[Federal Register Volume 65, Number 224 (Monday, November 20, 2000)]
[Rules and Regulations]
[Pages 69674-69693]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-29533]
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DEPARTMENT OF LABOR
Office of the Secretary
Employment Standards Administration
Wage and Hour Division
29 CFR Parts 1 and 5
RIN 1215-AA94
Procedures for Predetermination of Wage Rates; Labor Standards
Provisions Applicable to Contracts Covering Federally Financed and
Assisted Construction and to Certain Nonconstruction Contracts
AGENCY: Wage and Hour Division, Employment Standards Administration,
Labor.
ACTION: Final rule.
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SUMMARY: This document adopts as a final rule an amendment to the
regulations that govern the employment of ``helpers'' on federally-
financed and assisted construction contracts subject to the prevailing
wage standards of the Davis-Bacon and Related Acts (DBRA).
Specifically, this document amends the regulations to incorporate the
Wage and Hour Division's longstanding policy of recognizing helper
classifications and wage rates only where their duties are clearly
defined and distinct from those of journeyworker and laborer
classifications in the area; the use of such helpers is an established
prevailing practice in the area; and the term ``helper'' is not
synonymous with ``trainee'' in an informal training program.
EFFECTIVE DATE: January 19, 2001.
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) 693-0569. (This is
not a toll-free number.)
SUPPLEMENTARY INFORMATION:
[[Page 69675]]
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
Apart from the brief periods, as discussed below, when the
suspended ``helper'' regulations were implemented, the longstanding
practice of the Department of Labor (``DOL'' or ``the Department'') has
been to allow the use of helper classifications on DBRA-covered
construction projects only where (1) the duties of the helper are
clearly defined and distinct from those of the journeyworker and
laborer; (2) the use of such helpers is an established prevailing
practice in the area; and (3) the term ``helper'' is not synonymous
with ``trainee'' in an informal training program.
On May 28, 1982, Wage and Hour 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), containing new
provisions intended to allow contractors to expand their use of helpers
on Davis-Bacon covered projects at wages lower than those paid to
skilled journeyworkers.\1\
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\1\ The following four new provisions were promulgated:
A new definition of the term ``helper,'' allowing a
helper's duties to overlap with those of a journeylevel worker: ``A
helper is a semi-skilled worker (rather than a skilled journeyman
mechanic) who works under the direction of and assists a journeyman.
Under the journeyman's direction and supervision, the helper
performs a variety of duties to assist the journeyman such as
preparing, carrying and furnishing materials, tools, equipment, and
supplies and maintaining them in order; cleaning and preparing work
areas; lifting, positioning, and holding materials or tools; and
other related, semi-skilled tasks as directed by the journeyman. A
helper may use tools of the trade at and under the direction and
supervision of the journeyman. The particular duties performed by a
helper vary according to area practice.'' [29 CFR 5.2(n)(4), 47 FR
23667.]
A provision allowing a helper classification to be
included in the wage determination if it was an ``identifiable''
local practice. 29 CFR 1.7(d), 47 FR 23655.
A provision limiting the number of helpers to two for
every three journeyworkers. 29 CFR 5.5(a)(4)(iv), 47 FR 23670.
A provision allowing the addition of helper
classifications on contracts containing wage determinations without
helper classifications, where helpers are utilized in the area. 29
CFR 5.5(a)(1)(ii)(A), 47 FR 23688.
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These regulations were challenged in a lawsuit brought by the
Building and Construction Trades Department, AFL-CIO, and a number of
individual unions. On December 23, 1982, the U.S. District Court for
the District of Columbia Circuit held that the new helper regulations
conflicted with the Davis-Bacon Act and enjoined DOL from implementing
the regulations. See Building and Construction Trades Department, AFL-
CIO, et al. v. Donovan, et al., 553 F. Supp. 352 (D.D.C. 1982). On
appeal, the U.S. Court of Appeals for the District of Columbia upheld
the Department's authority to allow the increased use of helpers,
concluding that the Secretary's regulatory definition was ``not clearly
unreasonable.'' Building and Construction Trades Department, AFL-CIO,
et al. v. Donovan, et al., 712 F.2d 611, 630 (D.C. Cir. 1983), cert.
denied, 464 U.S. 1069 (1983). However, the court struck down that part
of the regulation that allowed for the issuance of a helper wage rate
where helpers were only ``identifiable.'' Id. at 624.
On remand, the district court lifted the injunction as it applied
to the helper definition, but maintained it as to the remaining helper
regulations. The district court added that the Secretary ``may,
however, submit to this Court reissued regulations governing the use of
helpers, and if these regulations conform to the decision of the Court
of Appeals, they will be approved.'' 102 CCH Labor Cases para. 34,648,
p. 46,702 (D.D.C. 1984).
In accordance with the district court's order, DOL published in the
Federal Register (52 FR 31366, August 19, 1987) proposed revisions to
the helper regulations to add the requirement that helpers must prevail
in an area in order to be recognized. The Department, on January 27,
1989, published a revised final rule governing the use of helpers on
federal and federally assisted construction contracts subject to the
Davis-Bacon and Related Acts (54 FR 4234).
On September 24, 1990, the district court vacated its injunction,
and on December 4, 1990, Wage and Hour published a Federal Register
notice 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 from spending any funds to
implement or administer the helper regulations as published, or to
implement or administer any other regulation that would have the same
or similar effect. In compliance with this 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 that did not
include a ban restricting the implementation of the helper regulations.
On January 29, 1992, Wage and Hour issued All Agency Memorandum No.
161, instructing the contracting agencies to include the helper
contract clauses in contracts for which bids were solicited or
negotiations were concluded after that date. On April 21, 1992, the
U.S. Court of Appeals for the District of Columbia invalidated the
regulation that prescribed a ratio of two helpers for every three
journeyworkers for being without sufficient support in the record, but
upheld the remaining helper provisions. 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, Wage and Hour issued a
Federal Register notice removing the invalidated text, 29 CFR
5.5(a)(4)(iv), from the Code of Federal Regulations. 57 FR 28776.
Subsequently, Section 104 of the Department of Labor Appropriations
Act of 1994, Public Law 103-112, enacted on October 21, 1993,
prohibited the Department of Labor from expending funds to implement or
administer the helper regulations during fiscal year 1994. Accordingly,
on November 5, 1993, Wage and Hour published a Federal Register notice
(58 FR 58954) suspending the regulations governing the use of semi-
skilled helpers on DBRA-covered contracts, and reinstating the
Department's prior policy regarding the use of helpers. The Department
of Labor Appropriations Act for fiscal year 1995 again barred the
Department from expending funds with respect to the helper regulations
(Section 102, Public Law 103-333). That prohibition extended into
fiscal 1996 as a result of several continuing resolutions. There was no
such prohibition in the Department of Labor's Appropriations Acts for
fiscal 1996 and 1997, Public Law 104-134, enacted on April 26, 1996,
and Public Law 104-208, enacted on September 30, 1996.
On August 2, 1996, Wage and Hour published in the Federal Register
(61 FR 40366) a proposal to continue to suspend the implementation of
the helper regulations while additional rulemaking procedures were
undertaken to determine whether further amendments should be made to
those regulations. On December 30, 1996, a
[[Page 69676]]
final rule was published in the Federal Register (61 FR 68641)
continuing the suspension. Pursuant to that final rule, the November 5,
1993 suspension of the helper regulations continues in effect until
Wage and Hour either (1) issues a final rule amending (and superseding)
the suspended helper regulations; or (2) determines that no further
rulemaking is appropriate, and issues a final rule reinstating the
suspended regulations.
By decision dated July 23, 1997, the U.S. District Court for the
District of Columbia upheld the Department's December 30, 1996 final
rule continuing the suspension of the helper regulations until the
completion of rulemaking proceedings. Associated Builders &
Contractors, Inc. v. Herman, C.A. No. 96-1490, 1997 WL 525268 (D.D.C.
July 23, 1997).
The Department, by Notice of Proposed Rulemaking (NPRM) published
in the Federal Register on April 9, 1999 (64 FR 17442), proposed for
public comment an amendment to the regulations that would reflect the
longstanding policy of recognizing helpers as a distinct classification
on DBRA-covered work only where Wage and Hour determines that (1) the
duties of the helpers are not performed by other classifications in a
given area, i.e., the duties of the helper are clearly defined and
distinct from those of the journeyworker and laborer; (2) the use of
such helpers is an established prevailing practice in the area; and (3)
the term ``helper'' is not synonymous with ``trainee'' in an informal
training program.
In addition to the proposed rule, the Administrator also presented
for comment the reasons the Department had concluded that the suspended
rule should not be implemented, as well as the various other
alternatives that had been considered by the Department: (1) Add a
ratio requirement to the suspended helper definition; (2) change the
``helper'' definition to emphasize the semi-skilled nature of the
classification; (3) define ``helpers'' based on the Bureau of Labor
Statistics, Occupational Employment Statistics (OES) Dictionary of
Occupations, which focuses on unskilled duties and the worker's
interaction with journeylevel craft workers; and (4) explicitly
delineate the semi-skilled tasks performed by each helper
classification. The Administrator also presented for comment an
Economic Impact Analysis comparing the economic costs of the proposed
rule governing the use of helpers under the DBRA to those under the
suspended rule and the other alternatives considered by DOL, and a
Regulatory Flexibility Analysis.
The Department received 23 responses to the NPRM. These included 18
responses providing substantive comments, one with no comments, and
four requesting an extension of the comment period. Comments were
received from three groups of Congressional Representatives:
Representatives Charlie Norwood, Bill Goodling, Cass Ballenger, John
Boehner, Peter Hoekstra, Buck McKeon, and Ron Paul; Representatives
William L. Clay, Major R. Owens, and James E. Clyburn; and
Representatives Jan Schakowsky and Anthony Weiner. Comments were also
submitted by six contractor associations: The Associated General
Contractors, Inc. (AGC); the Associated Builders and Contractors, Inc.
(ABC); the Small Business Survival Committee (SBSC); the Associated
Prevailing Wage Contractors, Inc. (APWC); the AGC of Texas (Highway,
Heavy, Utilities and Industrial Branch); and the Mechanical Electrical
Sheet Metal Alliance (MESMA), which is a coalition of members of the
Mechanical Contractors Association of America (MCAA), the National
Electrical Contractors Association (NECA) and the Sheet Metal and Air
Conditioning Contractors National Association (SMACNA).
Also submitting comments were three union organizations and a
union-contractor group: The Building and Construction Trades
Department, AFL-CIO (Building Trades); the Laborers' International
Union of North America (LIUNA); the International Brotherhood of
Electrical Workers (IBEW); and the National Joint Apprenticeship and
Training Committee for the Electrical Industry (NAJTC), which was
jointly created by the IBEW and NECA.
The Texas Department of Transportation (TxDOT) commented on the
proposal, as did two academic sources: A.J. Thieblot, Ph.D., Adj.
Prof., University of Baltimore and the Regulatory Studies Program,
Mercatus Center, George Mason University, Wendy L. Gramm, Director.
Comments were also provided by two individual companies, Halliburton/
Kellog Brown & Root (through in-house counsel) and Elevator Control
Service (Elcon).
Finally, two elevator contractors' associations (the National
Association of Elevator Contractors and the National Elevator Industry,
Inc.) and two elevator contracting companies (Quality Elevator Co. and
Barbee Curran Elevator Co., Inc.) requested an extension of the comment
period. Requests for extension of time were not granted.
III. Comments and Analysis
In the NPRM, the Department proposed not to implement the suspended
``semi-skilled'' helper rule, but instead, to issue a rule reflecting
the current, longstanding practice of recognizing helpers only where
they are a separate and distinct class with clearly defined duties. The
Department also provided therein a detailed explanation of the problems
it identified with respect to the suspended helper definition, as well
as a discussion of other alternatives for identifying helpers that were
considered.
As explained in the NPRM, the Department had preliminarily
concluded that the suspended rule was not capable of being administered
and enforced effectively in accordance with the goals and requirements
of the Davis-Bacon Act, especially in view of the court-ordered
abandonment of the ratio provision. The Department stated that the
suspended rule is problematic because it represents a sharp departure
from the Department's traditional practice of identifying job
classifications based on the duties performed by such classifications.
The suspended helper definition is unique in that it allows the
determination of a Davis-Bacon classification based on subjective
standards--the worker's skill level (``semi-skilled'') and the
existence of work-site supervision. Furthermore, the Department noted
that the definition is internally inconsistent in that the examples
given of the types of assistance the helper might provide to a
journeyworker are not semi-skilled, but rather are largely unskilled
duties commonly performed by laborers. The Department also stated that
the requirements that the helper be ``semi-skilled'' and work under the
supervision of a journeyworker are vague and would provide little
assistance in enforcement.
The Department reasoned that, because the suspended rule allows the
duties of a helper to overlap with those of both journeyworkers and
laborers and provides no readily ascertainable means for distinguishing
helpers from other classifications, contractors would find it difficult
to determine whether they were in compliance and the Department in turn
would find it difficult to enforce the regulation. Additionally, the
Department expressed concern that the ambiguities in the suspended rule
would make it difficult to prevent unscrupulous contractors from
intentionally reclassifying large numbers of both journeyworkers and
laborers as helpers when they work on DBRA projects, thus undermining
locally prevailing wages for construction job classifications. The
Department indicated that this is an even greater concern now that
there is
[[Page 69677]]
no longer any numerical limitation to using helpers on DBRA projects.
The Department also concluded that there seemed to be no generally
accepted meaning for the term ``helper'' in the construction industry,
and therefore there was reason to believe that the definition in the
suspended rule did not in fact represent industry practice. For this
reason, the Department was concerned that it would be difficult to
conduct meaningful wage surveys and, therefore, specifically requested
that commenters submit evidence regarding how helpers are in fact used.
