96-19649. Procedures for Predetermination of Wage Rates (29 CFR Part 1); Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction and to Certain Nonconstruction Contracts (29 CFR Part 5)  

  • [Federal Register Volume 61, Number 150 (Friday, August 2, 1996)]
    [Proposed Rules]
    [Pages 40366-40368]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 96-19649]
    
    
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    DEPARTMENT OF LABOR
    
    Employment Standards Administration; Wage and Hour Division
    Office of the Secretary
    
    29 CFR Parts 1 and 5
    
    
    Procedures for Predetermination of Wage Rates (29 CFR Part 1); 
    Labor Standards Provisions Applicable to Contracts Covering Federally 
    Financed and Assisted Construction and to Certain Nonconstruction 
    Contracts (29 CFR Part 5)
    
    AGENCY: Wage and Hour Division, Employment Standards Administration, 
    Labor.
    
    ACTION: Proposed rule.
    
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    SUMMARY: This document seeks comment on the Department's proposal to 
    continue the suspension of the implementation of regulations previously 
    issued under the Davis-Bacon and Related Acts while the Department 
    conducts additional rulemaking proceedings to determine whether further 
    amendments should be made to those regulations. These regulations 
    govern the employment of ``semi-skilled helpers'' on federally-financed 
    and federally-assisted construction contracts subject to the prevailing 
    wage standards of the Davis-Bacon and Related Acts (DBRA).
    
    DATES: Comments are due September 3, 1996.
    
    ADDRESSES: Submit written comments to Maria Echaveste, Administrator, 
    Wage and Hour Division, Employment Standards Administration, U.S. 
    Department of Labor, Room S-3502, 200 Constitution Avenue, N.W., 
    Washington, DC 20210. Any commenters desiring notification of receipt 
    of comments should include a self-addressed, stamped post card.
    
    FOR FURTHER INFORMATION CONTACT: William W. Gross, Director, Office of 
    Wage Determinations, Wage and Hour Division, Employment Standards 
    Administration, U.S. Department of Labor, Room S-3028, 200 Constitution 
    Avenue, NW., Washington, DC 20210. Telephone (202) 219-8353. (This is 
    not a toll free number.)
    
    SUPPLEMENTARY INFORMATION
    
    I. Paperwork Reduction Act
    
        This rule does not contain any new information collection 
    requirements and does not modify any existing requirements.
        Thus, the rule contains no reporting or recordkeeping requirements 
    subject to the Paperwork Reduction Act of 1995.
    
    II. Background
    
        On May 28, 1982, the Department published revised final 
    Regulations, 29 CFR Part 1, Procedures for Predetermination of Wage 
    Rates, and 29 CFR Part 5, Subpart A--Davis-Bacon and Related Acts 
    Provisions and Procedures (47 FR 23644 and 23658, respectively), which, 
    among other things, would have allowed contractors to use semi-skilled 
    helpers on Davis-Bacon projects at wages lower than those paid to 
    skilled journeymen, wherever the helper classification, as defined in 
    the regulations, was ``identifiable'' in the area. These rules 
    represented a reversal of a longstanding Department of Labor practice 
    by allowing some overlap between the duties of helpers, and journeymen 
    and laborers. To protect against possible abuse, a provision was 
    included limiting the number of helpers which could be used on a 
    covered project to a maximum of two helpers for every three journeymen. 
    See 29 CFR 1.7(d), 29 CFR 5.2(n)(4), 29 CFR 5.5(a)(1)(ii)(A), and 29 
    CFR 5.5(a)(4)(iv).
        As a result of a lawsuit brought by the Building and Construction 
    Trades Department, AFL-CIO, and a number of individual unions, 
    implementation of the regulations was enjoined. Building and 
    Construction Trades Department, AFL-CIO, et al. v. Donovan, et al., 553 
    F. Supp. 352 (D.D.C. 1982). The U.S. Court of Appeals for the District 
    of Columbia issued a decision upholding the Department's authority to 
    allow increased use of helpers and approving the regulatory definition 
    of a helper's duties, but struck down the provision for issuing a 
    helper wage rate where helpers were ``identifiable,'' thereby requiring 
    a modification to the regulations to provide that the helper 
    classification be ``prevailing'' in the area before it may be used. 
    Building and Construction Trades Department, AFL-CIO, et al., v. 
    Donovan, et al., 712 F.2d 611 (D.C. Cir. 1983), cert. denied, 464 U.S. 
    1069 (1984).
        On January 27, 1989, DOL published a final rule in the Federal 
    Register (54 FR 4234) to add the requirement that the use of a 
    particular helper classification must prevail in an area in order to be 
    recognized, and to define the circumstances in which the use of helpers 
    would be deemed to prevail. (54 FR 4234). Following the Court's lifting 
    of the injunction by Order dated September 24, 1990, the Department 
    published a Federal Register notice on December 4, 1990, implementing 
    the helper regulations effective February 4, 1991 (55 FR 50148).
        In April 1991, Congress passed the Dire Emergency Supplemental 
    Appropriations Act of 1991, Public Law 102-27 (105 Stat. 130), which 
    was signed into law on April 10, 1991. Section 303 of Public Law 102-27 
    (105 Stat. 152) prohibited the Department of Labor from spending any 
    funds to implement or administer the helper regulations. In support of 
    the prohibition, Chairman Ford of the House Education and Labor 
    Committee stated that ``Congress should insist that the administration 
    recognize that authorizing legislation is the only appropriate vehicle 
    for dealing with fundamental changes in the operation of the Davis-
    Bacon Act.'' In compliance with the Congressional directive, the 
    Department did not implement or administer the helper regulations for 
    the remainder of fiscal year 1991.
        After fiscal year 1991 concluded and subsequent continuing 
    resolutions expired, a new appropriations act was passed which did not 
    include a ban restricting the implementation of the helper regulations. 
    The Department issued All Agency Memorandum No. 161 on January 29, 
    1992, instructing the contracting agencies to include the helper 
    contract in contracts for which bids were solicited or negotiations 
    were concluded after that date.
    
