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Monday, January 26, 2015

Tips for Labor Compliance on HUD Projects: Part 3

Welcome to my final installment of HUD labor compliance tips. Part 1 provided an overview, and suggestions on complying with federal prevailing wages. Part 2 dealt with integration of requirements into contracts. Part 3 will focus on Equal Employment Opportunity and Section 3 requirements. Relevant regulations include Section 3 of the Housing and Urban Development of 1968, 24 CFR Part 135, Executive Orders 11246, 11375, 12086, and 41 CFR Part 60 1.4(b).

Equal Employment Opportunity (EEO) 
These requirements are often called MBE/WBE (Minority and Women Owned Business Enterprises). The purpose of these requirements is to involve minority and women owned businesses in contracts to the maximum extent possible. Grantees and general contractors must demonstrate that they have implemented policies and procedures to meet this goal. It isn't enough to say you tried. You must document efforts, and this post will help you understand how this can be done.

Section 3
These requirements generally apply to any contract funded by HUD that is $100,000 or greater. The purpose of these requirements is to involve local low-income persons in contracts to the maximum extent possible. Similar to EEO requirements, grantees and general contractors must demonstrate that they have taken steps to meet this goal.

EEO and Section 3 compliance has three elements: recruitment, documentation and contract management. Below is a summary of each.

  • Prepare a EEO/Section 3 Plan and send it to the General Contractor. It should consist of hiring goals and resources, including contact info for: the local government, developer, and HUD labor representatives; local unions and trade associations; local community organizations and media for affirmative recruitment; and in-house or local apprenticeship and trainee programs for referral.
  • Send letters to the local labor representative and local unions and trade associations requesting feedback on the EEO/Section 3 Plan.
  • Post a project sign at the project site, place notices in community papers, and send letters to community organizations and businesses identified by local government with the following information: Section 3 regulations; contact information for employment opportunities; and the list of apprenticeship and training programs from the EEO/Section 3 Plan.
  • Maintain a file documenting all EEO/Section 3 implementation efforts.
  • Maintain a list of all lower income residents, women and minority owned businesses that have applied for a job, and referral sources.
  • Provide an annual report on EEO/Section 3 progress to the HUD Administrator.
Contract Management
  • Notify potential subcontractors of EEO/Section 3 goals and requirements.
  • Incorporate EEO/Section 3 requirements and goals into all subcontracts.
Be aware that some local or State governments will add their own requirements on top of the base federal requirements. Feel free to contact me if you need assistance with putting together plans and templates. 

So go out there and have a blast with HUD labor compliance.....which really isn't possible. But at least you can move forward with confidence and a plan.

Tuesday, January 13, 2015

Tips for Labor Compliance on HUD Projects: Part 2

Happy New Year! I took a long holiday break from the blog, but now I'm back at it. In my last post, I focused on wage compliance for HUD Projects. In this post, I will address contract conditions.

When it comes to "CYA" for labor requirements, documentation is your friend, particularly contractual documentation. Far too often, the project team catches up with the labor requirements after the contracts are already signed, or after construction has already begun. You can always add addenda, but contractors will have already initiated their hiring and subcontracts. At that point, it's always challenging to get everyone to understand their obligations and implement them into their work programs. It's much better to start on the right foot and on the same page.

In this regard, I have assisted a general contractor that does a lot of HUD work. I drafted form letters for their subcontractors that accompanies the contract for execution, and requires incorporation of the HUD-92554M form into the contract. The letter explains key labor conditions of HUD-92554M, as described below. In this way, the general contractor and the subcontractors have the same requirements incorporated into their contracts, and those requirements are brought to their attention.

  • Davis-Bacon Wages: Inform contractor that they must pay Federal Prevailing Wages to all workers on the project, as determined by the U.S. Department of Labor (DOL). Refer to and attach the DOL Wage Determination to the contract. See my last blog post for more information about wage determinations.
  • Apprenticeships: Describe the process for requesting approval to use an apprenticeship program that is not listed on the Office of Apprenticeship website.
  • Copeland "Anti-Kickback" Act:  It is a federal crime for anyone to require any laborer to kickback (give up or pay back) any part of wages (29 CFR Part 3).
  • Contract Work Hours and Safety Standards Act (CWHSSA):  Overtime must be paid at 150% of the basic pay rate for all hours worked over 40 hours in a week. Proper health and safety standards must be maintained on the job site.
  • Equal Employment Opportunity and Section 3: Federal law requires that contractors implement a plan to affirmatively recruit low-income residents, minorities and women to work on the project. 

This is a summary of the major elements of the HUD-92554M form "Supplementary Conditions of the Contract for Construction". I recommend that you outline these clearly for your general contractor in a letter so that they understand the obligations they are taking on. In my next blog, I'll have more information about implementing Equal Employment Opportunity and Section 3 requirements.