Applicability of Davis-Bacon Labor Requirements to Projects Selected as Existing Housing Under the Section 8 Project-Based Voucher Program-Guidance, 12511-12516 [2015-05462]

Agencies

• DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Federal Register Volume 80, Number 45 (Monday, March 9, 2015)]
[Notices]
[Pages 12511-12516]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-05462]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5242-N-03]


Applicability of Davis-Bacon Labor Requirements to Projects 
Selected as Existing Housing Under the Section 8 Project-Based Voucher 
Program--Guidance

AGENCY: Office of the Assistant Secretary for Public and Indian 
Housing, HUD.

ACTION: Notice.

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SUMMARY: On June 25, 2014, HUD published a final rule amending the 
regulations for HUD's Section 8 Project-Based Voucher program. This 
notice supplements that final rule by providing further guidance on 
when Davis-Bacon wage requirements may apply to existing housing.

DATES: March 9, 2015.

FOR FURTHER INFORMATION CONTACT: Becky Primeaux, Director, Housing 
Voucher Management and Operations Division, Office of Voucher Programs, 
Office of Public and Indian Housing, Department of Housing and Urban 
Development, 451 7th Street SW., Room 4228, Washington, DC 20410; 
telephone number 202-708-2815 (this is not a toll-free number). 
Individuals with speech or hearing impairments may access this number 
through TTY by calling the toll-free Federal Information Service at 
800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

A. Section 8 Project-Based Voucher Assistance--June 25, 2014, Final 
Rule

    On June 25, 2014, at 79 FR 36146, HUD published a final rule that 
amended the regulations governing the Section 8 Project-Based Voucher 
(PBV) program, largely due to changes made to the PBV program by the 
Housing and Economic Recovery Act of 2008 (Pub. L. 110-289, approved 
July 30, 2008) (HERA). HERA made comprehensive and significant reforms 
to several HUD programs, including HUD's Public Housing, Section 8 
Tenant-Based Voucher, and PBV programs. On November 24, 2008, at 73 FR 
71037, HUD published a notice that provided information about the 
applicability of certain HERA provisions to these programs. The notice 
identified: (1) those statutory provisions that were self-executing and 
required no action on the part of HUD for the changes to be 
implemented; and (2) those statutory provisions that require new 
regulations or regulatory changes by HUD for the HERA provisions to be 
implemented. The notice also offered the opportunity for public comment 
on the guidance provided.
    HUD followed the November 2008 notice with a proposed rule 
published on May 15, 2012, at 77 FR 28742, that proposed to establish, 
in regulation, the reforms made by HERA solely to the Section 8 Tenant-
Based Voucher and PBV programs as discussed in the November 2008 
notice, to make other related changes to the regulations, and to 
further solicit public comment. The final rule published on June 25, 
2014, conformed the regulations of the Section 8 Tenant-Based Voucher 
and PBV programs to the statutory program changes made by HERA, made 
other related changes to these regulations as discussed in the May 2012 
proposed rule, and made further changes to the two voucher program 
regulations as a result of issues raised by public comment and certain 
clarifying changes determined needed by HUD.
    One of the changes made by the June 25, 2014, final rule pertained 
to labor standards. In the final rule, HUD updated the reference to 
labor standards provisions that are applicable to assistance under the 
PBV program to remove the reference to labor standards ``applicable to 
an Agreement'' covering nine or more assisted units and substitute a 
reference to labor standards

[[Page 12512]]

``applicable to development (including rehabilitation) of a project 
comprising'' nine or more assisted units. HUD advised that this 
language clarifies that Davis-Bacon requirements may apply to existing 
housing (which is not subject to an Agreement to Enter into Housing 
Assistance Payments (HAP) Contract) when the nature of any work planned 
to be performed prior to execution of a HAP Contract, or after HAP 
Contract execution (within such post-execution period as may be 
specified by HUD) constitutes development of the project. The final 
rule also amended the owner certification provision of the regulation 
to state that repair work on a project selected as an existing project 
that is performed within such post-execution period as specified by HUD 
may constitute development activity, and the owner, by execution of the 
HAP Contract, certifies that at execution and at all times during the 
term of the HAP Contract, if the repair work is determined to be 
development activity, the repair work undertaken shall be in compliance 
with Davis-Bacon wage requirements.
    As noted in the Summary, this notice supplements the June 25, 2014 
final rule by providing further guidance on the applicability of Davis-
Bacon to existing housing.

