[Federal Register Volume 59, Number 5 (Friday, January 7, 1994)]
[Notices]
[Pages 1029-1031]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-328]


[[Page Unknown]]

[Federal Register: January 7, 1994]


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DEPARTMENT OF LABOR

Employment Standards Administration

 

All-Agency Memorandum No. 174 Under the Davis-Bacon and Related 
Acts

AGENCY: Wage and Hour Division, Employment Standards Administration, 
Labor.

ACTION: Notice.

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SUMMARY: The Department of Labor (DOL) is publishing All Agency 
Memorandum No. 174, which was forwarded to Federal contracting agencies 
on December 2, 1993. This memorandum provides guidance concerning the 
suspension of ``helper'' regulations under the Davis-Bacon and related 
Acts in Fiscal Year 1994, and is being published to inform the public 
on policies and procedures now in effect as a result of the suspension.

FOR FURTHER INFORMATION CONTACT:
William W. Gross, Acting Assistant Administrator, Wage and Hour 
Division, Employment Standards Administration, U.S. Department of 
Labor, room S-3028, 200 Constitution Avenue, NW., Washington, DC 20210. 
Telephone (202) 219-8353. This is not a toll-free number.

SUPPLEMENTARY INFORMATION: On Thursday, October 21, 1993, President 
Clinton signed the FY 1994 Appropriations Act for the Department of 
Labor, Health and Human Services, and Education, and related agencies 
(Pub. L. 103-112). Section 104 of this act contains a provision that 
prohibits the Department of Labor (Department) from expending funds 
appropriated under the act to implement or administer the Davis-Bacon 
``helper'' regulations at 29 CFR sections 1.7(d), 5.2(n)(4) and 
5.5(a)(1)(ii). As a result, these regulations were suspended and former 
rules concerning conformance procedures were reinstated at 29 CFR 
5.5(a)(1)(v). (See Federal Register 58 FR 58954, (November 5, 1993).) 
The Wage and Hour Division routinely uses an ``All Agency Memoranda'' 
procedure to advise procurement agencies of applicable policies and 
procedures in the administration and enforcement of the labor standards 
requirements of the Davis-Bacon and related Acts. In this regard, All 
Agency Memorandum No. 174 provides guidance to procurement agencies on 
the suspension of ``helper'' regulations during FY 1994. Because of the 
interest in the use of helpers under the Davis-Bacon and related Acts, 
All Agency Memorandum No. 174 is published for general information.

Document Preparation

    This document was prepared under the direction and control of Maria 
Echaveste, Administrator, Wage and Hour Division, Employment Standards 
Administration, U.S. Department of Labor.


    Signed in Washington, DC, on this 30th day of December, 1993.
Maria Echaveste,
Wage and Hour Administrator.
    U.S. Department of Labor, Employment Standards Administration, 
Wage and Hour Division.

December 2, 1993.
Memorandum No. 174

Memorandum for All Contracting Agencies of the Federal Government and 
the District of Columbia

From: Maria Echaveste, Administrator
Subject: Prohibition on Department of Labor Implementation/
Administration of Davis-Bacon Helper Regulations Pursuant to Fiscal 
Year (FY) 1994 Appropriation Act


