CCASE:
Mr. Greg Noonan
DDATE:
19930526
TTEXT:
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[1] U.S. Department of Labor Employment Standards Administration
Wage and Hour Division
Washington, D.C. 20210
MAY 26 1993
Mr. Greg Noonan
Industrial Labor Relations Officer
Office of the Chief of Engineers
Department of the Army
Washington, D.C. 20314
Dear Mr. Noonan:
Re: Pacific Ventures, Inc. - Prime Contractor
Bellevue, Washington
Contract No.: DACW85-86-C-0019
Crater Lake Project
Snettisham, Alaska
This is in response to a letter from your Alaska District to our
Seattle Regional Wage and Hour Office requesting an opinion on
whether laborers and power equipment operators performing work
within the portals of the tunnel on the above-referenced contract
are entitled to a 10% premium above the listed prevailing wage
rates. Your request has been referred to this office for a
response.
The contract was awarded to Pacific Ventures, Inc. on August 26,
1986, and incorporates Wage Determination No. AK86-1, modifications
1-4. The classifications of laborers and power equipment operators
in the wage decision are based on negotiated rates. The wage
determination contains a provision stating that "LABORERS AND POWER
EQUIPMENT OPERATORS receive 10% premium while performing tunnel or
underground work." The prime contractor (Pacific Ventures) agrees
that the 10% premium applies to laborers and power equipment
operators who assist in the actual construction of the tunnel,
including the boring, bracing, cleaning and lining of the tunnel;
but contends that the premium does not apply to subsequent
structural, mechanical, and electrical work performed within the
portals of the tunnel. However, counsel representing the Alaska
District Council of Laborers (Laborers) and the International Union
of Operating Engineers, Local Number 302 (Operating Engineers),
asserts that the 10% premium is applicable to all work performed by
laborers and power equipment operators within the portals of a
tunnel.
As you know, questions of this nature must be resolved in
accordance with area practice. In this regard, your agency
contacted the Laborers' and Operating Engineers' unions for [1]
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[2] information on similar projects in the area. In addition, the
Seattle Regional Wage and Hour Office conducted a survey to determine
the area practice regarding the premium pay issue in the State of
Alaska. This survey identified four tunnel projects in the State of
Alaska during the time frame of 1979 to 1985. Based on the information
provided on the work performed on these four projects, it was the
practice in the State of Alaska to pay a 10% premium to laborers and
power equipment operators for all work performed within the portals of a
tunnel.
The firm asserts that its pay practices on this project were
identical to those on the initial phase of the Snettisham project
in the early 1970's and that project should be considered in
determining whether the 10% premium is applicable. /FN1/ By letter
dated January 15, 1990, the firm states that:
The Contractor for the Tunnel and Underground Work on the
first Snettisham Project paid the Underground Premium
required for their work. Pacific Ventures, Inc.
performed the other [*] non-tunnel work [*] [*](emphasis
added)[*](structural, mechanical, and electrical) in the
Powerhouse, Valve Room, and Tunnel Portals, and there was
no requirement for a Ten-Percent Premium for this work.
This is identical to the situation now at issue.
We disagree with Pacific Venture's assertion that the work it
performed on the original Snettisham project is identical to the
situation now at issue. In the initial Snettisham project, the
record shows that Pacific Ventures was the mechanical subcontractor
to the prime contractor, Gates and Fox, and that it performed
non-tunnel work in the powerhouse, valve room, and tunnel portals.
In correspondence to the Department of Labor, Counsel for the
Laborers has stated that work in the powerhouse is not "tunnel,
shaft or raise" work as stated in its agreement with the Alaska
Chapter Associated General Contractors and is, therefore, not
subject to the 10% premium. Therefore, although the firm is
correct in its statement that the 10% premium was not applicable to
the work it performed in the powerhouse (and presumably the valve
room), it is incorrect in its assertion that work performed within
the tunnel portals was not subject to the 10% premium. The prime
contractor on that project paid the 10% premium to all laborers and
operating engineers who performed work within the portals of the
tunnel during the complete duration of the project. This premium
would have also been applicable to laborers and power equipment
operators employed by [2]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ The original Snettisham project was not included in the area
practice survey because the project was completed some seven years
prior to the time frame established for the survey. [2]
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[3] Pacific Ventures who performed any work within the tunnel
portals.
Accordingly, the laborers and power equipment operators who
performed work within the tunnel portals on this project during the
actual construction of the tunnel and also during any and all
subsequent mechanical, electrical, and structural work are entitled
to the additional 10% premium.
We understand that the contractor paid the additional 10% premium
to its laborers and equipment operators during the construction of
the tunnel up to and including the lining of the tunnel.
Therefore, back wages are due only for the subsequent work. In an
effort to facilitate your back wage computations, we are enclosing
information that the contractor provided to us regarding the number
of hours worked by laborers and power equipment operators within
the portal of the tunnel on the above-referenced project that were
not compensated with 10% premium.
This constitutes a final ruling under section 5.13 of Regulations,
29 CFR Part 5. In accordance with section 7.9 of Regulations, 29
CFR Part 7, this ruling may be appealed by any interested party to
the Wage Appeals Board w thin 30 days of the date of this letter.
Sincerely,
/s/
Daniel F. Sweeney
Deputy Assistant Administrator
cc: Kevin Dougherty
Robert D. McWhiter [3]
