135.5 Labor Compliance: Difference between revisions

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==135.5.1 Contractor’s Weekly Payroll==


(This is required on all projects except those that do not contain Wage Rate Determinations).  The prime contractor and each subcontractor is required to submit one certified copy of labor payrolls for each week that work is in progress. If work is temporarily suspended, the last payrolls should be appropriately marked to note that it would be the last payroll until work is resumed.
Missouri and Federal law often require minimum wage rates (pay) for the various skilled trades. These wage rates are specified in the contract at the time of bidding and are enforced by MoDOT and the Division of Labor during the construction of the project. Typical MoDOT contracts that do not require Wage Rate Determinations are Railroad Adjustments, Utility Adjustments, and some Maintenance funded projects.


The prime contractor must submit a certified copy of each weekly payroll within 7 days of the payment date of the payroll. The certification may be attached to the payroll or may be on the payroll itself. The prime contractor will be considered responsible for submittal of payrolls and certifications for all subcontractors on the project. The prime contractor should be advised that failure to submit these payrolls within the 7-day period will result in delay in submittal of the engineer's payment estimates for each project involved. Estimates not submitted by the established date are to be withheld until the next estimate period. Payrolls should be kept in a secure storage area since the Social Security numbers of the contractor’s employees are included.
Two flowcharts are available to help guide the application of wage rate compliance, one for [http://www.modot.mo.gov/business/materials/PreCon%20Flow%20Chart%20-%20Federal.pdf federally funded projects] and one for [http://www.modot.mo.gov/business/materials/PreCon%20Flow%20Chart%20-%20State.pdf state funded projects.]


All payroll checking is to be done at the project level, with the following checks made to insure proper labor compliance:
==135.5.1 Wage Rate Compliance Checks==
:a. The [[105.2 Control of Work#105.2.1 Responsibilities of the Resident Engineer|resident engineer]] or delegated representative is to check payrolls to be sure the employee's full name as shown on the social security card, address and social security number are entered on each payroll.
The [[105.2 Control of Work#105.2.1 Responsibilities of the Resident Engineer|resident engineer]] or delegated representative is responsible for ensuring compliance with the wage rate laws  at the project level. Wage Rate Compliance Checks (WRCC) shall be performed on active projects when applicable. WRCC consist of two major items: '''Reviewing Payrolls''' and '''Wage Rate Interviews'''


:b. Check payroll for correct employee classification.
Payrolls, wage rate interviews, and all other labor compliance related documents are to be kept in the resident engineer's office for the duration of the project. After project completion, payrolls are to be sent to the district office where they shall be stored for a period of three years. All filing related to labor compliance should be kept in a secure storage area since the Social Security numbers of the contractor’s employees are included.


:c. Check payroll for correct hourly wage and, where applicable, correct overtime hourly rate.
===135.5.1.1 Payrolls===
Providing weekly payroll information is required on all projects except those that do not contain Wage Rate Determinations by Federal and Missouri law. The prime contractor and each subcontractor are required to submit one certified copy of labor payrolls for each week that work is in progress. If work is temporarily suspended, the last payroll should be appropriately marked to note that it would be the last payroll until work is resumed.


:d. Check daily and weekly hours worked in each classification including actual overtime hours worked. (Not adjusted hours.)
The prime contractor must submit a certified copy of each weekly payroll within 7 days of the payment date of the payroll. The certification may be attached to the payroll or may be on the payroll itself. The prime contractor will be considered responsible for submittal of payrolls and certifications for all subcontractors on the project. The certification must be a properly signed original. The prime contractor should be advised that failure to submit these payrolls within the 7-day period will result in delay in submittal of the engineer's payment estimates for those projects involved. The [[105.2 Control of Work#105.2.1 Responsibilities of the Resident Engineer|resident engineer]] shall keep a log of all payrolls received, the date received, and the time period covered. A copy of the complete log will be turned in as part of the project’s final plans.


