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USDOL/OALJ Reporter
CCASE:
SID GRINKER COMPANY
DDATE:
19920925
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of
SID GRINKER COMPANY, INC.,
Contractor WAB Case No. 92-07
With respect to the labor standards investigation of
Project P-2-35, Scattered Sites Program, Milwaukee
Housing Authority Rehabilitation Project
BEFORE: Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
Anna Maria Farias, Member
DATED: September 25, 1992
DECISION OF THE WAGE APPEALS BOARD
This case is before the Wage Appeals Board on the petition of
Sid Grinker Company, Inc. ("Grinker"), seeking review of a May 25,
1990 ruling (reconsideration denied, March 19, 1992) by the Deputy
Assistant Administrator of the Wage and Hour Division concerning
Grinker's contract performance on four properties under the City of
Milwaukee Housing Authority's Scattered Sites Program. The Deputy
Assistant Administrator determined that Grinker employed apprentice
carpenters on the job sites in excess of the allowable ratio of
apprentices to journeymen as stipulated in the applicable
apprenticeship program, which required the contractor to maintain
a ratio of one apprentice to two journeyman carpenters. For the
reasons stated below, the petition for review is denied.
I. BACKGROUND
The Housing Authority of the City of Milwaukee (the
"Authority") advertises groups of single family homes for
rehabilitation. The low bidder on [1]
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[2] each group of properties purchases the structures with an
agreement that the Authority will repurchase the structures upon
completion of the rehabilitation work. When an award is made
for a group of properties, the contractor executes separate
contract agreements for the rehabilitation of each of the
properties in the group. Certified payroll records are submitted
for each property.
The Authority published an invitation for bids for Project
P-2-35, under its Scattered Sites Program, on February 17, 1988.
The project involved renovation and rehabilitation of housing
structures in Milwaukee at 2535 41st Street, 2646 North 38th
Street, 2413 North 39th Street and 2856 North 34th Street. Grinker
was the successful bidder on the four properties; on June 16, 1988
Grinker executed four separate contracts with the Authority for the
rehabilitation of the properties. The contracts were subject to
the labor standards provisions of the U.S. Housing Act of 1937, as
amended and recodified, 42 U.S.C. [sec] 1437j, and the Department
of Labor's regulations at 29 C.F.R. Part 5. These labor standards
regulations include the provisions (29 C.F.R. 5.5(a)(4)(i))
regarding use of apprentices. The applicable wage determination,
No 87-WI-1, Modification 2, required that journeyman carpenters be
paid at wage rate totalling $19.89 ($15.36 per hour, plus $4.53 in
fringe benefits).
The apprentice/journeyman ratio applicable to the four
contracts was contained in the Residential Carpenters' Agreement of
the United Brotherhood of Carpenters and Joiners of America AFL-
CIO. That agreement required a ratio of one apprentice for every
two journeymen. That ratio has been adopted by the state
apprentice agency.
Following an investigation by the Authority and the U.S.
Department of Housing and Urban Development ("HUD"), Grinker was
notified by letter dated March 2, 1989 from the Authority that the
firm was liable for back wages because Grinker failed to maintain
the proper apprentice/journeyman ratio for each of the four
properties or job sites. The determination was made upon
investigation that three employees were due the carpenter's hourly
wage rate of $19.89 for much of their work, and that as a result of
the underpayments the three affected employees were due $9,336.80
in back wages. /FN1/
By letter to Grinker dated May 25, 1990, Wage and Hour Deputy
Assistant Administrator William W. Gross set forth the results of
the investigation. He noted that Grinker contended that "since
there is only one [2]
/FN1/The Authority's investigation also indicated that ratio
requirement violations existed regarding a sheet metal apprentice
(Michael Chapko) worked for a plumbing subcontractor on the job
sites. The Authority's letter to Grinker inadvertently included
the $204.05 in back wages calculated for the subcontractor's
employee. Consequently, the amount of back wages sought on behalf
of Grinker employees must be reduced by $204.05; the correct total
of back wages at issue in the instant case, therefore, is
$9,336.80. [2]
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[3] contract for scattered sites, the journeypersons at all the job
sites should be combined for the purpose of determining the
allowable ratio." The Deputy Assistant Administrator explained,
however, that "it is the Department's position that the allowable
ratio has to be maintained (or can not be exceeded) on each job
site subject to the Davis-Bacon and related Acts. . . ." (Original
emphasis.) This requirement, he added, "effectuates a major
purpose of the ratio requirements, which is to ensure that
apprentices receive adequate supervision and training."
Accordingly, the Deputy Assistant Administrator affirmed the
conclusions made by HUD as a result of the investigation. /FN2/
Grinker, by letter dated June 22, 1990, sought reconsideration
of the Deputy Assistant Administrator's ruling. On March 19, 1992,
the Deputy Assistant Administrator denied reconsideration.
