TEGL_11-16_Acc.pdf

ETA Advisory File Text

EMPLOYMENT AND TRAINING ADMINISTRATION ADVISORY SYSTEM U.S. DEPARTMENT OF LABOR Washington D.C. 20210 CLASSIFICATION YouthBuild CORRESPONDENCE SYMBOL OWI-DYS DATE December 20 2016 RESCISSIONS None EXPIRATION DATE ContinuingADVISORY TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 11-16 TO STATE WORKFORCE AGENCIES STATE WORKFORCE LIAISONS STATE WORKFORCE ADMINISTRATORS STATE AND LOCAL WORKFORCE DEVELOPMENT BOARDS ALL YOUTHBUILD GRANTEES FROM PORTIA WU s Assistant Secretary SUBJECT YouthBuild Compliance with Davis-Bacon and Related Acts DBRA 1. Purpose. This Training and Employment Guidance Letter TEGL clarifies compliance with Davis-Bacon and Related Acts requirements for YouthBuild programs. 2. References. Workforce Innovation and Opportunity Act Pub. L. 113-128 July 2014 https www.gpo.gov fdsys pkg PLAW-113publ128 pdf PLAW-113publ128.pdf Workforce Innovation and Opportunity Act Final Rule 20 CFR Part 688 https www.gpo.gov fdsys pkg FR-2016 -08-19 pdf 2016-15975.pdf Davis-Bacon and Related Acts Provisions and Procedures 29 CFR Part 5 http www.ecfr.gov cgi-bin text-idx rgn div5 node 29 1.1.1.1.6 TEGL 06-15 Qualifying Work Sites and Construction Projects for YouthBuild Grantees and Their Role in Training https wdr.doleta.gov directives corr doc.cfm docn 6610 U.S. Department of Labor s Wage and Hour Division https www.dol.gov whd govcontracts dbra.htm U.S. Department of Housing and Urban Development HUD Davis-Bacon Labor Standards http portal.hud.gov hudportal documents huddoc id 4812-LRguide.pdf HUD Davis-Bacon and Related Acts HOME Investment Partnerships HOME and Community Development Block Grant CDBG Policies Manual https www.hudexchange.info resources documents Davis- BaconandHOME TrainingManual.pdf HUD Labor Standards and Enforcement Regional Staff Contacts http portal.hud.gov hudportal HUD src program offices labor standards enforcement laborrelstf 3.Background. Department of Labor-funded YouthBuild programs must provide hands-on construction experience for participants receiving industry-recognized construction training. These 2 programs must provide qualifying work sites per TEGL 06-15 at which part icipants learn construction skills through the renovation rehabilitation or new construction of low-income housing projects. Many grantees partner with local Public Housing Authorities to access such work sites as well as with other developers or builders partially or wholly Federally- funded to construct or rehabilitate public housing. In such cases the Davis-Bacon labor standa rds may apply. Davis-Bacon Act requirements apply to federal contracts for construction of public buildings and public works. In addition many federal laws authorize federal assistance for construction through grants loans loan guarantees and insurance and require the application of Davis-Bacon labor standards including prevailing wage requirements to such construction. These laws are referred to as Davis-Bacon related Acts or DBRA. Several major HUD-administered laws that include Davis-Bacon requirements also set thresholds on coverage. In such cases the DBRA requirements do not apply unless a specific coverage threshold is met. Two major examples are discussed below. When DBRA applies contractors and subcontractors must pay their covered laborers and mechanics employed under the contract no less than the locally prevailing wage rate including fringe benefits for corresponding work on similar projects in the area. DBRA directs the Department of Labor hereafter the Department to determine such locally prevailing wage rates. 4. Determining DBRA Prevailing Wage Rate Applicability. YouthBuild participants are not exempt from prevailing wage requirements determinations for any project to which DBRA labor standards apply. Therefore YouthBuild participants must be paid prevailing wages on DBRA-covered construction. This is generally the equivalent to journeyworker s level wages. This requirement necessitates planning by YouthBuild programs that see federally-assisted construction projects as valuable training sites for their youth since YouthBuild programs do not generally budget for the prevailing wage rate. Many grantees struggle with finding suitable construction work sites that meet the minimum requirements to qualify for training purposes and some of those that would qualify are in whole or in part federally-funded projects subject to DBRA. As DBRA prevailing wage rate rules apply under a number of different HUD-administered statutes determining when the Davis-Bacon requirements apply is important. For example under some of these statutes there are coverage thresholds below which prevailing wage rates do not apply. Two examples are in the 8 unit rule under Community Development Block Grants CDBG and the 12 unit rule under the HOME Investment Partnership Program HOME The Community Development Block Grant CDBG program provides communities with resources in order to address widely varying and locally identified community de velopment needs. DBRA labor standards apply to construction work financed in whole or in part by CDBG funds. Financed includes both paying for construction work directly and also for example using CDBG assistance to reduce the interest rate on a construction loan. The CDBG 8-unit rule is a threshold for DBRA labor standards 3 coverage meaning that such standards only apply to construction on