:e. All deductions are listed and net wage shown. U.S. Department of Labor Form WH-347 may be used.
Every payroll submitted to the RE office should be checked. The following steps should be included in all payroll checks to insure proper labor compliance:
:1) Check that the employee's full name as shown on the social security card, address and social security number are entered on each payroll.
:2) Check payroll for correct employee classification.
:3) Check payroll for correct hourly wage and, where applicable, correct overtime hourly rate.
:4) Check daily and weekly hours worked in each classification including actual overtime hours worked (not adjusted hours).
:5) All deductions are listed and net wage shown. U.S. Department of Labor Form WH-347 may be used (more information on deductions outlined below).
:6) To assure that payrolls are arithmetically correct, approximately 10% of the extensions on the first 3 payrolls should be checked. The contractor is to be advised of any violations noted on the labor payroll. All errors are to be corrected by a supplementary payroll.
:7) All checking in the project office should be in red pencil, initialed by the checker.
:8) No attempt should be made to calculate withholding tax, old age benefits, etc., as this is beyond the scope of our work.
:9) Final payrolls should be marked "Final" or "Last Payroll".


:f. To assure that payrolls are arithmetically correct, approximately 10% of the extensions on the first 3 payrolls should be checked. The contractor is to be advised of any violations noted on the labor payroll. All errors are to be corrected by a supplementary payroll.
====Deductions====
All deductions should be clearly identified. Only approved deducations should be used in wage rate calculations. The most common standard approved dedutions from the Code of Federal Regulations are shown in the following list.
*State or federal taxes
*Voluntary insurance, pension, and/or retirement plans
*Child support and other payments ordered by a court (but not payments to the employer)
*Prepaid wages
*Payments to charitable organizations
*Union dues when agreed to by the union (fines are not allowable)


:g. All checking in the project office should be in red pencil, initialed by the checker.
Non-standard deductions can be approved by the Division of Labor on yearly basis. The contractor must provide documentation along with the payroll when any approved non-standard deductions are in use.


:h. No attempt should be made to calculate withholding tax, old age benefits, etc., as this is beyond the scope of our work.
====Owner-Operator====
An owner operator is when a contractor rents a piece of equipment and the operator comes with the rental equipment. A prime contractor can use owner-operators on MoDOT projects according to the Division of Labor. There are certain restrictions that would apply. Only the owner can operate the piece of equipment on site. The owner cannot have other employees on the job. The owner would not be subject to prevailing wage rates and therefore no wage rate interviews will need to be taken. Since this is a rental the prime contractor's insurance would cover the work performed by the owner-operator. The project office should obtain a copy of the contract between the prime contractor and owner-operator. This is to assure that it is a legitimate arrangement and not an attempt to circumvent prevailing wage rate laws.


:i. Final payrolls should be marked "Final" or "Last Payroll".
====Foreman-Supervisor====
The foreman-supervisor is always listed on the payrolls. A foreman-supervisor who performs 20% OR LESS of the day with the tools of the trade is exempt from wage rate requirements.


:j. A record of all payrolls is to be maintained by the [[105.2 Control of Work#105.2.1 Responsibilities of the Resident Engineer|resident engineer]]. Payrolls are to be kept in the resident engineer's office for the duration of the project. After project completion, payrolls are to be sent to the district office where they shall be stored for a period of three years.
Foreman-supervisors who perform MORE THAN 20% of the day with the tools of the trade are subject to wage rate requirements. If the listed wage rate for foreman is the same as the rate for the corresponding worker skill, the hours do not need to be segregated as separate classifications on the payroll. When the wage rates are different between forman and worker skills, the hours should be split appropriately between the classifications.


===Owner-Operator===
====Trainee====
Trainees should be listed on the payrolls. The correct classification should be used for the work performed with the trainee designation (e.g., Concrete Finisher/Trainee).