B. Existing Housing Under the PBV Program

    Under the PBV program, a public housing agency (PHA) may provide 
project-based assistance for existing housing, as well as for newly 
constructed or rehabilitated housing. This provision was put in place 
by the Quality Housing and Work Responsibility Act of 1998 (Pub. L. 
105-276, approved October 21, 1998) as further revised by the Fiscal 
year 2001 Departments of Veterans Affairs and Housing and Urban 
Development and Independent Agencies Appropriations Act (Pub. L. 106-
377, approved October 27, 2000) and implemented by HUD final rule 
published on October 13, 2005, at 70 FR 59892. In accordance with the 
2005 final rule, to qualify as ``existing housing'', the units must 
already exist and substantially comply with HUD's housing quality 
standards (HQS) on the proposal selection date, which is the date the 
PHA gives written notice to the owner that the owner's proposal has 
been selected. The units must fully comply with the HQS before 
execution of the HAP contract.

C. Section 12(a) of the United States Housing Act of 1937

    HUD's Section 8 program, including the PBV program, is subject to 
statutory labor standards provisions in section 12(a) of the U.S. 
Housing Act of 1937 (1937 Act) (42 U.S.C. 1437j(a)). Section 12(a) 
provides in relevant part as follows:

    Any contract for loans, contributions, sale, or lease pursuant 
to this Act . . . shall . . . contain a provision that not less than 
the wages prevailing in the locality, as predetermined by the 
Secretary of Labor pursuant to the Davis-Bacon Act (49 Stat. 1011), 
shall be paid to all laborers and mechanics employed in the 
development of the project involved (including a project with nine 
or more units assisted under section 8 of this Act, where the public 
housing agency or the Secretary and the builder or sponsor enter 
into an agreement for such use before construction or rehabilitation 
is commenced).

Under the Davis-Bacon Act, Davis-Bacon prevailing wage rates determined 
by the United States Department of Labor apply to construction 
(including rehabilitation) contracts in excess of $2000.

II. Applicability of Davis-Bacon Wage Requirements

A. Applicability in Development of Existing Project-Based Voucher Units

    As noted above, to ensure statutory compliance, the June 25, 2014, 
final rule revised the cross-reference to the labor standards in Sec.  
983.4 (entitled ``Cross-reference to other Federal requirements'') to 
clarify that even though an ``Agreement to Enter into Housing 
Assistance Payments Contract'' is not executed for existing housing 
projects, Davis-Bacon requirements may still apply, and revised Sec.  
983.210 (entitled ``Owner certification'') to provide for an owner 
certification that repair work that is undertaken on an existing 
housing project and is determined to be development activity shall be 
in compliance with Davis-Bacon requirements. The preamble to the June 
25, 2014, final rule clarifies that Davis-Bacon requirements may apply 
to existing PBV units when the nature of any work planned to be 
performed prior to HAP contract execution or within a HUD-defined post 
HAP contract execution period constitutes development of the project.

B. Development of the Section 8 Project

    The term ``development'' is defined in the PBV program as 
construction or rehabilitation of PBV housing after the proposal 
selection date. HUD has found that given the current, broad definition 
of ``existing housing'', the potential for circumvention of 
rehabilitation program requirements exists. These requirements include 
compliance with labor standards when rehabilitation of existing housing 
is contemplated in connection with the placement of units under Section 
8. The potential circumvention stems from the fact that PHAs can 
classify a project as ``existing housing'' and this classification does 
not preclude owners and developers from performing work that may fall 
within the scope of Davis-Bacon. Both the PBV Final Rule and this 
Notice make clear that Davis-Bacon requirements cannot be avoided 
simply by classifying a project as an existing housing project under 
the PBV regulation.
    The scope and timing of the contemplated development work are 
important measures in determining whether Davis-Bacon requirements 
apply to existing housing under the PBV program.
1. Scope
    ``Scope'' refers to the elements of the proposed work, that is, the 
specific activities that are involved. An analysis of the scope of the 
proposed work is performed by the relevant PHA to determine if such 
work represents ``development'' for purposes of determining the 
applicability of Davis-Bacon wage rates to existing housing undergoing 
construction or reconstruction activity within the time period 
discussed below in Section B.2. of this Notice.
    Development work is subject to Davis-Bacon wage rates, and, when 
used in reference to public housing, ``development'' is defined in 
section 3(c)(1) of the 1937 Act as any or all undertakings necessary 
for planning, land acquisition, demolition, construction, or equipment, 
in connection with a low-income housing project. Section 3(c)(1) also 
states that ``construction activity'' in connection with a low-income 
housing project may be confined to the reconstruction, remodeling, or 
repair of existing buildings.
    The 1937 Act defines ``development'' only as the term is used in 
reference to public housing. However, the 1937 Act also applies Davis-
Bacon requirements to ``development'' of projects under Section 8 of 
the Act, such as PBV projects. It is HUD's position, therefore, that 
the term ``development'', as applied to work subject to Davis-Bacon 
requirements on Section 8 projects, encompasses work on a Section 8 
project that is comparable to the scope of work that HUD has previously 
determined constitutes development of a public housing project. 
Accordingly, work that constitutes remodeling that alters the nature or 
type of housing units in a PBV project, reconstruction, or a 
substantial improvement in the quality

