B) of this section), the auditor is not required to identify 
more high-risk Type B programs than the number of low-risk Type A 
programs. Except for known reportable conditions in internal control or 
compliance problems as discussed in Sec. 99.525(b)(1), 
Sec. 99.525(b)(2), and Sec. 99.525(c)(1), a single criteria in 
Sec. 99.525 would seldom cause a Type B program to be considered high-
risk.
    (2) The auditor is not expected to perform risk assessments on 
relatively small Federal programs. Therefore, the auditor is only 
required to perform risk assessments on Type B programs that exceed the 
larger of:
    (i) $100,000 or three-tenths of one percent (.003) of total Federal 
awards expended when the auditee has less than or equal to $100 million 
in total Federal awards expended.
    (ii) $300,000 or three-hundredths of one percent (.0003) of total 
Federal awards expended when the auditee has more than $100 million in 
total Federal awards expended.
    (e) Step 4. At a minimum, the auditor shall audit all of the 
following as major programs:
    (1) All Type A programs, except the auditor may exclude any Type A 
programs identified as low-risk under Step 2 (paragraph (c)(1) of this 
section).
    (2)(i) High-risk Type B programs as identified under either of the 
following two options:
    (A) Option 1. At least one half of the Type B programs identified as 
high-risk under Step 3 (paragraph (d) of this section), except this 
paragraph (e)(2)(i)(A) does not require the auditor to audit more high-
risk Type B programs than the number of low-risk Type A programs 
identified as low-risk under Step 2.
    (B) Option 2. One high-risk Type B program for each Type A program 
identified as low-risk under Step 2.
    (ii) When identifying which high-risk Type B programs to audit as 
major under either Option 1 or 2 in paragraph (e)(2)(i)(A) or (B), the 
auditor is encouraged to use an approach which provides

[[Page 583]]

an opportunity for different high-risk Type B programs to be audited as 
major over a period of time.
    (3) Such additional programs as may be necessary to comply with the 
percentage of coverage rule discussed in paragraph (f) of this section. 
This paragraph (e)(3) may require the auditor to audit more programs as 
major than the number of Type A programs.
    (f) Percentage of coverage rule. The auditor shall audit as major 
programs Federal programs with Federal awards expended that, in the 
aggregate, encompass at least 50 percent of total Federal awards 
expended. If the auditee meets the criteria in Sec. 99.530 for a low-
risk auditee, the auditor need only audit as major programs Federal 
programs with Federal awards expended that, in the aggregate, encompass 
at least 25 percent of total Federal awards expended.
    (g) Documentation of risk. The auditor shall document in the working 
papers the risk analysis process used in determining major programs.
    (h) Auditor's judgment. When the major program determination was 
performed and documented in accordance with this part, the auditor's 
judgment in applying the risk-based approach to determine major programs 
shall be presumed correct. Challenges by Federal agencies and pass-
through entities shall only be for clearly improper use of the guidance 
in this part. However, Federal agencies and pass-through entities may 
provide auditors guidance about the risk of a particular Federal program 
and the auditor shall consider this guidance in determining major 
programs in audits not yet completed.
    (i) Deviation from use of risk criteria. For first-year audits, the 
auditor may elect to determine major programs as all Type A programs 
plus any Type B programs as necessary to meet the percentage of coverage 
rule discussed in paragraph (f) of this section. Under this option, the 
auditor would not be required to perform the procedures discussed in 
paragraphs (c), (d), and (e) of this section.
    (1) A first-year audit is the first year the entity is audited under 
this part or the first year of a change of auditors.
    (2) To ensure that a frequent change of auditors would not preclude 
audit of high-risk Type B programs, this election for first-year audits 
may not be used by an auditee more than once in every three years.



Sec. 99.525  Criteria for Federal program risk.

    (a) General. The auditor's determination should be based on an 
overall evaluation of the risk of noncompliance occurring which could be 
material to the Federal program. The auditor shall use auditor judgment 
and consider criteria, such as described in paragraphs (b), (c), and (d) 
of this section, to identify risk in Federal programs. Also, as part of 
the risk analysis, the auditor may wish to discuss a particular Federal 
program with auditee management and the Federal agency or pass-through 
entity.
    (b) Current and prior audit experience. (1) Weaknesses in internal 
control over Federal programs would indicate higher risk. Consideration 
should be given to the control environment over Federal programs and 
such factors as the expectation of management's adherence to applicable 
laws and regulations and the provisions of contracts and grant 
agreements and the competence and experience of personnel who administer 
the Federal programs.
    (i) A Federal program administered under multiple internal control 
structures may have higher risk. When assessing risk in a large single 
audit, the auditor shall consider whether weaknesses are isolated in a 
single operating unit (e.g., one college campus) or pervasive throughout 
the entity.
    (ii) When significant parts of a Federal program are passed through 
to subrecipients, a weak system for monitoring subrecipients would 
indicate higher risk.
    (iii) The extent to which computer processing is used to administer 
Federal programs, as well as the complexity of that processing, should 
be considered by the auditor in assessing risk. New and recently 
modified computer systems may also indicate risk.
    (2) Prior audit findings would indicate higher risk, particularly 
when the situations identified in the audit findings could have a 
significant impact on a Federal program or have not been corrected.

[[Page 584]]

    (3) Federal programs not recently audited as major programs may be 
of higher risk than Federal programs recently audited as major programs 
without audit findings.
    (c) Oversight exercised by Federal agencies and pass-through 
entities. (1) Oversight exercised by Federal agencies or pass-through 
entities could indicate risk. For example, recent monitoring or other 
reviews performed by an oversight entity which disclosed no significant 
problems would indicate lower risk. However, monitoring which disclosed 
significant problems would indicate higher risk.
    (2) Federal agencies, with the concurrence of OMB, may identify 
Federal programs which are higher risk. The OMB plans to provide this 
identification in the compliance supplement.
    (d) Inherent risk of the Federal program. (1) The nature of a 
Federal program may indicate risk. Consideration should be given to the 
complexity of the program and the extent to which the Federal program 
contracts for goods and services. For example, Federal programs that 
disburse funds through third party contracts or have eligibility 
criteria may be of higher risk. Federal programs primarily involving 
staff payroll costs may have a high-risk for time and effort reporting, 
but otherwise be at low-risk.
    (2) The phase of a Federal program in its life cycle at the Federal 
agency may indicate risk. For example, a new Federal program with new or 
interim regulations may have higher risk than an established program 
with time-tested regulations. Also, significant changes in Federal 
programs, laws, regulations, or the provisions of contracts or grant 
agreements may increase risk.
    (3) The phase of a Federal program in its life cycle at the auditee 
may indicate risk. For example, during the first and last years that an 
auditee participates in a Federal program, the risk may be higher due to 
start-up or closeout of program activities and staff.
    (4) Type B programs with larger Federal awards expended would be of 
higher risk than programs with substantially smaller Federal awards 
expended.



Sec. 99.530  Criteria for a low-risk auditee.

    An auditee which meets all of the following conditions for each of 
the preceding two years (or, in the case of biennial audits, preceding 
two audit periods) shall qualify as a low-risk auditee and be eligible 
for reduced audit coverage in accordance with Sec. 99.520:
    (a) Single audits were performed on an annual basis in accordance 
with the provisions of this part. A non-Federal entity that has biennial 
audits does not qualify as a low-risk auditee, unless agreed to in 
advance by the cognizant or oversight agency for audit.
    (b) The auditor's opinions on the financial statements and the 
schedule of expenditures of Federal awards were unqualified. However, 
the cognizant or oversight agency for audit may judge that an opinion 
qualification does not affect the management of Federal awards and 
provide a waiver.
    (c) There were no deficiencies in internal control which were 
identified as material weaknesses under the requirements of GAGAS. 
However, the cognizant or oversight agency for audit may judge that any 
identified material weaknesses do not affect the management of Federal 
awards and provide a waiver.
    (d) None of the Federal programs had audit findings from any of the 
following in either of the preceding two years (or, in the case of 
biennial audits, preceding two audit periods) in which they were 
classified as Type A programs:
    (1) Internal control deficiencies which were identified as material 
weaknesses;
    (2) Noncompliance with the provisions of laws, regulations, 
contracts, or grant agreements which have a material effect on the Type 
A program; or
    (3) Known or likely questioned costs that exceed five percent of the 
total Federal awards expended for a Type A program during the year.


[[Page 585]]



                              FINDING AIDS




  --------------------------------------------------------------------

  A list of CFR titles, subtitles, chapters, subchapters and parts and 
an alphabetical list of agencies publishing in the CFR are included in 
the CFR Index and Finding Aids volume to the Code of Federal Regulations 
which is published separately and revised annually.

  Table of CFR Titles and Chapters
  Alphabetical List of Agencies Appearing in the CFR
  List of CFR Sections Affected



[[Page 587]]



                    Table of CFR Titles and Chapters




                      (Revised as of June 23, 2000)

                      Title 1--General Provisions

         I  Administrative Committee of the Federal Register 
                (Parts 1--49)
        II  Office of the Federal Register (Parts 50--299)
        IV  Miscellaneous Agencies (Parts 400--500)

                          Title 2--[Reserved]

                        Title 3--The President

         I  Executive Office of the President (Parts 100--199)

                           Title 4--Accounts

         I  General Accounting Office (Parts 1--99)
        II  Federal Claims Collection Standards (General 
                Accounting Office--Department of Justice) (Parts 
                100--299)

                   Title 5--Administrative Personnel

         I  Office of Personnel Management (Parts 1--1199)
        II  Merit Systems Protection Board (Parts 1200--1299)
       III  Office of Management and Budget (Parts 1300--1399)
         V  The International Organizations Employees Loyalty 
                Board (Parts 1500--1599)
        VI  Federal Retirement Thrift Investment Board (Parts 
                1600--1699)
       VII  Advisory Commission on Intergovernmental Relations 
                (Parts 1700--1799)
      VIII  Office of Special Counsel (Parts 1800--1899)
        IX  Appalachian Regional Commission (Parts 1900--1999)
        XI  Armed Forces Retirement Home (Part 2100)
       XIV  Federal Labor Relations Authority, General Counsel of 
                the Federal Labor Relations Authority and Federal 
                Service Impasses Panel (Parts 2400--2499)
        XV  Office of Administration, Executive Office of the 
                President (Parts 2500--2599)
       XVI  Office of Government Ethics (Parts 2600--2699)
       XXI  Department of the Treasury (Parts 3100--3199)
      XXII  Federal Deposit Insurance Corporation (Part 3201)

[[Page 588]]