An owner operator is when a contractor rents a piece of equipment and the operator comes with the rental equipment. A prime contractor can use owner-operators on MoDOT projects according to the Division of Labor. There are certain restrictions that would apply. Only the owner can operate the piece of equipment on site. The owner cannot have other employees on the job. The owner would not be subject to prevailing wage rates and therefore no wage rate interviews will need to be taken. Since this is a rental the prime contractor's insurance would cover the work performed by the owner-operator. The project office should obtain a copy of the contract between the prime contractor and owner operator. This is to assure that it is a legitimate arrangement and not an attempt to circumvent prevailing wage rate laws.
===135.5.1.2 Wage Interviews===
The [[105.2 Control of Work#105.2.1 Responsibilities of the Resident Engineer|resident engineer]] or delegated representative are to conduct wage rate interviews as part of WRCC. The wage rate interview checks for compliance with wage rate laws as well as Equal Emplyment Opportunity (EEO) laws.


==135.5.2 Statement of Compliance==
Wage interviews shall be conducted at the rate shown on the following table:


The prime contractor and each subcontractor is required to submit a weekly statement of compliance within 7 days of the payment date of each payroll period. This statement is to be submitted in the prescribed form set out in "Required Contract Provisions" included in the contract. Failure to comply within 7 days should delay submittal of payment estimates.
{| border="1" class="wikitable" style="margin: 1em auto 1em auto"
|+
! style="background:#BEBEBE"| Job Type !! style="background:#BEBEBE"| Interview Frequency
|-
| align="center" | Interstate || align="center" | Once Per Week
|-
| align="center" | Federal Aid Primary or Federal Aid Urban Project || align="center" | Once Per Two Weeks
|-
| align="center" | Supplementary and 100% State Financed || align="center" | Once Per Four Weeks
|-
| colspan="2" width="600" style="background:#90EE90" | WRCC should be spread out throughout a project’s timeline. When required, a mininum of one WRCC should be performed on each project.
|}


A record of all statements is to be maintained by the resident engineer. The statement should be attached to the payroll for the corresponding period. Payrolls are stored in the project office after completion of the project.
At least one interview should be performed during each compliance check. Additional interviews should be performed when the risk of non-compliance is higher. Some examples of when additional interviews should be taken are when a contractor has a past wage rate violation history, when there is high crew turnover, when work observed doesn’t match the payrolls, when errors are found on the payrolls, etc.


==135.5.3 Weekly Payrolls and Statement of Compliance==
On smaller jobs it may be possible to interview every employee over time. There is no need to interview an individual a second time unless additional interviews are justified (see above). Once everyone on a job has been interviewed, a note can be used for documentation and wage interviews can cease until new employees are present on the job.


Contractor's payrolls, certifications, and statements of compliance are not required on
Interviews should be noted in SiteManager. See your SiteManager Policy & Procedure Document. The interviewer should determine employee's name, employer's name, classification of employee, actual wage paid, and posted wage. All wage rate interviews shall be recorded on the [http://epg.modot.org/forms/CO/Wage%20Interview%20(Form%20CR-1).dot Wage Interview] form.  All questions on the form should be asked during the interview – as mentioned above wage rate interviews monitor compliance with wage laws as well as EEO regulations. Care should be taken to secure any written record of wage interviews since the employee’s Social Security number is included.
Railroad or other Utility Adjustments, or on Maintenance funded projects.


==135.5.4 Labor Interviews==
===135.5.1.3 Errors, Ommisions, and Non-Compliance===
Project personnel are to conduct one wage rate interview on each Interstate Project per week, one wage rate interview on each Federal Aid Primary or Federal Aid Urban Project every two weeks and one wage rate interview on Supplementary and 100% State Financed Projects every four weeks. Labor interviews are not required on Railroad and other Utility Adjustments.
When there is any condition or evidence that suggests that the labor laws are not being fully complied with, the resident engineer shall investigate until satisfied of lawful compliance. Investigations shall be limited in nature and cases beyond our investigative ability should be referred to the Divison of Labor. Poor compliance efforts by the contractor should be noted on the [http://www.modot.mo.gov/business/materials/2008%20CPQ.doc Contractor Performance Questionaire].