Wage data collected by the Department during the implementation
period provided further support for the Department's decision to
reconsider the advisability of implementing the suspended rule. A key
underpinning of the helper rule at the time it was proposed was the
notion that helper use is widespread in construction in the private
sector. According to the preamble to the proposed rule published in
1987, the Secretary projected that helpers would prevail in two-thirds
to 100% of all craft classifications.\2\ The wage survey data submitted
to the Department during the implementation period, though admittedly
limited in quantity and geographic scope, indicated to the Department
that use of helpers might not be as widespread as previously thought.
This led the Department to examine other available data sources in
order to reassess its previous assumption that helper use is
widespread.
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\2\ The final rule stated, without quantification, that this
percentage would be reduced to the extent that collectively
bargained rates were found to prevail and did not provide for a
helper classification. 54 FR 4234, 4242 (January 27, 1989).
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The Department also became concerned, as a secondary matter, that
the suspended rule might have a negative impact on apprenticeship and
training by lessening the incentive for contractors to employ
apprentices and trainees participating in formal programs.
After a full and careful review of the suspended rule, as well as a
number of alternative approaches, the Department decided to propose for
implementation the duties-based approach to recognizing helpers, which
reflects longstanding policy. As discussed in the NPRM, it is the
Department's view that this approach is more consistent with the intent
of the Davis-Bacon Act to assure that workers employed on federal and
federally-assisted construction work are paid at least the wages paid
to workers doing similar work on similar construction in the area. The
Department also stated in the NPRM that this approach, in sharp
contrast to that under the suspended rule, would provide an objective
basis for administration and enforcement of helper use, as well as
clear criteria to facilitate compliance.
The following is a summary and analysis of the comments received as
they relate to the proposed regulation, the alternatives considered,
the problems identified by the Department with respect to the suspended
rule, and the Department's analysis and conclusions concerning the
proposed rule set forth in the NPRM. Each submission has been
thoroughly reviewed and each comment has been carefully considered.
Problems With the Suspended Helper Definition
1. The Suspended Helper Definition Would Be Difficult To Administer and
Enforce
The Building Trades commented that the suspended rule would be
unenforceable because it is simply too difficult to distinguish a
helper from a journeylevel worker on a job site. The Building Trades
stated that, if contractors and subcontractors were permitted to assign
helpers to perform the tasks of any and all classes of laborers and
mechanics at less pay, as the suspended definition would allow, the
requirement in the Davis-Bacon Act that wages be based on
``corresponding classes'' would effectively be read out of the statute.
The AGC, the ABC, and Dr. Thieblot, on the other hand, stated in their
respective comments that the Department should be able to identify
helper classes through area practice surveys as easily as it
differentiates among the various trade classifications.
The Department believes that it is much more difficult to identify
a helper classification under the suspended rule, than to identify a
craft or laborer classification under the traditional duties-based
approach. Under DBRA, a laborer or mechanic is entitled to be paid the
prevailing rate for the work performed according to the local area
practice, and therefore, is classified based on the duties the worker
performs. Because under the suspended definition, helpers may perform
the duties of other classifications--both journeylevel workers and
laborers--without any limitations other than that they be supervised by
and assist a journeyworker, it would be extremely difficult for the
Department to identify the work of a helper in any given area, both for
enforcement and wage determination purposes.
Comments suggesting that the Department can simply examine
prevailing practices to identify helpers provide no practical guidance
for resolving the suspended rule's inherent definitional problems.
Construction craft workers generally perform certain basic, core duties
that are specific to their respective classifications and therefore,
are more easily identifiable for both enforcement and wage
determination purposes. For example, it is widely understood that
carpenters use hammers, saws and other tools of the trade to construct
structures made of wood. Area practice issues arise concerning gray
areas, where in a particular locality certain types of duties may be
performed by another craft as an adjunct to its core duties, or may be
carved out as a separate classification altogether. Thus, in some
areas, carpenters may install drywall, while in others it may be
installed by a specialty classification referred to as ``drywall
installers.'' An area practice survey can make this determination. But
it is not necessary for Wage and Hour to conduct an area practice
survey to determine the work of each and every classification. For
example, an area practice survey would not be needed to determine
whether, instead of building wood structures, carpenters install water
pipes, because such work is part of the basic, core duties of a
plumber. Conversely, helpers, under the suspended rule, cannot be
identified under the duties-based approach because there is no
generally accepted subset of duties performed by helpers that would
distinguish the helper from other classifications.
LIUNA commented that the combination of the suspended rule's
allowance of overlap with laborers' duties and the lower wages
generally paid to helpers would result in either the displacement of
laborers in favor of workers classified and paid at lower helpers'
rates, or the performance by the existing laborer workforce of the same
work at lower wage and fringe benefit rates--contrary to the purpose of
the Davis-Bacon Act to prevent Federal construction from depressing
locally prevailing wages. LIUNA observed that many of the work
activities of certain construction laborer classifications are
precisely the same as the potential helper duties specifically
enumerated under the suspended rule. LIUNA noted, for example, that a
wide variety of ``tender'' classifications, which are negotiated
between the Laborers' local unions and construction employers
throughout the country, include the
[[Page 69678]]
same duties that would be performed by helpers under the suspended
regulations.\3\ Dr. Thieblot, however, stated that the fact that the
suspended helper definition may include work that would otherwise be
done by laborers should be of no more concern to the Department than
the performance by ``tender'' classifications of work that could be
done by laborers.
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\3\ LIUNA stated that the laborer's role as a ``tender'' or
``helper'' to other trades has a long history, as demonstrated by
the American Federation of Labor's 1903 charter to LIUNA, which
described the laborer's work as ``tending to masons, mixing and
handling all materials used by masons (except stone setters),
building of scaffolding for mason's plasters, building of centers
for fire proofing purposes, tending to carpenters, tending to and
mixing of all materials for plastering, whether done by hand or any
other process, clearing of debris from buildings, scoring,
underpinning and raising of old buildings * * *.'' LIUNA also stated
that, although today the term ``tender'' is preferred over
``helper'' in describing laborers' support relationship to other
craft workers, the two terms are interchangeable in the construction
industry and that DOL's Davis-Bacon General Wage Determinations
include ``literally hundreds of examples of `tender' or `helper' job
titles (mason tender, plasterer tender, carpenter tender, plumbing
tender, etc.) listed as part of the laborer classification.''
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The Department believes that LIUNA's concerns on the overlap of
helper duties with other existing laborer classifications under the
suspended rule are valid. The Department also believes that the
recognition of a wide variety of tender classifications under its
current policy demonstrates the manner in which helper classifications
will be recognized under the final rule. The Department under its
current policy, and under the final rule, will issue rates for helper
classifications where the duties they perform are distinct from those
of other classifications, including the journeyworkers they assist and
other laborer or tender classifications. Tender classifications
recognized by the Department must meet these criteria. While tender
classifications do perform laborer-type duties, their performance of
such work must be prevailing in the locality, i.e., more tenders than
any other classification perform the work in question in that
particular locality. In contrast, under the suspended rule, the use of
helpers by contractors must be prevailing in the locality and the
duties they perform is determined by area practice, but there is no
requirement that their performance of certain duties be prevailing in
relation to those performed by other classifications in the locality.
Thus, the suspended rule would allow the duties of a helper to overlap
with those of other classifications that prevail within the locality,
possibly leading to the employment of helpers to perform the work of
other classifications at lower wages. Because tender/helper
classifications must perform distinct duties for which the tender/
helper classifications prevails in the locality, the recognition of
such classifications does not carry the same potential for abuse and,
therefore, the undermining of prevailing wages associated with the use
of helpers under the suspended rule.
The Department indicated in the NPRM that it does not believe that
the suspended rule can be effectively enforced under the vague,
subjective criteria of its definition. For instance, the Department
stated in the NPRM that the suspended definition's failure to
distinguish between ``semi-skilled'' and ``skilled'' workers presented
the Department with a ``fundamental problem'' when it tried to develop
enforcement guidelines. LIUNA commented that the suspended definition
provides no guidance for distinguishing between a ``semi-skilled''
helper who uses tools of the trade, and a journeyworker with little
experience. The ABC stated, on the other hand, that contractors have
developed methods for recognizing differences between skilled and semi-
skilled work and have implemented pay scales based on such differences.
None of the commenters, however, has identified any methods or criteria
used by contractors that would be helpful to the Department in
distinguishing between skilled and semi-skilled work. Similarly, the
AGC stated that contractors routinely make hiring decisions based on
skill level and compensate craft workers based on their training and
experience. The Department believes that these practices are reflective
of the normal practice of non-union employers in many industries where
workers within an occupation are paid a range of rates based on their
training and experience. The Department does not believe that such a
practice demonstrates the existence of separate classes of workers
within the meaning of the Davis-Bacon Act.\4\
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\4\ See the recent decision of the Administrative Review Board
in Miami Elevator Company and Mid-American Elevator Company, Inc.,
ARB Case Nos. 98-086 and 97-145 (April 25, 2000), pp. 33-34.
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The AGC stated that whether a skilled worker would accept and
perform a ``semi-skilled'' job as a helper is an irrelevant concern,
because compliance should focus on ensuring that individuals are
properly compensated for the work they actually perform. This point
echoes one of the Department's main concerns which led it to reject the
suspended helper rule in favor of the traditional duties-based approach
under the proposed rule. Under the suspended rule, individuals
classified as helpers, who may perform the work of both higher paid
craft workers and laborers, would not be compensated based on the work
they perform, but rather on their comparatively lower skill levels.
Furthermore, the Department still does not believe it could draw the
line effectively between semi-skilled and skilled work, especially
given that, in today's construction market, skilled craft workers may
perform a whole range of duties from unskilled to semi-skilled to
skilled, and laborers often perform what may be considered semi-skilled
work as well.
The Department also observed in the NPRM that the supervision
aspect of the suspended helper definition would provide little
assistance in distinguishing a helper from other classifications of
workers. LIUNA agreed that supervision by a journeyworker is not a
practical standard for distinguishing ``semi-skilled'' helpers from
others on the work-site, because many classifications are supervised by
other workers or supervisors. LIUNA stated that laborers, apprentices,
trainees and lesser skilled journeyworkers all may work under the
``direction and supervision'' of other, more highly skilled
journeyworkers. The AGC, on the other hand, stated that the definition
of a helper does not need to ``indicate the nature or amount of
direction that helpers must receive to distinguish them from others on
a worksite,'' because this should be left to local prevailing practice.
None of the commenters offered suggestions as to how, from a practical
standpoint, the Department could determine local supervisory practices.
Nothing in the comments received by the Department contradicts its
view that laborers and journeylevel construction workers, like helpers
under the suspended rule, also may work under the ``direction and
supervision'' of other journeyworkers. In the Department's experience,
which is supported by LIUNA's comments, supervision on a construction
worksite is often an amorphous concept, especially where it is
performed by a ``team leader,'' and therefore, does not lend itself to
objective evaluation. Thus, the Department continues to be of the
opinion that supervision by a journeyworker is not a practical standard
for distinguishing semi-skilled helpers from other classifications on
the worksite.
The Department also stated in the NPRM that it believes the
problems resulting from the suspended rule's
[[Page 69679]]
definitional ambiguities are compounded by evidence that the term
``helper'' has multiple, quite different meanings within the
construction industry. LIUNA stated that the examples of duties that a
helper may perform, as listed in the suspended definition, are not
``semi-skilled,'' but rather include a range of skilled, semi-skilled,
and unskilled duties commonly performed by other classifications. AGC,
on the other hand, stated that many different craft classifications
have multiple, quite different meanings within the construction
industry, and that this is the primary reason that no standard
definitions have ever been promulgated for craft classifications
performing Davis-Bacon work.
While it is true, as discussed above, that craft classifications
may have somewhat different meanings within the industry, craft
classifications generally encompass certain well-recognized duties that
are widely understood to be the core duties of the craft occupation.
Thus, despite the occasional need for clarification regarding the
prevailing classification used by contractors in an area for workers
performing specialized work, the fundamental scope of work of most
construction craft occupations is not usually in question.
In contrast, it appears to the Department, as demonstrated by the
rulemaking record, that a helper classification can have various
meanings and uses even within the same locality. For example, the APWC
stated that helpers, in its view, ``are semi-skilled workers who work
under the direction of and provide assistance to journeymen,'' whereas
the AGC of Texas described the use of helpers in the State of Texas as
``allow[ing] construction contractors to utilize unskilled workers
while teaching them a trade or skill through our on-the-job training
programs.'' [Emphasis added]. Similarly, commenters on the proposed
rule to continue the suspension of the helper regulations, variously
characterized helpers as skilled workers who have not been trained in
the full range of journeylevel work, short-term entry-level workers
assisting journeyworkers in unskilled laborer duties, and longer-term
specialized workers who perform a limited number of duties that overlap
journeylevel workers. 61 FR 68646. In this regard, the Department, in
the NPRM, invited commenters to submit further evidence regarding how
helpers are in fact used by contractors, particularly any data
regarding whether there is in fact a generally recognized definition of
helpers that is capable of being objectively identified. No such data
were submitted by the commenters. The Department therefore believes
that it was correct in its view that no definition of helpers exists
that could adequately reflect ``the actual and varied practice in the
construction industry as a whole or even in any particular area.''
The Department also expressed its concern that Wage and Hour would
not be able to conduct a meaningful wage determination process using
the suspended definition of helpers in light of the likelihood that
contractors responding to area wage surveys would ascribe very
different meanings to the term ``helpers.'' Dr. Thieblot stated that
surveying for helper rates presents no special difficulties since it is
Wage and Hour's practice ``to accept the rates and job titles as
submitted by the contractors who paid them, whatever those titles might
be'' without analyzing job content. Dr. Thieblot stated, for example,
that it should be no more difficult for Wage and Hour to determine if
the job title ``mason's helper'' prevails in a given area, than to
determine if the job title ``mason's tender'' prevails.