[[Page 12513]]

or kind of original equipment and materials, falls within the purview 
of ``development''. Development activity on a PBV project does not 
include replacement of equipment and materials rendered unsatisfactory 
because of normal wear and tear by items of substantially the same 
kind.
2. Timing
    Development work planned to be carried out after the proposal 
selection date (either before or after execution of the HAP contract) 
within a period reasonably viewed as one in which the Section 8 housing 
is being developed (as opposed to being maintained, repaired or updated 
years after original placement of the units under Section 8), is an 
important factor in analyzing whether the work requires payment of 
Davis-Bacon wages to laborers and mechanics employed to perform such 
work. It has long been HUD's position, consistent with the intent to 
privatize responsibility for housing for low-income persons under the 
Section 8 program, that once a Section 8 housing project has been 
initially developed and placed under a HAP Contract, a decision by the 
owner to repair or rehabilitate the housing as it ages is not continued 
``development'' of the Section 8 project and is not subject to Davis-
Bacon wage requirements under Section 12 of the 1937 Act.
    HUD has determined that any development initiated on existing units 
within 18 months after the effective date of the HAP Contract on 
projects consisting of 9 or more units assisted under a PBV HAP 
Contract is considered development for purposes of Davis-Bacon wage 
rate applicability and such wages must be paid to laborers and 
mechanics employed to perform development work in connection with this 
initial placement of the project under a Section 8 contract.

C. PBV Existing Housing and the Rental Assistance Demonstration Program 
(RAD)

    Under HUD's final Notice announcing the RAD program (PIH-2012-32 
(HA)),\1\ issued July 2, 2013, the second component of the RAD program 
(RAD II) consisted of conversions of Section 8 Tenant Protection 
Vouchers in projects with expiring or terminating Rent Supplement, 
Rental Assistance Program, or Section 8 Moderate Rehabilitation 
contracts to PBVs. The final RAD Notice specifically provided that 
conversion of public housing projects under the first component of the 
RAD program would be subject to Davis-Bacon wage requirements. The last 
paragraph of Section 3.5 of the final RAD Notice states that all 
regulatory and statutory requirements of the PBV program in 24 CFR part 
983 apply to conversions carried out under RAD II (with certain 
exceptions not relevant to this guidance) but did not directly address 
the applicability of Davis-Bacon wage requirements to RAD II projects. 
Language on Davis-Bacon requirements elsewhere in the RAD Notice may 
have led to uncertainty regarding the applicability of Davis-Bacon 
requirements for RAD II projects that met the PBV definition of 
existing housing. This Notice makes clear that, as more specifically 
discussed above in Section II. B., rehabilitation constitutes 
``development'' of a Section 8 project, including projects where the 
rehabilitation is contemplated as part of the conversion of an existing 
project to a PBV contract under RAD, and regardless of whether the 
rehabilitation addresses Housing Quality Standards (HQS) deficiencies 
or is undertaken for other reasons. Accordingly, such rehabilitation is 
subject to Davis-Bacon requirements pursuant to Section 12(a) of the 
1937 Act regardless of whether the housing would qualify as ``existing 
housing'' as defined in part 983.
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    \1\ See https://portal.hud.gov/hudportal/documents/huddoc?id=pih2012-32rev1.pdf
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D. Addendum to Existing HAP Contract

    In the case of PBV projects selected as rehabilitation or new 
construction, an Agreement to Enter into a Housing Assistance Payments 
Contract (AHAP) is required prior to the commencement of construction 
or rehabilitation. The AHAP contains federal requirements including 
applicable labor standards. Since existing housing does not require an 
AHAP, but development activity described in this guidance may require 
the payment of Davis-Bacon wages to laborers and mechanics, an addendum 
to the PBV HAP Contract that reflects the applicability of Davis-Bacon 
wage rates in the development of existing PBV housing is required when 
such development will take place within 18 months of the effective date 
of the HAP Contract. The required addendum is attached to this notice 
as Appendix 1.

E. Public Housing Agency (PHA) Responsibilities

    PHAs that select existing housing under the PBV program are 
responsible for monitoring compliance with Davis-Bacon requirements 
outlined in the Addendum to the Existing Housing Contract (Appendix 1). 
As provided in Sec.  983.210 of the PBV regulations, the owner, by 
execution of the HAP Contract, certifies that repair work that is 
undertaken on an existing housing project and is determined to be 
development activity shall be in compliance with Davis-Bacon 
requirements. Owner non-compliance with the requirements outlined in 
the Addendum represents grounds for termination of the HAP Contract. If 
the contract is terminated, the PHA must provide housing choice 
vouchers to families living in units covered by the PBV HAP Contract.

    Dated: February 26, 2015.
Jemine A. Bryon,
Acting Assistant Secretary for Public and Indian Housing.

