CCASE:
TOLLEFSON PLUMBING AND HEATING
DDATE:
19970924
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of
TOLLEFSON PLUMBING AND HEATING CO. WAB Case No. 78-17
Mitchell, So. Dakota Dated: September 24, 1979
Decision by: Alfred L. Ganna, Chairman, Thomas M. Phelan,
Member,and William T. Evans, Member
DECISION OF THE WAGE APPEALS BOARD
This case came before the Wage Appeals Board on the petition
of Tollefson Plumbing and Heating Company, Mitchell, South Dakota,
to review a decision by the Acting Assistant Administrator, Wage
and Hour Division, that certain employees classified by Wage and
Hour as plumbers should be classified instead as apprentices, that
$6,396.21 now being held in escrow to pay these employees as
plumbers should be returned to Petitioner and to also review the
decision of the Acting Assistant Administrator that no hearing
concerning this dispute is required to be held under 29 CFR
[sec] 5.11(b).
The case arose from the fact that on or about November
13, 1976 Petitioner entered into a subcontract to perform the
plumbing work on a construction project for the Department of
Housing and Urban Development (HUD) in Mitchell, S.D. This [1]
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[2] contract was subject to the Davis-Bacon Act and the labor standard
provisions of the U.S. Housing Act of 1937. Upon being
requested by the prime contractor to furnish proof that he was in
compliance with the Davis-Bacon Act, Petitioner provided the
general contractor and HUD with copies of apprenticeship plumbing
permits issued by the State of South Dakota. Almost ten months
later, in August, 1977, Petitioner received a letter from HUD
informing him that the four employees Petitioner had classified
and paid as apprentice plumbers were not registered in a bona
fide apprenticeship program approved by the Bureau of
Apprenticeship and Training, U.S. Department of Labor, or with a
State apprenticeship program recognized by the Bureau of
Apprenticeship and Training, and would therefore have to be paid as
journeymen plumbers. At a meeting held in September, 1977 with
Petitioner, the general contractor and representatives of HUD
and DOL, Petitioner was advised that $6,396.21, representing the
difference between the wages as apprentices and journeymen
plumbers, was being placed in escrow pending final disposition
of the disputed classification.
Although Petitioner requested a hearing in January, 1978
to appeal the claim for back wages, the Acting Assistant
Administrator denied the request for a hearing stating that the
investigation record clearly substantiated the violations of
29 CFR [sec] 5.5(a)(4)(i), and that the claim did not meet the
criteria for a hearing under 29 CFR [sec] 5.11(b). Petitioner then [2]
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[3] appealed these final decisions of the Acting Assistant
Administrator to the Wage Appeals Board.
In its Petition for Review and a reply statement filed
with the Board Petitioner has asserted that it thought enrollment
of its apprentices in the State of South Dakota's apprenticeship
program or the U.S. Department of Labor's Job Labor Program or
New Hire Program constituted sufficient compliance with the
Davis-Bacon Act. Furthermore, Petitioner argues that 10 months
elapsed between the time it submitted the apprenticeship permits
to HUD and the time Petitioner was notified that his apprentices
were not properly enrolled in a bona fide training program, and
therefore since the government is required to make on-site
investigations of their projects and did not call these
deficiencies to Petitioner's attention, it should be estopped from
challenging the Petitioner's proof of enrollment of the
apprentices. Finally, Petitioner argues that it should be afforded
a hearing pursuant to 29 CFR [sec] 5.11(b), claiming that to
Petitioner the amount in question is a significant sum, and meets
another requirement of [sec] 5.11(b) for a hearing; that is, that
it involves novel or unusual circumstances.
The Wage and Hour Division replied to this petition in
a statement filed on behalf of the Acting Assistant Administrator.
In this statement Wage and Hour cites the regulations that are
included in the Special Conditions in Petitioner's contract with
HUD. These regulations allow employment of apprentices at less
than the predetermined rate only when they are individually [3]
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[4] registered in a bona fide apprenticeship program approved by the
U.S. Department of Labor, Employment and Training Administration,
Bureau of Apprenticeship and Training (BAT), or with a State
Apprenticeship agency recognized by the Bureau. Although
Petitioner submitted State of South Dakota's permit cards for its
employees, Wage and Hour argues that these were merely licenses
issued by the South Dakota State Plumbing Board and do not
constitute registration in a bona fide apprentice program required
by DOL's regulations. Wage and Hour points out that the Bureau of
Apprenticeship and Training has authorized State Apprenticeship
agencies in 29 states to approve apprenticeship programs, and notes
that South Dakota is not one of these states. Therefore, BAT must
approve individual apprenticeship programs in South Dakota, and no
program was certified for Petitioner.
Further, Wage and Hour's statement argues that DOL's New
Hire program is merely a placement service designed to aid
unemployed workers enter the job market and does not purport to
certify apprenticeship programs or qualify for recognition by BAT.
With reference to Petitioner's claim of estoppel since HUD
originally accepted Petitioner's proof of registration, Wage and
Hour cites several decisions of this Board in which the Board
rejected petitioners' reliance on assertions by HUD representatives
as a basis for exempting petitioners from requirements of the
regulations. Finally, Wage and Hour cites other Wage Appeals Board
decisions that have held that delays in [4]
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[5] notifying contractors of non-compliance did not excuse contractors
from compliance with the regulations.
