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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.

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