Print This Page
E-mail This PageG & C ENTERPRISES, INC., WAB No. 83-07 (WAB Feb. 8, 1984)
|
Subscribe to E-mail Updates
|
|
| DOL Home > OALJ > Davis-Bacon Act/Service Contract Act > G & C ENTERPRISES, INC., WAB No. 83-07 (WAB Feb. 8, 1984) |
USDOL/OALJ Reporter
CCASE:
G & C ENTERPRISES
DDATE:
19840208
TTEXT:
~1
[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of
G & C ENTERPRISES, INC. WAB Case No. 83-07
Bordentown, NJ Dated: February 8, 1984
APPEARANCES: Marvin E. Schlosser, Esquire for G & C
Enterprises, Inc.
Terry R. Yellig, Esquire for Building and
Construction Trades Department, AFL-CIO
Eleanor Jenkins Lauderdale, Esquire, Douglas J.
Davidson, Esquire, for the Wage and Hour Division
U.S. Department of Labor
BEFORE: Alvin Bramow, Chairman, Stuart Rothman, Member
Thomas X. Dunn, Member
DECISION OF THE WAGE APPEALS BOARD
This case is before the Wage Appeals Board on the petition
of G & C Enterprises, Inc., of Bordentown, New Jersey, (hereinafter
G & C) seeking review of the Assistant Administrator's ruling of
June 8, 1982. The Assistant Administrator concluded that a
contractor on a project subject to the Davis-Bacon Act is required
to pay fringe benefits to employees for all hours worked on a
covered project, including overtime hours. Petitioner contends
that a contractor is not required to make fringe benefit
contributions for overtime hours worked. [1]
~2
[2] G & C performed construction contracts for the Department
of Defense at 13 military sites in Pennsylvania and New Jersey.
The applicable construction contracts contained the labor standards
provisions of the Davis-Bacon Act and the Contract Work Hours and
Safety Standards Act (CWHSSA). All work is completed but the
Department of Defense is withholding sufficient sums from G & C to
satisfy back wage deficiencies computed to be due G & C's
employees. G & C did not pay the fringe benefits for hours its
employees worked in excess of either 8 hours per day or 40 hours
per week.
The Assistant Administrator advised G & C by letter of
June 8, 1982 that G & C's method of computing wages violates
the requirement of the Davis-Bacon Act that employees subject
to the Act be paid amounts found to be prevailing for the various
classes of laborers and mechanics employed on the project.
After G & C requested the Assistant Administrator to
reconsider her decision and was notified that the decision was
reaffirmed, G & C appealed the Assistant Administrator's decision
to the Wage Appeals Board April 6, 1983.
The petitioner's argument may be simply stated. (1) Neither
the Davis-Bacon Act nor CWHSSA require a contractor to pay fringe
benefits for overtime hours worked whether in excess of 8 hours
per day or 40 hours per week. (2) If the Wage Appeals Board
does not rule in favor of the petitioner on this question, the [2]
~3
[3] petitioner then argues that the Davis-Bacon Act is ambiguous on
the question of the applicability of fringe benefit payments
for overtime hours and subject to misconstruction. The petitioner
contends the Act may be legitimately misconstrued by contractors
bidding on work which is subject to the Act and asks the Board
to agree. Petitioner could then pursue other remedies.
* * *
After a hearing December 8, 1983, the Board carefully
considered the positions of the petitioner, the Assistant
Administrator and the Building and Construction Trades Department,
AFL-CIO, an interested party, on the question whether a contractor
must pay fringe benefits for all hours worked, including
overtime hours, under the Davis-Bacon Act, and whether the
Act or regulations are ambiguous.
The Davis-Bacon Act and the Contract Work Hours and Safety
Standards Act are separate and distinct statutes. One must
look at each statute separately to determine the requirements
for the payment of wages. The Davis-Bacon Act establishes the
wage rates to be paid for hours worked on a Federal or federally-
assisted project, whereas CWHSSA sets forth the requirements on
federal work for the payment of overtime hours (in excess of
eight hours in any calendar day, or in excess of forty hours
in a workweek). [3]
~4
[4] Section 1(a) of the Davis-Bacon Act, as amended, 40 USC
276(a) provides in pertinent part as follows:
That the advertised specifications for every contract
in excess of $2000, to which the United States . . .
is a party, for construction, alteration, and/or
repair, including painting and decorating, of public
buildings or public works of the United States . . .
shall contain a provision stating the [*] minimum wages [*]
to be paid various classes of laborers and mechanics
which shall be based upon the [*] wages [*] that will be
determined by the Secretary of Labor to be prevailing . . .;
and every contract based upon these specifications
shall contain a stipulation that the contractor or
his subcontractor [*] shall pay all mechanics and laborers
employed directly upon the site of the work . . . the full
amounts accrued at time of payment, computed at wage
rates not less than those stated in the advertised
specifications [*], . . . [*](Emphasis added.)[*]
The terms "wages", "minimum wages", "prevailing wages" and
"rates of wages" were not defined when the Act was enacted in
1931 and amended in 1935. The Department of Labor interpreted
these terms to mean the basic hourly rate of pay paid to each
employee. Therefore, the wage determination issued by the
Department of Labor and placed in the advertised specifications
for every contract contained only the basic cash hourly rate
to be paid to each employee for each hour worked.