     XXIII  Department of Energy (Part 3301)
      XXIV  Federal Energy Regulatory Commission (Part 3401)
       XXV  Department of the Interior (Part 3501)
      XXVI  Department of Defense (Part 3601)
    XXVIII  Department of Justice (Part 3801)
      XXIX  Federal Communications Commission (Parts 3900--3999)
       XXX  Farm Credit System Insurance Corporation (Parts 4000--
                4099)
      XXXI  Farm Credit Administration (Parts 4100--4199)
    XXXIII  Overseas Private Investment Corporation (Part 4301)
      XXXV  Office of Personnel Management (Part 4501)
        XL  Interstate Commerce Commission (Part 5001)
       XLI  Commodity Futures Trading Commission (Part 5101)
      XLII  Department of Labor (Part 5201)
     XLIII  National Science Foundation (Part 5301)
       XLV  Department of Health and Human Services (Part 5501)
      XLVI  Postal Rate Commission (Part 5601)
     XLVII  Federal Trade Commission (Part 5701)
    XLVIII  Nuclear Regulatory Commission (Part 5801)
         L  Department of Transportation (Part 6001)
       LII  Export-Import Bank of the United States (Part 6201)
      LIII  Department of Education (Parts 6300--6399)
       LIV  Environmental Protection Agency (Part 6401)
      LVII  General Services Administration (Part 6701)
     LVIII  Board of Governors of the Federal Reserve System (Part 
                6801)
       LIX  National Aeronautics and Space Administration (Part 
                6901)
        LX  United States Postal Service (Part 7001)
       LXI  National Labor Relations Board (Part 7101)
      LXII  Equal Employment Opportunity Commission (Part 7201)
     LXIII  Inter-American Foundation (Part 7301)
       LXV  Department of Housing and Urban Development (Part 
                7501)
      LXVI  National Archives and Records Administration (Part 
                7601)
      LXIX  Tennessee Valley Authority (Part 7901)
      LXXI  Consumer Product Safety Commission (Part 8101)
    LXXIII  Department of Agriculture (Part 8301)
     LXXIV  Federal Mine Safety and Health Review Commission (Part 
                8401)
     LXXVI  Federal Retirement Thrift Investment Board (Part 8601)
    LXXVII  Office of Management and Budget (Part 8701)

                          Title 6--[Reserved]

                         Title 7--Agriculture

            Subtitle A--Office of the Secretary of Agriculture 
                (Parts 0--26)
            Subtitle B--Regulations of the Department of 
                Agriculture

[[Page 589]]

         I  Agricultural Marketing Service (Standards, 
                Inspections, Marketing Practices), Department of 
                Agriculture (Parts 27--209)
        II  Food and Nutrition Service, Department of Agriculture 
                (Parts 210--299)
       III  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 300--399)
        IV  Federal Crop Insurance Corporation, Department of 
                Agriculture (Parts 400--499)
         V  Agricultural Research Service, Department of 
                Agriculture (Parts 500--599)
        VI  Natural Resources Conservation Service, Department of 
                Agriculture (Parts 600--699)
       VII  Farm Service Agency, Department of Agriculture (Parts 
                700--799)
      VIII  Grain Inspection, Packers and Stockyards 
                Administration (Federal Grain Inspection Service), 
                Department of Agriculture (Parts 800--899)
        IX  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Fruits, Vegetables, Nuts), Department 
                of Agriculture (Parts 900--999)
         X  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Milk), Department of Agriculture 
                (Parts 1000--1199)
        XI  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Miscellaneous Commodities), Department 
                of Agriculture (Parts 1200--1299)
      XIII  Northeast Dairy Compact Commission (Parts 1300--1399)
       XIV  Commodity Credit Corporation, Department of 
                Agriculture (Parts 1400--1499)
        XV  Foreign Agricultural Service, Department of 
                Agriculture (Parts 1500--1599)
       XVI  Rural Telephone Bank, Department of Agriculture (Parts 
                1600--1699)
      XVII  Rural Utilities Service, Department of Agriculture 
                (Parts 1700--1799)
     XVIII  Rural Housing Service, Rural Business-Cooperative 
                Service, Rural Utilities Service, and Farm Service 
                Agency, Department of Agriculture (Parts 1800--
                2099)
      XXVI  Office of Inspector General, Department of Agriculture 
                (Parts 2600--2699)
     XXVII  Office of Information Resources Management, Department 
                of Agriculture (Parts 2700--2799)
    XXVIII  Office of Operations, Department of Agriculture (Parts 
                2800--2899)
      XXIX  Office of Energy, Department of Agriculture (Parts 
                2900--2999)
       XXX  Office of the Chief Financial Officer, Department of 
                Agriculture (Parts 3000--3099)
      XXXI  Office of Environmental Quality, Department of 
                Agriculture (Parts 3100--3199)
     XXXII  Office of Procurement and Property Management, 
                Department of Agriculture (Parts 3200--3299)

[[Page 590]]

    XXXIII  Office of Transportation, Department of Agriculture 
                (Parts 3300--3399)
     XXXIV  Cooperative State Research, Education, and Extension 
                Service, Department of Agriculture (Parts 3400--
                3499)
      XXXV  Rural Housing Service, Department of Agriculture 
                (Parts 3500--3599)
     XXXVI  National Agricultural Statistics Service, Department 
                of Agriculture (Parts 3600--3699)
    XXXVII  Economic Research Service, Department of Agriculture 
                (Parts 3700--3799)
   XXXVIII  World Agricultural Outlook Board, Department of 
                Agriculture (Parts 3800--3899)
       XLI  [Reserved]
      XLII  Rural Business-Cooperative Service and Rural Utilities 
                Service, Department of Agriculture (Parts 4200--
                4299)

                    Title 8--Aliens and Nationality

         I  Immigration and Naturalization Service, Department of 
                Justice (Parts 1--599)

                 Title 9--Animals and Animal Products

         I  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 1--199)
        II  Grain Inspection, Packers and Stockyards 
                Administration (Packers and Stockyards Programs), 
                Department of Agriculture (Parts 200--299)
       III  Food Safety and Inspection Service, Department of 
                Agriculture (Parts 300--599)

                           Title 10--Energy

         I  Nuclear Regulatory Commission (Parts 0--199)
        II  Department of Energy (Parts 200--699)
       III  Department of Energy (Parts 700--999)
         X  Department of Energy (General Provisions) (Parts 
                1000--1099)
      XVII  Defense Nuclear Facilities Safety Board (Parts 1700--
                1799)
     XVIII  Northeast Interstate Low-Level Radioactive Waste 
                Commission (Part 1800)

                      Title 11--Federal Elections

         I  Federal Election Commission (Parts 1--9099)

                      Title 12--Banks and Banking

         I  Comptroller of the Currency, Department of the 
                Treasury (Parts 1--199)

[[Page 591]]

        II  Federal Reserve System (Parts 200--299)
       III  Federal Deposit Insurance Corporation (Parts 300--399)
        IV  Export-Import Bank of the United States (Parts 400--
                499)
         V  Office of Thrift Supervision, Department of the 
                Treasury (Parts 500--599)
        VI  Farm Credit Administration (Parts 600--699)
       VII  National Credit Union Administration (Parts 700--799)
      VIII  Federal Financing Bank (Parts 800--899)
        IX  Federal Housing Finance Board (Parts 900--999)
        XI  Federal Financial Institutions Examination Council 
                (Parts 1100--1199)
       XIV  Farm Credit System Insurance Corporation (Parts 1400--
                1499)
        XV  Department of the Treasury (Parts 1500--1599)
      XVII  Office of Federal Housing Enterprise Oversight, 
                Department of Housing and Urban Development (Parts 
                1700--1799)
     XVIII  Community Development Financial Institutions Fund, 
                Department of the Treasury (Parts 1800--1899)

               Title 13--Business Credit and Assistance

         I  Small Business Administration (Parts 1--199)
       III  Economic Development Administration, Department of 
                Commerce (Parts 300--399)
        IV  Emergency Steel Guarantee Loan Board (Parts 400--499)
         V  Emergency Oil and Gas Guaranteed Loan Board (Parts 
                500--599)

                    Title 14--Aeronautics and Space

         I  Federal Aviation Administration, Department of 
                Transportation (Parts 1--199)
        II  Office of the Secretary, Department of Transportation 
                (Aviation Proceedings) (Parts 200--399)
       III  Commercial Space Transportation, Federal Aviation 
                Administration, Department of Transportation 
                (Parts 400--499)
         V  National Aeronautics and Space Administration (Parts 
                1200--1299)

                 Title 15--Commerce and Foreign Trade

            Subtitle A--Office of the Secretary of Commerce (Parts 
                0--29)
            Subtitle B--Regulations Relating to Commerce and 
                Foreign Trade
         I  Bureau of the Census, Department of Commerce (Parts 
                30--199)
        II  National Institute of Standards and Technology, 
                Department of Commerce (Parts 200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)

[[Page 592]]

        IV  Foreign-Trade Zones Board, Department of Commerce 
                (Parts 400--499)
       VII  Bureau of Export Administration, Department of 
                Commerce (Parts 700--799)
      VIII  Bureau of Economic Analysis, Department of Commerce 
                (Parts 800--899)
        IX  National Oceanic and Atmospheric Administration, 
                Department of Commerce (Parts 900--999)
        XI  Technology Administration, Department of Commerce 
                (Parts 1100--1199)
      XIII  East-West Foreign Trade Board (Parts 1300--1399)
       XIV  Minority Business Development Agency (Parts 1400--
                1499)
            Subtitle C--Regulations Relating to Foreign Trade 
                Agreements
        XX  Office of the United States Trade Representative 
                (Parts 2000--2099)
            Subtitle D--Regulations Relating to Telecommunications 
                and Information
     XXIII  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                2300--2399)

                    Title 16--Commercial Practices

         I  Federal Trade Commission (Parts 0--999)
        II  Consumer Product Safety Commission (Parts 1000--1799)

             Title 17--Commodity and Securities Exchanges

         I  Commodity Futures Trading Commission (Parts 1--199)
        II  Securities and Exchange Commission (Parts 200--399)
        IV  Department of the Treasury (Parts 400--499)

          Title 18--Conservation of Power and Water Resources

         I  Federal Energy Regulatory Commission, Department of 
                Energy (Parts 1--399)
       III  Delaware River Basin Commission (Parts 400--499)
        VI  Water Resources Council (Parts 700--799)
      VIII  Susquehanna River Basin Commission (Parts 800--899)
      XIII  Tennessee Valley Authority (Parts 1300--1399)

                       Title 19--Customs Duties

         I  United States Customs Service, Department of the 
                Treasury (Parts 1--199)
        II  United States International Trade Commission (Parts 
                200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)

[[Page 593]]