This comment highlights a common misunderstanding of the
Department's wage determination process. Wage and Hour, in gathering
wage data, does not automatically accept the job titles as submitted by
reporting employers. Wage and Hour's experience in collecting wage data
is that contractors may use different job titles for the same craft
work. When faced with more than one name for the same type of work,
Wage and Hour must determine whether the workers with the various job
titles in question perform the same basic duties, in which case the
data for such work will be combined for the purpose of determining the
prevailing classification and issuing a single prevailing rate for the
particular work performed. In other cases, Wage and Hour might
determine that it is the prevailing practice in a certain area for
workers under a more specific job title (e.g., drywall hanger) to
perform a subset of the duties of a more generalized craft (e.g.,
carpenter), and thus issue a separate wage rate for the specific job
title where the data indicate that the specialized classification
prevails for such work in the area. Thus, Wage and Hour does not
automatically accept job titles as submitted by employers, but rather
analyzes job content, as appropriate, as part of the wage determination
process.
The problem with gathering data for helper classifications differs
significantly from the difficulty presented where workers in an area
perform the same craft work, but under different job titles. A helper
classification, even if referred to by many different names within the
locality, could nonetheless be surveyed effectively if the duties
performed by workers with the various job titles for a helper were
distinct from those of other classifications and essentially the same
under each title. The problem with identifying helpers during the wage
determination process is that the term ``helper'' under the suspended
rule can serve to describe a variety of workers performing many
different types of work. The Department is additionally concerned that
the suspended helper rule, which imposes upon the wage determination
process a definition of a helper that was created by the Department,
may not necessarily reflect the reality of how helpers are in fact
utilized in any given locality. Some employers may classify workers
performing the work of helpers under the suspended rule as journeylevel
workers, craft workers, or semi-skilled workers, while still others may
classify such workers as laborers, unskilled workers, or tenders. In
this regard, the Department notes that several contractors surveyed in
the processing of helper conformance requests during the period the
suspended regulations were in effect indicated that they used the job
title ``laborer'' for workers meeting the definition of ``helper''
under the suspended regulation. Thus, because their practices vary from
each other and from the definition in the suspended rule, the
Department continues to be of the view that contractors, when
responding to Davis-Bacon wage surveys, would likely be inconsistent in
how they classify workers as helpers. This in turn would raise
questions regarding the reliability of any wage data received for a
given locality concerning employment of helpers.
The SBSC acknowledged that the suspended helper rule is a break
from the tradition under the DBRA of identifying and differentiating
among job classifications on the basis of tasks performed by each
classification. SBSC commented, however, that the Wage and Hour
Division has an outdated construction mentality and that its complaints
about the use of helpers suggest a hesitancy to modernize its views.
SBSC's comments also questioned the Department's concern that helpers
will replace laborers, stating that it is a misclassification to insist
that helpers are laborers; it ``is the old class of laborer that has
become suspect.'' SBSC's comments provide little practical guidance on
how to create a definition of helpers that could
[[Page 69680]]
be effectively enforced consistent with the underlying intent of the
DBRA. In addition, the substantial number of laborers reported in the
wage surveys in the record, as well as the comments submitted by LIUNA
in support of the interests of laborers in this rulemaking procedure,
do not support SBSC's view that laborers no longer constitute a viable
worker classification on Davis-Bacon covered construction.
The Mercatus Center acknowledged that the Department's enforcement
and administrative concerns may be justified, but cautions that they
must be balanced against the productivity and cost-saving benefits from
the suspended definition of helpers. The Mercatus Center further noted
that by proposing to eliminate the flexibility of a helper to perform
the duties of other job classifications, the Department would eliminate
one of the most important cost-saving features of the helper position.
While the Department believes that cost-saving features are certainly
desirable, they cannot be determinative where the approach in question
(i.e., the definition of helpers under the suspended rule) cannot be
fairly and effectively administered in a manner consistent with the
goals of the statute to protect prevailing wages for the corresponding
classes of work performed. Indeed, one of the principal objectives of
the Davis-Bacon Act was to set a floor on wages so that wages would not
be reduced below the prevailing wage as a result of competitive bidding
for Federal construction contracts.
The ABC stated that the absence of a significant number of
complaints or incidents of abuse during the time the suspended rule was
in effect should be viewed as evidence that the Department's stated
concerns about enforcement difficulties are overstated. Neither the
absence nor presence of complaints had a bearing on the Department's
determination that the suspended helper rule cannot be administered and
enforced effectively; rather, as explained in the NPRM, it was the
difficulty encountered in attempting to develop effective enforcement
guidelines during the implementation period that initially raised these
concerns. The suspended helper regulations were in effect for too brief
a period for the absence of complaints to be indicative of a lack of
enforcement difficulties. Though the suspended rule had an
implementation period of approximately 20 months, it was nearly a year
after implementation before the helper provisions could begin to be
included in DBRA-covered construction contracts, following changes to
the Federal Acquisition Regulations and the Defense Acquisition
Regulations. Thus, the suspended helper rule simply was not in force
for a sufficient period of time to draw any conclusions from the number
of complaints received during its application.
After carefully reviewing the comments, the Department is persuaded
that the suspended rule cannot be effectively administered and
enforced. The suspended rule provides no objective basis for
distinguishing between helpers and other classifications, and
furthermore is vague and internally inconsistent. Its effect, contrary
to the intent of the statute, would be to allow contractors and
subcontractors on DBRA projects to assign the duties of both craft
workers and laborers to helpers who are paid at lower wage rates, with
virtually the only restriction being that the worker receive some
supervision. As a result, the Department remains concerned that
implementation of the suspended rule would lead to many instances of
intentional and unintentional misclassification of workers and
potential abuse of the rule, which the Department would be unable to
prevent or remedy. None of the comments submitted provided any
information or arguments which alleviated these concerns.
Additionally, the Department believes it would not be able to
collect meaningful, consistent wage data regarding use of helpers for
wage determination purposes. The Department believes that the ambiguous
language of the definition in the suspended rule would not give
contractors adequate guidance and would lead to inconsistent wage
reporting. Because there is no generally recognized practice regarding
how helpers are used, contractors reporting wage data in accordance
with the definition in the suspended rule in some instances probably
would report as helpers workers whom they consider journeymen or
laborers.
The court of appeals, in its review of the Department's original
rulemaking concerning helpers, stated that its deference to the
Secretary's choice of policy ``is properly near its greatest when his
decision turns on the enforceability of various regulatory schemes.''
Donovan, 712 F.2d at 629. The Department has been unable to develop a
method for determining whether workers classified as helpers have been
correctly classified under the suspended rule, consistent with the
fundamental statutory goal of preserving locally prevailing wages for
construction job classifications. Since the rulemaking record does not
demonstrate that the suspended rule is capable of practical and
efficient administration and enforcement to achieve the statutory goals
under DBRA, the Department must reject implementation of the suspended
rule.
2. Helpers Are Less Widespread Than Previously Believed
As explained in the preamble to the proposed rule, the belief that
a distinct class of ``helpers'' was in widespread use in the
construction industry was a key assumption underlying the Department's
development of the suspended helper regulation. 64 FR 17445. Although
not a representative sample, the data submitted to the Department in
the 78 surveys conducted during the brief period the suspended rule was
in effect failed to substantiate that assumption. In its earlier
rulemaking, the Department had projected that use of helpers would be
found to be a prevailing practice in from two-thirds to 100 percent of
all craft classifications surveyed, except where collectively bargained
rates were found to prevail and did not provide for a helper
classification. 52 FR 31366, 31369-70 (August 19, 1987); 54 FR 4234,
4242 (January 27, 1989). The Department's experience with the survey
data collected in 1992 and 1993 during the brief time that the
suspended regulations were in effect was quite different. In the 78
surveys conducted, the use of helpers prevailed in only 69, or 3.9
percent of the 1763 classifications issued, and only 48 of the 69
helper classifications, or 2.7 percent of the 1763 classifications,
were based on the practices of non-union contractors and
subcontractors. Furthermore, in only 20 of the 78 surveys conducted
were any non-union helper classifications found to prevail.
The Economic Impact and Flexibility Analysis in the proposed rule
also provided data showing that helpers were less widespread than
previous analyses had assumed. The 1996 Current Population Survey
(CPS), compiled and published by the Bureau of Labor Statistics (BLS)
and the Bureau of the Census, shows that helpers constituted only 1.2
percent of total construction employment. Data from the Occupational
Employment Statistics (OES) program showed that helpers comprised 8.7
percent of the total construction work force. Because OES does not
contain a separate classification for construction laborer, and its
definitions of the helper classifications appear to include laborers,
the Department believes the OES overstates the use of helpers. For this
reason, the Department developed
[[Page 69681]]
an alternative estimate, adjusting the OES data by utilizing the
percentage of laborers in the CPS workforce. The adjusted OES data
resulted in an estimate that helpers constituted 3.4 percent of the
total construction workforce.
In their comments, the Building Trades stated that the Department's
data on helper use are consistent with the 1996 Current Population
Survey (CPS) compiled by BLS and the Bureau of the Census, which showed
that helpers only account for 1.2 percent of total construction
industry employment. The Building Trades believes that these data
support its longstanding contention that the underlying purpose of the
suspended helper regulation was not to reflect locally prevailing
practices, but to ``artificially interject'' a non-prevailing
classification of construction workers into Davis-Bacon covered
projects as a means of undercutting prevailing wages.
The ABC questioned the appropriateness of the Department's
consideration of whether the use of helpers in the construction
industry is ``widespread.'' The ABC stated that the proper test for
determining the existence of helper classifications under the statute
is not whether the use of helpers is ``widespread,'' but rather whether
it ``prevails.'' The Department acknowledges that a basic prerequisite
to issuing wage rates for classifications under Davis-Bacon, including
helper classifications, is a determination of whether such
classifications and corresponding pay rates prevail in the particular
locality where the project is to be performed. However, the Department
believes its consideration of the overall extent of helper use in the
construction industry, i.e., whether helper use is ``widespread,'' is
appropriate as part of a broad inquiry concerning the advisability of
implementing the suspended regulations. As the Department stated in the
NPRM, ``[t]he belief that a distinct class known as `helpers' was in
widespread use in the construction industry was a key assumption
underlying the Department's development of the helper regulation.'' 64
FR 17445. It is appropriate for the Department to determine, before
taking further regulatory action, if the original underlying assumption
concerning the extent of helper use, which provided the impetus for the
suspended rule, was borne out by the data collected during the period
the regulations were in effect, or by any other more recent, relevant
data available to the Department. The Department believes this is a
particularly significant consideration where there is so little
consensus on a definition of helpers or how helpers are used.
Several commenters expressed their belief that the Department has
underestimated the prevalence of helpers in the construction industry.
Representative Norwood and the congressmen who joined in his comments
state that ``[o]ver 75 percent of all construction in the private
sector are performed by contractors who use semi-skilled helpers. One
study found that on a given open-shop job, 35-50 percent of the workers
in each craft are likely to be helpers.'' The source for these data was
not identified, and therefore, the Department is unable to weigh this
information against the data already available to the Department
concerning the prevalence of helpers. These data, furthermore, do not
indicate to what extent helper classifications actually prevail in the
construction industry.
The AGC stated that more recent BLS survey data contradict the
Department's conclusions regarding employment of helpers. In support,
the AGC cites the NCS test surveys discussed above for Jacksonville and
Tucson, which, according to the AGC, showed that helpers comprise 13.6
percent and 14.8 percent, respectively, of the total number of
construction craft workers in those two localities.
The AGC is referring to four fringe benefit pilot surveys in
Tucson, Arizona; Jacksonville, Florida; Salt Lake City, Utah; and
Toledo, Ohio, which BLS conducted pursuant to its National Compensation
Survey (NCS) program to test the feasibility of collecting detailed
fringe benefit data for occupations within the construction industry.
In these surveys, helpers \5\ constituted 9.6 percent, 8.3 percent, 4.2
percent, and 2.5 percent, respectively, of the total construction
workforce.\6\ Laborers constituted 14.3 percent, 6.9 percent, 9.9
percent, and 10.1 percent, respectively, of the total workforce.
Combined, helper employment in these areas was 5.8 percent of total
construction employment.
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\5\ ``Helpers, construction trades'' were defined by the
National Compensation Survey as ``[s]emi-skilled workers who assist
other workers of usually higher levels of competence or skill.
Helpers perform a variety of duties such as furnishing another
worker with materials, tools, and supplies; cleaning work areas,
machines, and equipment; feeding or offbearing machines; holding
materials and tools; and performing routine duties. Helpers
specialize in a particular craft or trade. A helper may learn a
trade but does so informally and without contract or agreement with
the employer.''
The AGC mistakenly refers to the helper definition used in the
NCS surveys as the OES definition. The OES definition is set forth
infra at note 15. In the future, NCS surveys (and OES surveys) will
use the new Standard Occupational Classification (SOC) definition.
Under the SOC definition, helpers are described as follows: ``Help
[craft worker] by performing duties of lesser skill. Duties include
using, supplying or holding materials or tools, and cleaning work
area and equipment.''
\6\ The percentage figures cited by the AGC are considerably
higher than those previously cited by the Department because those
cited by AGC reflect the elimination of supervisory construction
workers from the total number of construction workers surveyed. The
percentage of helpers in relation to the entire construction
workforce is the appropriate percentage to compare to the data
utilized in the NPRM.
---------------------------------------------------------------------------
It is important to note that the four pilot surveys, which included
Jacksonville and Tuscon, were not designed to collect data on the
employment of helpers, and do not report helpers by craft. In addition,
because the NCS studies obtained data for only four geographic areas,
the information produced by these studies cannot be projected to a
nationwide estimate of the percent of helpers relative to the
construction workforce as a whole. The Department believes that the
information provided by these surveys is generally in line with the
estimates used for the cost impact analysis provided in the NPRM.
