BATTEAST CONSTRUCTION CO., WAB No. 83-12 (WAB June 22, 1984)
CCASE:
BATTEAST CONSTRUCTION COMPANY
DDATE:
19840622
TTEXT:
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WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of
BATTEAST CONSTRUCTION COMPANY, WAB Case No. 83-12
Gibson-Lewis, Inc., and
Arthur C. Harpring Company, Inc. Dated: June 22 1984
Indiana Army Ammunition Plant
Charlestown, Indiana
DACA-45-77C-0136
BEFORE: Alvin Bramow, Chairman, Thomas X. Dunn, Member
Stuart Rothman, Member, Concurring
DECISION OF THE WAGE APPEALS BOARD
This case is before the Wage Appeals Board on the petition of
Arthur C. Harpring Company, Inc., (hereinafter Harpring) seeking
review of the August 31, 1983 decision of an Administrative Law
Judge (hereinafter ALJ). The ALJ ruled that Harpring had failed
to pay the applicable prevailing wage rate to two employees and
held Harpring liable for $6,989.61 in back wages under the Davis-
Bacon Act and the regulations issued thereunder.
Petitioner Harpring was a subcontractor on a $105,000 Army
contract for the installation of new sheet metal roofs and siding
on six existing buildings at the Indiana Army Ammunition Plant
in Charlestown, Indiana. The buildings were all one-story
warehouse structures of approximately 80' x 200', and 25' in
height.
The contract was subject to the labor standards provisions [1]
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[2] of the Davis-Bacon Act and the regulations issued thereunder,
and was subject to wage determination IN 77-2009. This
determination was applicable to all building construction in the
area in question and contained a wage rate for sheet metal workers
at the negotiated wage rate.
Two of Harpring's employees were employed as "residential
installers" and were paid approximately 50% of the wage rate
otherwise due sheet metal workers. These employees were engaged
in installing new siding and roofing on the existing buildings.
One employee used all the same tools as the sheet metal workers
except for a gas powered saw. The other employee used all the
same tools but did not read plans.
The Army's Contracting Officer called the discrepancy in
payment of these two employees as "residential installers" to
the attention of the prime contractor in April, 1978. Thereafter,
the Corps of Engineers advised the prime contractor that the
employees would have to be paid as sheet metal workers and paid
back wages based on the journeyman's wage rate. Petitioner then
tried to reclassify the employees as laborers, pre-apprentices
and helpers, but this was denied.
Petitioner refused to make restitution and requested an
administrative hearing pursuant to 29 CFR [sec] 5.11(b). A full
evidentiary hearing was held which affirmed the Wage and Hour
Administrator's findings and the ALJ's Decision and Order finding
the firm liable for $6,989.61 in back wages was appealed to this [2]
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[3] Board on September 28, 1983.
The petitioner disputes the finding of the ALJ that the
two employees in question performed the same work and used the
same tools as journeyman sheet metal workers, pointing out that
the employees in question were not qualified to read the plans
and specifications and never had that responsibility. Petitioner
also claims that it did not violate the Act by failing to pay the
wages specified for sheet metal workers. Petitioner asserts it
went to extraordinary lengths to satisfy the union, the Corps of
Engineers and the prime contractor. It is claimed that the
Department of Labor was derelict in checking the payrolls and in
challenging the status of the two employees until the project was
nearly completed.
The Wage and Hour Division's position is that the ALJ properly
ruled that petitioner's employees who performed sheet metal work
on the commercial buildings in question were entitled to the
predetermined sheet metal workers' wage rate. Wage and Hour relies
on the regulations that only in instances where bona fide
registered apprentices or trainees are employed on a Davis-Bacon
project may the contractor pay less than the predetermined wage
rate for the journeyman classification. Wage and Hour also relies
on an earlier decision of this Board that held: "(T)he duties
actually performed by a worker determine his rate of pay, not the
fact that he does not possess the tools of the trade, or a license
or formal training . . ." Framlau Corp. WAB Case No. 70-05 (April
19, 1975). [3]
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[4] Wage and Hour does not consider the ability to read plans and
specifications as crucial for classifying employees. Furthermore, it
appears that the only journeyman who read plans on the project was the
foreman.