    [[Page 40367]]
    
        During the course of the ongoing litigation in this matter, the 
    U.S. Court of Appeals for the District of Columbia (by decision dated 
    April 21, 1992) upheld the rule defining the circumstances in which 
    helpers would be found to prevail and the remaining helper provisions, 
    but invalidated the provision of the regulations that prescribed a 
    maximum ratio governing the use of helpers (Building and Construction 
    Trades Department, AFL-CIO v. Martin, 961 F.2d 269 (D.C. Cir. 1992)). 
    To comply with this ruling, on June 26, 1992, the Department issued a 
    Federal Register notice removing 29 CFR 5.5(a)(4)(iv) from the Code of 
    Federal Regulations. (57 FR 28776).
        Subsequently, Section 103 of the 1994 Department of Labor 
    Appropriations Act, Public Law 103-112, prohibited the Department of 
    Labor from expending funds to implement or administer the helper 
    regulations during fiscal year 1994. Accordingly, on November 5, 1993, 
    the Department published a Federal Register notice (58 FR 58954) 
    suspending the helper regulations and reinstituting the Department's 
    prior policy regarding the use of helpers. The 1995 Department of Labor 
    Appropriations Act again barred the Department from expending funds to 
    implement the helper regulations (Section 102. Pub. L. 103-333); this 
    prohibition extended into fiscal 1996 through several continuing 
    resolutions. There is no such prohibition in the Department of Labor's 
    Appropriations Act for fiscal year 1996, Public Law 104-134, signed 
    into law by President Clinton on April 26, 1996.
    