During 1962 and 1963 the subcommittee of the House Committee
on Labor and Education held hearings on the subject of amendments
to the Davis-Bacon Act to include fringe benefits in the definition
of prevailing wage. Testimony at these hearings revealed
that payments to fringe benefit funds had become part of the [4]
~5
[5] prevailing wage practices and customs throughout the construction
industry. It is apparent from this legislative history that
Congress believed it necessary to broaden the definition of the
term "prevailing wages" contained in the Davis-Bacon Act. On
July 2, 1964, the Act was amended to add a new section 1(b)
which provides in pertinent part as follows:
(b) As used in this Act the term "wages", "scale of
wages", "wage rates", "minimum wages", and "prevailing
wages" shall include --
(1) the basic hourly rate of pay; and
(2) the amount of --
(A) the rate of contribution irrevocably made
by a contractor or subcontra[c]tor to a trustee or to
a third person pursuant to a fund, plan, or program;
and
(B) the rate of costs to the contractor or
subcontractor which may be reasonably anticipated
in providing benefits to laborers and mechanics
pursuant to an enforc[ea]ble commitment to carry out
a financially responsible plan or program which
was communicated in writing to the laborers and
mechanics affected, for medical or hospital care,
pensions on retirement or death . . .:
Provided, That the obligation of a contractor or
subcontractor to make payment in accordance with
the prevailing wage determinations of the Secretary
of Labor, insofar as this Act and other Acts incorporating
this Act by reference are concerned may be discharged by
the making of payments in cash, by the making of
contributions of a type referred to in paragraph (2)(A),
or by the assumption of an enforc[ea]ble commitment to bear
the costs of a plan or program of a type referred to in
paragraph (2)(B), or any combination thereof, . . .
Another provision of the new subsection 1(b) specifically
provided that [*] fringe benefits [*] would not be considered in
the [*] calculation [*] of overtime under any Federal law. [*]
[EMPHASIS IN ORIGINAL][*] This would include [5]
~6
[6] overtime under the provisions of CWHSSA, the overtime statute
applicable to this appeal. Section 102(a) of that Act, 40 USC 327 et
seq., provides in part:
. . . the wages of every laborer and mechanic employed by
any contractor or subcontractor in his performance of
work on any contract . . . shall be computed on the basis
of a standard workday of eight hours and a standard
workweek of forty hours, and work in excess of such
standard workday or workweek shall be permitted subject
to the provisions of this section. For each workweek
in which any such laborer or mechanic is so employed,
such wages shall include compensation, at a rate not
less than one and one-half times the basic rate of pay,
for all hours work[ed] in excess of eight hours in any
calendar day or in excess of forty hours in the workweek ...
When the Board reads sections 1(a) and 1(b) of the Davis-
Bacon Act, coupled with section 102(a) of CWHSSA, it cannot
agree with the position of the petitioner that the amount of
fringe benefits which are defined as part of the "prevailing
wage rate" under the Davis-Bacon Act are not payable for overtime
hours worked by a laborer or mechanic. A careful reading of
these Acts leads the Board to the conclusion that the "prevailing
wage rate" must be paid for all hours worked on the site
of the work.
This conclusion is clearly supported by the legislative
history in which the following exchange took place:
Mr. Sickles. I just have one question that comes out
of some testimony I guess we are going to have from the
chamber of commerce, and I did not quite understand
that this effect would occur. But the example they give
is this: If a contractor pays $3.50 an hour, as his
basic wage, and at a 50-cent fringe, because he has one
of these funds, but, and this is determined as the
prevailing [6]
~7
[7] wage in the community, but another contractor, who does
not pay into a fund, would then have to pay $4. [*] In the
original there is no overtime on the fund, and so 48 hours of
work is still 50 cents per hour for each fund, and this
objection to the bill would indicate that the contractor who
does not pay into the fund would now have to pay not only the
$4 per hour, but on overtime, he would have to pay overtime
on this fringe.
Now, is that the way it would actually work in
practice?
Mr. Henning. Secretary Goldberg answered that question
when it was up last year, and made it clear the overtime
is paid on the basic rate.
Mr. Sickles. But not on this?
Mr. Henning. That is right.
(House hearings, Committee on Labor and Education, March
1963. John F. Henning, Under Secretary of Labor, appearing.)
[*] (Emphasis added). [*]
Also, it is abundantly clear from both the House and Senate
Committee reports that another purpose of the overtime provisions
of H.R. 6041 is to avoid penalizing a contractor who elects to
meet his obligations under the bill by paying benefits in cash.
See House Report No. 308, 88th Cong. 1st Sess., p.4 (1963) and
Senate Report No. 963, 88th Cong 2nd Sess., p.7 (1964).
Now to allow a contractor to exclude the payment of fringe
benefits from overtime hours worked would reverse the intent of
Congress. This exclusion would penalize those contractors who
pay fringe benefits into trust funds. They would be at a
disadvantage in bidding Government contracts. The whole purpose of
the 1964 amendments to the Davis-Bacon Act would be defeated by the
petitioner's interpretation of the overtime provisions in
section 1(b) of the Act. [7]
~8
[8] The Board finds that a contractor is required to pay fringe
benefits for all hours worked, including the overtime hours, by
virtue of the Davis-Bacon Act, as amended.
The Board further does not find the Davis-Bacon Act, as
amended, ambiguous as to the requirement that fringe benefits
be paid for overtime hours worked to justify misconstruction by
bidding contractors. The 1964 amendments have been in place
almost twenty years. The Board has no knowledge of any other
contractors having a similar problem. In fact it appears to
be standard knowledge in the construction industry that contractors
performing work subject to the Davis-Bacon Act must pay the fringe
benefits for all hours worked, including overtime hours.
In view of the foregoing, the Assistant Administrator's
decision is affirmed and the petition is hereby dismissed.
BY ORDER OF THE BOARD
Craig Bulger,
Executive Secretary
Wage Appeals Board [8]