                     Title 20--Employees' Benefits

         I  Office of Workers' Compensation Programs, Department 
                of Labor (Parts 1--199)
        II  Railroad Retirement Board (Parts 200--399)
       III  Social Security Administration (Parts 400--499)
        IV  Employees' Compensation Appeals Board, Department of 
                Labor (Parts 500--599)
         V  Employment and Training Administration, Department of 
                Labor (Parts 600--699)
        VI  Employment Standards Administration, Department of 
                Labor (Parts 700--799)
       VII  Benefits Review Board, Department of Labor (Parts 
                800--899)
      VIII  Joint Board for the Enrollment of Actuaries (Parts 
                900--999)
        IX  Office of the Assistant Secretary for Veterans' 
                Employment and Training, Department of Labor 
                (Parts 1000--1099)

                       Title 21--Food and Drugs

         I  Food and Drug Administration, Department of Health and 
                Human Services (Parts 1--1299)
        II  Drug Enforcement Administration, Department of Justice 
                (Parts 1300--1399)
       III  Office of National Drug Control Policy (Parts 1400--
                1499)

                      Title 22--Foreign Relations

         I  Department of State (Parts 1--199)
        II  Agency for International Development (Parts 200--299)
       III  Peace Corps (Parts 300--399)
        IV  International Joint Commission, United States and 
                Canada (Parts 400--499)
         V  Broadcasting Board of Governors (Parts 500--599)
       VII  Overseas Private Investment Corporation (Parts 700--
                799)
        IX  Foreign Service Grievance Board Regulations (Parts 
                900--999)
         X  Inter-American Foundation (Parts 1000--1099)
        XI  International Boundary and Water Commission, United 
                States and Mexico, United States Section (Parts 
                1100--1199)
       XII  United States International Development Cooperation 
                Agency (Parts 1200--1299)
      XIII  Board for International Broadcasting (Parts 1300--
                1399)
       XIV  Foreign Service Labor Relations Board; Federal Labor 
                Relations Authority; General Counsel of the 
                Federal Labor Relations Authority; and the Foreign 
                Service Impasse Disputes Panel (Parts 1400--1499)
        XV  African Development Foundation (Parts 1500--1599)
       XVI  Japan-United States Friendship Commission (Parts 
                1600--1699)
      XVII  United States Institute of Peace (Parts 1700--1799)

[[Page 594]]

                          Title 23--Highways

         I  Federal Highway Administration, Department of 
                Transportation (Parts 1--999)
        II  National Highway Traffic Safety Administration and 
                Federal Highway Administration, Department of 
                Transportation (Parts 1200--1299)
       III  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 1300--1399)

                Title 24--Housing and Urban Development

            Subtitle A--Office of the Secretary, Department of 
                Housing and Urban Development (Parts 0--99)
            Subtitle B--Regulations Relating to Housing and Urban 
                Development
         I  Office of Assistant Secretary for Equal Opportunity, 
                Department of Housing and Urban Development (Parts 
                100--199)
        II  Office of Assistant Secretary for Housing-Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 200--299)
       III  Government National Mortgage Association, Department 
                of Housing and Urban Development (Parts 300--399)
        IV  Office of Housing and Office of Multifamily Housing 
                Assistance Restructuring, Department of Housing 
                and Urban Development (Parts 400--499)
         V  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 500--599)
        VI  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 600--699) [Reserved]
       VII  Office of the Secretary, Department of Housing and 
                Urban Development (Housing Assistance Programs and 
                Public and Indian Housing Programs) (Parts 700--
                799)
      VIII  Office of the Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Section 8 Housing Assistance 
                Programs, Section 202 Direct Loan Program, Section 
                202 Supportive Housing for the Elderly Program and 
                Section 811 Supportive Housing for Persons With 
                Disabilities Program) (Parts 800--899)
        IX  Office of Assistant Secretary for Public and Indian 
                Housing, Department of Housing and Urban 
                Development (Parts 900--999)
         X  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Interstate Land Sales 
                Registration Program) (Parts 1700--1799)
       XII  Office of Inspector General, Department of Housing and 
                Urban Development (Parts 2000--2099)
        XX  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 3200--3899)
       XXV  Neighborhood Reinvestment Corporation (Parts 4100--
                4199)

[[Page 595]]

                           Title 25--Indians

         I  Bureau of Indian Affairs, Department of the Interior 
                (Parts 1--299)
        II  Indian Arts and Crafts Board, Department of the 
                Interior (Parts 300--399)
       III  National Indian Gaming Commission, Department of the 
                Interior (Parts 500--599)
        IV  Office of Navajo and Hopi Indian Relocation (Parts 
                700--799)
         V  Bureau of Indian Affairs, Department of the Interior, 
                and Indian Health Service, Department of Health 
                and Human Services (Part 900)
        VI  Office of the Assistant Secretary-Indian Affairs, 
                Department of the Interior (Part 1001)
       VII  Office of the Special Trustee for American Indians, 
                Department of the Interior (Part 1200)

                      Title 26--Internal Revenue

         I  Internal Revenue Service, Department of the Treasury 
                (Parts 1--799)

           Title 27--Alcohol, Tobacco Products and Firearms

         I  Bureau of Alcohol, Tobacco and Firearms, Department of 
                the Treasury (Parts 1--299)

                   Title 28--Judicial Administration

         I  Department of Justice (Parts 0--199)
       III  Federal Prison Industries, Inc., Department of Justice 
                (Parts 300--399)
         V  Bureau of Prisons, Department of Justice (Parts 500--
                599)
        VI  Offices of Independent Counsel, Department of Justice 
                (Parts 600--699)
       VII  Office of Independent Counsel (Parts 700--799)

                            Title 29--Labor

            Subtitle A--Office of the Secretary of Labor (Parts 
                0--99)
            Subtitle B--Regulations Relating to Labor
         I  National Labor Relations Board (Parts 100--199)
        II  Office of Labor-Management Standards, Department of 
                Labor (Parts 200--299)
       III  National Railroad Adjustment Board (Parts 300--399)
        IV  Office of Labor-Management Standards, Department of 
                Labor (Parts 400--499)
         V  Wage and Hour Division, Department of Labor (Parts 
                500--899)
        IX  Construction Industry Collective Bargaining Commission 
                (Parts 900--999)
         X  National Mediation Board (Parts 1200--1299)

[[Page 596]]

       XII  Federal Mediation and Conciliation Service (Parts 
                1400--1499)
       XIV  Equal Employment Opportunity Commission (Parts 1600--
                1699)
      XVII  Occupational Safety and Health Administration, 
                Department of Labor (Parts 1900--1999)
        XX  Occupational Safety and Health Review Commission 
                (Parts 2200--2499)
       XXV  Pension and Welfare Benefits Administration, 
                Department of Labor (Parts 2500--2599)
     XXVII  Federal Mine Safety and Health Review Commission 
                (Parts 2700--2799)
        XL  Pension Benefit Guaranty Corporation (Parts 4000--
                4999)

                      Title 30--Mineral Resources

         I  Mine Safety and Health Administration, Department of 
                Labor (Parts 1--199)
        II  Minerals Management Service, Department of the 
                Interior (Parts 200--299)
       III  Board of Surface Mining and Reclamation Appeals, 
                Department of the Interior (Parts 300--399)
        IV  Geological Survey, Department of the Interior (Parts 
                400--499)
        VI  Bureau of Mines, Department of the Interior (Parts 
                600--699)
       VII  Office of Surface Mining Reclamation and Enforcement, 
                Department of the Interior (Parts 700--999)

                 Title 31--Money and Finance: Treasury

            Subtitle A--Office of the Secretary of the Treasury 
                (Parts 0--50)
            Subtitle B--Regulations Relating to Money and Finance
         I  Monetary Offices, Department of the Treasury (Parts 
                51--199)
        II  Fiscal Service, Department of the Treasury (Parts 
                200--399)
        IV  Secret Service, Department of the Treasury (Parts 
                400--499)
         V  Office of Foreign Assets Control, Department of the 
                Treasury (Parts 500--599)
        VI  Bureau of Engraving and Printing, Department of the 
                Treasury (Parts 600--699)
       VII  Federal Law Enforcement Training Center, Department of 
                the Treasury (Parts 700--799)
      VIII  Office of International Investment, Department of the 
                Treasury (Parts 800--899)

                      Title 32--National Defense

            Subtitle A--Department of Defense
         I  Office of the Secretary of Defense (Parts 1--399)
         V  Department of the Army (Parts 400--699)
        VI  Department of the Navy (Parts 700--799)

[[Page 597]]

       VII  Department of the Air Force (Parts 800--1099)
            Subtitle B--Other Regulations Relating to National 
                Defense
       XII  Defense Logistics Agency (Parts 1200--1299)
       XVI  Selective Service System (Parts 1600--1699)
     XVIII  National Counterintelligence Center (Parts 1800--1899)
       XIX  Central Intelligence Agency (Parts 1900--1999)
        XX  Information Security Oversight Office, National 
                Archives and Records Administration (Parts 2000--
                2099)
       XXI  National Security Council (Parts 2100--2199)
      XXIV  Office of Science and Technology Policy (Parts 2400--
                2499)
     XXVII  Office for Micronesian Status Negotiations (Parts 
                2700--2799)
    XXVIII  Office of the Vice President of the United States 
                (Parts 2800--2899)

               Title 33--Navigation and Navigable Waters

         I  Coast Guard, Department of Transportation (Parts 1--
                199)
        II  Corps of Engineers, Department of the Army (Parts 
                200--399)
        IV  Saint Lawrence Seaway Development Corporation, 
                Department of Transportation (Parts 400--499)

                          Title 34--Education

            Subtitle A--Office of the Secretary, Department of 
                Education (Parts 1--99)
            Subtitle B--Regulations of the Offices of the 
                Department of Education
         I  Office for Civil Rights, Department of Education 
                (Parts 100--199)
        II  Office of Elementary and Secondary Education, 
                Department of Education (Parts 200--299)
       III  Office of Special Education and Rehabilitative 
                Services, Department of Education (Parts 300--399)
        IV  Office of Vocational and Adult Education, Department 
                of Education (Parts 400--499)
         V  Office of Bilingual Education and Minority Languages 
                Affairs, Department of Education (Parts 500--599)
        VI  Office of Postsecondary Education, Department of 
                Education (Parts 600--699)
       VII  Office of Educational Research and Improvement, 
                Department of Education (Parts 700--799)
        XI  National Institute for Literacy (Parts 1100--1199)
            Subtitle C--Regulations Relating to Education
       XII  National Council on Disability (Parts 1200--1299)

                        Title 35--Panama Canal

         I  Panama Canal Regulations (Parts 1--299)