    III. Discussion
    
        During the brief period since the passage of the appropriations act 
    for fiscal year 1996, the Department has carefully considered whether 
    the suspended regulation governing the use of helpers should be 
    modified. Fourteen years have passed since the Department first 
    promulgated the regulation, and more than four years have passed since 
    the Department last attempted to put a revised version of that 
    regulation in effect. During the extended period of time in which the 
    regulation was suspended, additional information has become available 
    which warrants review of the suspended rule.
        The suspended helper regulation was proposed and adopted 
    principally because it was believed that it would result in a 
    construction workforce on Federal construction projects that more 
    closely mirrored the private construction workforce's widespread use of 
    helpers and, at the same time, effect significant cost savings in 
    federal construction costs. However, data developed from the 
    Department's experience implementing the helper regulation (which was 
    not available during the rulemaking proceedings and upon which the 
    public has had no opportunity to comment) reveals that the use of 
    helpers might not be as widespread as previously thought. The 
    Department conducted 78 prevailing wage surveys during the period 
    January 29, 1992, through October 21, 1993, when the (now suspended) 
    semi-skilled helper regulations were in effect. In 45 of the 78 areas 
    surveyed, the Department determined that the use of helpers was not the 
    prevailing practice in any of the job classifications analyzed. In the 
    remaining 33 areas, the use of helpers was the prevailing practice in 
    only about 7 percent (i.e., 65 of 888) of job classifications surveyed. 
    The Department is preparing a preliminary regulatory impact analysis to 
    accompany a proposed rule which will discuss the Department's updated 
    estimate of costs savings which would be realized from the suspended 
    helper rule.
        The Department is concerned that the helper regulation may create 
    an unwarranted potential for abuse of the helper classification to 
    justify payment of wages which are less than the prevailing wage in the 
    area. As initially proposed, the 1982 helper regulation imposed a 
    numerical limitation on the use of helpers under which there could be 
    no more than two helpers for every three journeymen. 47 FR 23655. As 
    the Court of Appeals stressed in its 1983 decision, this limitation 
    ``increased the likelihood that gross violations will be caught, or at 
    least that evasion will not get too far out of line.'' However, the 
    specific ratio adopted by the Department was subsequently invalidated 
    by the Court in 1992. The Department's subsequent efforts to develop 
    enforcement guidelines led it to conclude that administration of the 
    revised helper criteria would be much more difficult than anticipated, 
    particularly in light of the court-ordered abandonment of the ratio 
    provision. When the Department implemented the Court's decision in 
    1992, it did not conduct notice and comment rulemaking proceedings on 
    the regulation as revised. Instead, the Court's order was implemented 
    by publication of a notice in the Federal Register removing the 
    numerical ratio from the regulation. Consequently, the public has never 
    had an opportunity to comment on the regulation in its current form.
        The Department is also concerned about the possible impact of the 
    helper regulations on formal apprenticeship and training programs. 
    These factors, and the obvious Congressional controversy over the 
    regulation, have led the Department to conclude that the basis and 
    effect of the semi-skilled helper regulation should be reexamined. 
    Accordingly, the Department intends to propose, and seek public comment 
    on, a rule that would amend the currently suspended helper regulations, 
    29 C.F.R. 1.7(d), 29 C.F.R. 5.2(n)(4), and 29 C.F.R. 5.5(a)(1)(ii). The 
    Department anticipates that these rulemaking proceedings will be 
    concluded, and any final amendment to the regulations promulgated, 
    within one year.
        The Department has carefully considered whether the regulations 
    which have been in effect during the past three years, while the 
    suspension has been in effect, should continue to apply during the 
    interim period or, alternatively, whether the suspended helper 
    regulation in its current form should be made effective during that 
    period. Given the information now available, the fact that the public 
    has never had an opportunity to comment on the suspended regulation in 
    its present form, and the Department's decision to initiate proceedings 
    proposing further amendments to the rule, the Department has decided to 
    seek public comment concerning whether or not to continue the 
    suspension of the helper regulation while further action is being taken 
    with respect to possibly amending the rule.
        In addition to the problems with the suspended helper regulation 
    discussed above, the Department is preliminarily of the view that 
    implementation of the regulation on a short-term basis would create 
    unwarranted disruption and uncertainty for both federal agencies and 
    the contracting community. Accordingly, the rule proposed here would 
    make no change to the regulations currently in effect, and thereby 
    continue the suspension of the helper regulations that has been in 
    effect since October 1993, while the Department engages in substantive 
    rulemaking concerning the helper regulations.
        The Department's past experience indicates that implementation of 
    the suspended helper regulations, even on an interim basis, would 
    likely require a substantial period of time. When the Department 
    promulgated the helper regulations in 1982 (47 FR 23658, May 28, 1982) 
    and in 1990 (55 FR 50149, December 4, 1990), it provided a 60-day 
    effective date, applicable to bids advertised or negotiations concluded 
    after the date, to allow agencies an opportunity to amend their
    
    [[Page 40368]]
    
    implementing regulations and their contract clause forms to incorporate 
    the new provisions. Solicitations for bids are ordinarily advertised 
    for at least 30 to 60 days before a contract may be awarded. In 
    accordance with the Department's usual practice, an effective date at 
    least 60 days after publication would be afforded if the Department 
    were to begin implementation of the suspended rule today.
        Conforming changes then have to be made by the appropriate 
    responsible federal agencies to the Federal Acquisition Regulations 
    (FAR) and the Defense Acquisition Regulations (DAR), which are 
    applicable to contracts subject to the Davis-Bacon Act. It is likely 
    that such changes would also have an effective date 60 days after their 
    publication, as did amendments to the FAR and DAR following the 
    Department's 1992 notice of implementation (September 1992-November 
    1992). In fact, when the Department implemented the helper rule in 
    January 1992, conforming changes in the FAR and the DAR did not 
    actually become effective until November 1992, approximately ten months 
    after the Department issued its notice implementing the rule.
        Moreover, under the suspended rule, helpers could be used on a 
    given contract only after the Department determines that the use of 
    helpers is the prevailing practice in a particular job classification 
    in the area in which the work will be performed. Thus, the time 
    necessary for the Department to perform surveys in response to requests 
    to use helper classifications adds further delay before contractors may 
    lawfully pay their workers at helper rates.
        Thus, the suspended regulation would be fully effective for only a 
    brief period, if at all, before the Department expects it would 
    complete substantive rulemaking proceedings to consider amending the 
    regulation. Given the pendency of those proceedings, and the history of 
    the regulation, contractors would be uncertain to reconfigure their 
    staffing patterns and work site procedures for the purpose of 
    submitting bids in reliance upon a regulation which they are aware the 
    Department may amend shortly thereafter. Similarly, repeated changes in 
    the regulations within a short period of time would create unwarranted 
    disruption in the contracting process of federal agencies which would 
    be required to amend their regulations and contract forms on an interim 
    basis only to repeat the entire process if proposed amendments to the 
    helper regulation are finalized. Finally, the Department of Labor would 
    have to postpone or abandon planned surveys needed to update prevailing 
    wage determinations in order to divert resources to the collection and 
    analysis of prevailing practice and wage data under helper regulations 
    which may be modified shortly thereafter.
        In short, the Department believes that the disruption and 
    uncertainty associated with implementation of the suspended helper 
    regulations for such a brief period would be unwarranted. The 
    Department expects to complete its analysis of public comments on this 
    proposed rule to continue the suspension of the helper regulations, and 
    publish a final rule within 120 days after the date of publication.
    