Appendix 1 Addendum to Existing HAP Contract--Labor Standards

1. HUD-FEDERAL LABOR STANDARDS PROVISIONS

    The owner is responsible for inserting the entire text of 
section 1 of this Addendum in all construction contracts and, if the 
owner performs any rehabilitation work on the project, the owner 
must comply with all provisions of section 1. (Note: Sections 1(b) 
and (c) apply only when the amount of the prime contract exceeds 
$100,000.)
    (a)(1)(i) Minimum Wages. All laborers and mechanics employed or 
working upon the site of the work (or under the United States 
Housing Act of 1937 or under the Housing Act of 1949 in the 
construction or development of the project) will be paid 
unconditionally and not less often than once a week, and without 
subsequent deduction or rebate on any account (except such payroll 
deductions as are permitted by regulations issued by the Secretary 
of Labor under the Copeland Act (29 CFR part 3)), the full amount of 
wages and bona fide fringe benefits (or cash equivalents thereof) 
due at time of payment computed at rates not less than those 
contained in the wage determination of the Secretary of Labor which 
is attached hereto and made part hereof regardless of any 
contractual relationship which may be alleged to exist between the 
contractor and such laborers and mechanics. Contributions made or 
costs reasonably anticipated for bona fide fringe benefits under 
section l(b)(2) of the Davis-Bacon Act on behalf of laborers or 
mechanics are considered wages paid to such laborers or mechanics, 
subject to the provisions of 29 CFR 5.5(a)(1)(iv); also, regular 
contributions made or costs incurred for more than a weekly period 
(but not less often than quarterly) under plans, funds, or programs, 
which cover the particular weekly period, are deemed to be 
constructively made or incurred during such weekly period. Such 
laborers and mechanics shall be paid the appropriate wage rate and 
fringe benefits on the wage determination for the classification of 
work actually performed, without regard to skill, except as provided 
in 29 CFR 5.5(a)(4). Laborers or mechanics performing work in more 
than one classification may be compensated at the rate specified for 
each classification for the time actually worked therein: Provided, 
That the employer's

[[Page 12514]]