The helper data reported in these four pilot studies also reflect
inconsistencies between the level of skill associated with the
``helper'' and their compensation levels. Logically, a semi-skilled job
would be expected to command a higher wage than an unskilled one, but
this was not borne out by the NCS survey data. Helpers are defined, for
purposes of these surveys, as ``semi-skilled'' workers; however, Table
2 of the NCS surveys shows that ``semi-skilled'' helpers are paid
approximately the same wage as ``unskilled'' non-union laborers.\7\
This inconsistency lends credence to the view that there is a widely
disparate use of ``helpers'' in the construction industry.
---------------------------------------------------------------------------
\7\ The NCS surveys actually show that the average wage rates
reported for helpers are below the wage rates reported for
``unskilled'' construction laborers. However, the lower average wage
rate paid helpers in these NCS surveys appears to be due to the fact
that the laborer's rates are an average of wage rates paid to both
union and non-union workers, while the helper's rates are based only
on non-union data.
---------------------------------------------------------------------------
The ABC stated that the Occupational Employment Statistics (OES)
data show as many as 500,000 helpers currently working in the
construction industry. As explained in the NPRM, the OES survey did not
include a separate construction laborers definition, and the helper
definition appears to encompass laborers where they assist craft
workers. It is likely therefore that the OES figures include many
laborers and other
[[Page 69682]]
unskilled workers in the helper category. For this reason, the
Department believes that OES figures overstate the use of helpers in
the construction industry.
The ABC also noted that the Department, when first publishing the
suspended rule in 1982, relied upon earlier BLS estimates that helpers
constitute between 3 and 9 percent of the total workers in the
industry, and stated that these estimates do not differ greatly from
the statistics cited in the most recent NPRM. In the preamble to its
1982 Final Rule, the Department stated that BLS survey data of large
metropolitan areas indicated that the estimated helper share of
employment in the construction industry was between 3.2 percent and 5.6
percent. 47 FR 23650. However, the Department indicated that this
estimate might be understated because the survey was limited to areas
that were ``heavily unionized.'' Id. To correct this understatement,
the Department assumed that the true union share of Davis-Bacon
employment was 50 percent and, accordingly, adjusted the estimate of
the helper share of employment in the construction industry to between
5.98 and 9.4 percent. Id. The Impact Analysis in the 1987 proposed rule
utilized the OES survey as the basis for its assumption that 15 percent
of employees in construction will be helpers. 52 FR 31368-31369. As
discussed in the Impact Statement published in the NPRM, the Department
now believes these estimates overstate the percentage of helpers in
construction employment.
However, none of these surveys and studies shows the degree to
which the use of helper classifications is actually prevailing within
the meaning of the DBRA.\8\ As discussed above, the 1987/1989
rulemaking projected helper classifications would prevail in two-thirds
to 100% of all non-union craft classifications. The Department's
limited experience, as reflected in the data collected during the
implementation period, does not support these projections.
---------------------------------------------------------------------------
\8\ In this regard, the AGC commented that ``[t]he percentage of
helpers in the `construction industry' is likely to underestimate
their numbers and reveals nothing about their employment with
respect to a particular craft.''
---------------------------------------------------------------------------
Several commenters stated that the 78 wage surveys conducted in
1992-93, upon which the Department relied in part to assess the extent
of helper use, constituted too small a sample to be a reliable measure
of the extent of helper employment throughout the construction
industry. The AGC and the ABC cited a GAO audit of the Davis-Bacon wage
survey process as the basis for their opinion that the Davis-Bacon
surveys are unreliable and should not be used as a basis for estimating
the extent of helper employment. GAO/HEHS-96-130 (May 1996). The ABC
suggested that these survey results might also be unreliable because a
large number of non-union contractors either did not voluntarily
participate in the survey process or were not aware that helpers should
be reported during the implementation period. Dr. Thieblot also
expressed his belief that factors other than scarcity explain why
relatively few helper rates were determined to prevail during the
implementation period. Dr. Thieblot stated that the Department's
inability to find helper rates prevailing during this period was due to
the type of surveys conducted, where they were conducted, and how the
results were interpreted.
The Department agrees with the comments that the 78 surveys were
not a statistically valid sample and are not a reliable measure of the
extent of helper employment in the industry. However, the Department
has found its 1992-1993 survey data to be consistent with the
relatively low incidence of helpers reflected in the other available
data sources discussed in the Impact Analysis. The Department believes
that a sufficient number of surveys were conducted to provide evidence
that the earlier estimates of the extent to which use of helpers
prevails were overstated. It is also worth noting that most of the
surveys were selected to target areas where the Department believed
that use of helpers would likely be found to be prevailing.\9\
---------------------------------------------------------------------------
\9\ The Department also reopened unpublished surveys that were
conducted before the helper rules were in effect in order to include
helper data.
---------------------------------------------------------------------------
While the report from the GAO raises the possibility that some
prevailing wage decisions issued during this period might be affected
by the submission of erroneous data, there is no evidence that the data
collected by the Department concerning prevalence of the use of helpers
were inaccurate or skewed by the submission of erroneous data.\10\
Erroneous reporting of an employee's classification is not a typical
error mentioned in the GAO report.\11\ Thus, the GAO findings are not
relevant to the issue of prevalence of the use of helpers and cannot be
used to support the conclusion that the surveys conducted during the
time that the semi-skilled helper rule was in effect are an unreliable
source of information on that issue. The Department also disagrees with
the comment that contractors were not made aware that they should be
reporting helper employment during the implementation period. Specific
instructions were included on the WD-10 survey forms to inform
contractors of the definition of ``helper'' and that workers falling
within that definition should be listed as helpers, regardless of job
title.
---------------------------------------------------------------------------
\10\ As the Department stated in the Final Rule, continuing the
suspension of the ``semi-skilled'' helper regulations, ``It is
inappropriate to draw conclusions concerning the accuracy of survey
results based on the GAO report. The report did not examine or
verify the accuracy of wage determination data, survey response
rates, or calculation of prevailing wages. It focused on the
policies and procedures utilized to prevent the use of inaccurate
data, and proposed changes to strengthen those policies and
procedures.'' 61 FR 68641, 68645.
\11\ The typical errors mentioned in the GAO report concerning
data submissions include:
Reporting the wrong peak week,
Reporting a slightly incorrect wage or fringe benefit
rate (e.g., reporting the rates currently being paid rather than the
rates that were paid during the peak week that occurred ten months
previously), or
Reporting an average wage rate rather than the wage
rate paid to each individual worker within the classification (e.g.,
an employer might report five electricians paid one average rate
when in fact each electrician was paid a slightly different rate).
---------------------------------------------------------------------------
Dr. Thieblot re-analyzed the non-union data on helper use,
discarding all surveys which, based on the areas in which the surveys
were performed and the type of construction surveyed, he did not
believe would be likely to produce helper classifications. He then
proceeded to eliminate all classifications that he believed would not
ordinarily utilize helpers, such as truck drivers and equipment
operator classifications. After paring down the data in this manner,
Dr. Thieblot concluded that helper use prevails in 14.5% (48 of 331) of
those non-union classifications he believed could possibly use helpers.
The assumptions on which Dr. Thieblot's analysis was based,
regarding which geographic areas and which types of construction and
classification are likely to produce helper classifications, appear to
be speculative and inconsistent with the data in the surveys.\12\ In
any event, this total is much less than the two-thirds to 100% of all
(non-union) craft classifications in which the Department previously
estimated helpers would prevail.
---------------------------------------------------------------------------
\12\ For example, although Dr. Thieblot eliminated highway
construction and truck drivers from his count on the assumption that
these types of construction and classifications would not use
helpers, the Department found 6 instances in which truck driver
distributor helpers prevailed and 3 instances in which mechanics'
helpers prevailed on highway construction.
---------------------------------------------------------------------------
Dr. Thieblot also questioned what he termed the Department's
``unexplained rejections of helper rates as prevailing
[[Page 69683]]
* * *.'' However, the Department followed the suspended rules at 29 CFR
1.7(d) for determining the circumstances in which a helper
classification is found to prevail. For example, where the union
electrician's rate was found to prevail, an electrician's helper
classification would not be found to be prevailing unless it was the
practice for union contractors to hire electrician's helpers. Where the
electrician's rate was based on an average of wages paid, the
determination of whether use of electrician's helpers prevailed was
based on a comparison of the number of craft workers (journeymen,
apprentices, trainees and helpers) working on projects utilizing
electrician's helpers with the number of craft workers (journeymen,
apprentices, and trainees) working on projects without helpers.
Finally, the Department's data sufficiency guidelines in effect at the
time required that the Department not list a classification and wage
rate where the number of helpers used (or any other classification), or
the number of contractors using helpers was not sufficient to determine
a prevailing wage.\13\
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\13\ Wage and Hour procedures in effect at the time required
that, in order for a prevailing rate to be issued, there must be at
least 6 workers employed by at least 3 contractors if the
contractor-response rate was less than 50 percent, and at least 3
workers employed by at least 2 employers if the response rate was 50
percent or more.
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After review of the comments, the Department continues to believe
that helpers are not as widespread as it had previously assumed.
3. The Suspended Regulation Could Have a Negative Impact on Formal
Apprenticeship and Training Programs
Although not its primary concern in this rulemaking, the Department
believes that the potential impact of the suspended rule on formal
apprenticeship and training programs merits discussion, given the
Secretary's broad authority to protect and promote the welfare of
workers, including the authority under the National Apprenticeship Act
of 1937, 29 U.S.C. 50, et seq. (also known as the Fitzgerald Act) to
promote apprenticeship. As stated in the NPRM, the Department believes
that the suspended helper regulations could undermine effective
training in the construction industry if contractors are permitted to
use helpers, who may never become journeylevel workers, in lieu of
apprentices and trainees participating in formal programs that place
ratio limits on their use, assure that they receive full training, and
lead to jobs at the journey level.
Several commenters were concerned about the negative impact the
suspended helper rule would have on formal apprenticeship and training
programs. Congressional Representatives Clay, Owens, and Clyburn stated
that minority and female workers would suffer reduced earning
opportunities and/or lost wages and benefits if the suspended helper
regulation were implemented. These congressmen expressed concern that
the suspended rule would trap younger workers, including a
disproportionate share of minority workers, in the new helper
classifications; as a result these workers would never enter
apprenticeship programs, which are the primary route to obtaining
decent wages and fringe benefits. Representatives Schakowsky and Weiner
echoed these concerns, stating that the suspended rule, which contains
no requirement that contractors provide any training to helpers, would
have an adverse impact on construction worker training and
apprenticeship programs, thus exacerbating the current skills shortage
in the construction industry. These congressmen also stated their
belief that the suspended regulation would reduce opportunities
available to minority and female workers within the construction
industry by relegating them to helper status.
The Building Trades commented that, in the NPRM, the Department
greatly understated the long-term negative impact the suspended
regulation would have on formal apprenticeship and training programs.
The Building Trades stated that the suspended helper regulations would
permit almost unfettered use of low-paid semi-skilled helpers on DBRA-
covered projects, thus offering contractors and subcontractors savings
in labor costs without the quid pro quo of investing in apprenticeship
training. The Building Trades stated that contractors and
subcontractors who participate in and provide financial support for
formal apprenticeship and training programs would be placed at a
competitive disadvantage vis-a-vis contractors using helpers, thus
undermining their continued participation in such programs. The
Building Trades also expressed its concern that the suspended rule's
failure to encourage formal craft training would eventually lead to a
severe shortage of skilled craft workers in the industry.
LIUNA cited the GAO's finding that a ``major incentive'' for
contractors to use apprentices has been the ability to pay less than
the prevailing wage on DBRA projects. GAO/HRD-92-43 (1992), p. 11.
LIUNA stated that the reduced apprenticeship opportunities that would
accompany the suspended rule would result in additional costs for
training workers, a long-term shortage of skilled workers, fewer
genuine training opportunities for women and minority craft workers,
and an increase in construction injuries, since most injuries occur to
new, entry-level workers who are untrained or inadequately trained.
MESMA noted that prevailing wage laws support the funding and
viability of many labor-management apprenticeship programs that provide
state-of-the-art training and produce the most productive workers in
the industry. MESMA stated that the overuse of helpers could lead to a
reduction in skills and diminishing quality of construction, as well as
an increase in industrial accidents, because helpers generally receive
little or no safety training.
The NJATC commented that helpers under the suspended definition
would likely perform the same role that apprentices now perform on the
jobsite, only at a lower cost. The NJATC stated its belief that this
practice would result in fewer indentured apprentices, as contractors,
in competition to win federal construction contracts, would replace
``journeymen-in-training'' apprentices with lower-paid helpers in
continually increasing numbers. NJATC stated that, within five to ten
years, this replacement of apprentices with helpers on DBRA projects
would result in an acute shortage of skilled construction workers.
The IBEW commented that, if use of helpers is allowed extensively
on DBRA projects, contractors would no longer be motivated in a
competitive setting to spend 2 percent or more of their payroll on
training, and use an apprenticeship system requiring ratios, when they
could use helpers and avoid such requirements.
On the other hand, both the ABC and the AGC commented that there is
no basis for the Department's concern that increased recognition of
helper classifications may have a detrimental effect on apprenticeship
and training programs. The ABC stated that, over the last decade,
funding and participation by open shop contractors in apprenticeship
and training programs has increased significantly, independent of the
Davis-Bacon regulatory process. The ABC stated that the Department's
policies regarding apprenticeship programs and ratio requirements have
made apprenticeship training unavailable to some workers who desire to
enter the construction industry in semi-skilled jobs. The ABC further
[[Page 69684]]
stated that the helper classification is an important point of entry
into the construction industry for young people, women and minorities,
and that it is improper for the Department to refuse to recognize the
prevailing practice of employing helpers in an effort to force into
training programs workers who either may not be qualified or may not
desire such training.