[[Page 598]]

             Title 36--Parks, Forests, and Public Property

         I  National Park Service, Department of the Interior 
                (Parts 1--199)
        II  Forest Service, Department of Agriculture (Parts 200--
                299)
       III  Corps of Engineers, Department of the Army (Parts 
                300--399)
        IV  American Battle Monuments Commission (Parts 400--499)
         V  Smithsonian Institution (Parts 500--599)
       VII  Library of Congress (Parts 700--799)
      VIII  Advisory Council on Historic Preservation (Parts 800--
                899)
        IX  Pennsylvania Avenue Development Corporation (Parts 
                900--999)
         X  Presidio Trust (Parts 1000--1099)
        XI  Architectural and Transportation Barriers Compliance 
                Board (Parts 1100--1199)
       XII  National Archives and Records Administration (Parts 
                1200--1299)
       XIV  Assassination Records Review Board (Parts 1400--1499)
        XV  Oklahoma City National Memorial Trust (Part 1501)

             Title 37--Patents, Trademarks, and Copyrights

         I  Patent and Trademark Office, Department of Commerce 
                (Parts 1--199)
        II  Copyright Office, Library of Congress (Parts 200--299)
        IV  Assistant Secretary for Technology Policy, Department 
                of Commerce (Parts 400--499)
         V  Under Secretary for Technology, Department of Commerce 
                (Parts 500--599)

           Title 38--Pensions, Bonuses, and Veterans' Relief

         I  Department of Veterans Affairs (Parts 0--99)

                       Title 39--Postal Service

         I  United States Postal Service (Parts 1--999)
       III  Postal Rate Commission (Parts 3000--3099)

                  Title 40--Protection of Environment

         I  Environmental Protection Agency (Parts 1--799)
         V  Council on Environmental Quality (Parts 1500--1599)
       VII  Environmental Protection Agency and Department of 
                Defense; Uniform National Discharge Standards for 
                Vessels of the Armed Forces (Parts 1700--1799)

          Title 41--Public Contracts and Property Management

            Subtitle B--Other Provisions Relating to Public 
                Contracts
        50  Public Contracts, Department of Labor (Parts 50-1--50-
                999)

[[Page 599]]

        51  Committee for Purchase From People Who Are Blind or 
                Severely Disabled (Parts 51-1--51-99)
        60  Office of Federal Contract Compliance Programs, Equal 
                Employment Opportunity, Department of Labor (Parts 
                60-1--60-999)
        61  Office of the Assistant Secretary for Veterans 
                Employment and Training, Department of Labor 
                (Parts 61-1--61-999)
            Subtitle C--Federal Property Management Regulations 
                System
       101  Federal Property Management Regulations (Parts 101-1--
                101-99)
       102  Federal Management Regulation (Parts 102-1--102-299)
       105  General Services Administration (Parts 105-1--105-999)
       109  Department of Energy Property Management Regulations 
                (Parts 109-1--109-99)
       114  Department of the Interior (Parts 114-1--114-99)
       115  Environmental Protection Agency (Parts 115-1--115-99)
       128  Department of Justice (Parts 128-1--128-99)
            Subtitle D--Other Provisions Relating to Property 
                Management [Reserved]
            Subtitle E--Federal Information Resources Management 
                Regulations System
       201  Federal Information Resources Management Regulation 
                (Parts 201-1--201-99) [Reserved]
            Subtitle F--Federal Travel Regulation System
       300  General (Parts 300-1--300.99)
       301  Temporary Duty (TDY) Travel Allowances (Parts 301-1--
                301-99)
       302  Relocation Allowances (Parts 302-1--302-99)
       303  Payment of Expenses Connected with the Death of 
                Certain Employees (Part 303-70)
       304  Payment from a Non-Federal Source for Travel Expenses 
                (Parts 304-1--304-99)

                        Title 42--Public Health

         I  Public Health Service, Department of Health and Human 
                Services (Parts 1--199)
        IV  Health Care Financing Administration, Department of 
                Health and Human Services (Parts 400--499)
         V  Office of Inspector General-Health Care, Department of 
                Health and Human Services (Parts 1000--1999)

                   Title 43--Public Lands: Interior

            Subtitle A--Office of the Secretary of the Interior 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Lands
         I  Bureau of Reclamation, Department of the Interior 
                (Parts 200--499)
        II  Bureau of Land Management, Department of the Interior 
                (Parts 1000--9999)

[[Page 600]]

       III  Utah Reclamation Mitigation and Conservation 
                Commission (Parts 10000--10005)

             Title 44--Emergency Management and Assistance

         I  Federal Emergency Management Agency (Parts 0--399)
        IV  Department of Commerce and Department of 
                Transportation (Parts 400--499)

                       Title 45--Public Welfare

            Subtitle A--Department of Health and Human Services 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Welfare
        II  Office of Family Assistance (Assistance Programs), 
                Administration for Children and Families, 
                Department of Health and Human Services (Parts 
                200--299)
       III  Office of Child Support Enforcement (Child Support 
                Enforcement Program), Administration for Children 
                and Families, Department of Health and Human 
                Services (Parts 300--399)
        IV  Office of Refugee Resettlement, Administration for 
                Children and Families Department of Health and 
                Human Services (Parts 400--499)
         V  Foreign Claims Settlement Commission of the United 
                States, Department of Justice (Parts 500--599)
        VI  National Science Foundation (Parts 600--699)
       VII  Commission on Civil Rights (Parts 700--799)
      VIII  Office of Personnel Management (Parts 800--899)
         X  Office of Community Services, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 1000--1099)
        XI  National Foundation on the Arts and the Humanities 
                (Parts 1100--1199)
       XII  Corporation for National and Community Service (Parts 
                1200--1299)
      XIII  Office of Human Development Services, Department of 
                Health and Human Services (Parts 1300--1399)
       XVI  Legal Services Corporation (Parts 1600--1699)
      XVII  National Commission on Libraries and Information 
                Science (Parts 1700--1799)
     XVIII  Harry S. Truman Scholarship Foundation (Parts 1800--
                1899)
       XXI  Commission on Fine Arts (Parts 2100--2199)
     XXIII  Arctic Research Commission (Part 2301)
      XXIV  James Madison Memorial Fellowship Foundation (Parts 
                2400--2499)
       XXV  Corporation for National and Community Service (Parts 
                2500--2599)

[[Page 601]]

                          Title 46--Shipping

         I  Coast Guard, Department of Transportation (Parts 1--
                199)
        II  Maritime Administration, Department of Transportation 
                (Parts 200--399)
       III  Coast Guard (Great Lakes Pilotage), Department of 
                Transportation (Parts 400--499)
        IV  Federal Maritime Commission (Parts 500--599)

                      Title 47--Telecommunication

         I  Federal Communications Commission (Parts 0--199)
        II  Office of Science and Technology Policy and National 
                Security Council (Parts 200--299)
       III  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                300--399)

           Title 48--Federal Acquisition Regulations System

         1  Federal Acquisition Regulation (Parts 1--99)
         2  Department of Defense (Parts 200--299)
         3  Department of Health and Human Services (Parts 300--
                399)
         4  Department of Agriculture (Parts 400--499)
         5  General Services Administration (Parts 500--599)
         6  Department of State (Parts 600--699)
         7  United States Agency for International Development 
                (Parts 700--799)
         8  Department of Veterans Affairs (Parts 800--899)
         9  Department of Energy (Parts 900--999)
        10  Department of the Treasury (Parts 1000--1099)
        12  Department of Transportation (Parts 1200--1299)
        13  Department of Commerce (Parts 1300--1399)
        14  Department of the Interior (Parts 1400--1499)
        15  Environmental Protection Agency (Parts 1500--1599)
        16  Office of Personnel Management Federal Employees 
                Health Benefits Acquisition Regulation (Parts 
                1600--1699)
        17  Office of Personnel Management (Parts 1700--1799)
        18  National Aeronautics and Space Administration (Parts 
                1800--1899)
        19  Broadcasting Board of Governors (Parts 1900--1999)
        20  Nuclear Regulatory Commission (Parts 2000--2099)
        21  Office of Personnel Management, Federal Employees 
                Group Life Insurance Federal Acquisition 
                Regulation (Parts 2100--2199)
        23  Social Security Administration (Parts 2300--2399)
        24  Department of Housing and Urban Development (Parts 
                2400--2499)
        25  National Science Foundation (Parts 2500--2599)
        28  Department of Justice (Parts 2800--2899)
        29  Department of Labor (Parts 2900--2999)

[[Page 602]]

        34  Department of Education Acquisition Regulation (Parts 
                3400--3499)
        35  Panama Canal Commission (Parts 3500--3599)
        44  Federal Emergency Management Agency (Parts 4400--4499)
        51  Department of the Army Acquisition Regulations (Parts 
                5100--5199)
        52  Department of the Navy Acquisition Regulations (Parts 
                5200--5299)
        53  Department of the Air Force Federal Acquisition 
                Regulation Supplement (Parts 5300--5399)
        54  Defense Logistics Agency, Department of Defense (Part 
                5452)
        57  African Development Foundation (Parts 5700--5799)
        61  General Services Administration Board of Contract 
                Appeals (Parts 6100--6199)
        63  Department of Transportation Board of Contract Appeals 
                (Parts 6300--6399)
        99  Cost Accounting Standards Board, Office of Federal 
                Procurement Policy, Office of Management and 
                Budget (Parts 9900--9999)

                       Title 49--Transportation

            Subtitle A--Office of the Secretary of Transportation 
                (Parts 1--99)
            Subtitle B--Other Regulations Relating to 
                Transportation
         I  Research and Special Programs Administration, 
                Department of Transportation (Parts 100--199)
        II  Federal Railroad Administration, Department of 
                Transportation (Parts 200--299)
       III  Federal Motor Carrier Safety Administration, 
                Department of Transportation (Parts 300--399)
        IV  Coast Guard, Department of Transportation (Parts 400--
                499)
         V  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 500--599)
        VI  Federal Transit Administration, Department of 
                Transportation (Parts 600--699)
       VII  National Railroad Passenger Corporation (AMTRAK) 
                (Parts 700--799)
      VIII  National Transportation Safety Board (Parts 800--999)
         X  Surface Transportation Board, Department of 
                Transportation (Parts 1000--1399)
        XI  Bureau of Transportation Statistics, Department of 
                Transportation (Parts 1400--1499)

                   Title 50--Wildlife and Fisheries

         I  United States Fish and Wildlife Service, Department of 
                the Interior (Parts 1--199)

[[Page 603]]