payroll records accurately set forth the time spent in each 
classification in which work is performed. The wage determination 
(including any additional classification and wage rates conformed 
under 29 CFR 5.5(a)(1)(ii) and the Davis-Bacon poster (WH-1321)) 
shall be posted at all times by the contractor and its 
subcontractors at the site of the work in a prominent and accessible 
place where it can be easily seen by the workers.
    (ii)(A) Any class of laborers or mechanics which is not listed 
in the wage determination and which is to be employed under the 
contract shall be classified in conformance with the wage 
determination. HUD shall approve an additional classification and 
wage rate and fringe benefits therefor only when the following 
criteria have been met: (1) The work to be performed by the 
classification requested is not performed by a classification in the 
wage determination; (2) The classification is utilized in the area 
by the construction industry; and (3) The proposed wage rate, 
including any bona fide fringe benefits, bears a reasonable 
relationship to the wage rates contained in the wage determination.
    (B) If the contractor and the laborers and mechanics to be 
employed in the classification (if known), or their representatives, 
and HUD or its designee agree on the classification and wage rate 
(including the amount designated for fringe benefits where 
appropriate), a report of the action taken shall be sent by HUD or 
its designee to the Administrator of the Wage and Hour Division, 
Employment Standards Administration, U.S. Department of Labor, 
Washington, DC 20210. The Administrator, or an authorized 
representative, will approve, modify, or disapprove every additional 
classification action within 30 days of receipt and so advise HUD or 
its designee or will notify HUD or its designee within the 30-day 
period that additional time is necessary.
    (C) In the event the contractor, the laborers or mechanics to be 
employed in the classification or their representatives, and HUD or 
its designee do not agree on the proposed classification and wage 
rate (including the amount designated for fringe benefits, where 
appropriate), HUD or its designee shall refer the questions, 
including the views of all interested parties and the recommendation 
of HUD or its designee, to the Administrator for determination. The 
Administrator, or an authorized representative, will issue a 
determination within 30 days of receipt and so advise HUD or its 
designee or will notify HUD or its designee within the 30-day period 
that additional time is necessary.
    (D) The wage rate (including fringe benefits where appropriate) 
determined pursuant to subparagraphs (a)(1)(ii)(B) or (C) of this 
paragraph, shall be paid to all workers performing work in the 
classification under this contract from the first day on which work 
is performed in the classification.
    (iii) Whenever the minimum wage rate prescribed in the contract 
for a class of laborers or mechanics includes a fringe benefit which 
is not expressed as an hourly rate, the contractor shall either pay 
the benefit as stated in the wage determinations or shall pay 
another bona fide fringe benefit or an hourly cash equivalent 
thereof.
    (iv) If the contractor does not make payments to a trustee or 
other third person, the contractor may consider as part of the wages 
of any laborer or mechanic the amount of any costs reasonably 
anticipated in providing bona fide fringe benefits under a plan or 
program: Provided, That the Secretary of Labor has found, upon the 
written request of the contractor, that the applicable standards of 
the Davis-Bacon Act have been met. The Secretary of Labor may 
require the contractor to set aside in a separate account assets for 
the meeting of obligations under the plan or program.
    (2) Withholding. HUD or its designee shall upon its own action 
or upon written request of an authorized representative of the 
Department of Labor withhold or cause to be withheld from the 
contractors under this contract or any other Federal contract with 
the same prime contractor, or any other Federally-assisted contract 
subject to Davis-Bacon prevailing wage requirements, which is held 
by the same prime contractor, so much of the accrued payments or 
advances as may be considered necessary to pay laborers and 
mechanics, including apprentices, trainees and helpers, employed by 
the contractor or any subcontractor the full amount of wages 
required by the contract. In the event of failure to pay any laborer 
or mechanic, including any apprentice, trainee or helper, employed 
or working on the site of the work (or under the United States 
Housing Act of 1937 or under the Housing Act of 1949 in the 
construction or development of the project), all or part of the 