II. DISCUSSION
The Department of Labor's Davis-Bacon labor standards
regulations address, at 29 C.F.R. 5.5(a)(4)(i), the requirements
for the use of apprentices and trainees on projects subject to the
provisions of the Davis-Bacon Act or Related Acts. These
regulations specify, in pertinent part, that
[t]he allowable ratio of apprentices to journeymen [*] on
the job site [*] in any craft classification shall not be
greater than the ratio permitted to the contractor as to
the entire work force under the registered program.
[*](Emphasis supplied.)[*]
The regulations further provide that "any apprentice performing
work on the job site in excess of the ratio permitted . . . shall
be paid not less than the applicable wage rate on the wage
determination for the work actually performed." (Emphasis
supplied.) In addition, the Department's regulation addressing
labor standards requirements for registration of apprenticeship
programs, provides (at 29 C.F.R. 29.5) that any apprenticeship
program utilized by a government contractor must meet the standards
listed in that regulation. Among those standards is the
requirements that "[t]he numeric ratio of apprentices to journeymen
[be] consistent with proper supervision, training, safety, and
continuity of employment, and applicable provisions in collective
bargaining agreements." 29 C.F.R. 29.5(b)(7). [3]
/FN2/ The Deputy Assistant Administrator's letter states that the
Authority determined that four apprentice carpenters were due the
full carpenters' rate. However, as discussed at p. 2, supra, the
investigation by the Authority and HUD disclosed that three
apprentices were due the full carpenters' wage rate. [3]
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[4] The Deputy Assistant Administrator in this case approved the
conclusion reached as the result of the investigation conducted by
the Authority and HUD that Grinker failed to maintain the proper
apprentice/journeyman ratio for each of the four properties or job
sites and that back wages were due affected employees. Upon review
the Board concludes that the Deputy Assistant Administrator's
ruling -- modified to refer to the correct number of affected
employees and the correct amount of back wages (see nn.1, 2, supra)
-- is reasonable and should be affirmed.
The Deputy Assistant Administrator turned aside Grinker's
contention that journeymen at all the job sites should be
considered for apprentice/journeymen ratio purposes. He explained
both the Department's position on that issue and the policy
underlying that position. Thus, the Deputy Assistant Administrator
explained that the Department takes the position that the allowable
ratio must be met (or not exceeded) at each job site subject to
Davis-Bacon requirements, a position designed to effectuate "a
major purpose of the ratio requirements, which is to ensure that
apprentices receive adequate supervision and training." /FN3/ The
Department's position and underlying policy are entirely
reasonable, and the Board sees no basis for second-guessing the
Wage and Hour Division on that point. See Titan IV Mobile Service
Tower, WAB Case No. 89-14 (May 10, 1991), at p. 7. See also, A.
Vento Construction, WAB Case No. 87-51 (Oct. 17, 1990), at p. 9.
Before the Board, Grinker attempts to find support for its
view of the apprentice/journeyman ratio by relying upon the Board's
decision in Arbor Hill Rehabilitation Project, WAB Case No. (Nov.
3, 1987). In that decision, the Board affirmed the Administrator's
interpretation of the term "residential property" as used in
Section 110 of the Housing and Community Development Act, 42 U.S.C.
[sec] 5310, to mean the entire property comprising a project rather
than individual structures. /FN4/ Grinker also argues that the
four properties involved in this case collectively meet the "site
of work" definition set forth at 29 C.F.R. 5.2(l). However, the
term used in the regulatory provisions regarding apprentices is
"job site" -- a term that must be examined and interpreted on the
basis of the policy reasons underlying the apprentice provisions,
and not on the basis of the policy considerations underlying terms
such as "residential property" and "site of work" which involve the
applicability of Davis-Bacon requirements to projects or contracts.
As stated earlier, the Board finds no basis for questioning the [4]
/FN3/ Regarding the adequacy of supervision, counsel for the Acting
Administrator notes (Statement, at pp. 6-7) that the investigation
in this case disclosed that apprentices worked at the job site with
no journeyman present for all or part of a work day.
/FN4/ We note that Arbor Hill involved one contract, whereas in the
instant case separate agreements were executed for rehabilitation
of each of the four properties.
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[5] reasonableness of Wage and Hour's interpretation of the term
"job site" as that term is used in the apprentice regulations.
In sum, the petition for review is denied. The Deputy
Assistant Administrator's ruling is affirmed as modified.
BY ORDER OF THE BOARD:
Gerald F. Krizan, Esq.
Executive Secretary
Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
Anna Maria Farias, Member [5]