        II  National Marine Fisheries Service, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 200--299)
       III  International Fishing and Related Activities (Parts 
                300--399)
        IV  Joint Regulations (United States Fish and Wildlife 
                Service, Department of the Interior and National 
                Marine Fisheries Service, National Oceanic and 
                Atmospheric Administration, Department of 
                Commerce); Endangered Species Committee 
                Regulations (Parts 400--499)
         V  Marine Mammal Commission (Parts 500--599)
        VI  Fishery Conservation and Management, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 600--699)

                      CFR Index and Finding Aids

            Subject/Agency Index
            List of Agency Prepared Indexes
            Parallel Tables of Statutory Authorities and Rules
            List of CFR Titles, Chapters, Subchapters, and Parts
            Alphabetical List of Agencies Appearing in the CFR



[[Page 605]]





           Alphabetical List of Agencies Appearing in the CFR




                      (Revised as of June 23, 2000)

                                                  CFR Title, Subtitle or 
                     Agency                               Chapter

Administrative Committee of the Federal Register  1, I
Advanced Research Projects Agency                 32, I
Advisory Commission on Intergovernmental          5, VII
     Relations
Advisory Council on Historic Preservation         36, VIII
African Development Foundation                    22, XV
  Federal Acquisition Regulation                  48, 57
Agency for International Development, United      22, II
     States
  Federal Acquisition Regulation                  48, 7
Agricultural Marketing Service                    7, I, IX, X, XI
Agricultural Research Service                     7, V
Agriculture Department                            5, LXXIII
  Agricultural Marketing Service                  7, I, IX, X, XI
  Agricultural Research Service                   7, V
  Animal and Plant Health Inspection Service      7, III; 9, I
  Chief Financial Officer, Office of              7, XXX
  Commodity Credit Corporation                    7, XIV
  Cooperative State Research, Education, and      7, XXXIV
       Extension Service
  Economic Research Service                       7, XXXVII
  Energy, Office of                               7, XXIX
  Environmental Quality, Office of                7, XXXI
  Farm Service Agency                             7, VII, XVIII
  Federal Acquisition Regulation                  48, 4
  Federal Crop Insurance Corporation              7, IV
  Food and Nutrition Service                      7, II
  Food Safety and Inspection Service              9, III
  Foreign Agricultural Service                    7, XV
  Forest Service                                  36, II
  Grain Inspection, Packers and Stockyards        7, VIII; 9, II
       Administration
  Information Resources Management, Office of     7, XXVII
  Inspector General, Office of                    7, XXVI
  National Agricultural Library                   7, XLI
  National Agricultural Statistics Service        7, XXXVI
  Natural Resources Conservation Service          7, VI
  Operations, Office of                           7, XXVIII
  Procurement and Property Management, Office of  7, XXXII
  Rural Business-Cooperative Service              7, XVIII, XLII
  Rural Development Administration                7, XLII
  Rural Housing Service                           7, XVIII, XXXV
  Rural Telephone Bank                            7, XVI
  Rural Utilities Service                         7, XVII, XVIII, XLII
  Secretary of Agriculture, Office of             7, Subtitle A
  Transportation, Office of                       7, XXXIII
  World Agricultural Outlook Board                7, XXXVIII
Air Force Department                              32, VII
  Federal Acquisition Regulation Supplement       48, 53
Alcohol, Tobacco and Firearms, Bureau of          27, I
AMTRAK                                            49, VII
American Battle Monuments Commission              36, IV
American Indians, Office of the Special Trustee   25, VII
Animal and Plant Health Inspection Service        7, III; 9, I
Appalachian Regional Commission                   5, IX
Architectural and Transportation Barriers         36, XI
   Compliance Board
[[Page 606]]

Arctic Research Commission                        45, XXIII
Armed Forces Retirement Home                      5, XI
Army Department                                   32, V
  Engineers, Corps of                             33, II; 36, III
  Federal Acquisition Regulation                  48, 51
Assassination Records Review Board                36, XIV
Benefits Review Board                             20, VII
Bilingual Education and Minority Languages        34, V
     Affairs, Office of
Blind or Severely Disabled, Committee for         41, 51
     Purchase From People Who Are
Board for International Broadcasting              22, XIII
Broadcasting Board of Governors                   22, V
  Federal Acquisition Regulation                  48, 19
Census Bureau                                     15, I
Central Intelligence Agency                       32, XIX
Chief Financial Officer, Office of                7, XXX
Child Support Enforcement, Office of              45, III
Children and Families, Administration for         45, II, III, IV, X
Civil Rights, Commission on                       45, VII
Civil Rights, Office for                          34, I
Coast Guard                                       33, I; 46, I; 49, IV
Coast Guard (Great Lakes Pilotage)                46, III
Commerce Department                               44, IV
  Census Bureau                                   15, I
  Economic Affairs, Under Secretary               37, V
  Economic Analysis, Bureau of                    15, VIII
  Economic Development Administration             13, III
  Emergency Management and Assistance             44, IV
  Export Administration, Bureau of                15, VII
  Federal Acquisition Regulation                  48, 13
  Fishery Conservation and Management             50, VI
  Foreign-Trade Zones Board                       15, IV
  International Trade Administration              15, III; 19, III
  National Institute of Standards and Technology  15, II
  National Marine Fisheries Service               50, II, IV, VI
  National Oceanic and Atmospheric                15, IX; 50, II, III, IV, 
       Administration                             VI
  National Telecommunications and Information     15, XXIII; 47, III
       Administration
  National Weather Service                        15, IX
  Patent and Trademark Office                     37, I
  Productivity, Technology and Innovation,        37, IV
       Assistant Secretary for
  Secretary of Commerce, Office of                15, Subtitle A
  Technology, Under Secretary for                 37, V
  Technology Administration                       15, XI
  Technology Policy, Assistant Secretary for      37, IV
Commercial Space Transportation                   14, III
Commodity Credit Corporation                      7, XIV
Commodity Futures Trading Commission              5, XLI; 17, I
Community Planning and Development, Office of     24, V, VI
     Assistant Secretary for
Community Services, Office of                     45, X
Comptroller of the Currency                       12, I
Construction Industry Collective Bargaining       29, IX
     Commission
Consumer Product Safety Commission                5, LXXI; 16, II
Cooperative State Research, Education, and        7, XXXIV
     Extension Service
Copyright Office                                  37, II
Corporation for National and Community Service    45, XII, XXV
Cost Accounting Standards Board                   48, 99
Council on Environmental Quality                  40, V
Customs Service, United States                    19, I
Defense Contract Audit Agency                     32, I
Defense Department                                5, XXVI; 32, Subtitle A; 
                                                  40, VII
  Advanced Research Projects Agency               32, I
  Air Force Department                            32, VII

[[Page 607]]

  Army Department                                 32, V; 33, II; 36, III, 
                                                  48, 51
  Defense Intelligence Agency                     32, I
  Defense Logistics Agency                        32, I, XII; 48, 54
  Engineers, Corps of                             33, II; 36, III
  Federal Acquisition Regulation                  48, 2
  National Imagery and Mapping Agency             32, I
  Navy Department                                 32, VI; 48, 52
  Secretary of Defense, Office of                 32, I
Defense Contract Audit Agency                     32, I
Defense Intelligence Agency                       32, I
Defense Logistics Agency                          32, XII; 48, 54
Defense Nuclear Facilities Safety Board           10, XVII
Delaware River Basin Commission                   18, III
Drug Enforcement Administration                   21, II
East-West Foreign Trade Board                     15, XIII
Economic Affairs, Under Secretary                 37, V
Economic Analysis, Bureau of                      15, VIII
Economic Development Administration               13, III
Economic Research Service                         7, XXXVII
Education, Department of                          5, LIII
  Bilingual Education and Minority Languages      34, V
       Affairs, Office of
  Civil Rights, Office for                        34, I
  Educational Research and Improvement, Office    34, VII
       of
  Elementary and Secondary Education, Office of   34, II
  Federal Acquisition Regulation                  48, 34
  Postsecondary Education, Office of              34, VI
  Secretary of Education, Office of               34, Subtitle A
  Special Education and Rehabilitative Services,  34, III
       Office of
  Vocational and Adult Education, Office of       34, IV
Educational Research and Improvement, Office of   34, VII
Elementary and Secondary Education, Office of     34, II
Emergency Oil and Gas Guaranteed Loan Board       13, V
Emergency Steel Guarantee Loan Board              13, IV
Employees' Compensation Appeals Board             20, IV
Employees Loyalty Board                           5, V
Employment and Training Administration            20, V
Employment Standards Administration               20, VI
Endangered Species Committee                      50, IV
Energy, Department of                             5, XXIII; 10, II, III, X
  Federal Acquisition Regulation                  48, 9
  Federal Energy Regulatory Commission            5, XXIV; 18, I
  Property Management Regulations                 41, 109
Energy, Office of                                 7, XXIX
Engineers, Corps of                               33, II; 36, III
Engraving and Printing, Bureau of                 31, VI
Environmental Protection Agency                   5, LIV; 40, I, VII
  Federal Acquisition Regulation                  48, 15
  Property Management Regulations                 41, 115
Environmental Quality, Office of                  7, XXXI
Equal Employment Opportunity Commission           5, LXII; 29, XIV
Equal Opportunity, Office of Assistant Secretary  24, I
     for
Executive Office of the President                 3, I
  Administration, Office of                       5, XV
  Environmental Quality, Council on               40, V
  Management and Budget, Office of                25, III, LXXVII; 48, 99
  National Drug Control Policy, Office of         21, III
  National Security Council                       32, XXI; 47, 2
  Presidential Documents                          3
  Science and Technology Policy, Office of        32, XXIV; 47, II
  Trade Representative, Office of the United      15, XX
       States
Export Administration, Bureau of                  15, VII
Export-Import Bank of the United States           5, LII; 12, IV
Family Assistance, Office of                      45, II
Farm Credit Administration                        5, XXXI; 12, VI
Farm Credit System Insurance Corporation          5, XXX; 12, XIV

[[Page 608]]