    IV. Executive Order 12866; Sec. 202 of the Unfunded Mandates Reform 
    Act of 1995; Small Business Regulatory Enforcement Fairness Act
    
        This proposed rule is not ``economically significant'' within the 
    meaning of Executive Order 12866; nor does it require a statement under 
    Sec. 202 of the Unfunded Mandates Reform Act of 1995. This rule merely 
    continues the suspension of the helper regulations that has been in 
    effect since November 1993 in order that the Department may proceed 
    with rulemaking while avoiding the unnecessary disruption and confusion 
    that would result from implementation of the helper regulations during 
    the interim. Therefore, there would be no cost or savings that would 
    result from continuing the suspension since this would merely preserve 
    the status quo. Moreover, as discussed above, a substantial period of 
    time is required before the regulations would be implemented by their 
    incorporation in contracts, and the Department's experience in the 
    brief period in 1992 and 1993 when the suspended regulation was in 
    effect was that relatively few surveys were completed in which helpers 
    were found to prevail.
        Thus, any theoretical savings that would be lost from a failure to 
    implement the helper regulations during the rulemaking period would be 
    minimal. Accordingly, it is expected that this proposal will not result 
    in a rule that may have an annual effect on the economy of $100 million 
    or more, or adversely affect in a material way the economy or a sector 
    of the economy. Because this rule will not have a significant economic 
    impact, no economic analysis is required. For the same reason, this 
    rule does not constitute a ``major rule'' within the meaning of section 
    804(2) of the Small Business Regulatory Enforcement Fairness Act.
        Because the alternative to the proposed rule--lifting of the 
    suspension and implementing the helper regulations while rulemaking is 
    ongoing--could possibly interfere with actions planned or taken by 
    other government agencies, the Department has concluded that it will 
    treat the proposed rule as a ``significant regulatory action'' within 
    the meaning of section 3(f)(2) of Executive Order 12866.
    
    V. Regulatory Flexibility Act
    
        The Department has determined that the proposed rule will not have 
    a significant economic impact on a substantial number of small 
    entities. As a continuation of the status quo, there is no economic 
    impact. Furthermore, the Department has determined that if the 
    suspension were lifted and the regulation implemented, there would not 
    be a significant economic impact on a substantial number of small 
    entities during the interim period prior to completion of rulemaking 
    action on the helper regulations--expected to be completed within a 
    year. Because of the lag times in agency procedures to amend their 
    regulations and incorporate the contract clauses, and the relatively 
    small number of helper classifications which the Department found 
    prevailing in its surveys in 1992 and 1993, it is unlikely that a 
    substantial number of small entities would have the opportunity to use 
    helper classifications during the period before the rulemaking is 
    completed. Accordingly, the proposed rules are not expected to have a 
    ``significant economic impact on a substantial number of small 
    entities'' within the meaning of the Regulatory Flexibility Act, and 
    the Department has certified to this effect to the Chief Counsel for 
    Advocacy of the Small Business Administration. Thus, a regulatory 
    flexibility analysis is not required.
    
    VII. Document Preparation
    
        This document was prepared under the direction and control of Maria 
    Echaveste, Administrator, Wage and Hour Division, Employment Standards 
    Administration, U.S. Department of Labor.
    
        Signed at Washington, D.C., this 29th day of July 1996.
    John R. Fraser,
    Deputy Administrator, Wage and Hour Division.
    [FR Doc. 96-19649 Filed 7-31-96; 8:45 am]
    BILLING CODE 4510-27-M
    
    
    

Document Information

Published:
08/02/1996
Department:
Labor Department
Entry Type:
Proposed Rule
Action:
Proposed rule.
Document Number:
96-19649
Dates:
Comments are due September 3, 1996.
Pages:
40366-40368 (3 pages)
PDF File:
96-19649.pdf