With reference to Petitioner's claim that it should have
been allowed to have a Section 5.11(b) hearing pursuant to the
regulation, Wage and Hour asserts that the regulations establish
that a [sec] 5.11(b) hearing is merely discretionary. It is
claimed there was no abuse of discretion in denying the hearing
because Wage and Hour's position is that there was no question of
fact to be resolved in such a hearing, that there were neither
significant sums of money, large groups of employees or novel
or unusual circumstances in regard to prevailing wage rates or
proper classifications. Wage and Hour claims that Petitioner has
made no showing of capriciousness or abuse of discretion which
would be required for the Board to overturn the Acting
Administrator's decision. Furthermore, with reference to
Petitioner's argument that it should be exempt from the
requirements of the regulations, Wage and Hour asserts that there
has been no evidence on the grounds of public interest, or to
prevent injustice and undue hardship, to grant Petitioner an
exemption from compliance with the regulations.
The Wage Appeals Board considered this case in executive
session on the basis of the Petition for Review and Reply and
related documents incorporated by reference therein filed by
Petitioner, and the Statement for Assistant Administrator, Wage
and Hour Division, a Supplementary Statement subsequently filed, [5]
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[6] and the record of the case before the Wage and Hour Division
filed on behalf of the Acting Assistant Administrator.
Although Petitioner in its Reply strongly questions the
statement by the Acting Assistant Administrator that the
uncontested facts are that Petitioner employed and paid four
plumbers as apprentices, the Board must take notice of the fact
that the Petitioner's contract with HUD contains the following
provisions, (Supplementary Conditions Article I,C.(i)):
Apprentices will be permitted to work as such only
when they are registered, individually, under a bona
fide apprenticeship program registered with a state
apprenticeship agency which is recognized by the
Bureau of Apprenticeship and Training, United States
Department of Labor; or, if no such recognized agency
exists in a state, under a program registered with
the Bureau of Apprenticeship and Training, United
States Department of Labor. . . . With the exception
of trainees as referred to in C(2) below, any employees
listed on a payroll at an apprenticeship wage rate
who is not registered as above, shall be paid the
wage rate determined by the Secretary of Labor for
the classification of work he actually performed.
The Contractor shall furnish to the FHA written
evidence of the required registration of his
program and apprentices and those of subcontractors,
the approved ratios of apprentices and trainees
to journeymen, and the approved apprentice wage rates
for the area of construction, prior to the use of
the apprentices and trainees on the contract work.
The Board agrees with the Acting Assistant Administrator that
Petitioner's employees were not duly registered in a bona fide
apprenticeship program which was appropriately recognized or
authorized by BAT and the working permits issued by the South
Dakota Plumbing Board pursuant to the South Dakota Codified
Laws 36-25-17 et seq. do not under any circumstances constitute
the required apprenticeship registration for prevailing wage [6]
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[7] purposes.
It is apparent to the Board that Petitioner was ill-served
by HUD when the work permits were accepted as evidence of
appropriate registration for Davis-Bacon purposes and when
the agency waited for approximately 10 months before advising
Petitioner that the permit cards were not evidence of proper
registration. Nevertheless, the Board in its decisions has
strictly construed the apprenticeship provisions of the regulations
to insure that laborers and mechanics working on Federal or
federally-assisted projects received the protection to which they
were entitled by the statute.
The Board has dealt with this problem in two recent
decisions, CRC Development Corporation, WAB Case No. 77-01 (Order
Dismissing, Jan. 23, 1978) [(] "Payment of the apprentice wages are
permitted under the Davis-Bacon Act cases only to the very limited
extent that is spelled out in the [*] approved [*] apprenticeship
agreement. Other than the apprentice rate, there is no provision
for payment of a wage rate other than the journeyman's rate in the
Davis-Bacon Act and related acts." [*](Emphasis added)[*] [)], and
Soule Glass and Glazing Co., WAB Case No. 78-18 (February 8, 1979)
[(] "[*] Duly registered apprentices or trainees [*] are the only
employees covered by the labor standards provisions of the
Davis-Bacon and related Acts and regulations applicable thereto who
may be paid less than the predetermined wage rate for the work they
perform". [*](Emphasis added)[*][)]. The record does not show that
the employees [7]
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[8] in question were properly registered under the
provisions of the subcontract Petitioner executed with HUD. The
responsibility for having a bona fide apprenticeship program and
registering his employees is the Petitioner's, not the contracting
agency's.
In view of this the Acting Assistant Administrator's
decision denying Petitioner a Section 5.11(b) hearing must be
upheld because even though it may be demonstrated that the
employees performed only as apprentices, they cannot be compensated
as such unless they are appropriately registered in a bona fide and
approved apprenticeship program. This cannot be shown here,
therefore Petitioner is required to pay the plumber's wage rate.
With reference to Petitioner's argument that the Department
of Labor should be estopped from requiring payment of the
plumber's rate because HUD misled it and delayed in advising
Petitioner that its apprentices were not being properly paid,
this Board held in Metropolitan Rehabilitation Corporation,
WAB Case No. 78-25 (Aug. 2, 1979) that advice by a contracting
agency was not binding on the Department of Labor and did not
estop the Department of Labor from requiring payment of the
proper wage rate. "The Department of Labor has the final authority
in this regard under the statute and Reorganization Plan No. 14,
and no one outside the Department operates with any apparent
authority such as would estop the Department of Labor from
making the final determinations." [8]
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[9] With respect to Petitioner's argument that the contract
involved states that in the event of a dispute over a
classification or laborer on a job, it should be referred to the
Secretary of Labor for final determination, Petition[er] should be
advised that the Secretary of Labor's authority in this regard has
been duly delegated to the Acting Assistant Admin[i]strator.
Under the facts of this case the Board does not find that
this would be an appropriate case in which to exempt Petitioner
from the effects of his contract with HUD as contemplated by
[sec] 5.13 of the Regulations.
In the light of these considerations, the decision of the
Acting Assistant Administrator, Wage and Hour Division, is
affirmed and the Petition for Review is hereby dismissed.
BY ORDER OF THE BOARD
Craig Bulger,
Executive Secretary
Wage Appeals Board [9]
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