Farm Service Agency                               7, VII, XVIII
Federal Acquisition Regulation                    48, 1
Federal Aviation Administration                   14, I
  Commercial Space Transportation                 14, III
Federal Claims Collection Standards               4, II
Federal Communications Commission                 5, XXIX; 47, I
Federal Contract Compliance Programs, Office of   41, 60
Federal Crop Insurance Corporation                7, IV
Federal Deposit Insurance Corporation             5, XXII; 12, III
Federal Election Commission                       11, I
Federal Emergency Management Agency               44, I
  Federal Acquisition Regulation                  48, 44
Federal Employees Group Life Insurance Federal    48, 21
     Acquisition Regulation
Federal Employees Health Benefits Acquisition     48, 16
     Regulation
Federal Energy Regulatory Commission              5, XXIV; 18, I
Federal Financial Institutions Examination        12, XI
     Council
Federal Financing Bank                            12, VIII
Federal Highway Administration                    23, I, II
Federal Home Loan Mortgage Corporation            1, IV
Federal Housing Enterprise Oversight Office       12, XVII
Federal Housing Finance Board                     12, IX
Federal Labor Relations Authority, and General    5, XIV; 22, XIV
     Counsel of the Federal Labor Relations 
     Authority
Federal Law Enforcement Training Center           31, VII
Federal Management Regulation                     41, 102
Federal Maritime Commission                       46, IV
Federal Mediation and Conciliation Service        29, XII
Federal Mine Safety and Health Review Commission  5, LXXIV; 29, XXVII
Federal Motor Carrier Safety Administration       49, III
Federal Prison Industries, Inc.                   28, III
Federal Procurement Policy Office                 48, 99
Federal Property Management Regulations           41, 101
Federal Railroad Administration                   49, II
Federal Register, Administrative Committee of     1, I
Federal Register, Office of                       1, II
Federal Reserve System                            12, II
  Board of Governors                              5, LVIII
Federal Retirement Thrift Investment Board        5, VI, LXXVI
Federal Service Impasses Panel                    5, XIV
Federal Trade Commission                          5, XLVII; 16, I
Federal Transit Administration                    49, VI
Federal Travel Regulation System                  41, Subtitle F
Fine Arts, Commission on                          45, XXI
Fiscal Service                                    31, II
Fish and Wildlife Service, United States          50, I, IV
Fishery Conservation and Management               50, VI
Food and Drug Administration                      21, I
Food and Nutrition Service                        7, II
Food Safety and Inspection Service                9, III
Foreign Agricultural Service                      7, XV
Foreign Assets Control, Office of                 31, V
Foreign Claims Settlement Commission of the       45, V
     United States
Foreign Service Grievance Board                   22, IX
Foreign Service Impasse Disputes Panel            22, XIV
Foreign Service Labor Relations Board             22, XIV
Foreign-Trade Zones Board                         15, IV
Forest Service                                    36, II
General Accounting Office                         4, I, II
General Services Administration                   5, LVII; 41, 105
  Contract Appeals, Board of                      48, 61
  Federal Acquisition Regulation                  48, 5
  Federal Management Regulation                   41, 102
  Federal Property Management Regulations         41, 101
  Federal Travel Regulation System                41, Subtitle F
  General                                         41, 300
  Payment From a Non-Federal Source for Travel    41, 304
     Expenses
[[Page 609]]

  Payment of Expenses Connected With the Death    41, 303
       of Certain Employees
  Relocation Allowances                           41, 302
  Temporary Duty (TDY) Travel Allowances          41, 301
Geological Survey                                 30, IV
Government Ethics, Office of                      5, XVI
Government National Mortgage Association          24, III
Grain Inspection, Packers and Stockyards          7, VIII; 9, II
     Administration
Harry S. Truman Scholarship Foundation            45, XVIII
Health and Human Services, Department of          5, XLV; 45, Subtitle A
  Child Support Enforcement, Office of            45, III
  Children and Families, Administration for       45, II, III, IV, X
  Community Services, Office of                   45, X
  Family Assistance, Office of                    45, II
  Federal Acquisition Regulation                  48, 3
  Food and Drug Administration                    21, I
  Health Care Financing Administration            42, IV
  Human Development Services, Office of           45, XIII
  Indian Health Service                           25, V
  Inspector General (Health Care), Office of      42, V
  Public Health Service                           42, I
  Refugee Resettlement, Office of                 45, IV
Health Care Financing Administration              42, IV
Housing and Urban Development, Department of      5, LXV; 24, Subtitle B
  Community Planning and Development, Office of   24, V, VI
       Assistant Secretary for
  Equal Opportunity, Office of Assistant          24, I
       Secretary for
  Federal Acquisition Regulation                  48, 24
  Federal Housing Enterprise Oversight, Office    12, XVII
       of
  Government National Mortgage Association        24, III
  Housing--Federal Housing Commissioner, Office   24, II, VIII, X, XX
       of Assistant Secretary for
  Inspector General, Office of                    24, XII
  Multifamily Housing Assistance Restructuring,   24, IV
       Office of
  Public and Indian Housing, Office of Assistant  24, IX
       Secretary for
  Secretary, Office of                            24, Subtitle A, VII
Housing--Federal Housing Commissioner, Office of  24, II, VIII, X, XX
     Assistant Secretary for
Human Development Services, Office of             45, XIII
Immigration and Naturalization Service            8, I
Independent Counsel, Office of                    28, VII
Indian Affairs, Bureau of                         25, I, V
Indian Affairs, Office of the Assistant           25, VI
     Secretary
Indian Arts and Crafts Board                      25, II
Indian Health Service                             25, V
Information Resources Management, Office of       7, XXVII
Information Security Oversight Office, National   32, XX
     Archives and Records Administration
Inspector General
  Agriculture Department                          7, XXVI
  Health and Human Services Department            42, V
  Housing and Urban Development Department        24, XII
Institute of Peace, United States                 22, XVII
Inter-American Foundation                         5, LXIII; 22, X
Intergovernmental Relations, Advisory Commission  5, VII
     on
Interior Department
  American Indians, Office of the Special         25, VII
       Trustee
  Endangered Species Committee                    50, IV
  Federal Acquisition Regulation                  48, 14
  Federal Property Management Regulations System  41, 114
  Fish and Wildlife Service, United States        50, I, IV
  Geological Survey                               30, IV
  Indian Affairs, Bureau of                       25, I, V
  Indian Affairs, Office of the Assistant         25, VI
       Secretary
  Indian Arts and Crafts Board                    25, II
  Land Management, Bureau of                      43, II
  Minerals Management Service                     30, II

[[Page 610]]

  Mines, Bureau of                                30, VI
  National Indian Gaming Commission               25, III
  National Park Service                           36, I
  Reclamation, Bureau of                          43, I
  Secretary of the Interior, Office of            43, Subtitle A
  Surface Mining and Reclamation Appeals, Board   30, III
       of
  Surface Mining Reclamation and Enforcement,     30, VII
       Office of
Internal Revenue Service                          26, I
International Boundary and Water Commission,      22, XI
     United States and Mexico, United States 
     Section
International Development, United States Agency   22, II
     for
  Federal Acquisition Regulation                  48, 7
International Development Cooperation Agency,     22, XII
     United States
International Fishing and Related Activities      50, III
International Investment, Office of               31, VIII
International Joint Commission, United States     22, IV
     and Canada
International Organizations Employees Loyalty     5, V
     Board
International Trade Administration                15, III; 19, III
International Trade Commission, United States     19, II
Interstate Commerce Commission                    5, XL
James Madison Memorial Fellowship Foundation      45, XXIV
Japan-United States Friendship Commission         22, XVI
Joint Board for the Enrollment of Actuaries       20, VIII
Justice Department                                5, XXVIII; 28, I
  Drug Enforcement Administration                 21, II
  Federal Acquisition Regulation                  48, 28
  Federal Claims Collection Standards             4, II
  Federal Prison Industries, Inc.                 28, III
  Foreign Claims Settlement Commission of the     45, V
       United States
  Immigration and Naturalization Service          8, I
  Offices of Independent Counsel                  28, VI
  Prisons, Bureau of                              28, V
  Property Management Regulations                 41, 128
Labor Department                                  5, XLII
  Benefits Review Board                           20, VII
  Employees' Compensation Appeals Board           20, IV
  Employment and Training Administration          20, V
  Employment Standards Administration             20, VI
  Federal Acquisition Regulation                  48, 29
  Federal Contract Compliance Programs, Office    41, 60
       of
  Federal Procurement Regulations System          41, 50
  Labor-Management Standards, Office of           29, II, IV
  Mine Safety and Health Administration           30, I
  Occupational Safety and Health Administration   29, XVII
  Pension and Welfare Benefits Administration     29, XXV
  Public Contracts                                41, 50
  Secretary of Labor, Office of                   29, Subtitle A
  Veterans' Employment and Training, Office of    41, 61; 20, IX
       the Assistant Secretary for
  Wage and Hour Division                          29, V
  Workers' Compensation Programs, Office of       20, I
Labor-Management Standards, Office of             29, II, IV
Land Management, Bureau of                        43, II
Legal Services Corporation                        45, XVI
Library of Congress                               36, VII
  Copyright Office                                37, II
Management and Budget, Office of                  5, III, LXXVII; 48, 99
Marine Mammal Commission                          50, V
Maritime Administration                           46, II
Merit Systems Protection Board                    5, II
Micronesian Status Negotiations, Office for       32, XXVII
Mine Safety and Health Administration             30, I
Minerals Management Service                       30, II
Mines, Bureau of                                  30, VI
Minority Business Development Agency              15, XIV

[[Page 611]]

Miscellaneous Agencies                            1, IV
Monetary Offices                                  31, I
Multifamily Housing Assistance Restructuring,     24, IV
     Office of
National Aeronautics and Space Administration     5, LIX; 14, V
  Federal Acquisition Regulation                  48, 18
National Agricultural Library                     7, XLI
National Agricultural Statistics Service          7, XXXVI
National and Community Service, Corporation for   45, XII, XXV
National Archives and Records Administration      5, LXVI; 36, XII
  Information Security Oversight Office           32, XX
National Bureau of Standards                      15, II
National Capital Planning Commission              1, IV
National Commission for Employment Policy         1, IV
National Commission on Libraries and Information  45, XVII
     Science
National Council on Disability                    34, XII
National Counterintelligence Center               32, XVIII
National Credit Union Administration              12, VII
National Drug Control Policy, Office of           21, III
National Foundation on the Arts and the           45, XI
     Humanities
National Highway Traffic Safety Administration    23, II, III; 49, V
National Imagery and Mapping Agency               32, I
National Indian Gaming Commission                 25, III
National Institute for Literacy                   34, XI
National Institute of Standards and Technology    15, II
National Labor Relations Board                    5, LXI; 29, I
National Marine Fisheries Service                 50, II, IV, VI
National Mediation Board                          29, X
National Oceanic and Atmospheric Administration   15, IX; 50, II, III, IV, 
                                                  VI
National Park Service                             36, I
National Railroad Adjustment Board                29, III
National Railroad Passenger Corporation (AMTRAK)  49, VII
National Science Foundation                       5, XLIII; 45, VI
  Federal Acquisition Regulation                  48, 25
National Security Council                         32, XXI
National Security Council and Office of Science   47, II
     and Technology Policy
National Telecommunications and Information       15, XXIII; 47, III
     Administration
National Transportation Safety Board              49, VIII
National Weather Service                          15, IX
Natural Resources Conservation Service            7, VI
Navajo and Hopi Indian Relocation, Office of      25, IV
Navy Department                                   32, VI
  Federal Acquisition Regulation                  48, 52
Neighborhood Reinvestment Corporation             24, XXV
Northeast Dairy Compact Commission                7, XIII
Northeast Interstate Low-Level Radioactive Waste  10, XVIII
     Commission
Nuclear Regulatory Commission                     5, XLVIII; 10, I
  Federal Acquisition Regulation                  48, 20
Occupational Safety and Health Administration     29, XVII
Occupational Safety and Health Review Commission  29, XX
Offices of Independent Counsel                    28, VI
Oklahoma City National Memorial Trust             36, XV
Operations Office                                 7, XXVIII
Overseas Private Investment Corporation           5, XXXIII; 22, VII
Panama Canal Commission                           48, 35
Panama Canal Regulations                          35, I
Patent and Trademark Office                       37, I
Payment From a Non-Federal Source for Travel      41, 304
     Expenses
Payment of Expenses Connected With the Death of   41, 303
     Certain Employees
Peace Corps                                       22, III
Pennsylvania Avenue Development Corporation       36, IX
Pension and Welfare Benefits Administration       29, XXV
Pension Benefit Guaranty Corporation              29, XL
Personnel Management, Office of                   5, I, XXXV; 45, VIII

