U. S. DEPARTMENT OF LABOR
OFFICE OF THE SOLICITOR
WASHINGTON 25
September 2, 1958
Mr. E, Manning Seltzer.
Chief, Legal Division
Office of Chief of Engineers
Department of the Army
Washington125, D. C.
Dear Mr. Seltzers
This is in reply to your letter and enclosures of  July 14,
1958, requesting a ruling under Section 5.11 of Regulations, Part 5
(29 CFR, Subtitle A), in the matter of apparent labor standards vio-
lations by X, subcontractor to Y, under Contract No, DA-29-005-CIVENG-
56-6 for the construction of Phase III of the Rio Grande Floodway near
Albuquerque, New Mexico. The facts reported are described below.
In the course of the contract work, subcontractor X hired a
large number of trucks which were owner-operated, and paid both wages
and truck rental together on a cubic-yard basis in lieu of paying the
specified truck drivers' hourly wage rate for the driving work plus a
separate truck rental. Your investigation indicated that at least
some, and probably most of the truck drivers were underpaid. In deter-
mining the restitution due these owner-operators, a problem has arisen
regarding the correct method of determining the restitution due. The
subcontractor has disagreed, in part, with the method used by the Con-
tracting Officer.
Upon review of the record submitted, we would like to make
clear the following ruling and would appreciate it if you would have
your Albuquerque District proceed on these principles. Truck owner-
operators such as here involved are employees within the meaning of
the Davis-Bacon Act and the Eight Hour Law and are entitled under the
provisions of the labor standards stipulations of the contract to be
compensated for all covered hours worked at the applicable truck drivers'
rate. This compensation is exclusive of and in addition to the amounts
due these employees for rental of their trucks based on the going rate
for rental of such equipment in the area in question.
Under the above principles, your District will have to make
two computations for comparison purposes against the total amount re-
ceived by the owner-operator covering wages and rental. First, the
Contracting -Officer should determine, by checking area practice, the
















Mr. E. Manning Seltzer     Page 2
prevailing rate for rental of the type of truck in question and pre-
ferably establish the reasonable rental due on a work-week basis. This
sum should then be deducted from the total amount received by the em-
ployee for that week, to arrive at the amount ,paid for wages. This bal-
ance should then be divided by the covered hours worked to determine the
hourly wage rate actually paid. The resultant amount should then be com-
pared with the predetermined hourly wage rate applicable to ascertain
whether any underpayments have occurred.
With reference to the determination of the truck rental amount,
as informally discussed with representatives of your Office, area prac-
tice survey together with discussion with the contractors and owner-
operators involved should enable the Contracting Officer to arrive at a
reasonable rental rate for computation purposes which will assure com-
pliance with the laws involved. If our Dallas Regional Office or our
Enforcement Branch can be of further assistance, please let us know.
At the conclusion of your enforcement action in this case, we
would appreciate receiving your report and recommendation.
Very truly yours,
Stuart Rothman
Solicitor of Labor
By
James R. Beaird
Acting Assistant Solicitor