January 2013

A New Year, and a New Attitude about Davis-Bacon Enforcement

It's worth saying again: Davis-Bacon enforcement is back in a real way. While the statute itself is still not back to what it should be in terms of wage determinations, we need more locals to help be the eyes and ears of our compliance strategy. As a team, we are making progress, but we can do so much more.

For example, one of the recent proud moments for us was a complaint we helped file with the U.S. Department of Labor last year with the help of Local 492's (Nashville, Tenn.) Business Manager Sam McElroy.

The case ended up being investigated into a massive, multi-trade "rats-nest" of cheaters on a federally funded plant in Smyrna, Tennessee. The U.S. Department of Labor recovered a total of $787,548 in back wages for 124 workers. They found that five contractors violated provisions of the Davis-Bacon and Related Acts as well as the Contract Work Hours and Safety Standards Act, which resulted in the workers being underpaid, and not receiving fringe benefits to which they were entitled.

"The misclassification of employees as independent contractors is unacceptable, and something we see all too often," said Nancy J. Leppink, the recently resigned deputy administrator of the Wage and Hour Division (WHD). "The federal government's financial support for significant work projects benefits businesses and is also meant, through Davis-Bacon, to maintain a level-playing field among employers. Honest employers who play by the rules have a difficult time competing against scofflaws who gain an advantage by underpaying their workers. And workers and their families lose when they are denied the wages they rightfully deserve."

Investigators found that numerous workers were misclassified as independent contractors and left off the company's certified payroll. Overtime compensation was paid at a lower rate to the workers because of their misclassification. Among the contractors, according to the WHD, was T.W. Frierson Contractor Inc. (of Nashville, Tenn.), which improperly classified ironworkers as laborers.

"Workers employed on federally funded projects deserve their full pay as required under federal law," said Sandra Sanders, director of the division's Nashville district office. "Employers are well aware of their obligations to pay prevailing wage rates when they enter such contracts. These investigations underscore the Labor Department's commitment to ensure that proper prevailing wages and fringe benefits are paid to employees working on government contracts. Other employers accepting taxpayer money to perform work on federally financed projects should take this as an opportunity to assess their own payroll practices to verify that they are paying their employees in compliance with federal law."

Since 2009, the WHD has hired more than 300 investigators, for a total of 1,000. More than 600 investigators speak a language in addition to English. The WHD opened 13 new offices last year with upgrades nationwide. Last year was the best ever, as the WHD concluded over 33,000 compliance actions, resulting in $225 million in back wages for 275,000 workers nationwide.

Of these were 1,700 Davis-Bacon cases resulting in over $20 million in back wages for more than 11,000 construction workers. This is a 300% increase compared to 2008, a 100% hike in back wages and an 80% jump in the number of workers.

What this all means for Iron Worker locals in 2013 is that we should be re-doubling our efforts. Please communicate any problems you become aware of when contractors misclassify and underpay ironworkers on federal projects.

As they say these days on train and subway systems--"if you see something, say something"--in this case, to this office first. Don't overthink the case and spend months waiting for certified payroll records, etc. Business managers, agents, organizers: Call me first and let's plot a strategy. For now, do make sure the job is active or about to begin and let's see about making that playing field level for our signatory contractors.