While acknowledging that the helper classification cannot be used
as an informal training program, the APWC stated that it fulfills an
important entry-level job opportunity for many construction workers.
The AGC of Texas, on the other hand, stated that the use of helpers
allows contractors to utilize unskilled workers while teaching them a
trade or skill. Dr. Thieblot expressed concern that a larger number of
skilled journeymen will be needed to sustain the construction industry
in the future than the number which can be provided by existing
apprenticeship and formal training programs. Dr. Thieblot also
expressed his belief that the suspended helper rules, to the extent
they would allow informal, on-the-job training of semi-skilled workers,
would provide a necessary alternative to formal apprenticeship and
training programs for training and upgrading workers to journeyman
status.
The Mercatus Center expressed its belief that the increased
employment of helpers under the suspended rule would provide greater
employment and training opportunities for minorities and women. The ABC
recommended more study on the potential impact on minorities and women
prior to issuance of the proposed rule. The APWC stated that it is
inappropriate for the Department, in analyzing the merits of the helper
regulations, to express a preference for formal training, such as
provided under union-sponsored apprenticeship plans, over the informal
training methods utilized in the non-union sector.
The Department continues to believe that formal structured training
programs are more effective than informal on-the-job training alone.
The Department's encouragement of formal training is reflected in the
provisions of the Secretary's DBRA regulations that currently allow
laborers and mechanics classified as ``apprentices'' or ``trainees'' to
be paid less than the prevailing wage rate on Davis-Bacon covered
projects only if they are enrolled in a bona fide apprenticeship
program registered with the Department's Office of Apprenticeship,
Training Employer and Labor Services (ATELS) (formerly, Bureau of
Apprenticeship and Training (BAT)) or a State Apprenticeship Agency
recognized by ATELS, or a bona fide training program approved by the
Department's Employment and Training Administration.
The Department views any increases in funding and participation in
formal training programs in the open-shop construction community as a
positive development, but this does not address the concerns expressed
by several of the commenters that the implementation of the suspended
rule would discourage the growth of such programs and result in the
replacement on DBRA-covered projects of apprentices and trainees
enrolled in formal programs, by helpers who could perform the same work
as apprentices and trainees at a lower cost to the construction
contractor and without any restrictions as to how helpers are used. The
Department shares this concern, along with the additional concern that
workers employed as helpers--and particularly, young, minority and
female workers--will not receive the type of training necessary to
become higher skilled, better paid workers. The Department notes that
the Congressional Budget Office (CBO) has also recognized that the
suspended rule might have a negative impact on apprenticeship and
training programs.\14\
---------------------------------------------------------------------------
\14\ The CBO stated in its Study: ``Modifying the Davis-Bacon
Act: Implications for the Labor Market and the Federal Budget,''
July 1983 at page 42: ``Contractors who would have been induced to
provide approved training and apprenticeship programs, because doing
so was the only way of paying less than journeymen's wages on
federal projects, might now reduce the number of apprentices in
favor of helpers and informal trainees. To the extent that this
adjustment occurred, less-skilled workers might receive less
training of the type that would qualify them for entry into the
skilled crafts--possibly reducing minority access to these crafts
and limiting the supply of skilled labor in the future.''
---------------------------------------------------------------------------
Although not the paramount concern in this rulemaking, the
Department is of the view that the increased use of helpers under the
suspended rule poses a significant risk that formal apprenticeship and
training programs on DBRA-covered projects would be undermined.
Discussion of Other Alternatives Considered
Except for TxDOT, which appears to favor a combination of the
proposed alternatives, none of the commenters urged the Department to
adopt any of the alternatives set forth below. The ABC stated that,
while it believes that the Department should reinstate the suspended
rule, it would support further study of any of the proposed
alternatives. The ABC commented that each of the proposed alternatives
is preferable to adoption of the proposed rule, and that the Department
has not given sufficient study to the alternative approaches. On the
other hand, both the Building Trades and LIUNA indicated their belief
that none of the alternative approaches considered by the Department is
viable.
The Mercatus Center commented that the Department has not properly
assessed the quantitative benefits of the alternatives presented in the
NPRM. The Mercatus Center stated that, without better information on
the costs and benefits of the alternatives, the Department places
inordinate weight on such factors as ease of administration and
enforcement, rather than on net social benefits. As explained in the
NPRM, ``[e]ach alternative would likely result in greater use of
helpers than under the proposed rule, but less than under the suspended
rule,'' and therefore, ``the economic impact would presumably yield
some portion but not all, of the savings anticipated under the
suspended rule.'' 64 FR 17455. The Department also stated that it would
not be possible to provide detailed estimates of the economic impacts
of the alternatives because ``each alternative encompassed many
possible variations and outcomes'' and ``there is no data source that
would provide appropriate information on these variations and
outcomes.'' Id.
1. Add a Ratio Requirement to the Suspended Helper Definition
The Department stated in the NPRM that it believed that
implementation of a ratio provision would be essential if the suspended
rule were implemented, in order to reduce the potential for abuse. The
Department recognized, however, that adoption of a ratio provision
would not address or resolve the suspended rule's definitional problems
that make it extremely difficult for contractors, as well as Wage and
Hour and contracting agencies, to identify and distinguish helpers from
other workers for DBRA enforcement and wage determination purposes. The
Department also questioned whether, as a practical matter, an
appropriate nationwide or local ratio standard could be determined, and
expressed concern for the substantial resources that would be required
to determine appropriate ratios based on local practices.
The Building Trades expressed the view that any fixed nationwide
ratio, like the ratio that was struck down in Federal court, would be
arbitrary and capricious because it would be inconsistent with the
underlying principle of DBRA that labor standards reflect local
prevailing practices. LIUNA stated that the addition of a ratio
requirement under the suspended rule
[[Page 69685]]
would not address or resolve the definitional problems inherent in the
suspended rule, and that it would be extremely difficult to develop an
appropriate ratio standard that would reflect local practices.
Noting that the D.C. Circuit Court of Appeals allowed the
Department to reinstate a ratio requirement provided that the
Department can support such ratio with an administrative record, the
ABC commented that the Department failed to develop such a record and
did not attempt to set local ratios through the wage survey process.
The Mercatus Center stated that the Department should re-evaluate
the original rationale for including a ratio in the suspended rule. The
Mercatus Center noted that ratios appropriate for productive
construction efforts are subject to change with changes in production
methods, materials, technology, and population, and that due to
regulatory time lag, any binding ratio might be obsolete in a few
years. The Center suggested that if a rationale for the type of abuse a
ratio is intended to prevent could be articulated, then a ceiling that
is non-binding, but that would prevent any feared abuse of the helper
category, might be workable.
TxDOT recommended that the Department adopt a combination of
measures, including the addition of a ratio requirement to the
suspended definition to prevent abuse of the helper classification.
TxDOT suggested that varying the ratio requirement, depending on the
type of work performed, might be a way of validating the ratio
provision.
None of the commenters has provided the Department with specific
guidance as to how an appropriate nationwide or local ratio standard
could be determined. As noted in the NPRM, a nationwide ratio would not
accord with local practices, whereas locally developed ratios would
present significant administrative and enforcement concerns and would
require substantial resources for implementation.
The difficulty with determining locally prevailing ratios begins
with deciding how that ratio should be calculated. The easiest method
would be to compare the total number of helpers to the total number of
journeyworkers reported for the classification. This methodology,
however, does not measure the typical ratio of helpers to
journeyworkers on any particular job. For example, four hypothetical
data submissions might report carpenters and carpenter helpers as
follows:
------------------------------------------------------------------------
Number of
Project carpenter Number of
helpers carpenters
------------------------------------------------------------------------
A............................................ 1 2
B............................................ 1 2
C............................................ 6 1
D............................................ 1 2
-------------------------
Totals................................. 9 7
------------------------------------------------------------------------
In this example, the prevailing jobsite ratio of carpenter helpers
to carpenters is clearly 1:2 (i.e., on three of the four projects,
contractors used one helper for every two carpenters). However, if the
ratios are averaged, the resulting ratio would be almost 2:1 (1.875),
and a ratio derived by dividing the total number of helpers by the
number of carpenters would be greater than 1:1 (i.e., 9:7 or 1.286).
Therefore, either of these approaches could frequently yield a
distorted picture of the true prevailing ratio.
Collecting and verifying data on the ratio of helpers to
journeyworkers for each jobsite is likewise a difficult task.
Currently, Wage and Hour collects data for each classification based on
the ``peak week'' of employment on the project. This ``peak week'' may
differ for each classification. Since one may find that the peak week
of employment for carpenters is a different week than that for the
carpenters' helpers, the ratio would vary as well. It is not clear how
the peak week concept should be applied in this situation. Any solution
to this question could be administratively costly and time-consuming
for Wage and Hour and for contractors, thereby impacting the
Department's ability to obtain the cooperation of contractors to
collect accurate data.
The Department remains of the view that adding a ratio requirement
would be essential to reduce the potential for abuse from the excessive
use and misclassification of helpers if the suspended rule were
implemented. The D.C. Circuit Court of Appeals also recognized the
importance of a ratio provision to the effective administration and
enforcement of the suspended helper rule when it stated that ``the
Secretary has increased the likelihood that gross violations will be
caught, or at least that evasion will not get too far out of line, by
putting the forty-percent cap on the use of helpers. * * * [T]he
existence of some cap at least increases our confidence that the
Secretary has considered the enforcement problems of the new definition
and responded to them.'' Donovan, 712 F.2d at 630.
More importantly, the Department continues to believe the addition
of a ratio provision to the suspended helper rule--although it might
curb the worst abuses--would not address or resolve the problems
inherent in the suspended rule's definition, which, as discussed above,
make it extremely difficult to identify helpers for DBRA enforcement
and wage determination purposes.
2. Change the Suspended ``Helper'' Definition To Emphasize the Semi-
Skilled Nature of the Classification
In the NPRM, the Department stated that it believed that amending
the ``helper'' definition to emphasize its semi-skilled nature would
help assure that the helper classification would be a true ``semi-
skilled'' classification rather than a broad catch-all classification
that could perform everything from laborer duties to an undefined and
potentially unlimited assortment of skilled tasks overlapping the work
of journeyworkers. The Department suggested that this approach would
aid in distinguishing helpers from laborers by emphasizing the ``semi-
skilled'' nature of helpers, as distinguished from the unskilled duties
in the definition in the suspended rule. Under this approach the
definition would elaborate on the supervisory relationship between the
helper and the journeyworker and the craft-specific assistance
provided, and expressly limit the unskilled work the helper could
perform. The Department noted, however, that this alternative would not
resolve the administrative and enforcement problems that stem from the
overlap of duties between journeyworkers and helpers, and that it might
result in helper classifications being used to replace, rather than
supplement, the use of apprentices and trainees registered in bona fide
training programs.
The Building Trades commented that, even under this modified
definition of a helper, it would not be possible to distinguish a
helper from a laborer because laborers also assist craft workers and
many use tools of the trade to perform certain duties. The Building
Trades also noted that a laborer working under the supervision of a
journeylevel worker could be classified as a lower-paid helper under
this definition, simply by adding to his or her duties a few relatively
low-skilled tasks using tools of the trade.
LIUNA stated that this alternative would not prevent the
substitution of helpers for laborers, because laborers perform not only
unskilled duties, but a wide array of semi-skilled duties as well.
LIUNA further stated that, because laborers generally earn higher wages
than helpers, this alternative would
[[Page 69686]]
result in misclassification of laborers just as would the suspended
rule.
The ABC stated that the Department's rejection of this alternative
on the grounds that helpers would continue to have overlapping duties
with journeymen is inappropriate. The ABC stated that, if the
prevailing practice is to employ helpers to perform duties overlapping
with those of journeylevel workers, it is the Department's statutory
obligation to recognize that practice.
The Department continues to believe that this alternative would not
resolve the administrative and enforcement problems that would stem
from the overlap of duties between journeyworkers and helpers. The
Department remains of the view that the emphasis on semi-skilled duties
under this approach might result in helper classifications being used
to replace, rather than supplement, the use of apprentices and trainees
registered in bona fide training programs. Furthermore, it appears that
this alternative might not even resolve the problems of overlap of
duties between helpers and laborers.
3. Define ``Helpers'' Based on the Bureau of Labor Statistics,
Occupational Employment Statistics (OES) Dictionary of Occupations,
Which Focuses on Unskilled Duties and the Worker's Interaction With
Journeylevel Craft Workers \15\
---------------------------------------------------------------------------
\15\ The OES Dictionary of Occupations classification scheme
includes a broad category titled ``Helpers, Laborers, and Material
Movers, Hand, Exclud[ing] Agricultural and Forestry Laborers.'' The
work of helpers in the construction industry is described as
follows: ``Help workers in the construction trades, such as
Bricklayers, Carpenters, Electricians, Painters, Plumbers and
Surveyors. Perform duties such as furnishing tools, materials, and
supplies to other workers; cleaning work areas, machines, and tools;
and holding materials or tools for other workers.''
---------------------------------------------------------------------------
The Department noted in the NPRM that this approach, by focusing on
the role of the helper in assisting the journeyworker and eliminating
the ``semi-skilled'' characterization from the definition of helpers,
could provide a more practical basis for distinguishing helpers from
journeyworkers. However, the Department expressed its concern that
laborers may often perform the same work encompassed within the OES
helper definition, thereby causing significant problems for Wage and
Hour in conducting wage and area practice surveys and in enforcement
because of the lack of clear differentiation between the
classifications. The Department also stated that it might be difficult
under this approach for contractors to determine whether workers
performing similar or identical duties are ``laborers'' or ``helpers''
when submitting DBRA survey data and in classifying workers on DBRA-
covered projects.