Interviews should be noted in SiteManager. See your SiteManager Policy & Procedure
When payrolls are not submitted within 7 days and/or contain errors, the resident engineer should notify the contractor and encourage them to improve. Payrolls containing errors should be corrected and resubmitted in a timely manner. When payrolls are routinely late and there is no effort to improve on the contractors part, the [[105.2 Control of Work#105.2.1 Responsibilities of the Resident Engineer|resident engineer]] should withold payment until the next regular estimate date after compliance is attained.
Document. The interviewer should determine employee's name, employer's name, classification of employee, actual wage paid, and posted wage. Care should be taken to secure any written record of wage interviews since the employee’s Social Security number is included.


When a wage rate is believed to be below the contractual lawful minimum, the Division of Labor should be notified. The Divison of Labor will open a complaint case at the request of MoDOT, the employee, the union, or other third party. The Divison of Labor will perform an investigation and then close the complaint either as a violation or non-violation. The resident engineer should ensure a copy of all correspondance from the Divison of Labor is kept in the contract files.
==135.5.2 Semi-Annual Labor Report==
The district construction engineer is to submit a semi-annual report to the main office containing the following information:
The district construction engineer is to submit a semi-annual report to the main office containing the following information:
:a. Number of contractors/subcontractors against whom complaints were received.
:b. Number of investigations completed.
:c. Number of contractors/subcontractors found in violation.
:d. Amount of wage restitution found due under:
::(1) Davis-Bacon and related acts.
::(2) Work Hours Act of 1962 (The Davis-Bacon Act encompasses prevailing wage rate violations, whereas the Contract Work Hours Act encompasses daily and weekly overtime violations).
:e. Number of employees due wage restitution under Davis-Bacon and related acts and/or Work Hours Act of 1962.
:f. Amount of liquidated damages assessed under Work Hours Act of 1962.


:a. Number of contractors/subcontractors against whom complaints were received._______
Due dates for the Semi-Annual Labor report are:
:b. Number of investigations completed. _______
:c. Number of contractors/subcontractors found in violation. _______
:d. Amount of wage restitution found due under:
::(1) Davis-Bacon and related Acts $_______
::(2) Work Hours Act of 1962 $_______
::(The Davis-Bacon Act encompasses prevailing wage rate violations, whereas the Contract Work Hours Act encompasses daily and weekly overtime violations.)
:e. Number of employees due wage restitution under Davis-Bacon and related Acts and/or Work Hours Act of 1962._______
:f. Amount of liquidated damages assessed under Work Hours Act of 1962. _______


The above report is due not later than April 4 for the period from October 1 to March 31, and not later than October 5 for the period from April 1 to September 30. This report should include all information gathered on all Federal Aid Projects.
{| border="1" class="wikitable" style="margin: 1em auto 1em auto"
|+ '''Semi-Annual Labor Report Due Dates'''
! style="background:#BEBEBE" width="250" | Reporting Period !! style="background:#BEBEBE" width="250" | Due Date
|-
| align="center" | October 1 to March 31 || align="center" | April 4
|-
| align="center" | April 1 to September 30 || align="center" | October 5
|}


[[category:135 Public Relations for Construction Activities]]
The above report is due not later than April 4 for the period from October 1 to March 31, and not later than October 5 for the period from April 1 to September 30. This report should include all information gathered on Federal Aid Projects.

Revision as of 11:52, 24 September 2008

Missouri and Federal law often require minimum wage rates (pay) for the various skilled trades. These wage rates are specified in the contract at the time of bidding and are enforced by MoDOT and the Division of Labor during the construction of the project. Typical MoDOT contracts that do not require Wage Rate Determinations are Railroad Adjustments, Utility Adjustments, and some Maintenance funded projects.

Two flowcharts are available to help guide the application of wage rate compliance, one for federally funded projects and one for state funded projects.