Wage and Hour denies that it was derelict in pointing out the
alleged misclassifications since it asserts that the Corps of
Engineers had the primary enforcement responsibility under
Reorganization Plan No. 14 of 1950, and that the Corps of Engineers
apparently notified the prime contractor of the on-going
misclassification approximately 7 months into the construction
of the project. Wage and Hour points out that even at that time
petitioner did not evidence any intent to change its classification
practices, but instead, attempted to reclassify its employees
to the lesser categories.
The Wage Appeals Board considered this appeal from the record
on the basis of the Petition filed by petitioner which consisted
of Respondents Exceptions to Decision of the ALJ, a statement on
behalf of the Wage and Hour Division filed by the Solicitor of
Labor and a brief in support of the Wage and Hour Division filed
by the Building and Construction Trades Department, AFL-CIO. No
request for a hearing was received by the Board.
* * *
Upon consideration of the record of this case, the Board
realizes that it has consistently agreed with the practice of
the Wage and Hour Division concerning the issuance of sub- [4]
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[5] classifications for traditional crafts on wage
determinations or the approval of such additional classifications
pursuant to Department of Labor regulations 29 CFR 5.5(a)(ii) /FN1/
The principles laid down are as follows: 1) The particular
classification actually prevails in the area, 2) The scope of
duties is clearly defined and can be differentiated from the duties
of the journeyman, and 3) The classification is not utilized as an
informal apprentice or trainee.
The record of this appeal is completely void of any
information which would lead this Board to believe that it is the
[*] area practice [*] in the vicinity of the Indiana Army
Ammunition Plant in Charlestown, Indiana, to employ helpers or
residential installers on commercial building construction. In
fact, the record indicates that a classification of "sheet metal
helper" does not exist and "residential installers" are permitted
to perform work only on pre-engineered metal buildings and
residential construction at a rate below that of the journeyman.
[*][EMPHASIS IN ORIGINAL][*]
Even assuming that it is the practice to employ helpers,
the Board cannot distinguish the duties performed by these
workers on the project from those of journeyman sheet metal
workers. The petitioner has admitted that the employees in
question were working with the tools of the trade and performed
all the duties necessary except the reading of plans. In our
judgment the mere failure to be able to read plans does not [5]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ Department of Labor regulations 29 CFR Part 5 were revised
as of July 1, 1983, subsequent to the performance of this
contract. [5]
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[6] differentiate these employees' duties from those of a
journeyman. See Framlau Corp. supra.
Certainly, these workers cannot be considered apprentices
or trainees. They were not enrolled in an approved apprenticeship
or training program in accordance with the Department of
Labor regulations 29 CFR (a)(4)(i) and (ii).
Furthermore, the petitioner is a contractor of long standing
in the area and a member of the Kentucky Sheet Metal Contractors'
Association. This association bargains with the sheet metal
workers' local union the classifications and wage rates to be
employed on the various types of construction, i.e.: buildings,
residential, etc., in the locality of the project. In other
words, the contractors belonging to this association set the area
practice as well as the prevailing wage rates. Therefore, the
petitioner must have had knowledge of the classifications and
wage rates applicable to be employed on the installation of
sheet metal work at the Indiana Army Ammunition Plant.
Also, it is clear from the record below that the petitioner
upon taking the subcontract intentionally planned on cutting its
labor costs. By petitioner's own admission, with the concurr[e]nce
of the local union, it worked out a method to cut labor costs
by employing workers in a category known in the area as
"residential installers" /FN2/. Even though the local union
sanctioned [6]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN2/ Petitioner's Exhibit 5 contained in the record below
substantiates the union's participation. [6]
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[7] the use of workers classified and paid below that of
journeymen, it does not excuse a contractor or subcontractor for
violating the labor standards provisions of the Davis-Bacon Act and
the regulations promulgated thereunder contained in the contract.