Both the Building Trades and LIUNA commented that this alternative
would present the same problem as that presented by the suspended rule,
viz., helpers and laborers both perform the work as described in the
operative definition. The Building Trades and LIUNA state that it would
be difficult for contractors to determine whether workers performing
similar or identical duties are laborers or helpers when submitting
Davis-Bacon survey data and in classifying workers on DBRA projects.
The AGC commented that the OES definition of a helper is consistent
with the definition in the suspended regulation, and can be used by
contractors to effectively distinguish helpers from laborers and other
craft workers. The ABC objected to the Department's characterization of
the OES definition as ``eliminating the semi-skilled characterization''
from the definition of helpers. The ABC further stated that any such
elimination would deny an essential component of helpers and would
defeat the statutory mandate of recognizing prevailing practices.
None of the commenters has demonstrated how helpers can be
effectively distinguished from laborers under this approach for both
enforcement and wage determination purposes, given that laborers would
often perform the same work as that described in the OES helper
definition. Moreover, the Department does not believe that focusing on
the role of the helper in assisting the journeyworker is an effective
means for distinguishing helpers from laborers. None of the commenters
disputes that laborers, too, are frequently called upon in the
performance of their regular duties to assist journeymen.
4. Explicitly Delineate the Semi-Skilled Tasks Performed by Each Helper
Classification
As this so-called ``job family'' approach was described in the
NPRM, an employee who performs only lower level duties that are
associated with a particular craft may be classified and paid at the
lower level helper rate; however, an employee who performs some lower
level duties and some higher level duties must be paid the higher
journeylevel rate for all of the employee's work time. The Department
stated that this approach, in effect, would allow for the expanded use
of helpers, with differentiation based on the skill and knowledge
required to perform particular duties. The Department theorized that
once the duties or tasks that the helpers could perform were clearly
defined, wage data could be collected on that basis, and contractors
could reasonably be expected to comply with the wage requirements for
the various classifications employed on their contracts, thereby
facilitating administration and enforcement. The Department stated,
however, that developing clear definitions of the duties or tasks that
helpers to each journeylevel craft worker would be allowed to perform
would be very difficult, requiring extensive occupational analyses and
further rulemaking to promulgate helpers' duties descriptions. The
Department further questioned whether this approach, which presumably
would result in uniform, nationwide definitions, would be consistent
with the underlying principle that DBRA classifications are determined
based on local area practices.
The Building Trades and LIUNA stated that developing clear
definitions of the duties or tasks that helpers would be allowed to
perform would be very difficult, requiring extensive occupational
analyses to develop accurate and specific descriptions of helpers'
duties. They also commented that the uniform, nationwide definitions
that would result from application of this alternative would not
necessarily reflect locally prevailing practices, as DBRA requires.
TxDOT appears to favor this or a similar approach, in that it
recommended (in conjunction with other recommendations) the use of
standardized definitions for both journeylevel and helper
classifications, stating that each level of classification should
require a specific level of skill, and for those classifications where
a specific skill is not required, the common laborer classification
should be utilized in lieu of a helper classification. TxDOT stated
that, under this approach, the need for a semi-skilled worker
classification would be eliminated. The AGC of Texas provided a copy of
its ``Standard Job Classifications'' booklet to demonstrate the use of
standard, uniform job definitions for job classifications, including
several helper classifications, in connection with highway, heavy,
utility, and industrial construction projects in the State of Texas.
TxDOT also proposed that the Department expand and define the role
of training programs with regard to such helper classifications, thus
allowing helpers to progress to a status of ``journeyman trainee'' and
then
[[Page 69687]]
journeyman. However, though the Department has concern for the impact
its helper regulations may have on apprenticeship and training
programs, it is not within the Department's purview in the context of
this Davis-Bacon Act rulemaking to expand and define the role of
training programs with respect to helpers.
The Department believes that adoption of this approach is simply
not practicable because of the expenditure of time and resources that
would be necessary to develop job descriptions for all the construction
crafts. The Department also believes that this approach is inadvisable
because it would amount to recognizing sub-classifications within each
craft, a practice that has never been permitted under DBRA.
Furthermore, close examination reveals that the helper definitions
created by the AGC of Texas suffer from the same infirmities as the
helper definition in the suspended rule. For example, the AGC of Texas
booklet provides the following job description for a ``Carpenter
Helper, Rough'' classification: \16\
---------------------------------------------------------------------------
\16\ The definition for a ``Carpenter Helper, Rough'' is fairly
representative of all of the helper definitions contained in the AGC
of Texas booklet. They generally all begin with the phrase, ``A
learner or worker semi-skilled in this craft''; require supervision
by the journeyworker; provide a list of specific duties; and
conclude with the phrase, ``Performs other related duties.'' Though
the specific duties vary from craft to craft with respect to each
helper classification, they are basically unskilled duties that a
laborer could perform.
A learner or worker semi-skilled in this craft who assists a
rough carpenter by expediting materials, keeping work area clean,
sawing lumber to size specified, and assisting in constructing
wooden structures, under the direction of a Rough Carpenter.
---------------------------------------------------------------------------
Performs other related duties.
Like the suspended helper definition, this definition uses the
undefined term ``semi-skilled'' to describe the carpenters' helper
classification without explaining what it means to be ``semi-skilled.''
Additionally, this definition is internally inconsistent in that it
defines the carpenters' helper as ``semi-skilled,'' but specifically
lists duties that might commonly be performed by unskilled laborers.
The definition not only allows the duties of a helper to overlap with
those of a journeyworker, but also provides no limitation on the duties
a carpenter's helper can perform by including the open-ended phrase
``[p]erforms other related duties.'' Lastly, this definition, by
referring to a carpenter helper as a ``learner,'' poses perhaps an even
greater risk than the suspended helper definition that helpers will be
substituted for apprentices and trainees participating in formal
programs that lead to workers achieving journeylevel status.
The Proposed Rule--Helpers as a Distinct Class With Clearly Defined
Duties Which Do Not Overlap With Laborer or Journeyman Classifications
Congressional Representatives Norwood, Goodling, Ballenger,
Boehner, Hoekstra, McKeon, and Paul opposed the Department's proposed
helper regulations, stating that they would tend to discourage rather
than facilitate the use of helpers on DBRA projects. They commented
that the proposed regulations are deficient because they do not reflect
current industry practice and are not responsive to the needs and
practices of the vast majority of the construction industry. These
congressmen also stated that the proposed helper rule, in contrast to
the suspended rule, will not encourage access by low-skilled workers to
valuable entry-level jobs. They further stated that opening more helper
jobs under the suspended rule would attract workers to the construction
industry, which suffers from a serious shortage of skilled workers.
Representatives Clay, Owens, and Clyburn supported the proposed
rule on the basis that it not only better reflects the current
practices of Davis-Bacon contractors, but also ensures that minority
workers will be paid locally prevailing wages and fringe benefits. They
further commented that the proposed rule will ensure that the Federal
government, through its procurement practices, will not act to
undermine the living standards of workers, and will promote continued
access to the kinds of apprenticeship programs that are essential if
new workers in the construction industry are to better themselves.
Representatives Schakowsky and Weiner also urged the Department to
adopt as final the proposed rule because it recognizes the need for a
clear delineation and limitation on the use of helpers on DBRA-covered
projects. They stated that the proposed rule will encourage proper
training for young, minority and female workers by promoting formal and
effective apprenticeship programs. They also commented that the
proposed rule will enhance the presence of more skilled and productive
workers on Davis-Bacon projects, thus reducing the costs resulting from
job-related injuries and improving the economic situation of the entire
community.
The AGC, the ABC, Dr. Thieblot, and the SBSC all opposed the
Department's proposed rule and advocated implementation of the
suspended rule. These commenters, as well as the APWC, stated that
where the use of helpers prevails, they should be recognized by the
Department in accordance with its statutory mandate to reflect
prevailing practices. For example, the ABC commented that, if it is the
prevailing practice to employ helpers in a given locality to perform
overlapping duties with journeymen, the Department of Labor has an
obligation to recognize that practice. The AGC echoed this point,
stating that even if helpers prevail in only 3.9 percent or 2.7 percent
of surveyed job classifications, as surmised by the Department in its
NPRM, helper classifications should nonetheless be recognized in those
instances where they are found to prevail. The ABC also urged the
Department to delay issuance of the proposed rule until the upgrade of
the Department's survey and data collection processes has been
completed and a fair and objective study of the helper issue is
conducted.
The AGC of Texas supported restoring the increased use of helpers
under the suspended rule, stating that for more than 35 years helper
classifications have been recognized in Texas and are still being used
on projects that have no Federal funds. The Mercatus Center generally
opposed adoption of the proposed rule, primarily based on economic
considerations. Elcon specifically objected to the Department's refusal
under its current policy to approve the elevator helper classification
negotiated by the International Union of Elevator Constructors. Elcon
stated that the Davis-Bacon Act should not be used to make new rules
that would reduce competition, unnecessarily inflate costs on Federal
construction projects, provide unfair advantages for nonunion
organizations, and create separate job definitions for Federal
projects.
The Building Trades and LIUNA both urged the Department to adopt
the proposed rule. They favored the proposed rule because it
reestablishes the duties-based classification approach, provides an
objective basis for administration and enforcement, including clear
criteria that facilitate contractor compliance, and is consistent with
the statutory intent to assure that workers employed on DBRA projects
receive the prevailing wages paid to workers performing similar work on
similar construction in the same area. They also stated that the
proposed rule's lack of overlapping duties will discourage contractor
misclassification and abuse and that the requirement that helpers be
separate and distinct from
[[Page 69688]]
journeylevel workers and laborers will facilitate collection of wage
data used to establish prevailing wage rates on DBRA work. Finally,
they stated that the proposed rule will provide strong incentives to
contractors and subcontractors to establish and participate in formal
apprenticeship and training programs.
MESMA opposed the use of helpers without stringent enforcement by
the Department as part of a comprehensive Davis-Bacon reform effort.
MESMA expressed concern that the overuse of helpers could lead to a
reduction in workforce skills, diminishing quality of construction, and
an increase in industrial accidents. The NJATC opposed the helper
concept in general based on its belief that the institution of helpers
will have a negative impact on apprenticeship and training programs.
The IBEW opposed adoption of the Department's proposed rule based on
its general opposition to use of helper classifications, under any
definition, on DBRA projects. The IBEW suggested that the creation of
helper classifications may bring down wage scales, put more people in
poverty, and force construction workers to work more than one job in
order to survive economically. MESMA and the IBEW both questioned
whether the helper criteria under the proposed regulation can be
effectively administered and enforced.
Based on careful review of the comments and further consideration
of the alternatives, the Department has decided to adopt as a final
rule an amendment to the regulations that will incorporate the
longstanding policy of recognizing helpers as a distinct classification
on DBRA-covered work only where Wage and Hour determines that (1) the
duties of the helper are clearly defined and distinct from those of the
craft worker and laborer, i.e., the duties of the helper are not
routinely performed by any other classifications in a given area; (2)
the use of such helpers is the prevailing practice in the area; and (3)
the helper is not used as a ``trainee'' in an informal training
program.
The Department favors this approach because it incorporates the
duties-based methodology for distinguishing classifications that the
Department utilizes in identifying other classifications under the
DBRA. By providing for the recognition of helpers based on the duties
they perform, rather than on the worker's skill level and the existence
of supervision, the proposed rule provides an objective basis for Wage
and Hour to administer and enforce the statute's prevailing wage
requirements with respect to the employment of helpers. This duties-
based approach also facilitates compliance by providing clearer
criteria to be followed by contractors who wish to employ helpers on
DBRA-covered projects.
The Department also believes that, by recognizing helpers only
where their duties are distinct and do not overlap with those routinely
performed by other classifications, the proposed rule will discourage
contractor misclassification and/or abuse that could result from
contractors reclassifying journeyworkers and laborers as helpers at
lesser rates of pay on DBRA jobs.
The Department believes that the proposed rule provides the only
approach that is administratively feasible. Unlike some of the other
alternatives considered, the policy under the proposed rule does not
require Wage and Hour, in its enforcement, to make a fact-bound inquiry
of each worker to assess his or her skill level and the nature of the
worksite supervision he or she receives to determine whether the worker
will be recognized as a ``helper'' for Davis-Bacon purposes. The
requirement that helpers have distinct duties from those of other
classifications on the wage determination also facilitates the
collection of wage data that more reliably reflect the prevailing wage
rates paid for work performed by helpers on DBRA-covered construction
work.
Under the regulations, helpers--whatever their job title--will be
recognized, as they are today, whenever their duties are separate and
distinct from duties routinely performed by other classifications. For
example, tender classifications are common on Davis-Bacon wage
determinations. On the other hand, where helpers are just lesser
skilled workers of a particular craft, they will be included in the
surveys under the craft classification, and their rates averaged
together with the journeylevel workers (where there is no rate paid to
a majority of the workers in the classification).\17\
---------------------------------------------------------------------------
\17\ Employers who use helpers that meet the definition under
this final rule should report the use of helpers in response to
Davis-Bacon prevailing wage surveys, along with a description of the
duties or other characteristics that distinguish helpers from other
workers. Where ``helpers'' perform the duties of another
classification on the wage determination, the employer should report
the ``helper'' under that classification. If helpers are listed on a
WD-10 survey form, the Department will determine whether they are a
separate classification, meeting the criteria of the regulations; if
not, the Department will determine the appropriate classification
for the work performed and include the ``helpers'' and their wage
rates under that classification--laborer, craft worker, or
otherwise.
---------------------------------------------------------------------------
Additionally, this approach maintains the current incentive to
contractors to establish and participate in structured apprenticeship
and training programs that facilitate the advancement of lesser skilled
workers to journeylevel status.
