M.Z. CONTRACTORS COMPANY INC., WAB No. 92-23 (WAB Aug. 16, 1993)
CCASE:
M.Z. CONTRACTORS COMPANY INC.
DDATE:
19930816
TTEXT:
~1
[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of:
M.Z. CONTRACTORS WAB Case No. 92-23
COMPANY, INC.
BEFORE: Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
DATED: August 16, 1993
DECISION OF THE WAGE APPEALS BOARD
This matter is before the Wage Appeals Board on the petition
of the International Association of Heat and Frost Insulators and
Asbestos Workers, AFL-CIO ("Union" or "Petitioner"), seeking review
of the November 19, 1992 ruling issued by the Acting Administrator
of the Wage and Hour Division. For the following reasons, the
ruling of the Acting Administrator is affirmed.
I. BACKGROUND
A. Relevant Facts
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. Wage [1]
~2
[2] determinations for both building construction (General Wage Decision
PA90-5) and residential construction (General Wage Decision PA90-25)
were included in the contract.
On May 6, 1991 M.Z. Contractors requested 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." The
contractor averred 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." M.Z. Contractors
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 an $8.00 hourly rate
plus $2.00 in fringe benefits, which were equal to the rates 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.
B. Procedural History
On July 1, 1991 the Director of the Division of Wage
Determinations had approved the addition of a "mechanical
insulator" classification to General Wage Decision PA90-25: $8.00
per hour and $2.00 in fringe benefits, which was the rate proposed
by M.Z. Contractors. As noted, these rates were equal to the
amounts in the wage determination applicable to 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 stated that the
conformance regulation (29 C.F.R. 5.5(a)(1)(ii)(A)(3)) provides
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 for classifications listed
in the wage determination. The Acting Administrator noted that the
Union took the position that the duties and skills of mechanical
insulators are comparable to those of plumbers or steamfitters and
that since the wage rates for those classifications were higher
than the proposed rate for a "mechanical insulator," Petitioner [2]
~3
[3] argued that the proposed rate did not bear a reasonable
relationship to the rates listed in the wage determination.
The Acting Administrator rejected the Union's argument,
stating: "It has been a long-standing policy of the Department 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 Petitioner
appealed that ruling to the Board, which considered the petition in
our decision in the matter of M.Z. Contractors, Inc., WAB Case No.
92-06 (Aug. 25, 1992)("M.Z. I").
C. The decision in M.Z. I
The Board stated its view that the Wage and Hour policy of
conforming classifications to the lowest-paid skilled or laborer's
classification was reasonable in the ordinary circumstance, but
noted that Wage and Hour had fashioned exceptions to that policy.
Furthermore, the Board found the general policy was not reasonable
under the facts of M.Z. I:
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" [3]
~4
[4] 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 . . . ."
M.Z. I, at p. 4. The Board remanded the matter to Wage and Hour
for reconsideration of a wage rate -- reasonably related to the
wage rates contained in the wage determination -- for mechanical
insulators. Emphasizing the need to investigate the work to be
performed and the skills, training and tools required by the
proposed conformed classification, the Board did not mandate any
particular methodology for comparing skills of the proposed
classification to skills of the listed classifications. Nor did
the Board suggest that the same methodology be employed under all
the varied situations presented by conformance cases in general.
Rather, the Board left it "to the expertise of Wage and Hour to
determine reasonable methods that will serve the interests of
efficiency and fairness." Id. at p. 5.
Upon reconsideration, the Acting Administrator determined that
the skills of the proposed classification were most similar to
those of the so-called "mechanical trades" listed in the wage
determination: plumbers and steamfitters. A new wage rate was
conformed for mechanical insulators at the wage determination rate
for the lowest-paid mechanical trade which was $17.31 per hour plus
$3.47 in fringe benefits for steamfitters.
Petitioner appealed this ruling on remand to this Board. No
new administrative record was submitted; however, the Acting
Administrator's ruling on remand enclosed a letter from the
contracting agency referring the Wage and Hour Division to the
Dictionary of Occupational Titles, for a description of the tasks
and tools necessary to complete the contract work. After filing of
briefs, the Board conducted oral argument of the issues raised on
July 30, 1993.
II. DISCUSSION
The Petitioner's principal argument is that the Acting
Administrator's interpretation and application of the conformance
regulation on remand remains unreasonable and should therefore be
reversed. Petitioner argues that the new conformed rate ignores
the "realities of the local construction labor market," since the
applicable wage decision's prevailing rates for two mechanical
trades --plumber and steamfitter -- were recognized as the
collectively bargained rates. The Acting Administrator, argues
Petitioner, should have recognized the pattern [4]
~5
[5] that prevailing rates for mechanical trades were the negotiated
rates
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ and therefore should have conformed a rate for mechanical
insulator at the rate collectively bargained for the locality by
Local No. 14, Heat and Frost Insulators and Asbestos Workers with
the Philadelphia Insulation Contractors Association. The Board
does not agree with this position for the following reasons.
In the first place, it must be noted that Department of Labor
regulations do not require a conformed rate to be either the
collectively bargained rate or the "prevailing rate." If we were
to adopt the Union's position in this case, the conformance process
could thereafter become an essentially de novo wage determination
procedure. 29 C.F.R. 5.5(a)(1)(ii)(A)(3) authorizes approval if
the proposed rate "bears a reasonable relationship to the wage
rates contained in the wage determination." (Emphasis supplied).
Given the facts of this case, adoption of the Local No. 14
Mechanical Insulator rate would effectively constitute a
determination that the collectively bargained rate was the
prevailing rate for the classification where, in fact, there was
insufficient data in the first instance to determine any rate --
whether collectively bargained or weighted average for a Mechanical
Insulator under residential construction.
The Board finds that it was not unreasonable under the
regulation to find a reasonable relationship for mechanical
insulator to the lowest mechanical trade's rate. Moreover, on
these facts -- where the Local No. 14 collectively bargained rate
is higher than the rate for all listed skilled classifications --
we could not conclude that Local No. 14's rate bore a reasonable
relationship to the rates contained in the wage determination.
Further, there is nothing in the record to support the
conclusion that a mechanical insulator's skills are greater or
training more extensive than for the skilled trades paid more than
steamfitter which was the mechanical trade's rate chosen as the
conformed rate on remand. With additional regard to this point,
the Board takes note of the fact that Petitioner has not suggested
that the skills or training of a mechanical insulator are in fact
any greater than those of the other, listed mechanical trades.
Thus, the Acting Administrator's conformance action on remand was
reasonable under our earlier decision directing reconsideration in
light of the work to be performed and the skills, training and
tools required for the work.
Our directive to Wage and Hour upon remand was to evaluate the
skills, duties and tools to be utilized to perform the work on the
Norris Homes project by Mechanical Insulators. This was done and
-- as suggested by Petitioner in the first round of litigation --
the Acting Administrator determined that it was [5]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ WD PA90-25 contained no residential rate for the remaining
mechanical trade of sheetmetal worker. [5]
~6
[6] reasonable to compare the skills, duties, and tools of the
proposed classification to the mechanical trades group. In short,
the Acting Administrator's new methodology in conforming the
proposed classification to the lowest listed mechanical trade was
not unreasonable.
For the foregoing reasons, the ruling of the Acting
Administrator is affirmed.
BY ORDER OF THE BOARD:
Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
Gerald F. Krizan, Esq.
Executive Secretary [6]
