CCASE:
M.Z. CONTRACTORS
COMPANY, INC.
DDATE:
19920825
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of:
M.Z. CONTRACTORS WAB Case No. 92-06
COMPANY, INC.
With respect to the addition of a Mechanical Insulator
classification to Davis-Bacon Wage Decision No. PA90-25
BEFORE: Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
Stuart Rothman, Senior Member
DATED: August 25, 1992
DECISION OF THE WAGE APPEALS BOARD
This case is before the Wage Appeals Board on the petition of
the International Association of Heat and Frost Insulators and
Asbestos Workers, AFL-CIO ("Petitioner" or "Union") for review of
a conformance ruling issued by the Acting Administrator of the Wage
and Hour Division on February 25, 1992. For the reasons stated
below, this matter is remanded to the Wage and Hour Division for
further proceedings consistent with this decision. [1]
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[2] I. BACKGROUND
On December 10, 1990 the Philadelphia Housing Authority
contracted with M.Z. Contractors Company, Inc. ("M.Z. Contractors")
for asbestos removal and disposal and mechanical reinsulation of
all crawl spaces in the low rise structures at Norris Homes in
Philadelphia, Pennsylvania. The contract included wage
determinations for both building construction (General Wage
Decision PA90-5) and residential construction (General Wage
Decision PA90-25).
On May 6, 1991 M.Z. Contractors submitted a request for the
addition of an "insulator" classification to the wage determination
applicable to building construction -- General Wage Decision
PA90-5. M.Z. Contractors described an "insulator" as a "laborer
who applies asbestos-free, non hazardous fiberglass insulation."
M.Z. Contractors added that "the applicable insulation [was]
fiberglass wrapping, ready to use, [and that] the only tool
involved is a knife to cut the proper length of insulation." The
contractor also stated that the proposed classification required no
licensing or special training, knowledge or classification. The
proposed wage rate was the same as the laborer's wage rate in Wage
Decision PA90-5 -- $15.95 plus $5.65 in fringe benefits.
A few days later, apparently after M.Z. Contractors had been
advised that the residential construction wage determination
(General Wage Decision PA90-25) was applicable to the project, the
contractor submitted a request for addition of an "insulator"
classification to the residential wage schedule. The proposed wage
rate for the "insulator" classification was equal to the $8.00 rate
plus $2.00 in fringe benefits listed for laborers in General Wage
Decision PA90-25. The lowest wage rate listed for a skilled
classification was for the painter classification, at $8.86 per
hour with no fringe benefits.
On July 1, 1991 the Director of the Division of Wage
Determinations approved the addition of a "mechanical insulator"
classification to General Wage Decision PA90-25. The approved wage
rate was $8.00 per hour and $2.00 in fringe benefits -- the rate
proposed by M.Z. Contractors, and equal to the wage rate for the
laborer classification. Petitioner sought review and
reconsideration of the Director's decision by letter dated
September 20, 1991.
The Acting Administrator affirmed the Director's ruling on
February 25, 1992. The Acting Administrator noted that the
conformance regulations provide, at 29 C.F.R. 5.5(a)(1)(ii)(A)(3)
that a proposed classification and wage rate will be added to a
wage determination only if the proposed wage rate bears a
reasonable relationship to the rates listed in the wage
determination. The Petitioner, the Acting Administrator stated,
took the position that the duties and skills of mechanical
insulators are comparable to those of plumbers or steamfitters;
since the wage rates for those classifications were higher than the
[2]
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[3] proposed rate for a "mechanical insulator," Petitioner
argued that the proposed rate did not bear a reasonable
relationship to the rates listed in the wage determination.
"It has been a long-standing policy of the Department," the
Acting Administrator stated, "to require that the proposed rate for
a skilled classification be equal to or exceed the lowest rate of
the skilled classifications already contained in the WD." She
added that an exception to this policy exists for "conforming a
class within a clearly recognized group, such as power equipment
operators. However, the instant request does not fall within this
exception." The Acting Administrator concluded that "[s]ince the
lowest wage rate paid to a skilled classification (painters) in
Wage Decision No. PA90-25 is $8.86 per hour, a rate of $8.00 per
hour plus $2.00 per hour in fringe benefits for a total of $10.00
per hour bears a reasonable relationship to the wage rates in the
contract WD."
The Union filed a petition with the Board for review of the
Acting Administrator's ruling. The Board held a hearing in this
matter on May 28, 1992.