[[Page 612]]

  Federal Acquisition Regulation                  48, 17
  Federal Employees Group Life Insurance Federal  48, 21
       Acquisition Regulation
  Federal Employees Health Benefits Acquisition   48, 16
       Regulation
Postal Rate Commission                            5, XLVI; 39, III
Postal Service, United States                     5, LX; 39, I
Postsecondary Education, Office of                34, VI
President's Commission on White House             1, IV
     Fellowships
Presidential Documents                            3
Presidio Trust                                    36, X
Prisons, Bureau of                                28, V
Procurement and Property Management, Office of    7, XXXII
Productivity, Technology and Innovation,          37, IV
     Assistant Secretary
Public Contracts, Department of Labor             41, 50
Public and Indian Housing, Office of Assistant    24, IX
     Secretary for
Public Health Service                             42, I
Railroad Retirement Board                         20, II
Reclamation, Bureau of                            43, I
Refugee Resettlement, Office of                   45, IV
Regional Action Planning Commissions              13, V
Relocation Allowances                             41, 302
Research and Special Programs Administration      49, I
Rural Business-Cooperative Service                7, XVIII, XLII
Rural Development Administration                  7, XLII
Rural Housing Service                             7, XVIII, XXXV
Rural Telephone Bank                              7, XVI
Rural Utilities Service                           7, XVII, XVIII, XLII
Saint Lawrence Seaway Development Corporation     33, IV
Science and Technology Policy, Office of          32, XXIV
Science and Technology Policy, Office of, and     47, II
     National Security Council
Secret Service                                    31, IV
Securities and Exchange Commission                17, II
Selective Service System                          32, XVI
Small Business Administration                     13, I
Smithsonian Institution                           36, V
Social Security Administration                    20, III; 48, 23
Soldiers' and Airmen's Home, United States        5, XI
Special Counsel, Office of                        5, VIII
Special Education and Rehabilitative Services,    34, III
     Office of
State Department                                  22, I
  Federal Acquisition Regulation                  48, 6
Surface Mining and Reclamation Appeals, Board of  30, III
Surface Mining Reclamation and Enforcement,       30, VII
     Office of
Surface Transportation Board                      49, X
Susquehanna River Basin Commission                18, VIII
Technology Administration                         15, XI
Technology Policy, Assistant Secretary for        37, IV
Technology, Under Secretary for                   37, V
Tennessee Valley Authority                        5, LXIX; 18, XIII
Thrift Supervision Office, Department of the      12, V
     Treasury
Trade Representative, United States, Office of    15, XX
Transportation, Department of                     5, L
  Coast Guard                                     33, I; 46, I; 49, IV
  Coast Guard (Great Lakes Pilotage)              46, III
  Commercial Space Transportation                 14, III
  Contract Appeals, Board of                      48, 63
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 12
  Federal Aviation Administration                 14, I
  Federal Highway Administration                  23, I, II
  Federal Motor Carrier Safety Administration     49, III
  Federal Railroad Administration                 49, II
  Federal Transit Administration                  49, VI
  Maritime Administration                         46, II
  National Highway Traffic Safety Administration  23, II, III; 49, V

[[Page 613]]

  Research and Special Programs Administration    49, I
  Saint Lawrence Seaway Development Corporation   33, IV
  Secretary of Transportation, Office of          14, II; 49, Subtitle A
  Surface Transportation Board                    49, X
  Transportation Statistics Bureau                49, XI
Transportation, Office of                         7, XXXIII
Transportation Statistics Brureau                 49, XI
Travel Allowances, Temporary Duty (TDY)           41, 301
Treasury Department                               5, XXI; 12, XV; 17, IV
  Alcohol, Tobacco and Firearms, Bureau of        27, I
  Community Development Financial Institutions    12, XVIII
       Fund
  Comptroller of the Currency                     12, I
  Customs Service, United States                  19, I
  Engraving and Printing, Bureau of               31, VI
  Federal Acquisition Regulation                  48, 10
  Federal Law Enforcement Training Center         31, VII
  Fiscal Service                                  31, II
  Foreign Assets Control, Office of               31, V
  Internal Revenue Service                        26, I
  International Investment, Office of             31, VIII
  Monetary Offices                                31, I
  Secret Service                                  31, IV
  Secretary of the Treasury, Office of            31, Subtitle A
  Thrift Supervision, Office of                   12, V
Truman, Harry S. Scholarship Foundation           45, XVIII
United States and Canada, International Joint     22, IV
     Commission
United States and Mexico, International Boundary  22, XI
     and Water Commission, United States Section
Utah Reclamation Mitigation and Conservation      43, III
     Commission
Veterans Affairs Department                       38, I
  Federal Acquisition Regulation                  48, 8
Veterans' Employment and Training, Office of the  41, 61; 20, IX
     Assistant Secretary for
Vice President of the United States, Office of    32, XXVIII
Vocational and Adult Education, Office of         34, IV
Wage and Hour Division                            29, V
Water Resources Council                           18, VI
Workers' Compensation Programs, Office of         20, I
World Agricultural Outlook Board                  7, XXXVIII

[[Page 615]]



List of CFR Sections Affected



All changes in this volume of the Code of Federal Regulations which were 
made by documents published in the Federal Register since January 1, 
1986, are enumerated in the following list. Entries indicate the nature 
of the changes effected. Page numbers refer to Federal Register pages. 
The user should consult the entries for chapters and parts as well as 
sections for revisions.
For the period before January 1, 1986, see the ``List of CFR Sections 
Affected, 1949-1963, 1964-1972, and 1973-1985'' which is published in 
seven separate volumes.

                                  1986

29 CFR
                                                                   51 FR
                                                                    Page
Subtitle A
4.181  (b) and (c) revised.........................................12265
5  Authority citation revised......................................12265
5.5  (b) (1) and (2) revised.......................................12265
5.8  (a) revised...................................................12265
    (a) corrected..................................................13496
5.15  (d)(1) removed; (d)(2) redesignated as (d)(1); (d) (3) and 
        (4) redesignated as (d) (2) and (3) and revised............12266
12  Added.....................................................7012, 7022
    Technical correction...........................................18884
56  Authority citation revised......................................9441
56.20  (b)(12) eff. 10-1-84; (b)(13) eff. 7-18-84...................9440
56.51  (b)(1) eff. 10-1-84..........................................9440
    (b)(1) amended..................................................9441
91  Redesignated as 20 CFR part 617 and revised....................45848

                                  1987

29 CFR
                                                                   52 FR
                                                                    Page
Subtitle A
12  Authority citation revised.....................................48019
    Revised; interim; eff. 4-2-89..................................48020
12.1  Heading revised; (a) and (b) redesignated as (a) (1) and 
        (2); introductory text designated as new (a) introductory 
        text; new (a) heading and (b) added; interim...............48019
19  Added..........................................................48420
20  Authority citation revised......................................3772
20.74--20.90 (Subpart D)  Added.....................................3772
20.81  (c) corrected...............................................13563
22  Added..........................................................48492
33  Added..........................................................11606
    Authority citation revised; nomenclature change; eff. 7-27-87 
                                                                   23967
33.3  Amended; eff. 7-27-87........................................23967
33.11  (e)(1) corrected............................................24367
90  Authority citation revised.....................................23401
90.1  Revised......................................................23401
90.2  Amended......................................................23401
90.11  (c) amended.................................................23401
90.12  Revised.....................................................23401
90.13  (a)(2) amended; (d) revised.................................23401
90.14  (a), (b), and (d) revised...................................23401
90.15  Removed.....................................................23402
90.16  (a) and (b) introductory text revised.......................23402
90.17  (c) removed; (d) amended....................................23402
90.18  (a), (e), (h), and (i) revised..............................23402
90.19  Revised.....................................................23402
90.31  (a) revised.................................................23403
90.32  (a) revised.................................................23403

                                  1988

29 CFR
                                                                   53 FR
                                                                    Page
Subtitle A
96.501--96.504 (Subpart 96.5)  Revised..............................5967
96.601--96.603 (Subpart 96.6)  Revised..............................5968
97  Added; eff. 10-1-88.......................................8069, 8087
98  Added; eff. 10-1-88.....................................19188, 19204

[[Page 616]]

    Nomenclature change; eff. 10-1-88..............................19189

                                  1989

29 CFR
                                                                   54 FR
                                                                    Page
Subtitle A
1  Regulations at 47 FR 23644 withdrawn (effective date pending) 
                                                                    4243
    Technical correction............................................5303
1.7  (d) added (effective date pending).............................4243
5  Technical correction.............................................5303
5.1--5.17 (Subpart A)  Regulations at 47 FR 23665 withdrawn 
        (effective date pending)....................................4243
5.2  (n) introductory text revised; (n)(4) added (effective date 
        pending)....................................................4243
5.5  (a)(1)(ii)(A) revised; (a)(4)(iv) added (effective date 
        pending)....................................................4243
12  Regulations at 52 FR 48019 confirmed; see regulation codified 
        at 49 CFR 24................................................8912
70  Revised........................................................23144
    Authority citation correctly revised...........................25204
70.4  (a)(1) corrected.............................................25204
70.22  Corrected...................................................25204
70.38  (f) and (h) corrected.......................................25204
70.40  (a)(4) corrected............................................25204
    (b)(4) technical correction....................................30503
98  Heading and authority citation revised..........................4959
    Technical correction............................................6363
98.305  (c) (3) and (4) amended; (c)(5) added; interim........4950, 4959
98.320  (a) revised; interim..................................4950, 4959
98.600--98.630 (Subpart F)  Added; interim....................4950, 4959
98  Appendix C added; interim.................................4950, 4959