135.5.1 Wage Rate Compliance Checks

The resident engineer or delegated representative is responsible for ensuring compliance with the wage rate laws at the project level. Wage Rate Compliance Checks (WRCC) shall be performed on active projects when applicable. WRCC consist of two major items: Reviewing Payrolls and Wage Rate Interviews

Payrolls, wage rate interviews, and all other labor compliance related documents are to be kept in the resident engineer's office for the duration of the project. After project completion, payrolls are to be sent to the district office where they shall be stored for a period of three years. All filing related to labor compliance should be kept in a secure storage area since the Social Security numbers of the contractor’s employees are included.

135.5.1.1 Payrolls

Providing weekly payroll information is required on all projects except those that do not contain Wage Rate Determinations by Federal and Missouri law. The prime contractor and each subcontractor are required to submit one certified copy of labor payrolls for each week that work is in progress. If work is temporarily suspended, the last payroll should be appropriately marked to note that it would be the last payroll until work is resumed.

The prime contractor must submit a certified copy of each weekly payroll within 7 days of the payment date of the payroll. The certification may be attached to the payroll or may be on the payroll itself. The prime contractor will be considered responsible for submittal of payrolls and certifications for all subcontractors on the project. The certification must be a properly signed original. The prime contractor should be advised that failure to submit these payrolls within the 7-day period will result in delay in submittal of the engineer's payment estimates for those projects involved. The resident engineer shall keep a log of all payrolls received, the date received, and the time period covered. A copy of the complete log will be turned in as part of the project’s final plans.

Every payroll submitted to the RE office should be checked. The following steps should be included in all payroll checks to insure proper labor compliance:

1) Check that the employee's full name as shown on the social security card, address and social security number are entered on each payroll.
2) Check payroll for correct employee classification.
3) Check payroll for correct hourly wage and, where applicable, correct overtime hourly rate.
4) Check daily and weekly hours worked in each classification including actual overtime hours worked (not adjusted hours).
5) All deductions are listed and net wage shown. U.S. Department of Labor Form WH-347 may be used (more information on deductions outlined below).
6) To assure that payrolls are arithmetically correct, approximately 10% of the extensions on the first 3 payrolls should be checked. The contractor is to be advised of any violations noted on the labor payroll. All errors are to be corrected by a supplementary payroll.
7) All checking in the project office should be in red pencil, initialed by the checker.
8) No attempt should be made to calculate withholding tax, old age benefits, etc., as this is beyond the scope of our work.
9) Final payrolls should be marked "Final" or "Last Payroll".

Deductions

All deductions should be clearly identified. Only approved deducations should be used in wage rate calculations. The most common standard approved dedutions from the Code of Federal Regulations are shown in the following list.

  • State or federal taxes
  • Voluntary insurance, pension, and/or retirement plans
  • Child support and other payments ordered by a court (but not payments to the employer)
  • Prepaid wages
  • Payments to charitable organizations
  • Union dues when agreed to by the union (fines are not allowable)

Non-standard deductions can be approved by the Division of Labor on yearly basis. The contractor must provide documentation along with the payroll when any approved non-standard deductions are in use.

Owner-Operator

An owner operator is when a contractor rents a piece of equipment and the operator comes with the rental equipment. A prime contractor can use owner-operators on MoDOT projects according to the Division of Labor. There are certain restrictions that would apply. Only the owner can operate the piece of equipment on site. The owner cannot have other employees on the job. The owner would not be subject to prevailing wage rates and therefore no wage rate interviews will need to be taken. Since this is a rental the prime contractor's insurance would cover the work performed by the owner-operator. The project office should obtain a copy of the contract between the prime contractor and owner-operator. This is to assure that it is a legitimate arrangement and not an attempt to circumvent prevailing wage rate laws.

Foreman-Supervisor

The foreman-supervisor is always listed on the payrolls. A foreman-supervisor who performs 20% OR LESS of the day with the tools of the trade is exempt from wage rate requirements.

Foreman-supervisors who perform MORE THAN 20% of the day with the tools of the trade are subject to wage rate requirements. If the listed wage rate for foreman is the same as the rate for the corresponding worker skill, the hours do not need to be segregated as separate classifications on the payroll. When the wage rates are different between forman and worker skills, the hours should be split appropriately between the classifications.

