Building and Construction Trades Department, AFL-CIO, WAB No. 76-09 (WAB June 7, 1978)
CCASE:
WAB Case No. 76-09
DDATE:
19780607
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of
COLLINSON CONSTRUCTION CO. WAB Case No. 76-09
HUD Project No. Mich. 74-2 Dated: June 7, 1978
Mt. Pleasant, MI
ORDER DENYING MOTION FOR RECONSIDERATION
The Wage Appeals Board is in receipt of a Motion for
Reconsideration from the Building and Construction Trades
Department, AFL-CIO, of that portion of the Board's decision in the
above-captioned matter which directed the Administrator to review
the regulations reflecting his interpretation and application of
Section 1(b)(2) of the Davis-Bacon Act to contributions by
contractors and subcontractors to bona-fide fringe benefit funds
not determined by the Secretary of Labor to prevail in the locality
where the project will be constructed.
The factual situation which apparently lead to this motion
was the creation of a fringe benefit program in Lincoln, Nebraska
to provide educational and training benefits for all employees of
contractors contributing to the fund. One roofing contractor
working on Davis-Bacon projects allegedly is paying between $3.30 [1]
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[2] to $5.05 per hour per employee to the fund and reducing the
predetermined hourly wage rate of $8.30 plus $.10 for pension
benefits by the amount contributed to the fund.
The practice of crediting amounts contributed to fringe
benefits funds was permissible under Regulations, Part 5, Section
5.31, prior to the Collinson decision for fringe benefits
recognized as prevailing in the locality by the Secretary of Labor,
provided the fringe benefit was bona fide. The Board's decision in
the Collinson case extended the right to set off payments to bona
fide fringe benefit funds which had not been recognized by the
Secretary of Labor as prevailing in the area.
It is the position of the Building and Construction Trades
Department, AFL-CIO, that the Board's decision in the Collinson
case opened the door for possible abuses of payment of the
prevailing wage to the employees and cites the situation in
Lincoln, Nebraska, as an example of what has happened under that
decision.
The Board does not agree that the decision in the Collinson
case created this problem. The same abuse which was described by
the Building and Construction Trade Department could have occurred
prior to the Collinson decision except that the payments would have
to have been of a type found by the Secretary of Labor to be
prevailing. The Collinson decision merely allowed crediting of
payments not so recognized. Reversal of the Board's [2]
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[3] decision will not forestall abuses of the type being complained of
in Nebraska. The crucial consideration in this instance appears to
be that the fringe benefit payment must be to a bona fide fund.
That determination is made by the Department of Labor and any
abuses are subject to enforcement actions by the Department.
Documents attached to the motion and supporting memorandum indicate
that a complaint has been forwarded to Wage and Hour, and the Board
has been advised that an investigation of possible abuses has
begun. Following the final decision in that investigation, the
matter may be brought before the Board for further consideration of
any enforcement actions. At this time, however, the Board is still
of the view that the Administrator should review the Regulations
reflecting the interpretations and application of Section 1(b)(2)
of the Davis-Bacon Act.
The Motion for Reconsideration by the Building and
Construction Trades Department is therefore denied.
BY ORDER OF THE BOARD
Craig Bulger,
Executive Secretary
Wage Appeals Board [3]