residential propertie s that contain 8 or more housing units. Typically single family homeowner properties do not fall under DBRA prevailing wage requirements when funded by CDBG. However property is not limited to a specific building CDBG defines property as one or mo re buildings on an undivided lot or on contiguous lots or parcels that are commonly -owned and operated as one rental cooperative or condominium project. Examples of 8 or more unit properties which meet the threshold and trigger DBRA prevailing wage requ irements may include 4 townhouse buildings side -by -side which consist of 2 units each 3 apartment buildings each consisting of 3 units and located on one tract of land or 8 single -family not homeowner houses located on contiguous lots and operated as a single rental property . Properties below the threshold i.e. with fewer than 8 total units would not trigger DBRA prevailing wage requirements as a result of CDBG f inanc ing. The HOME Investment Partnership Program HOME provides formula grants to states and localities to fund a wide range of activities in local communities including building buying and or rehabilitating affordable to low -income housing . DBRA labor standards apply to contracts for construction covering 12 or more HOME -assisted un its. Unlike CDBG the standard for coverage is assisted not financed which provides for much broader application. This means that DBRA standards may be applicable without regard to whether the HOME funds are used for construction or non -construct ion activities such as real property acquisition engineering or architectural fees or down payment assistance. HOME projects can contain units that are not assisted by HOME. The DBRA coverage threshold 12 or more units applies only to the number of units assisted by HOME. However once the threshold is met and DBRA requirements are triggered the labor standards apply to construction of the entire project including the portions of the project that are not assisted with HOME funds . Thus DBR A preva iling wage requirements do not appl y to HOME projects w here there are only 11 or fewer HOME -assisted units. These are not the only DBRA s that include coverage thresholds but they present examples where DBRA prevailing wage requirements may not apply due t o coverage thresholds set forth in the statutory language in specific DBRA s. It is not possible to describe here every such threshold . The above examples are meant to indicate how important it is to determine where DBRA prevailing wage r equirement s apply . If there are any questions as to the applicability of DBRA YouthBuild grantees are directed to work with their HUD Labor Standards and Enforcement Regional Field staff for assistance in determining whether DBRA applies to specific projects and to ensu re YouthBuild programs are adhering to the federal wage requirements under DBRA where applicable . The HUD labor relations staff are regional experts who can help YouthBuild programs determine where DBRA prevailing wage rates apply specify the applicable Davis -Bacon wage determination s and when YouthBuild participants may be allowed to work on federally - assisted construction projects without a requirement of prevailing wage rate s. Contact information for HUD Labor Standards and Enforcement Regional sta ff can be located at 4 http portal.hud.gov hudportal HUD src program offices labor standards enforcement lab orrelstf . 5. DBRA Apprentices and Certified Training Programs . Per DBRA apprentices and trainees may be paid less than the applicable DBRA prevailing wage rates only if they meet specific conditions see 29 CFR 5.5 a 4 . The conditions can be met for apprentices individually registere d in a bona fide apprenticeship program registered either with the National Office of Apprenticeship or a State Apprenticeship Agency recognized by the Office of Apprenticeship or trainees individually registered in specific training programs that are cer tified by the Department s Employment and Training Administration ETA . Being funded by a D epartment program i.e. YouthBuild is not equivalent to having a registered or certified training program as described above. Previously ETA certified the Yout hBuild -Trainee Apprenticeship Preparation YB -TAP standards as such a training program. During this time YouthBuild programs that were registered under the YB -TAP standards were not required to pay prevailing wage rates on DBRA applicable construction s ites but instead based pay on the rate related to the trainee s level of progress as specified by the program documents. In 2012 the Employment and Training Administration de -certified YB -TAP as a training program and stopped offering these standards . Thus YouthBuild participants may not be paid less than the prevailing wage rates listed in the applicable Davis -Bacon wage determination for the classification s of work they perform when they are engaged in DBRA -covered construction . Additional informa tion about the Davis -Bacon and Related Acts is available at https www.dol.gov whd govcontracts dbra.htm . For DBRA -specific questions go to https www.dol.gov whd contact us.htm or call the Department s Wage and Hour Division s toll -free help line Monday -Friday 8 a.m. to 5 p.m. Eastern time at 1-866 -4USWAGE 1 -866 -487 -9243 TTY 1 -877 -889 -5627 6. Inquir ies. Questions on this TEGL may be a ddressed to the appropriate ETA regional office.