The chief objection to the proposed rule expressed by commenters in
this rulemaking is that it disregards local area practices in those
instances where there may be a prevailing practice of employing helpers
who do not meet the three-part regulatory test as set forth above. The
gravamen of this objection is that the proposed rule does not accord
with the Department's statutory obligation to provide classifications
and wage rates that mirror locally prevailing practices.
The Department believes that the proposed rule is fully consistent
with the DBRA's underlying prevailing wage goals and requirements. The
Davis-Bacon Act provides little guidance concerning the methodology the
Secretary is to use in determining ``classes'' of laborers and
mechanics and their respective prevailing wage. Consequently, the
Secretary has a substantial amount of flexibility and discretion in
devising a methodology to fulfill the Department's statutory
obligations and responsibilities under the Act. Donovan, 712 F.2d at
616, 629-630; Miami Elevator Company and Mid-American Elevator Company,
Inc., ARB Case Nos. 98-086 and 97-145 (April 25, 2000), slip op. at 35.
The Davis-Bacon Act directs the Secretary to determine the
prevailing wage for ``corresponding classes'' of laborers and
mechanics. It has been the longstanding practice of the Department--
with the exception of the short period during which the suspended rule
was implemented--to utilize a duties-based approach to identifying
classes of laborer and mechanics.\18\ Under this practice, the duties
that a particular class of worker performs may vary somewhat from one
area to another; and a classification may be recognized in one area and
be subsumed under another classification in another area, in accordance
with prevailing area practice. Thus, in one area a helper may be a
separate class, while, in another area, it may be subsumed under
another classification in accordance with prevailing area practice.
Although this duties-based distinction is not mandated by the statute,
the Department believes it is
[[Page 69689]]
fully consistent with the legislative history and statutory intent.
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\18\ The Department has created a regulatory exception for
apprentices and trainees in approved programs.
---------------------------------------------------------------------------
Furthermore, the Department believes it simply is not feasible to
graft onto a duties-based system of classifications, one class defined
on the basis of skill and supervision. Since the craft worker is not
defined on the basis of skill and supervision, and the prevailing wage
of the craft worker is based on rates paid to workers with a range of
skills and supervision, it does not make sense to carve out certain
workers who may have less skill and receive more supervision.
In addition, the Department has been unable to determine how the
suspended helper rule can be administered and enforced in accordance
with the DBRA's prevailing wage requirement. A review of the comments
reveals no consensus as to how helpers are used in the construction
industry, and the commenters provided no information to aid the
Department in identifying a generally accepted definition of a helper
that corresponds to industry practices. Nor is there a practicable,
reasonable way to identify helpers, when the manner in which they are
used varies so in each and every area where DBRA-covered construction
is taking place.
The Department's Administrative Review Board in its recent decision
in the case of Miami Elevator Company and Mid-American Elevator
Company, Inc., ARB Case Nos. 98-086 and 97-145 (April 25, 2000),
explained the Department's position. In response to an argument that
the Department's refusal to approve an elevator helper classification
because it did not meet the current three-part test resulted in ``a
staffing pattern that is inconsistent with locally prevailing
practice,'' the Board stated as follows:
``[W]e note that the oft-repeated declaration that the purpose
of the Davis-Bacon Act is to `hold * * * a mirror up to local
prevailing wage conditions and reflect * * * them' on federal
construction projects is a simplistic and inaccurate
characterization of the statute. [Citation omitted]
* * * * *
``[I]t is virtually inevitable that some laborers and mechanics
who work in a given jurisdiction are paid less than the prevailing
wage rates determined by the Secretary, yet the congressionally-
mandated prevailing wage scheme requires that all construction
workers be paid not-less-than the prevailing rate when employed on a
federal construction contract--even those workers who might
otherwise be employed on non-Federal projects in the local
construction industry at lower pay scales. The goal of the Act is
not merely to replicate (or ``mirror'') the full range of local pay
scales, but to require that workers be paid at least the prevailing
rate.
* * * * *
``In sum, the prevailing wage mechanism chosen by Congress
always has included the possibility that some construction workers
in a locality who normally earn less than the prevailing wage might
earn more when employed on a project subject to the Act; similarly,
the Secretary and the Administrator have a long history of limiting
the circumstances under which workers in a training mode would be
allowed to work on federally-funded projects, generally insisting
that such workers be enrolled in government-approved training
programs designed to promote quality training and prevent abuse. The
fact that these forces combine to produce a staffing pattern that
may not `mirror' local practice does not mean that the
Administrator's decisions are incorrect, either under the law or
regulations.'' Miami Elevator Company, supra, slip op. at 33-34.
Accordingly, the Department concludes that the proposed rule, by
requiring that the duties of a helper be distinct from those of other
classifications employed on the jobsite, best fulfills the fundamental
purpose of the Davis-Bacon Act to assure that workers employed on
federal and federally-assisted construction work be paid at least the
wages paid to corresponding classes of workers on similar construction
in the area.
The Department points out that it is not its intention that a
helper classification would never be issued simply because some workers
in another classification occasionally perform the work in question. As
discussed above, the Department intends to issue helper classifications
where the duties in question are not routinely performed by another
classification on the wage determination and it is the prevailing
practice in the area for helpers/tenders to perform the work in
question, provided the other criteria of the regulation are met. In
other words, although roofers may occasionally tear off roofing or
carry roofing materials, the Department will issue a roofer's helper
classification in a wage determination if more roofer's helpers perform
these tasks than roofers on the projects surveyed, provided that the
helpers tasks are clearly defined and do not include duties that
prevail for other classifications in the area (e.g., application of
roofing where it is prevailing practice that roofers perform this
work), and that the helper is not an informal trainee. Consistent with
the Department's practice on approval of additional classifications
under the conformance procedures at section 5.5(a)(1)(ii)(A), moreover,
the Department will not approve an additional classification of helper
if the helper performs any tasks that are ever performed by other
classifications on the wage determination. Thus, in the example given,
the Department would not approve the roofer's helper as an additional
classification because tearing off of roof and carrying of roofing
materials are sometimes done by roofers.
Consistent with the above discussion, the regulations have been
amended to delete the suspended provision at section 1.7(d), defining
the circumstances in which use of helpers would be found to prevail.
The Department will apply its longstanding policies in determining
prevailing practices. Section 5.2(n)(4) has been revised to set forth
the circumstances in which helpers will be recognized on wage
determinations and in additional classification (conformance) requests.
Finally, the conformance provisions at section 5.5(a)(1)(ii) have been
revised to delete the special references to helpers from the suspended
paragraphs, and the second conformance provision at section
5.5(a)(1)(v), which was in effect during the period of the suspended
regulation, has been deleted.
Additional Modifications
The regulations are further amended to reflect the organizational
change in the title of the Bureau of Apprenticeship and Training (BAT)
to the Office of Apprenticeship, Training Employer and Labor Services
(ATELS).
IV. Executive Order 12866; Sec. 202 of the Unfunded Mandates Reform
Act of 1995; Small Business Regulatory Enforcement Fairness Act
Summary
The Department determined that the proposed rule should be treated
as ``economically significant'' within the meaning of Executive Order
12866 and as a major rule within the meaning of the Small Business
Regulatory Enforcement Fairness Act because the various alternatives to
the proposed rule, including reinstatement of the suspended rule, could
result in potential savings in excess of $100 million per year.
Therefore, a full economic impact analysis was prepared and presented
for comment.\19\ The principal finding of this analysis was that any
impact resulting from the increased use of helpers under the suspended
rule, or any of the other alternatives considered, would be relatively
modest. The Department estimated potential savings under the suspended
rule to be from $72.8 million
[[Page 69690]]
(utilizing Current Population Survey (CPS) data) to $296.0 million
(utilizing Occupational Employment Statistics (OES) data). The
Department also devised an alternative methodology that is OES-based,
but utilizes CPS data to compensate for the likelihood that OES data
overestimate the number of helpers and underestimate the number of
laborers. This ``adjusted-OES data'' provided an estimate of $108.6
million in possible savings. As discussed in the NPRM, the Department
believes that the potential savings are likely to be closer to $72.8
million than $296.0 million.
---------------------------------------------------------------------------
\19\ The Department also determined, for the reasons explained
in the NPRM, that the provisions of the Unfunded Mandates Reform Act
of 1995 do not apply to this rulemaking. None of the commenters
disputed this determination.
---------------------------------------------------------------------------
Discussion of Comments
The AGC does not believe that the surveys and data sources used by
the Department support the conclusion that the employment of helpers is
not as widespread as previously believed. Specifically, the AGC pointed
out that, although the OES survey used does combine laborers, helpers
and other categories, the survey is being revised to separate the
helpers and laborers, making it more useful in the future. The AGC
states that independent contractors rarely bid on Federal construction
contracts, but rather are frequently hired by the contractors that are
awarded the contracts. It therefore disagreed with the Department's
view that inclusion of self-employed workers in the CPS is a strength
of the survey. Furthermore, the AGC disagreed with the Department's
statement that the OES definition of helpers is very similar to
laborers who assist journeymen. Finally, the AGC disagreed with the
Department's conclusion that the OES survey likely includes laborer
employment with helper employment, thereby overstating the number of
helpers and stated that the Department offers no support for its view
that contractors cannot distinguish between helpers and laborers.
The ABC believes that the Department's economic impact and
flexibility analysis greatly understates the economic costs of the
proposed rule. Raising similar concerns to those raised by the AGC, the
ABC stated that the Department's analysis is flawed by: (1) A lack of
evidence that helpers would replace laborers and apprentices in
proportion to the number of workers in each of those occupations; (2)
the absence of a basis for assuming that OES statistics include large
numbers of laborers in the estimates of helpers; (3) improper inclusion
of self-employed workers in the universe of ``relevant'' construction
employment; and (4) the use of flawed and distorted 1992-1993 wage
surveys to estimate the number of classifications in which helpers
would prevail. The ABC estimates that the proposed rule will cost
hundreds of millions of dollars each year.
Turning first to the CPS survey, the Department continues to
believe that it is appropriate to include independent contractors in
construction workforce data. As the AGC said, independent contractors
(performing as journeylevel workers) are frequently hired by
contractors on Davis-Bacon contracts. Furthermore, independent
contractors performing the work of laborers or mechanics are covered by
the Act. No other concerns have been raised regarding the
appropriateness of the data in the CPS. Therefore, as stated in the
NPRM (see 64 FR 17561), based principally on the fact at this time the
OES has not published data with a separate classification for laborer,
together with the fact that OES does not collect data on self-employed
individuals, Wage and Hour continues to believe that the CPS data are
more likely than the OES data to be representative of the distribution
of employment in construction by occupation for helpers and laborers.
The assumption that helpers would replace laborers, apprentices,
and journeyworkers in proportion to the number of workers in each of
these occupations is addressed in the NPRM at 64 FR 17499. The
Department explained that the 1989 helper impact analysis assumed that
helpers would replace only journeyworkers, and measured the wage
differentials based only on this replacement effect. The Department now
believes this assumption was incorrect because helpers frequently
perform laborers' duties and laborers' wage rates would sometimes be
higher than helpers' rates on the wage determination. The Department
observed that comments received from some contractors surveyed in the
processing of helper conformance requests during the period the
suspended regulations were in effect indicated that they used the job
title ``laborer'' for workers meeting the definition of ``helper''
under the suspended regulation. The Department took a ``middle ground''
in its impact analysis by assuming that helpers would replace laborers,
apprentices, and journeyworkers in the same proportion as their
relative occupational employment.\20\ The comments do not undermine the
reasonableness of this assumption or provide a reasonable, alternative
approach.
---------------------------------------------------------------------------
\20\ With its ``middle ground'' approach, the Department
calculated that the great majority of helpers would replace higher-
paid journeyworkers, thus enhancing the potential savings computed
under the suspended definition.
---------------------------------------------------------------------------
The assumption that large numbers of laborers are included in the
OES helper data is based on the absence of a separate OES laborer
classification, and the fact that the duties described in the OES
helper definition are similar to those performed by laborers.\21\
Furthermore, other available surveys, such as the CPS, the Decennial
Census, and the four NCS pilot surveys conducted by BLS show a much
greater incidence of laborer employment than could be gleaned from the
OES survey data. As AGC pointed out, a separate construction laborer
classification is included in the new Standard Occupational
Classification definitions and will be used in future OES surveys.
---------------------------------------------------------------------------
\21\ Helpers, as defined by OES, ``perform duties such as
furnishing tools, materials and supplies to other workers; cleaning
work areas, machines, and tools; and holding materials or tools for
other workers.''
---------------------------------------------------------------------------
The ABC's contention that the 1992-1993 wage surveys were distorted
has been discussed above. In addition, these survey results were used
only for the assumption that helpers would be likely to ``prevail'' for
a limited number of classes in areas representing about half the
construction employment covered by the Davis-Bacon and Related Acts.
\22\
---------------------------------------------------------------------------
\22\ One or more classifications of helper (union and open shop)
were found to prevail in 35 of 78 surveys. Open shop helpers were
found to prevail in only 20 of 78 surveys.
---------------------------------------------------------------------------
Representative Norwood and the congressmen who joined in his
comments stated that the proposed rule is based on an unrealistic
economic impact analysis, noting that the Congressional Budget Office
(CBO) has estimated that legislation allowing the increased use of
helpers could save the Federal government $1.4 billion over five years
and $3.5 billion over 10 years. The CBO's precise methodology for
estimating the reduction in discretionary outlays over five and ten
year periods has not been provided. It is the Department's
understanding that the CBO estimates are based on the methodology used
by the Department to estimate savings in its original impact analysis
conducted in 1982, with estimated percentages of savings modified (from
1.6 percent of federal construction costs to .8 percent) to account for
changes to certain assumptions made in the 1982 analysis.\23\ For the
reasons set forth in the NPRM, the Department now believes, based on
more current information and data sources that were
[[Page 69691]]
not then available, that many of those assumptions were wrong. The
Department also points out that the CBO savings estimates are
consistent with the high end of the savings estimates set forth in the
Department's latest economic impact analysis, based on the OES data.