Of course, the local union's actions may be mitigating
circumstances in a debarment action, but this is not such a case.
The Board rejects petitioner's contention that it should be
excused from liability because the Wage and Hour Division or
even the contracting agency did not make an early investigation,
detect the violations, and notify the firm. It is the
responsibility of contractors and subcontractors performing on the
project to abide by the labor standards provisions of the contract.
The Davis-Bacon and related acts were intended to protect the
rights of laborers and mechanics employed on Federal and federally
assisted projects, not to protect contractors who have violated the
law and then attempt to mitigate the violations through alleged
dereliction of enforcement by either the Wage and Hour Division or
the contracting agency.
In view of the foregoing, the Administrative Law Judge's
decision is affirmed and the petition is dismissed.
* * *
Stuart Rothman, Concurring
I concur in the result reached by the majority. At no time
did the petitioner apply to the appropriate agency, whether it
be the Corps of Engineers, Department of Army, or the Department [7]
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[8] of Labor, for the classification or subclassification of
"residential installer, sheet metal workers". The pretext of using
the classification "laborer" and then "helper" was not even in
accord with the agreement reached with the sheet metal workers
local union to classify these employees as "residential
installers", and to pay them accordingly. The Administrative Law
Judge was not in error in concluding that the two employees
performed the work of journeyman sheet metal workers. Accordingly,
whether they were called laborers, helpers, or residential
installers, we have here a simple case of misclassification. The
usual Davis-Bacon Act principles must be applied.
I infer that the two employees were regular members of the
local sheet metal workers union and were referred to the job by
the union. The ALJ did not find otherwise. There is no evidence
that these two employees were registered "apprentices" or duly
recognized "helpers" under area local practice.
Although concurring in the result reached, I believe that
more must be said about this case to put it in proper perspective.
The petitioner is a local union contractor who secures union sheet
metal workers through[] the union's referral system. As a
sub-subcontractor bidding on this job, he told the local union that
to get the job he would have to meet competition by reducing his
bid. He was down to the point where he would have to do it in
labor cost. The union business agent agreed that [8]
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[9] it would be all right for him to use a limited number of sheet metal
workers classified as "residential installers". /FN1/
The question is raised with respect to what is the accurate
and appropriate prevailing wage rate for a particular
classification based upon area practice under Davis-Bacon
principles when the parties who have negotiated the wage rate then
go on in a particular case to denigrate the rate or to adjust it
downward to enable a bidder to secure a federal job.
It appears to me that at least one of the errors the
petitioning contractor made is that he believed that all he had
to do was make his peace with the local union over paying a
specialized residential construction rate on this commercial
job. It may even have been that both parties believed that a
particular part of the commercial construction could qualify as
work to be performed by "residential installers" taken from
"residential" wage schedules. But under Davis-Bacon Act
requirements, it was not sufficient for the petitioner to make his
peace with the local union with whom the rate was negotiated.
It was necessary for him to secure an appropriate job
classification or subclassification from the appropriate agency or
the Department of Labor on a timely basis. In this case a timely
request would have had to be made and an appropriate rate secured
at the bidding and award stage. [9]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ The Administrative Law Judge made no finding that the same
consent or authorization was granted in advance by the business
agent to any other union contractor who may have desired to bid
this job. This lack of even-handed treatment would militate
against any result other than that reached in this case. [9]
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[10] In cases in which the area prevailing wage rate first set by
local contract negotiations has been adjusted downward by further
negotiation to apply to a particular federal project or for a
particular similar project or projects, should the government
still be required to pay and employees whose representative made
the change receive the previously negotiated wage rate generally
prevailing in the area? The Administrator should give
consideration to this kind of problem and appropriate speedy
procedures to deal with it. But on the basis of the record
submitted in this case, the matter is properly treated as a
straight case of misclassification and the decision of the
Administrative Law Judge should be affirmed.
BY ORDER OF THE BOARD
Craig Bulger,
Executive Secretary
Wage Appeals Board [10]