    On Thursday, October 21, 1993, President Clinton signed the FY 1994 
Appropriations Act for the Department of Labor, Health and Human 
Services, and Education, and related agencies (Pub. L. 103-112). 
Section 104 of this act contains a provision that prohibits the 
Department of Labor (Department) from expending funds appropriated 
under the act to implement or administer the Davis-Bacon ``helper'' 
regulations that were previously codified at 29 CFR 1.7(d), 5.2(n)(4) 
and 5.5(a)(1)(ii). (See Federal Register, 54 FR 4234, 55 FR 50148, and 
57 FR 28776). Those regulations have therefore been suspended and the 
former rules reinstated. (See Notice of suspension of regulations and 
reinstatement of former regulation published in the Federal Register on 
November 5, 1993 (58 FR 58954), copy attached.
    As of October 21, the Department of Labor ceased activities that 
were related to the administration and implementation of suspended 
helper regulations. The discontinued activities included:
     Issuing classifications and wage rates for helpers in wage 
determinations based on data yielded by new surveys.
     Processing survey data to determine whether the use of 
helpers is prevailing on construction in areas where Davis-Bacon 
surveys are being conducted to determine prevailing wage rates for any 
particular type of construction.
     Processing requests for the approval of additional 
classifications and wage rates for helpers pursuant to the suspended 
conformance procedures formerly set forth in 29 CFR 5.5(a)(1)(ii).
     Processing requests for the reconsideration of rulings or 
final determinations concerning the use of helper classifications and/
or wage rates.
    Guidance regarding the effect of the newly enacted prohibition on 
contracts at various stages of the procurement process follows.
    Contracts awarded on or after October 21, 1993.\1\
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    \1\In the case of projects assisted under the National Housing 
Act, the applicable date is the start of construction or the initial 
endorsement of the mortgage, whichever occurs first. Similarly, in 
the case of projects to receive housing assistance payments under 
section 8 of the U.S. Housing Act of 1937, the applicable date is 
the beginning of construction or the date the housing assistance 
payment contract is executed, whichever occurs first.
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    Contractors and subcontractors may not employ ``helpers'' as that 
term was defined in Sec. 5.2(n)(4) of the suspended regulations on any 
Davis-Bacon covered contract awarded on or after October 21, 1993. 
Semi-skilled helper classifications and wage rates that were issued in 
wage determinations pursuant to the suspended regulations and that have 
been included in contracts awarded on or after October 21, 1993, are 
not valid. Moreover, the regulatory provision that allowed the 
consideration of additional classification actions for helpers is 
suspended; therefore, the Department will not consider any additional 
classification requests that would permit the use of helpers as defined 
in the suspended regulations on such contracts. Davis-Bacon general 
wage determinations are being modified to omit those helper 
classifications and wage rates that were issued pursuant to the 
suspended regulations.
    In accordance with its prior practice, the Department will, 
however, recognize helper classifications that are separate and 
distinct classes of workers performing duties distinguished from those 
of journey-level workers or other classifications listed on the wage 
determination; whose use prevails in an area; and who are not employed 
in an informal apprenticeship or training capacity. As detailed in the 
November 5, 1993, notice, the Department will issue such helpers on 
wage determinations or consider additional classification requests for 
such helpers where these criteria are met and a specific description of 
duties is associated with the particular helper class. Helpers may be 
employed on contracts awarded after October 21, 1993, only if a 
definition of the helper's duties establishing the helper as a separate 
and distinct classification is set forth in the wage determination or 
on the additional classification approval documents.
    Contracts awarded prior to October 21, 1993 where the contract 
contains the newly-suspended helper clauses and the contract wage 
determination contains a helper classification or a helper 
classification has been approved for use on the project.
    Contractors and subcontractors may continue to employ individuals 
in helper classifications that were issued for application to contracts 
or approved for use on contracts awarded prior to the suspension of the 
regulations. The workers must, however, be employed in accordance with 
the regulatory definition set forth in Sec. 5.2(n)(4) of regulations, 
part 5, which was applicable at the time the contract was awarded, and 
the workers must be paid at least the corresponding wage rate for the 
helper classification in which they are performing.
    The Department will continue to take action to ensure that workers 
erroneously classified as helpers are reclassified as journey-level 
workers or laborers in accordance with the work performed (those cases, 
for example, where employees perform work solely of a skilled nature, 
where individuals do not work under the supervision and direction of a 
journey-level classification, or where workers perform duties beyond 
the duties performed by helpers pursuant to the practice in the area). 
The Department will also take enforcement action against any contractor 
or subcontractor that fails to compensate its helpers according to the 
applicable wage determination rate or approved conformance wage rate. 
Contracting agencies are also reminded of their enforcement 
responsibilities under Reorganization Plan No. 14 of 1950 and 
encouraged to take action as may be necessary to ensure compliance in 
such situations.
    Contracts awarded prior to October 21, 1993 where the contract 
contains the newly-suspended helper clauses but the contract wage 
determination does not contain a helper classification and a helper 
classification has not yet been approved for use on this project.
    Contractors and subcontractors may not employ any classification, 
including helpers, on a Davis-Bacon covered project unless the wage 
determination contains the classification or the classification is 
approved pursuant to the Department's additional classification 
procedures. The regulations provide that the wage rates determined for 
unlisted classifications under the additional classification procedures 
shall be paid to all workers performing work in that classification 
from the first day on which work was performed. This regulatory 
provisions permits retroactive application of approved additional 
classifications and wage rates and, at the same time, also allows for 
retroactive enforcement action against a contractor or subcontractor 
whose proposed additional classification and/or wage rate is denied by 
the Department.
    Clearly, the Department cannot act on conformance requests for 
helpers or requests for reconsideration of such conformance actions 
given the Congressional action. Thus, contractors or subcontractors who 
classify and pay individuals as helpers with the expectation that the 
Department will approve an additional classification request at some 
future point place themselves at risk of subsequent enforcement action, 
including the withholding of contract funds. Under these circumstances, 
agencies should use their enforcement discretion in determining whether 
withholding action is appropriate to protect the interest of employees 
where contractors pay individuals less than the journey-level rate 
during the period of the prohibition. Agencies clearly should withhold 
contract funds where the Department has denied a conformance request, 
even through the contractor or subcontractor may have or may intend to 
request reconsideration of the additional classification denial. 
Agencies should also withhold contract payments on any contracts 
completed or nearing completion during the suspension of the helper 
regulations so that any back wages potentially due employees are not 
lost because the contract was closed and contract funds paid out.
    Contracts awarded prior to October 21, 1993 where the contract does 
not contain the revised helper clauses.
    In implementing the helper regulations after the lifting of the 
prohibition imposed by section 303 of the 1991 Dire Emergency 
Supplement Appropriation Act, the Department suggested that contracting 
agencies modify existing contracts to include the revised helper 
contract clauses, thereafter permitting the addition of helper 
classifications through the additional classification procedures in 
Sec. 5.5(a)(1)(ii) of regulations, part 5. However, in light of the 
Congressional action, that option no longer exists for contracts that 
were awarded without the helper contract clauses and which have not yet 
been modified. Contractors and subcontractors performing on such 
contracts may not employ helpers as those classifications were defined 
by Sec. 5.2(n)(4) of regulations, part 5.
    Prior background concerning the regulations in question is 
contained in All Agency Memoranda Nos. 154, 161, 163 and 165, issued on 
January 2, 1991, January 29, 1992, June 22, 1992, and July 24, 1992, 
respectively. Application of these All-Agency Memoranda is also 
suspended.
    Agencies are reminded of the need to make appropriate changes in 
the procurement regulations (see especially 48 CFR 22.406-3, 52.222-
6(b) and 52.222-9) and related contract documents to conform to the 
revised regulations.

[FR Doc. 94-328 Filed 1-6-94; 8:45 am]
BILLING CODE 4510-27-M