wages required by the contract, HUD or its designee may, after 
written notice to the contractor, sponsor, applicant, or owner, take 
such action as may be necessary to cause the suspension of any 
further payment, advance, or guarantee of funds until such 
violations have ceased. HUD or its designee may, after written 
notice to the contractor, disburse such amounts withheld for and on 
account of the contractor or subcontractor to the respective 
employees to whom they are due.
    (3)(i) Payrolls and Basic Records. Payrolls and basic records 
relating thereto shall be maintained by the contractor during the 
course of the work and preserved for a period of three years 
thereafter for all laborers and mechanics working at the site of the 
work (or under the United States Housing Act of 1937, or under the 
Housing Act of 1949, in the construction or development of the 
project). Such records shall contain the name, address, and social 
security number of each such worker, his or her correct 
classification, hourly rates of wages paid (including rates of 
contributions or costs anticipated for bona fide fringe benefits or 
cash equivalents thereof of the types described in section 
l(b)(2)(B) of the Davis-Bacon Act), daily and weekly number of hours 
worked, deductions made and actual wages paid. Whenever the 
Secretary of Labor has found under 29 CFR 5.5 (a)(1)(iv) that the 
wages of any laborer or mechanic include the amount of any costs 
reasonably anticipated in providing benefits under a plan or program 
described in section l(b)(2)(B) of the Davis-Bacon Act, the 
contractor shall maintain records which show that the commitment to 
provide such benefits is enforceable, that the plan or program is 
financially responsible, and that the plan or program has been 
communicated in writing to the laborers or mechanics affected, and 
records which show the costs anticipated or the actual cost incurred 
in providing such benefits. Contractors employing apprentices or 
trainees under approved programs shall maintain written evidence of 
the registration of apprenticeship programs and certification of 
trainee programs, the registration of the apprentices and trainees, 
and the ratios and wage rates prescribed in the applicable programs.
    (ii)(A) The contractor shall submit weekly for each week in 
which any contract work is performed a copy of all payrolls to HUD 
or its designee if the agency is a party to the contract, but if the 
agency is not such a party, the contractor will submit the payrolls 
to the applicant, sponsor, or owner, as the case may be, for 
transmission to HUD or its designee. The payrolls submitted shall 
set out accurately and completely all of the information required to 
be maintained under 29 CFR 5.5(a)(3)(i), except that full social 
security numbers and home addresses shall not be included on weekly 
transmittals. Instead the payrolls shall only need to include an 
individually identifying number for each employee (e.g., the last 
four digits of the employee's social security number). The required 
weekly payroll information may be submitted in any form desired. 
Optional Form WH-347 is available for this purpose from the Wage and 
Hour Division Web site at https://www.dol.gov/esa/whd/forms/wh347instr.htm or its successor site. The prime contractor is 
responsible for the submission of copies of payrolls by all 
subcontractors. Contractors and subcontractors shall maintain the 
full social security number and current address of each covered 
worker, and shall provide them upon request to HUD or its designee 
if the agency is a party to the contract, but if the agency is not 
such a party, the contractor will submit them to the applicant, 
sponsor, or owner, as the case may be, for transmission to HUD or 
its designee, the contractor, or the Wage and Hour Division of the 
Department of Labor for purposes of an investigation or audit of 
compliance with prevailing wage requirements. It is not a violation 
of this section for a prime contractor to require a subcontractor to 
provide addresses and social security numbers to the prime 
contractor for its own records, without weekly submission to the 
sponsoring government agency (or the applicant, sponsor, or owner).
    (B) Each payroll submitted shall be accompanied by a ``Statement 
of compliance,'' signed by the contractor or subcontractor or his or 
her agent who pays or supervises the payment of the persons employed 
under the contract and shall certify the following: (1) That the 
payroll for the payroll period contains the information required to 
be provided under 29 CFR 5.5(a)(3)(ii), the appropriate information 
is being maintained under 29 CFR 5.5 (a)(3)(i), and that such 
information is correct and complete; (2) That each laborer or 
mechanic (including each helper, apprentice, and trainee) employed 
on the contract during the

