SOUTHEASTERN CAPITAL CORP., WAB No. 78-12 (WAB Jan. 16, 1979)
CCASE:
WAGE RATES FOR RESIDENTIAL CONST.
DDATE:
19790116
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of
SOUTHEASTERN CAPITAL CORP. WAB Case No. 78-12
Wage Rates for Residential
Construction, Birmingham,
Jefferson Co., Ala Dated: January 16, 1979
Wage Decision No. AL 75-1047
Before: Alfred L. Ganna, Chairman, William T. Evans, Member,
Thomas M. Phelan, Member
ORDER GRANTING MOTION TO DISMISS
This case is before the Wage Appeals Board on the petition
of Southeastern Capital Corporation requesting the Board to
review the final decision of the Assistant Administrator, Wage
and Hour Division, that any modifications to wage decision
No. AL 75-1047, issued prior to the start of construction of
Petitioner's project, Covington Apartments, are appli[c]able
thereto, and that Wage Decision No. AL 77-1075, issued after the
start of construction is not applicable.
The Wage and Hour Division issued wage determination
No. AL 75-1047 in April 1975 for residential construction in
several counties in Alabama, including Jefferson County. The wage
rates contained in the general determination resulted from a survey
of residential construction in the area conducted by Wage and Hour
in [1]
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[2] the latter part of 1974. In May 1976, a modification of
the plumber's rate was issued to wage decision No. AL 75-1047 on
the basis of additional wage payment data submitted from
residential projects in the appropriate area. This modification
raised the plumber's hourly wage rate from $4.71 to $9.75 plus
fringes. Similarly, in November 1976, based on newly acquired wage
payment evidence, the roofer's rate in wage decision No. AL 75-1047
was raised from $4.25 to $7.50 plus fringe benefits by Modification
No. 2.
In connection with guaranteeing the mortgage under the
National Housing Act, HUD furnished Petitioner with wage decision
No. AL 75-1047 including Modification No. 1, in July 1976 as the
wage determination applicable to the construction of the Covington
Apartments in Birmingham. Initial endorsement of the mortgage for
Covington Apartments occurred on August 31, 1976, a preconstruction
conference at which the Davis-Bacon requirements were discussed was
held on September 1, 1976 and construction started, also, on
September 1, 1976.
When HUD reviewed the payrolls from the project they advised
Petitioner's subcontractor that the subcontractor was not paying
the predetermined wage rate for plumbers. The subcontractor
continued to pay less than the predetermined wage rate because
Petitioner advised HUD that Petitioner would appeal the plumber's
rate to Wage and Hour. At this time HUD is holding $2,864.56 for
payment of back wages. [2]
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[3] Subsequently, in early 1977 Wage and Hour conducted another
survey of residential construction in the same counties in Alabama
and in June 1977 issued a new wage decision, No. AL 77-1075, which
listed a plumber's rate of $6.50 and a roofer's rate of $4.50.
Petitioner's appeal is based primarily on his claim that wages
contained in the modifications to wage decision No. AL 75-1047 were
in error due to the fact that the wage data on which the rates were
based was obtained from custom built homes from a centralized
location in Birmingham and was not representative of the wages
being paid on construction similar to Petitioner's project.
Petitioner further states that the wage rates for plumbers and
roofers issued in wage decision No. AL 77-1075 dropped considerably
from the levels in AL 75-1047 and considers this an indication that
the wage rates in the earlier decision, AL 75-1047, were erroneous
and based on faulty wage data.
The Wage and Hour Division filed a Motion to Dismiss the
petition in this case on the basis that the appeal was not timely
filed since Petitioner is requesting changes in the wage rates
after construction has started. Wage and Hour asserts that the
wage rates which Petitioner contends are applicable to Covington
Apartments and were those contained in wage decision No. AL 77-1075
issued June 3, 1977, 10 months after the start of construction,
cannot be applied to the project. Wage and Hour cites numerous
Board decisions wherein the Board, interpreting Section 1.7(b) of
the Regulations, has held that a modification [3]
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[4] to a wage determination is not applicable after a contract award
or after the start of construction under the National Housing Act.
Wage and Hour also relies on the language of Section 1.7(b) of the
regulations which provides that a modification is effective under
the National Housing Act if made prior to the start of
construction, and before the mortgage is initially endorsed by the
Federal agency.
The Wage Appeals Board considered this appeal on the basis of
the Petition for Review and a response to Wage and Hour's Motion
to Dismiss filed by Petitioner, and the Statement for the Assistant
Administrator in Support of the Motion to Dismiss and the record of
the case filed by the Solicitor of Labor on behalf of the Wage and
Hour Division.
The Wage Appeals Board cannot accept the Petitioner's position
that the wage data used as the basis for Modification No. 1 was not
appropriate for a schedule of wage rates for residential
construction in Jefferson County. There is nothing in the record
to prove this allegation. Petitioner was furnished with a copy of
wage decision No. AL 75-1047 and Modification No. 1 by HUD in early
July, 1976. Construction of the project did not start until
September 1, 1976. There was ample time for Petitioner to question
the wage rate for plumbers contained in Modification No. 1 prior to
the start of construction. Also, there was a preconstruction
conference at which this issue should have been raised if there was
any question about it. If the Petitioner disagreed with Wage and
Hour's determination of the rate as provided to it by HUD,
Petitioner should have requested the [4]
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[5] Wage and Hour Division to resolve the matter. Further appeal
could have been made to the Wage Appeals Board at that time.
These channels of appeal are provided to eliminate questions
and disagreements arising during construction of the project and
would seem to the Board to be an appropriate effort on the part of
the contracting agencies and the Department of Labor to assist the
parties interested in Federal or Federally assisted construction.
However, they can only be of assistance to the parties if they
avail themselves of them.
The Wage Appeals Board must take note of Section 1.7(b)(2) of
Regulations, Part 1, which provides in part:
(2) All actions modifying a general wage
determination shall be applicable thereto,
.... In the case of contracts entered
into pursuant to the National Housing Act,
such modifications shall be effective if
made prior to the beginning of construction,
but shall not apply after the mortgage is
initially endorsed by the Federal agency.
In view of the above considerations the Motion to Dismiss the
petition is granted and the final decision of the Assistant
Administrator is hereby affirmed.
BY ORDER OF THE BOARD
Craig Bulger,
Executive Secretary
Wage Appeals Board [5]