Trainee

Trainees should be listed on the payrolls. The correct classification should be used for the work performed with the trainee designation (e.g., Concrete Finisher/Trainee).

135.5.1.2 Wage Interviews

The resident engineer or delegated representative are to conduct wage rate interviews as part of WRCC. The wage rate interview checks for compliance with wage rate laws as well as Equal Emplyment Opportunity (EEO) laws.

Wage interviews shall be conducted at the rate shown on the following table:

Job Type Interview Frequency
Interstate Once Per Week
Federal Aid Primary or Federal Aid Urban Project Once Per Two Weeks
Supplementary and 100% State Financed Once Per Four Weeks
WRCC should be spread out throughout a project’s timeline. When required, a mininum of one WRCC should be performed on each project.

At least one interview should be performed during each compliance check. Additional interviews should be performed when the risk of non-compliance is higher. Some examples of when additional interviews should be taken are when a contractor has a past wage rate violation history, when there is high crew turnover, when work observed doesn’t match the payrolls, when errors are found on the payrolls, etc.

On smaller jobs it may be possible to interview every employee over time. There is no need to interview an individual a second time unless additional interviews are justified (see above). Once everyone on a job has been interviewed, a note can be used for documentation and wage interviews can cease until new employees are present on the job.

Interviews should be noted in SiteManager. See your SiteManager Policy & Procedure Document. The interviewer should determine employee's name, employer's name, classification of employee, actual wage paid, and posted wage. All wage rate interviews shall be recorded on the Wage Interview form. All questions on the form should be asked during the interview – as mentioned above wage rate interviews monitor compliance with wage laws as well as EEO regulations. Care should be taken to secure any written record of wage interviews since the employee’s Social Security number is included.

135.5.1.3 Errors, Ommisions, and Non-Compliance

When there is any condition or evidence that suggests that the labor laws are not being fully complied with, the resident engineer shall investigate until satisfied of lawful compliance. Investigations shall be limited in nature and cases beyond our investigative ability should be referred to the Divison of Labor. Poor compliance efforts by the contractor should be noted on the Contractor Performance Questionaire.

When payrolls are not submitted within 7 days and/or contain errors, the resident engineer should notify the contractor and encourage them to improve. Payrolls containing errors should be corrected and resubmitted in a timely manner. When payrolls are routinely late and there is no effort to improve on the contractors part, the resident engineer should withold payment until the next regular estimate date after compliance is attained.

When a wage rate is believed to be below the contractual lawful minimum, the Division of Labor should be notified. The Divison of Labor will open a complaint case at the request of MoDOT, the employee, the union, or other third party. The Divison of Labor will perform an investigation and then close the complaint either as a violation or non-violation. The resident engineer should ensure a copy of all correspondance from the Divison of Labor is kept in the contract files.

135.5.2 Semi-Annual Labor Report

The district construction engineer is to submit a semi-annual report to the main office containing the following information:

a. Number of contractors/subcontractors against whom complaints were received.
b. Number of investigations completed.
c. Number of contractors/subcontractors found in violation.
d. Amount of wage restitution found due under:
(1) Davis-Bacon and related acts.
(2) Work Hours Act of 1962 (The Davis-Bacon Act encompasses prevailing wage rate violations, whereas the Contract Work Hours Act encompasses daily and weekly overtime violations).
e. Number of employees due wage restitution under Davis-Bacon and related acts and/or Work Hours Act of 1962.
f. Amount of liquidated damages assessed under Work Hours Act of 1962.

Due dates for the Semi-Annual Labor report are:

Semi-Annual Labor Report Due Dates
Reporting Period Due Date
October 1 to March 31 April 4
April 1 to September 30 October 5

The above report is due not later than April 4 for the period from October 1 to March 31, and not later than October 5 for the period from April 1 to September 30. This report should include all information gathered on Federal Aid Projects.