---------------------------------------------------------------------------
\23\ A 1994 GAO report, ``Changes to the Davis-Bacon Act
Regulations and Administration,'' (GAO/HEHS-94-95R, February 7,
1994), noted that, as of September 1993, the use of helpers was
found to be a prevailing practice in 23 of 73 surveys (32 percent)
completed since the surveys were started in April 1992.
---------------------------------------------------------------------------
The Building Trades and LIUNA both state that the Department's
economic impact analysis overstates any possible cost savings under the
suspended rule and that consideration of certain other factors would
eliminate the ``modest'' savings predicted by the Department in its
analysis. The other factors that the Building Trades and LIUNA believe
would offset any potential savings under the suspended rule include:
(1) Lowered productivity of construction workers as contractors employ
more low-wage, lesser-skilled workers; (2) lowered income and sales tax
revenues resulting from lowered worker income; (3) negative impact on
apprenticeship programs with reduced training levels and lower skill
levels among construction workers; (4) increased incidences of
accidents and increased workers' compensation premiums due to the
increase in the number of new, entry-level workers who are untrained or
inadequately trained; and (5) the negative impact on the quality of
public construction resulting from the increased use of lower-paid,
lesser-skilled workers. Finally, the Building Trades and LIUNA believe
that the suspended rule, in and of itself, would probably have no
effect on Federal budgetary outlays, as it is unlikely that there would
be a reduction in congressional appropriations for Federal and
federally-assisted public building and public works projects to reflect
the anticipated cost savings from the increased use of helpers.
While the factors mentioned by the Building Trades and LIUNA could
have some bearing on impact analysis estimates (the NPRM did, for
example, note the possibility of reduced savings as a result of fewer
apprenticeships and higher journeyworker wage rates), adequate data
simply are not available to allow detailed consideration of these
factors. Of the many studies cited, none provides the framework or data
necessary for integration into an economic impact analysis.
Furthermore, there may be offsetting factors which could neutralize the
effects of the factors cited.
Of the many studies cited by these commenters, none provides the
framework or data necessary for integration into an economic impact
analysis. For the most part, the studies cited in the union comments do
not focus directly on the comparative costs of the two helper rules,
but rather on the more general cost differentials associated with union
versus open shop construction. Moreover, the Department has determined
that comparisons would be made using only primary, direct costs for the
following reasons: (1) Generally accepted databases maintained by
Federal agencies should be relied upon in the comparative cost study;
and (2) the impact of such factors as productivity, social costs/
benefits, and construction quality are not definitive, and therefore,
consideration of these factors would invite considerable debate from
those who have reached opposite conclusions based on their research.
The Department therefore concludes that the belief expressed by the
Building Trades and LIUNA that adoption of the suspended rule would
probably have no effect on Federal budgetary outlays is too speculative
to form an appropriate basis for their integration into a cost-impact
analysis.
Final Regulatory Impact Analysis
After review of the comments, the Department has concluded that
there is no reason to change its estimates of the potential savings
under the suspended rule and the other alternatives considered, in
comparison to the proposed rule, as set forth in the preliminary
regulatory impact analysis.
V. Executive Order 13132 (Federalism)
The Department has reviewed this rule in accordance with Executive
Order 13132 regarding federalism, and has determined that it does not
have ``federalism implications.'' The rule does not ``have substantial
direct effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.''
VI. Regulatory Flexibility Act
Under the Regulatory Flexibility Act, Public Law 96-354 (94 Stat.
1164; 5 U.S.C. 601 et seq.), Federal agencies are required to prepare
and make available for public comment an initial regulatory flexibility
analysis that describes the anticipated impact of proposed rules that
would have a significant economic impact on small entities. Though the
Department determined that a regulatory flexibility analysis was not
necessary for the proposed rule because it would not have a significant
economic impact on a substantial number of small entities, it
nonetheless published for comment such an analysis because of the
interest in the rule.\24\ After review of the comments and
consideration of the various alternatives, the Department has prepared
the following regulatory flexibility analysis regarding this rule:
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\24\ The Department believed that a Regulatory Flexibility
Analysis was not necessary because (1) the proposed regulation would
not result in any changes in requirements for small businesses; (2)
if Wage and Hour were to propose implementing the suspended rule or
any of the alternatives considered, it would not be more costly than
current regulatory requirements, and therefore, would not have a
significant economic impact on a substantial number of small
entities; and (3) neither the suspended rule nor any of the
alternatives considered could be implemented in a manner that would
accomplish the objectives of the statute.
---------------------------------------------------------------------------
(1) The Need for and Objectives of the Rule
In 1982, Wage and Hour published final regulations which, among
other things, would have allowed contractors to use ``semi-skilled''
helpers on Davis-Bacon covered projects at wages lower than those paid
to skilled journeyworkers. These rules represented a sharp departure
from Wage and Hour's longstanding practice of not allowing overlap of
duties between job classifications. 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
journeyworkers. This ratio provision was subsequently invalidated by
the U.S. Court of Appeals for the District of Columbia.
As discussed in greater detail above, during its existence, the
helper rule has been the subject of considerable litigation and
Congressional attention. The rule has been enjoined by the district
court and modified on two occasions as a result of court of appeals
decisions. It has twice been implemented for short periods of time. It
has also been suspended on two occasions as the result of Congressional
action prohibiting Wage and Hour from spending any funds to implement
or administer the helper rule. On December 30, 1996, the Department's
suspension of the 1982 rule was continued pending completion of this
rulemaking.
The helper rule was originally proposed and adopted because it was
believed that it would result in a construction workforce on Federal
construction projects that more closely reflected private
construction's ``widespread'' use of helpers to perform certain craft
tasks and, at the same time, effect significant cost savings in federal
construction costs. It was also believed
[[Page 69692]]
that the expanded definition would provide additional job and training
opportunities for unskilled workers, in particular women and
minorities. The Department's subsequent efforts to develop enforcement
guidelines led it to conclude that administration and enforcement of
the revised helper rule would be much more difficult than anticipated,
especially in light of the court's invalidation of the ratio provision.
Moreover, new data has led the Department to conclude that the use of
helpers is not as widespread as previously thought. The Department is
also concerned about the possible negative effect of the helper
regulations on formal apprenticeship and training programs. These
factors led the Department to conclude that the suspended helper rule
should not be implemented and that new regulations were needed to
govern employment of helpers on DBRA-covered projects. The objective of
these regulations is to establish the most appropriate approach to
governing employment of helpers on DBRA-covered projects.
(2) Summary of Significant Issues Raised by the Public Comments in
Response to the Initial Regulatory Flexibility Analysis
The Department received a number of comments regarding the economic
impact analysis prepared pursuant to Executive Order 12866. Those
comments were discussed in the previous section containing the
Department's economic impact analysis. The Department received no
separate comments concerning its initial regulatory flexibility
analysis.
(3) Number of Small Entities Covered Under the Rule
Size standards for the construction industry are established by the
Small Business Administration (SBA), and are expressed in millions of
dollars of annual receipts for affected entities, i.e., Major Group 15,
Building Construction--General Contractors and Operative Builders, $17
million; Major Group 16, Heavy Construction (non-building), $17
million; and Major Group 17, Special Trade Contractors, $7 million. The
overwhelming majority of construction establishments would have annual
receipts under these levels. According to the Census, 98.7 percent of
these establishments have annual receipts under $10 million. Therefore,
for the purpose of this analysis, it is assumed that virtually all
establishments potentially affected by this rule would meet the
applicable criteria used by the SBA to define small businesses in the
construction industry.
As explained above, however, the final rule would cause no impact
on small entities since it does not propose to make any changes in
requirements applicable to small businesses. Implementation of the
suspended rule or any of the alternatives considered would expand the
use of helpers and could result in some savings to the Federal
government and to recipients of Federal assistance. The impact would
depend upon the specifications of the alternative relative to current
practice. Even relative to unlimited use, however, possible savings
would be very modest, ranging from 0.239 percent of the value of Davis-
Bacon annual construction starts (CPS), to 0.359 (adjusted OES), and
0.958 (unadjusted OES) percent and, as discussed in the Department's
economic impact analysis in the NPRM, may very well be short-termed.
(4) Reporting, Recordkeeping and Other Compliance Requirements of the
Rule
There are no reporting or recording requirements for contractors
under the final rule. Nor would there be any such requirements under
the suspended rule or any of the alternatives considered. The
compliance requirements under any rule regarding helpers would merely
require contractors who use helpers to do so in accordance with a
chosen regulatory framework and pay helpers at least the prevailing
wages for the helper classification as set by the Department.
(5) Description of the Steps Taken To Minimize the Significant Economic
Impact on Small Entities Consistent with the Objectives of the Davis-
Bacon and Related Acts
The Department carefully analyzed the suspended rule, as well as a
number of alternative approaches, to determine whether they could be
enforced and administered in a manner consistent with the objectives of
the Davis-Bacon and Related Acts. Based on this analysis, the
Department concluded that the final rule, which adopts the Department's
current policy governing employment of helpers, is the only alternative
considered that is both consistent with the purposes of the Davis-Bacon
and Related Acts and capable of practical and efficient administration,
enforcement, and compliance.
The Department also performed an economic impact analysis wherein
the Department estimated the relative economic costs under the
suspended rule, the various alternatives considered, and the final
rule, respectively. As detailed above, the Department concluded from
this analysis that any economic cost savings to the Federal government
and recipients of Federal assistance, resulting from the increased use
of lower-paid helpers under the suspended rule or any of the other
alternatives considered, would be relatively modest. The Department
therefore determined that implementation of the final rule, which
preserves the status quo concerning employment of helpers on DBRA-
covered projects, would not have a significant economic impact on a
substantial number of small entities.
Document Preparation
This document was prepared under the direction and control of John
R. Fraser, Deputy Administrator, Wage and Hour Division, Employment
Standards Administration, U.S. Department of Labor.
List of Subjects
29 CFR Part 1
Administrative practice and procedure, Construction industry,
Government contracts, Minimum wages.
29 CFR Part 5
Administrative practice and procedure, Construction industry,
Employee benefit plans, Government contracts, Minimum wages, Reporting
and recordkeeping requirements.
Accordingly, for the reasons set forth in the preamble, 29 CFR Part
1 and Part 5 are amended as set forth below:
PART 1--PROCEDURES FOR PREDETERMINATION OF WAGE RATES
1. The authority citation for Part 1 continues to read as follows:
Authority: 5 U.S.C. 301; R.S. 161, 64 Stat. 1267; Reorganization
Plan No. 14 of 1950, 5 U.S.C. Appendix; 29 U.S.C. 259; 40 U.S.C.
276a-276a-7; 40 U.S.C. 276c; and the laws listed in appendix A of
this part.
2. Section 1.7(d) is revised to read as follows:
Sec. 1.7 Scope of consideration.
* * * * *
(d) The use of helpers, apprentices and trainees is permitted in
accordance with part 5 of this subtitle.
[[Page 69693]]
PART 5--LABOR STANDARDS PROVISIONS APPLICABLE TO CONTRACTS COVERING
FEDERALLY FINANCED AND ASSISTED CONSTRUCTION (ALSO LABOR STANDARDS
PROVISIONS APPLICABLE TO NONCONSTRUCTION CONTRACTS SUBJECT TO THE
CONTRACT WORK HOURS AND SAFETY STANDARDS ACT)
3. The authority citation for Part 5 continues to read as follows:
Authority: 40 U.S.C. 276a-276a-7; 40 U.S.C. 276c; 40 U.S.C. 327-
332; Reorganization Plan No. 14 of 1950, 5 U.S.C. Appendix; 5 U.S.C.
301; 29 U.S.C. 259; 108 Stat. 4104(c); and the statutes listed in
section 5.1(a) of this part.
4. In Sec. 5.2, paragraph (n)(1) is amended by removing ``Bureau of
Apprenticeship and Training'' each place it appears in the paragraph
and inserting in its place ``Office of Apprenticeship Training,
Employer and Labor Services'', and paragraph (n)(4) is revised to read
as follows:
Sec. 5.2 Definitions.
* * * * *
(n) * * *
(4) A distinct classification of ``helper'' will be issued in wage
determinations applicable to work performed on construction projects
covered by the labor standards provisions of the Davis-Bacon and
Related Acts only where:
(i) The duties of the helper are clearly defined and distinct from
those of any other classification on the wage determination;
(ii) The use of such helpers is an established prevailing practice
in the area; and
(iii) The helper is not employed as a trainee in an informal
training program. A ``helper'' classification will be added to wage
determinations pursuant to Sec. 5.5(a)(1)(ii)(A) only where, in
addition, the work to be performed by the helper is not performed by a
classification in the wage determination.
* * * * *
5. Section 5.5 is amended by removing paragraphs (a)(1)(ii)(A)(4)
and (a)(1)(v); by removing ``; and'' from the end of paragraph
(a)(1)(ii)(A)(3) and inserting in its place a period; by revising
paragraph (a)(1)(ii)(A)(1) to read as set forth below; and by removing
the phrase ``Bureau of Apprenticeship and Training'' each place it
appears in paragraph (a)(4) and inserting in its place ``Office of
Apprenticeship Training, Employer and Labor Services'' and removing
``Bureau'' each time it appears in paragraph (a)(4) and inserting in
its place ``Office''.
Sec. 5.5 Contract provisions and related matters.
* * * * *
(a) * * *
(1) * * *
(ii)(A) * * *
(1) The work to be performed by the classification requested is not
performed by a classification in the wage determination; and
* * * * *
Signed at Washington, D.C., on this 14th day of November, 2000.
Bernard E. Anderson,
Assistant Secretary for Employment Standards.
[FR Doc. 00-29533 Filed 11-17-00; 8:45 am]
BILLING CODE 4510-27-U