(a) General. Contracting agencies are responsible for assuring the full and impartial enforcement of the labor standards in the administration of construction contracts. To enforce this policy, contracting agencies shall maintain a continuing effective program that shall include

(1) Ensuring that contractors and subcontractors are informed, prior to commencement of work, of the obligations under the labor standards clauses of the contract (see GSA Form 618-A, Form Letter for Informing Contractor of Labor Standard Provisions);

(2) Adequate payroll reviews, on-site inspections, and employee interviews to determine compliance by the contractor and subcontractors and prompt initiation of corrective action when required;

(3) Prompt investigation and disposition of complaints (see GSA Form 3017, Labor Standards Interview); and (4) Prompt submission of all reports required by this subpart.

(b) Responsibility. The contracting officer shall inform the contractor of the labor standards clauses of the contract and of the contractor's and any subcontractor's responsibilities under the contract. Unless it is clear that the contractor is fully aware of the requirements, the contracting officer shall issue an explanatory letter or arrange a conference with the contractor promptly after award of the contract. The contracting officer may use

the GSA Form 618-A, for this purpose.

522.405-2 Wages, fringe benefits, and overtime.

(a) In computing wages paid to a laborer or mechanic, the contractor may include only the following items:

(1) Amounts paid in cash to the laborer or mechanic, or deducted from payments under the requirements of 29 CFR Part 3.

(2) Contributions, except those required by Federal, State, or local law, that the contractor makes irrevocably to a trustee or a third party under any bona fide fund, plan, or program to provide for medical or hospital care, pensions, compensation for injuries or illness resulting from occupational activity unemployment benefits, life insurance, disability and sickness insurance, accident insurance vacation and holiday pay, defraying costs of apprenticeship, or any other bona fide fringe benefit.

(3) Other contributions or anticipated costs for bona fide fringe benefits to the extent expressly approved by the Secretary of Labor.

(b)(1) The contractor may satisfy the obligation under the clause at 552.222-70, Davis-Bacon Act, by providing wages consisting of any combination of contributions or costs as specified in 522.405-2(a), if the total cost of such combination is not less than the total of the basic hourly rate and fringe benefits payments prescribed in the wage determination decision for the classification of laborer or mechanic concerned.

(2) Wages provided by the contractor and fringe benefits payments required by the wage determination may include items that are not stated as exact cash amounts. In these cases, the interested parties shall determine the cash equivalent of the cost of those items when necessary to determine whether the wages provided by the contractor satisfy the requirements of the wage determination. If the interested parties cannot agree on the cash equivalent, the contracting officer under paragraph (d) of the clause at 552.222-70, Davis-Bacon Act, shall submit the question for final de

termination to the Department of Labor. The information submitted shall include

(i) A comparison of the payments, contributions, or costs in the wage determination decision with those made or proposed as equivalents by the contractor; and

(ii) The comments and recommendations of the contracting officer.

(c) In computing required overtime payments, the contractor shall use the basic rate of pay in the wage determination, or the rate actually paid by the contractor, if higher. The basic rate of pay includes employee contributions to fringe benefits, but excludes the contractor's contributions, costs, or payment of cash equivalents for fringe benefits. Overtime shall not be computed on a rate lower than the basic rate specified in the wage determination.

522.405-3 Additional classifications.

(a) If any laborer or mechanic is to be employed in a classification not listed in the wage determination applicable to the contract, the contractor shall submit to the contracting officer a request for authorization (GSA Form 2428), stating the proposed additional minimum classification and

wage rate inlcuding any fringe benefits payments.

(b) Upon receipt, the contracting officer shall review the request to determine whether it meets the following criteria:

(1) The classification is appropriate and the work to be performed under the classification requested cannot be performed by a classification contained in the applicable wage determination.

(2) The classification is utilized in the area by the construction industry.

(3) The proposed wage rate, including any bona fide fringe benefits, bears a reasonable relationship to the wage rates in the wage determination contained in the contract.

(c) If the conditions in 522.405-3(b) (1), (2), and (3) are met and no interested party objects to the proposed classification, the contracting officer shall approve the request subject to review by the Department of Labor. The contracting officer shall submit a

copy to the Department of Labor who will approve, modify or disapprove every additional classification action within 30 days of receipt or will notify the contracting officer within the 30 day period that additional time is required.

(d) If the criteria are not met or the interested parties cannot agree on the request, the contracting officer shall submit the proposal including the views of all interested parties, other available pertinent information and the contracting officer's recommendation, to the Department of Labor for final determination. (29 CFR 5.5).