[[Page 12515]]

payroll period has been paid the full weekly wages earned, without 
rebate, either directly or indirectly, and that no deductions have 
been made either directly or indirectly from the full wages earned, 
other than permissible deductions as set forth in 29 CFR part 3; (3) 
That each laborer or mechanic has been paid not less than the 
applicable wage rates and fringe benefits or cash equivalents for 
the classification of work performed, as specified in the applicable 
wage determination incorporated into the contract.
    (C) The weekly submission of a properly executed certification 
set forth on the reverse side of Optional Form WH-347 shall satisfy 
the requirement for submission of the ``Statement of Compliance'' 
required by paragraph (a)(3)(ii)(B) of this section.
    (D) The falsification of any of the above certifications may 
subject the contractor or subcontractor to civil or criminal 
prosecution under section 1001 of Title 18 and section 3801 et seq. 
of Title 31 of the United States Code.
    (iii) The contractor or subcontractor shall make the records 
required under paragraph (a)(3)(i) of this section available for 
inspection, copying, or transcription by authorized representatives 
of HUD or its designee or the Department of Labor, and shall permit 
such representatives to interview employees during working hours on 
the job. If the contractor or subcontractor fails to submit the 
required records or to make them available, HUD or its designee may, 
after written notice to the contractor, sponsor, applicant, or 
owner, take such action as may be necessary to cause the suspension 
of any further payment, advance, or guarantee of funds. Furthermore, 
failure to submit the required records upon request or to make such 
records available may be grounds for debarment action pursuant to 29 
CFR 5.12.
    (4)(i) Apprentices and Trainees. Apprentices. Apprentices will 
be permitted to work at less than the predetermined rate for the 
work they performed when they are employed pursuant to and 
individually registered in a bona fide apprenticeship program 
registered with the U.S. Department of Labor, Employment and 
Training Administration, Office of Apprenticeship Training, Employer 
and Labor Services or with a State Apprenticeship Agency recognized 
by the Office, or if a person is employed in his or her first 90 
days of probationary employment as an apprentice in such an 
apprenticeship program, who is not individually registered in the 
program, but who has been certified by the Office of Apprenticeship 
Training, Employer and Labor Services or a State Apprenticeship 
Agency (where appropriate) to be eligible for probationary 
employment as an apprentice. The 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. Any worker listed on a 
payroll at an apprentice wage rate, who is not registered or 
otherwise employed as stated above, shall be paid not less than the 
applicable wage rate on the wage determination for the 
classification of work actually performed. In addition, any 
apprentice performing work on the job site in excess of the ratio 
permitted under the registered program shall be paid not less than 
the applicable wage rate on the wage determination for the work 
actually performed. Where a contractor is performing construction on 
a project in a locality other than that in which its program is 
registered, the ratios and wage rates (expressed in percentages of 
the journeyman's hourly rate) specified in the contractor's or 
subcontractor's registered program shall be observed. Every 
apprentice must be paid at not less than the rate specified in the 
registered program for the apprentice's level of progress, expressed 
as a percentage of the journeymen hourly rate specified in the 
applicable wage determination. Apprentices shall be paid fringe 
benefits in accordance with the provisions of the apprenticeship 
program. If the apprenticeship program does not specify fringe 
benefits, apprentices must be paid the full amount of fringe 
benefits listed on the wage determination for the applicable 
classification. If the Administrator determines that a different 
practice prevails for the applicable apprentice classification, 
fringes shall be paid in accordance with that determination. In the 
event the Office of Apprenticeship Training, Employer and Labor 
Services, or a State Apprenticeship Agency recognized by the Office, 
withdraws approval of an apprenticeship program, the contractor will 
no longer be permitted to utilize apprentices at less than the 
applicable predetermined rate for the work performed until an 
acceptable program is approved.
    (ii) Trainees. Except as provided in 29 CFR 5.16, trainees will 
not be permitted to work at less than the predetermined rate for the 
work performed unless they are employed pursuant to and individually 
registered in a program which has received prior approval, evidenced 
by formal certification by the U.S. Department of Labor, Employment 
and Training Administration. The ratio of trainees to journeymen on 
the job site shall not be greater than permitted under the plan 
approved by the Employment and Training Administration. Every 
trainee must be paid at not less than the rate specified in the 
approved program for the trainee's level of progress, expressed as a 
percentage of the journeyman hourly rate specified in the applicable 
wage determination. Trainees shall be paid fringe benefits in 
accordance with the provisions of the trainee program. If the 
trainee program does not mention fringe benefits, trainees shall be 
paid the full amount of fringe benefits listed on the wage 
determination unless the Administrator of the Wage and Hour Division 
determines that there is an apprenticeship program associated with 
the corresponding journeyman wage rate on the wage determination 
which provides for less than full fringe benefits for apprentices. 
Any employee listed on the payroll at a trainee rate who is not 
registered and participating in a training plan approved by the 
Employment and Training Administration shall be paid not less than 
the applicable wage rate on the wage determination for the 
classification of work actually performed. In addition, any trainee 
performing work on the job site in excess of the ratio permitted 
under the registered program shall be paid not less than the 
applicable wage rate on the wage determination for the work actually 
performed. In the event the Employment and Training Administration 
withdraws approval of a program, the contractor will no longer be 
permitted to utilize trainees at less than the applicable 
predetermined rate for the work performed until an acceptable 
program is approved.
    (iii) Equal Employment Opportunity. The utilization of 
apprentices, trainees and journeymen under this part shall be in 
conformity with the equal employment opportunity requirements of 
Executive Order 11246, as amended, and 29 CFR part 30.
    (5) Compliance with Copeland Act Requirements. The contractor 
shall comply with the requirements of 29 CFR part 3 which are 
incorporated by reference in this Addendum.
    (6) Subcontracts. The contractor or subcontractor will insert in 
any subcontracts the clauses contained in section 1(a)(1) through 
(11) and such other clauses as HUD or its designee may by 
appropriate instructions require, and also a clause requiring the 
subcontractors to include these clauses in any lower tier 
subcontracts. The prime contractor shall be responsible for the 
compliance by any subcontractor or lower tier subcontractor with all 
the contract clauses in this section 1(a).
    (7) Contract Terminations; Debarment. A breach of the contract 
clauses in 29 CFR 5.5 may be grounds for termination of the 
contract, and for debarment as a contractor and a subcontractor as 
provided in 29 CFR 5.12.
    (8) Compliance with Davis-Bacon and Related Act Requirements. 
All rulings and interpretations of the Davis-Bacon and related Acts 
contained in 29 CFR parts 1, 3, and 5 are herein incorporated by 
reference in this contract.
    (9) Disputes Concerning Labor Standards. Disputes arising out of 
the labor standards provisions of this contract shall not be subject 
to the general disputes clause of this contract. Such disputes shall 
be resolved in accordance with the procedures of the Department of 
Labor set forth in 29 CFR parts 5, 6, and 7. Disputes within the 
meaning of this clause include disputes between the contractor (or 
any of its subcontractors) and HUD or its designee, the U.S. 
Department of Labor, or the employees or their representatives.
    (10)(i) Certification of Eligibility. By entering into this 
Addendum, the contractor certifies that neither it (nor he or she) 
nor any person or firm who has an interest in the contractor's firm 
is a person or firm ineligible to be awarded Government contracts by 
virtue of section 3(a) of the Davis-Bacon Act or 29 CFR 5.12(a)(1) 
or to be awarded HUD contracts or participate in HUD programs 
pursuant to 24 CFR part 24.
    (ii) No part of this Contract shall be subcontracted to any 
person or firm ineligible for award of a Government contract by 
virtue of section 3(a) of the Davis-Bacon Act or 29 CFR 5.12(a)(1) 
or to be awarded HUD contracts or participate in HUD programs 
pursuant to 24 CFR part 24.