                                  1990

29 CFR
                                                                   55 FR
                                                                    Page
Subtitle A
1  Withdrawal of regulations at 47 FR 23644 confirmed..............50149
1.7  (d) republished; effective date confirmed.....................50149
5.1--5.17 (Subpart A)  Withdrawal of regulations at 47 FR 23665 
        confirmed..................................................50149
5.2  (n) introductory text and (4) republished; effective date 
        confirmed..................................................50149
5.5  (a)(1)(ii)(A) and (4)(iv) republished; effective date 
        confirmed..................................................50150
18.1--18.59  Designated as Subpart A...............................13219
18.44  Removed.....................................................13219
18.101--18.1104 (Subpart B)  Added.................................13219
    Appendix corrected.............................................24227
18.609  (e) corrected..............................................14038
93  Added; interim............................................6737, 6751
98.305  Regulation at 54 FR 4950, 4959 confirmed...................21696
98.320  Regulation at 54 FR 4950, 4959 confirmed...................21696
98.600--98.635 (Subpart F)  Revised; eff. in part 7-24-90...21688, 21696
98  Appendix C revised; eff. in part 7-24-90................21690, 21696

                                  1991

29 CFR
                                                                   56 FR
                                                                    Page
Subtitle A
6.2  (c) amended...................................................54708
18.3  (a) amended..................................................54708
40  Removed........................................................54786
41  Removed........................................................54786
92  Removed........................................................46116
96  Authority citation revised.....................................50784
96.202  Amended....................................................50784
96  Appendix C added...............................................50784

                                  1992

29 CFR
                                                                   57 FR
                                                                    Page
Subtitle A
5.2  (j) revised; interim..........................................19206
5.5  (a)(4)(iv) removed............................................28776
20  Authority citation revised; nomenclature change................31450

                                  1993

29 CFR
                                                                   58 FR
                                                                    Page
Subtitle A
1.7  (d) suspended.................................................58955
4  Administrative variance.........................................49192

[[Page 617]]

5.2  (n)(4) suspended..............................................58955
5.5  (a)(1)(ii) suspended; (a)(1)(v) added.........................58955
18  Authority citation revised.....................................38500
18.9  Heading revised; (e) added...................................38500
34  Added...........................................................4750

                                  1994

29 CFR
                                                                   59 FR
                                                                    Page
Subtitle A
0 Authority citation revised.......................................32611
0.735-1--0.735-3 (Subpart A)  Removed..............................32611
0.735-4--0.735-10 (Subpart B)  Removed.............................32611
0.735-11  Removed..................................................32611
0.735-12  Introductory text, (a), (b), and (d) removed.............32611
0.735-13  Heading revised; (d) added...............................32611
0.735-14--0.735-17 (Subpart D)  Removed............................32611
0.735-18--0.735-28 (Subpart E)  Removed............................32611
18.3  (b) revised; (f) and (g) added...............................41876
18.4  (d) revised..................................................41877
18.18  (a) revised.................................................41877
18.19  (f) revised.................................................41877
18.20  (g) revised.................................................41877
18.22  (c) revised.................................................41877
20  Authority citation revised.....................................47250
    Heading revised................................................47250
20.101--20.111 (Subpart E)  Added..................................47250
24.4  (d)(2)(i), (ii), (3)(i) and (ii) revised.....................41877
70  Appendix A amended.............................................29900
  Appendix B added.................................................29904
95  Added..........................................................38271

                                  1995

29 CFR
                                                                   60 FR
                                                                    Page
Subtitle A
4.7  Removed.......................................................51727
15  Revised........................................................19658
18.3  Regulation at 59 FR 41876 confirmed; (a) and (b) revised.....26970
18.4  Regulation at 59 FR 41877 confirmed..........................26970
18.18  Regulation at 59 FR 41877 confirmed.........................26970
18.19  Regulation at 59 FR 41877 confirmed.........................26970
18.20  Regulation at 59 FR 41877 confirmed.........................26970
18.22  Regulation at 59 FR 41877 confirmed.........................26970
20  Regulation at 59 FR 47250 confirmed............................41016
20.101--20.111 (Subpart E)  Regulation at 59 FR 47250 confirmed....41016
20.105  Revised....................................................41017
20.106  (b) revised................................................41017
24.4  Regulation at 59 FR 41877 confirmed..........................26970
89  Redesignated as Title 20, Part 641.............................26581
97.36  (d), (g), (h) and (i) revised........................19639, 19643
98.100  Revised; eff. 8-25-95...............................33040, 33052
98.105  Amended; eff. 8-25-95...............................33041, 33052
98.110  (c) revised; eff. 8-25-95...........................33041, 33052
98.200  Revised; eff. 8-25-95...............................33041, 33052
98.215  Revised; eff. 8-25-95...............................33041, 33052
98.220  Revised; eff. 8-25-95...............................33041, 33052
98.225  Revised; eff. 8-25-95...............................33041, 33052
98  Appendixes A and B revised; eff. 8-25-95................33042, 33052

                                  1996

29 CFR
                                                                   61 FR
                                                                    Page
Subtitle A
0  Authority citation revised......................................57286
0.735-1  Added.....................................................57287
0.735-2 (Subpart A)  Redesignated from 0.735-12 (Subpart A); 
        heading revised............................................57287
0.735-12 (Subpart C)  Redesignated as 0.735-2 (Subpart A)..........57287
0.735-13  Removed..................................................57287
0.737-1--0.737-11 (Subpart B)  Redesignated from Subpart F; 
        authority citation removed.................................57287
1.1  (a) amended...................................................19984
1.6  (e)(2) amended................................................19984
1.7  Partial stay at 58 FR 58954 extended..........................68641
1.9  Amended.......................................................19984

2  Authority citation revised......................................19984

2.8  Added.........................................................19984

2.12  (d) amended..................................................19984

4  Authority citation revised......................................40716


[[Page 618]]

        ................................................................
4.2  Revised.......................................................68663

4.1b  (a) amended..................................................19984

4.6  (d)(2) amended................................................19984

      (q) introductory text revised................................68663

4.11  (e) amended..................................................19984

4.12  (d)(4)(iii) and (f) amended..................................19984

4.52  Redesignated as 4.53; new 4.52 added.........................68664

4.53  Redesignated as 4.54; new 4.53 redesignated from4.52.........68664

4.54  Redesignated as 4.55; new 4.54 redesignated from 4.53........68664

4.55  (b) amended..................................................19984

4.55  Redesignated as 4.56; new 4.55 redesignated from 4.54........68664

4.56  Redesignated from 4.55.......................................68664

4.112  Revised.....................................................68664

4.163  (c) amended.................................................19984

4.181  (b)(1) revised..............................................40716

4.187  (a) amended.................................................19984

5  Authority citation revised......................................40716

5.2  Partial stay at 58 FR 58954 extended..........................68641

5.5  (b) introductory text revised.................................40716

    Partial stay at 58 FR 58954 extended...........................68641

5.8  (c) amended...................................................19984

5.11  (c)(3) and (d) amended.......................................19984

5.12  (c), (d)(2)(iv)(C) and (5) amended...........................19984

5.15  (b)(1) and (2) removed; (b)(3), (4) and (5) redesignated as 
        (b)(1), (2) and (3)........................................40716

6.8  Amended.......................................................19984

6.18  (b)(3) amended...............................................19984

6.19  (b)(1) amended...............................................19984

6.20  Amended......................................................19984

6.21  (a) and (b) amended..........................................19984

6.32  (b)(4) amended...............................................19984

6.33  (b)(1) amended...............................................19984

6.34  Amended......................................................19984

6.35  Amended......................................................19984

6.43  (b)(3) amended...............................................19984

6.44  (b) amended..................................................19984

6.45  Amended......................................................19985

6.46  Amended......................................................19984

6.56  Amended......................................................19984

6.57  Amended......................................................19984

7  Heading revised.................................................19985

7.1  (a) revised...................................................19985

7.3  Amended.......................................................19985

7.5  (a)(2) amended................................................19985

7.7  Amended.......................................................19985

7.8  Heading amended...............................................19985

7.15  (a) amended..................................................19985

7.16  (a) amended..................................................19985

8  Heading revised.................................................19985

8.0  Removed.......................................................19985

8.1  (a) revised...................................................19985

8.4  (a)(2) amended................................................19985

8.6  Heading amended...............................................19985

8.9  Heading amended...............................................19985

8.10  (a) amended..................................................19985

8.18  Amended......................................................19985

22.2  (c) revised..................................................19985

24  Authority citation revised.....................................19985

24.1  (a) revised; (c) added.......................................19985

32.3  Amended......................................................19985

56  Removed........................................................33659

96.603  (b)(4) and (5) revised.....................................19985

                                  1997

29 CFR
                                                                   62 FR
                                                                    Page
Subtitle A

9  Added: eff. 7-21-97.............................................28185

95.26  (a), (b), and (c) revised............................45939, 45942

97.26  (a), (b) introductory text and (1) revised...........45939, 45942

                                  1998

29 CFR
                                                                   63 FR
                                                                    Page
Subtitle A
24  Revised.........................................................6621
44  Added..........................................................70261
70a  Redesignated as part 71.......................................56741
71  Redesignated from part 70a and revised.........................56741

                                  1999

29 CFR
                                                                   64 FR
                                                                    Page
Subtitle A
0.735-1  Regulation at 61 FR 57287 confirmed; revised..............73853
0.735-2  Regulation at 61 FR 57287 confirmed; removed..............73853
0.735-12  Regulation at 61 FR 57287 confirmed......................73853

[[Page 619]]

0.735-13  Regulation at 61 FR 57287 confirmed......................73853
0.737-1--0.737-11 (Subpart B)  Regulation at 61 FR 57287 confirmed
                                                                   73853
0.737-1  Revised...................................................73853
0  Appendix A removed..............................................73853
18.9  (e)(2) revised...............................................47089
37  Added; interim.................................................61715
96  Revised........................................................14539
99  Added..........................................................14541

                                  2000

   (Regulations published from January 1, 2000, through July 1, 2000)

29 CFR
                                                                   65 FR
                                                                    Page
Subtitle A
44  Revised.........................................................7195
95  Authority citation revised.....................................14410
95.36  (c) revised; (d) redesignated as (e); new (d) added; (c) 
        introductory text and new (d)(1) amended; interim...14407, 14410