(e) Upon approval under paragraph (c) or (d) above, the contracting officer shall notify the contractor and instruct that the approved rate and classification be posted in accordance with 522.405-6(e) and the approved rate be paid to all workers in the affected classification from the first day on which work was performed in the classification.

522.405-4 Apprentices and trainees.

(a) A contractor, prior to using apprentices or trainees on the contract work, is required to have on file written evidence of registration of those employees in a program accepted by the Bureau of Apprenticeship and Training (BAT), U.S. Department of Labor, or a State apprenticeship and training agency approved and recognized by BAT. The contractor also is required to have on file written evidence of the ratios of apprentices to journeymen, and trainees to journeymen, with the wage rates for apprentices and trainees including fringe benefits payments, specified in the contractor's or subcontractor's registered programs. The contracting officer should examine these files to determine ratios and rates and compare them with those approved in the BAT program to determine the contractor's compliance with the clause at 552.22272, Apprentices and Trainees.

(b) When a contractor has classified employees as apprentices or trainees without complying with the requirements in paragraph (a) above, the contracting officer shall reject the classification and require the contractor to

(a) Submission. Within 7 calendar days after the regular payment date of the payroll week covered, the contractor is required to submit or cause to be submitted, for the contractor and each subcontractor, copies of weekly payrolls applicable to the contract and weekly payroll statements of compliance. The contractor may use the Department of Labor Form WH-347, Payroll (For Contractors Optional Use), or a similar form that provides the same data and identical representations.

(b) Withholding for nonsubmission. If the contractor fails to promptly submit copies of its or its subcontractors' payrolls, the contracting officer shall, from any payment due to the contractor, withhold approval of an amount that the contracting officer considers necessary to protect the interests of the Government and the employees of the contractor or any subcontractor. (See 29 CFR 5.5.)

(c) Examination. (1) The contracting officer shall examine the payrolls and statements to ensure compliance with the contract and any statutory or regulatory requirements. Particular attention should be given to—

(i) The correctness of classifications and rates;

(ii) Fringe benefits payments; (iii) Hours worked;

(iv) Deductions; and

(v) Disproportionate employment ratios of laborers, helpers, apprentices, or trainees, to journeymen.

(2) Fringe benefits payments, contributions made, or costs incurred on other than a weekly basis shall be considered as a part of weekly payments to the extent they are creditable to the particular weekly period involved and are otherwise acceptable.

(d) Preservation. The agency shall retain payrolls and statements for 3 years after completion of the contract and shall make them available when requested by the Department of Labor at any time during that period.

(e) Posting wage determinations. The contractor is required to keep a copy of the wage determination and any approved additional classifications posted at the site of the work in a prominent place where they can be easily seen by the workers. The contracting officer shall furnish to the contractor the Department of Labor Form WH-1321, Notice to Employees Working on Federal or Federally Financed Construction Projects, for posting with the wage rates. The name and address of the officer responsible for the administration of the contract shall be inserted in the poster to inform workers to whom they may submit complaints or raise questions concerning labor standards.

(f) Statement when work is performed personally. Prime contractors and subcontractors who personally perform work are required to submit, in lieu of weekly payrolls and statements of compliance with respect to payment of wages, a statement clearly showing (1) their contractual relationship, (2) the scope and dates of work performed, (3) that they received no wages, and (4) that no mechanics or laborers were employed in the prosecution of the work. GSA Form 618D, Statement to be Submitted When Work is Performed Personally, should be used to furnish this information.

522.405-7 Compliance checking.

(a) Regular compliance checks. The contracting officer administering the contract shall cause regular checks to be made to ensure compliance with

the contract labor standards requirements. Compliance checking shall be made as frequently as necessary. Contracts of 6 months duration or less shall be investigated before final payment is made. Continuous and careful checking is essential to the success of the labor standards enforcement program. Compliance checking includes the following activities:

(1) Employee interviews to determine correctness of classifications and rates of pay, including fringe benefits payments.

(2) On-site inspections to check type of work performed, number and classification of workers, and fulfillment of posting requirements.

(3) Payroll reviews to ensure that payrolls of prime contractors and subcontractors have been submitted on time and are complete and correct.

(4) Comparison of the above information with available data, including daily inspector's report and daily logs of construction, to ensure consistency.