[[Page 12516]]

    (iii) The penalty for making false statements is prescribed in 
the U.S. Criminal Code, 18 U.S.C. 1001.
    11. Complaints, Proceedings, or Testimony by Employees. No 
laborer or mechanic to whom the wage, salary, or other labor 
standards provisions of this Addendum are applicable shall be 
discharged or in any other manner discriminated against by the 
Contractor or any subcontractor because such employee has filed any 
complaint or instituted or caused to be instituted any proceeding or 
has testified or is about to testify in any proceeding under or 
relating to the labor standards applicable under this Addendum to 
his employer.
    (b) Contract Work Hours and Safety Standards Act. The provisions 
of this paragraph (b) are applicable only where the amount of the 
prime contract exceeds $100,000. As used in this paragraph, the 
terms ``laborers'' and ``mechanics'' include watchmen and guards.
    (1) Overtime Requirements. No contractor or subcontractor 
contracting for any part of the contract work which may require or 
involve the employment of laborers or mechanics shall require or 
permit any such laborer or mechanic in any workweek in which he or 
she is employed on such work to work in excess of forty hours in 
such workweek unless such laborer or mechanic receives compensation 
at a rate not less than one and one-half times the basic rate of pay 
for all hours worked in excess of forty hours in such workweek.
    (2) Violation; Liability for Unpaid Wages; Liquidated Damages. 
In the event of any violation of the clause set forth in 
subparagraph (1) of this paragraph, the contractor and any 
subcontractor responsible therefor shall be liable for the unpaid 
wages. In addition, such contractor and subcontractor shall be 
liable to the United States (in the case of work done under contract 
for the District of Columbia or a territory, to such District or to 
such territory), for liquidated damages. Such liquidated damages 
shall be computed with respect to each individual laborer or 
mechanic, including watchmen and guards, employed in violation of 
the clause set forth in subparagraph (1) of this paragraph, in the 
sum of $10 for each calendar day on which such individual was 
required or permitted to work in excess of the standard workweek of 
forty hours without payment of the overtime wages required by the 
clause set forth in subparagraph (1) of this paragraph.
    (3) Withholding for Unpaid Wages and Liquidated Damages. HUD or 
its designee shall upon its own action or upon written request of an 
authorized representative of the Department of Labor withhold or 
cause to be withheld, from any monies payable on account of work 
performed by the contractor or subcontractor under any such contract 
or any other Federal contract with the same prime contractor, or any 
other Federally-assisted contract subject to the Contract Work Hours 
and Safety Standards Act, which is held by the same prime 
contractor, such sums as may be determined to be necessary to 
satisfy any liabilities of such contractor or subcontractor for 
unpaid wages and liquidated damages as provided in the clause set 
forth in subparagraph (2) of this paragraph.
    (4) Subcontracts. The contractor or subcontractor shall insert 
in any subcontracts the clauses set forth in subparagraphs (1) 
through (4) of this paragraph and also a clause requiring the 
subcontractors to include these clauses in any lower tier 
subcontracts. The prime contractor shall be responsible for 
compliance by any subcontractor or lower tier subcontractor with the 
clauses set forth in subparagraphs (1) through (4) of this 
paragraph.
    (c) Health and Safety. The provisions of this paragraph (c) are 
applicable only where the amount of the prime contract exceeds 
$100,000.
    (1) No laborer or mechanic shall be required to work in 
surroundings or under working conditions which are unsanitary, 
hazardous or dangerous to his or her health and safety as determined 
under construction safety and health standards promulgated by the 
Secretary of Labor by regulation.
    (2) The contractor shall comply with all regulations issued by 
the Secretary of Labor pursuant to 29 CFR part 1926, and failure to 
comply may result in imposition of sanctions pursuant to the 
Contract Work Hours and Safety Standards Act, 40 U.S.C. 3701 et seq.
    (3) The contractor shall include the provisions of this 
paragraph in every subcontract so that such provisions will be 
binding on each subcontractor. The contractor shall take such action 
with respect to any subcontract as the Secretary of Housing and 
Urban Development or the Secretary of Labor shall direct as a means 
of enforcing such provisions.

2. WAGE AND CLAIMS ADJUSTMENTS

    The owner shall be responsible for the correction of all 
violations under section 1 of this Addendum, including violations 
committed by other contractors. In cases where there is evidence of 
underpayment of salaries or wages to any laborers or mechanics 
(including apprentices and trainees) by the owner or other 
contractor or a failure by the owner or other contractor to submit 
payrolls and related reports, the owner shall be required to place 
an amount in escrow, as determined by HUD sufficient to pay persons 
employed on the work covered by the Addendum the difference between 
the salaries or wages actually paid such employees for the total 
number of hours worked and the full amount of wages required under 
this Addendum, as well as an amount determined by HUD to be 
sufficient to satisfy any liability of the owner or other contractor 
for liquidated damages pursuant to section 1 of this Addendum. The 
amounts withheld may be disbursed by HUD for and on account of the 
owner or other contractor to the respective employees to whom they 
are due, and to the Federal Government in satisfaction of liquidated 
damages under section 1.

3. EVIDENCE OF UNIT(S) COMPLETION; ESCROW

    (a) The owner shall evidence the completion of the unit(s) by 
furnishing the PHA a certification of compliance with the provisions 
of sections 1 and 2 of this Addendum, and that to the best of the 
owner's knowledge and belief there are no claims of underpayment to 
laborers or mechanics in alleged violation of these provisions of 
the Addendum. In the event there are any such pending claims to the 
knowledge of the owner, the PHA, or HUD, the owner will place a 
sufficient amount in escrow, as directed by the PHA or HUD, to 
assure such payments.
    (b) The escrows required under this section and section 2 of 
this Addendum shall be paid to HUD, as escrowee, or to an escrowee 
designated by HUD, and the conditions and manner of releasing and 
approving such escrows shall be approved by HUD.

[FR Doc. 2015-05462 Filed 3-6-15; 8:45 am]
 BILLING CODE 4210-67-P