II. DISCUSSION
On review, the Board concludes that this matter must be
remanded to the Acting Administrator for determination of a wage
rate for the mechanical insulator classification that "bears a
reasonable relationship to the wage rates contained in the wage
determination." 29 C.F.R. 5.5(a)(1)(ii)(A)(3). The Acting
Administrator based her decision in this matter on Wage and Hour's
policy requiring that when conforming a classification and wage
rate to a wage determination, "the proposed rate for a skilled
classification be equal to or exceed the lowest rate of the skilled
classifications already contained in the WD." Counsel for the
Acting Administrator, in turn, characterizes the pivotal question
in this case as the reasonableness of that Wage and Hour policy.
The Board views this case as turning on a somewhat narrower
point. Indeed, we have no quarrel with the reasonableness of Wage
and Hour's policy as applied in the ordinary circumstance. Counsel
for the Acting Administrator have identified several purposes
served by the policy -- among them, promoting the efficiency of the
conformance procedure. We agree that a policy that essentially
establishes a floor for a proposed wage rate when a skilled
classification is added to a wage decision can serve as a useful
screening tool for both contracting agencies and Wage and Hour as
they evaluate conformance requests. We also agree that as a
general matter such a policy can serve to inform contractors of
wage rate requirements as they engage in the bidding process, and
can also serve to protect employees' interests. [3]
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[4] This does not mean, however, that the Board views as
reasonable the application, without variation or exception, of this
policy to all types of conformance situations. Indeed, Wage and
Hour itself recognizes the need for some exceptions to the
application of this policy. Thus, counsel for the Acting
Administrator explains that if a proposed classification is within
a "clearly recognized group, such as power equipment operators, the
proposed rate must be similar to the rates for other power
equipment operator classifications on the wage determination"
(Statement, at p. 9). See also, Hillside Gardens, Inc., WAB Case
No. 90-32 (June 26, 1992), at p. 2 (approval of wage rate for
proposed landscape laborer classification that was significantly
less than the wage rate listed in the wage determination for
construction laborers).
In our view, flexibility in application of Wage and Hour's
policy is also demanded to accommodate a situation such as that
presented by this case -- where almost all the skilled
classifications have wage rates higher than the laborers' rate but
a few skilled classifications are below the rate established for
the laborers. In such circumstances, it was unreasonable to set a
wage rate for mechanical insulators by simply setting the rate for
that skilled classification at the same level as the laborers'
rate. Thus, we agree with Petitioner (Supplemental Statement, at
p. 15) that
under the circumstances of this case, and others where most of
the wage rates and fringe benefits prescribed in a wage
determination for "skilled" classifications are substantially
higher than the wages and fringe benefits applicable to one or
two other "skilled" classifications, mechanical adoption of
the wage rate and fringe benefits applicable to the lowest
paid "skilled" classification, or the wage rate and fringe
benefits for the "Laborer" classification, whichever is
higher, does not satisfy the requirement . . . that "[t]he
proposed wage rate, including any fringe benefits, bears a
reasonable relationship to the wage rates contained in the wage
determination . . . ."
Counsel for the Acting Administrator argues that any departure
from Wage and Hour's policy would be a burden on Wage and Hour's
resources, and might in some circumstances require an extensive
field survey to compare the skills of the proposed classification
with those already listed in the wage determination. We do not
mandate, however, that any particular method be used to evaluate
the skills of the proposed classification or to compare those
skills with the listed classifications, nor do we hold or even
suggest that the same method need be used in all the various
circumstances presented by conformance cases. In this case, for
example, the extensive discussion in the contract of the mechanical
re-insulation work to be performed under that contract may provide
sufficient information --for purposes of the conformance procedure
-- of the nature of the mechanical insulation work, as well as the
skills required and the tools needed to perform that work. [4]
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[5]
We leave it to the expertise of Wage and Hour to determine
reasonable methods that will serve the interests of efficiency and
fairness. Finally, we note that the discussion in the parties'
written submissions and at oral argument highlighted changes in the
industry; we urge Wage and Hour in this and similar cases to take
a closer look at the skills and tools required for fiberglass
insulation technologies.
In sum, this matter is remanded to the Acting Administrator
for further proceedings consistent with this decision. It is
Ordered that Wage and Hour shall issue a decision on remand and
provide a copy to the Board within 60 days of the date of this
decision.
BY ORDER OF THE BOARD:
Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
Stuart Rothman, Senior Member
Gerald F. Krizan, Esq.
Executive Secretary [5]