(b) Special compliance checks. Situations that may require special compliance checks include

(1) Inconsistencies, errors, or omissions detected during regular compliance checks; or

(2) Receipt of a complaint alleging violations. When the complaint is not specific enough, the complainant shall be so advised and invited to submit additional information. The disclosure of employee statements shall be protected and governed by the provision of the Freedom of Information Act (5 U.S.C. 552) and the Privacy Act of 1974 (5 U.S.C. 552(a)).

written statements are taken from an employee during a regular or special investigation, they shall not be divulged to the individual's employer or to anyone other than authorized Government representatives working on the case, without the employee's written permission. In the absence of individual agency instructions, investigators are urged to use other guidelines provided by the investigation and enforcement instructions contained in memoranda issued by the Administrator, Wage and Hour Division, U.S. Department of Labor. Copies of those instructions may be obtained from the Administrator upon request.

(b) Notification to the contractor. (1) The contracting officer shall review the investigator's report and make preliminary findings regarding the contractor. Adverse findings that are not supported by other evidence shall not normally be based solely on employee statements that have not been authorized for disclosure by the employee. However, when investigation establishes a pattern of possible violations that are based on employees' statements that have not been authorized for disclosure, the pattern itself may constitute a suitable basis for a finding of noncompliance.

(2) Except in cases involving criminal violations under the Copeland (Antikickback) Act and the Contract Work Hours and Safety Standards Act, the contracting officer shall take the following actions upon completing the review:

(i) Provide written notice to the contractor concerning the preliminary findings, proposed corrective actions, and the contractor's right to request that the basis for the findings be made available and to submit written or oral rebuttal information within a reasonable period of time.

(ii) Request the contractor to make payment for restitution or liquidated damages determined by the contracting officer to be due, whether the violation is considered willful or nonwillful. If the request includes liquidated damages, it shall contain a written statement that the contractor may request relief from the assessment. Also see 552.405-13(b).

(3) If the contractor submits a rebuttal, the contracting officer shall reconsider the preliminary findings based on information brought out by the rebuttal and notify the contractor of the final findings. If no rebuttal is submitted within a reasonable time, the preliminary findings shall be considered to be final.

(4) Upon request from the contractor, the contracting officer shall make the basis for the findings available. However, under no circumstances will the contractor be permitted to examine the investigation report.

522.405-9 Requests for restitution of underpayments.

When a violation of the Davis-Bacon Act or the Contract Work Hours and Safety Standards Act appears to exist, the contracting officer shall request the contractor to make restitution to the employees and/or plans, funds, or programs for any type of benefits required by the applicable wage determinations.

522.405-10 Withholdings from contract payments.

(a) If the contractor or subcontractor fails or refuses to make restitution of all or any part of the wages due the employees, the contracting officer shall withhold from accrued payments due the contractor, an amount equal to the estimated wage underpayments, plus any estimated liquidated damages due under the Contract Work Hours and Safety Standards Act. In this regard the clause at 552.222-75, withholding, permits the contracting officer to withhold or cause to be withheld from the contractor under the current contract or any other Federal contract with the same prime contractor, or any other Federally-assisted contract subject to Davis-Bacon prevailing wage (or Contract Work Hours and Safety Standards Act, as appropriate) requirements, which is held by the prime contractor, so much of the accrued payments or advances as may be considered necessary for payment of unpaid wages. The General Accounting Office encourages timely action to withhold funds for underpayments.

(b) If wage underpayments continue, or the failure or refusal to make restitution appears continuing or willful, or if the contractor fails or refuses to comply with any other contract, statutory or regulatory requirements, the contracting officer may suspend all contract payments to the contractor until the violations have ceased.

(c) If restitution has not been made prior to final payment under the contract, the contracting officer shall submit to the General Accounting Office, through the appropriate disbursing office: (1) The contractor's payment voucher or vouchers, (2) a Standard Form 1093, Schedule of Withholdings Under the Davis-Bacon Act, and/or the Contract Work Hours and Safety Standards Act, and (3) a statement of the amounts to be withheld for underpayment of wages and liquidated damages under the Contract Work Hours and Safety Standards Act. These amounts shall be disposed of in accordance with agency procedures.

a

If a contract is terminated for violation of the labor standards clauses, the contracting agency shall submit report to the Administrator, Wage and Hour Division, Department of Labor, and the Comptroller General. The report shall include—

(a) The number of the terminated contract;

(b) The name and address of the terminated contractor or subcontractor;

(c) The name and address of the contractor or subcontractor who is to complete the work;

(d) The amount and number of the latter's contract; and

(e) A description of the work. 522.405-12 Cooperation with the Department of Labor.

(a) The contracting agency shall cooperate with representatives of the Department of Labor in the inspection of records, interviews with workers, and all other aspects of investigations undertaken by the Department of Labor. When requested, the contracting agency shall furnish to the Secretary of Labor any available informa