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July 2018 | Volume 2

JATC BULLETIN The latest news and updates for apprenticeship programs from Germaine Law Firm

Be Aware of Apprentice Issues on Federal Construction Jobs In this Issue

Does your apprenticeship program have contractors that work on Federal construction projects over $2,000? If so, you need to be aware of the Federal Davis Bacon Act and its specific provisions regarding apprentices.

• Be Aware of Apprentice Issues on Federal Construction Jobs

The Davis Bacon Act requires the payment of prevailing wage rates to all laborers and mechanics on Federal government construction projects in excess of $2,000. A Federal construction project receives financing in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution.

• From the Desk of Jennifer E. Germaine: Make Your Education a Priority

Within the Act are provisions that specifically cover apprentices and trainees on the job. Several apprenticeship programs have recently had issues on Davis Bacon projects regarding the ratio of apprentices to journeyworkers and/or the payment of fringe benefits to apprentices.

Germaine

Law Firm,

PLLC

www.germainelawfirm.com

jennifer@germainelawfirm.com

/germainelawfirm.com

319-449-6969

Jennifer

E.

Germaine

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Ratio of Apprentices The Davis Bacon Act, 29 C.F.R. §5.5(4) sets forth the provisions for apprentices and trainees that must be followed. Contractors may only pay apprentices less than the predetermined rate for work they perform if certain conditions are met. First, the apprentice must be registered with an apprenticeship program. The apprenticeship program must be registered with the U.S. Department of Labor, Employment and Training Administration, Office of Apprenticeship Training, Employer and Labor Services or with a State Apprenticeship Agency. Second, the Davis Bacon Act interprets a work force ratio to apply to the specific Federal job site. The specific provision in the Davis Bacon Act reads as follows: The allowable ratio of apprentices to journeymen on the job site in any craft classification shall not be greater than the ratio permitted to the contractor as to the entire work force under the registered program. Davis-Bacon Act, 29 C.F.R. §5.5(4)(i), emphasis added.

On a Davis Bacon project, the job site ratio may not be greater than the entire work force ratio. If the job site ratio is greater, the contractor will be paying journeyman scale for any apprentices over the entire work force ratio.

Any apprentice that is not registered with a program or employed at the proper ratio will not be allowed to be listed on a contractor’s payroll at an apprentice rate but instead, the contractor will be forced to pay the journeymen rate for the work actually performed by the apprentice. This ratio issue has recently been raised on several Federal construction job sites across Iowa, especially on HUD projects. For example, if your Collective Bargaining Agreement has a work force ratio for apprentices of one apprentice for every three journey workers, the Davis Bacon Act will require three journey workers to be on the Federal job site before the contractor may pay one apprentice at the apprentice wage rates. The Davis Bacon Act changes the Collective Bargaining Agreement’s work force ratio to a job site ratio.

Germaine

Law Firm,

PLLC

www.germainelawfirm.com

jennifer@germainelawfirm.com

/germainelawfirm.com

319-449-6969

Jennifer

E.

Germaine

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Fringe Benefits The Davis Bacon Act also covers how apprentices shall be paid fringe benefits. The Act specifies that an apprentice shall be paid fringe benefits in accordance with the apprenticeship program. If the apprenticeship program does not specify fringe benefits, apprentices must be paid the full amount of fringe benefits listed on the wage determination for the applicable classification. Davis-Bacon Act, 29 C.F.R. §5.5(4)(i) It is recommended to list how apprentice fringe benefits are paid in your Standards. This is especially true if your apprentice fringe benefits are not covered by your Collective Bargaining Agreement. When a contractor is asked to provide documentation on how apprentice fringe benefits are paid, the contractor can then provide the Standards to show how the fringes are paid for each apprentice classification. In regard to apprentice fringe benefits, the Act does have a caveat in this section that allows the Administrator to allow fringes to be paid other than at journeyman rates if the Administrator determines that a different practice prevails for the applicable apprentice classification. However, if your apprentice fringe benefits are set by past practice and not listed in your Standards or your Collective Bargaining Agreement, a contractor will have an uphill battle to try to prove the apprentice fringe benefit amounts should be less than the journeyworker rates since there is no written documentation to show how fringes should be paid.

Fringe benefits shall be paid in accordance with the apprenticeship program. Make sure it is clear what apprentice fringe benefits are in your program.

Projects Outside Locality of Registered Program The Davis Bacon Act also covers what ratios and wage rates apply on projects in a locality other than where the apprenticeship program is registered. If a contractor is outside the registered program locality, the ratios and wage rates specified in the registered program shall be observed. The Act states “Every apprentice must be paid at not less than the rate specified in the registered program for the apprentice’s level of progress, expressed as the percentage of the journeymen hourly rate specified in the applicable wage determination.”

Germaine

Law Firm,

PLLC

www.germainelawfirm.com

jennifer@germainelawfirm.com

/germainelawfirm.com

319-449-6969

Jennifer

E.

Germaine

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Tips It is recommended to review your Standards and Collective Bargaining Agreement regarding apprentice ratios and fringe benefit rates. More specifically, it is recommended to review and determine the following: 1. Compare the apprentice ratio in Collective Bargaining Agreement(s) to the Standards. Determine if the same ratio is listed. 2. Compare the apprentice ratio to contractor’s use of apprentices on Federal jobs. Are contractors using an entire work force ratio in the Collective Bargaining Agreement or Standards to apply to the specific Federal jobs? If not, consider structuring the Apprentice ratio in a way to comply with the Davis Bacon Act. 3. Compare the apprentice fringe benefit rate in the Collective Bargaining Agreement(s) to the Standards. If apprentice fringe benefits are not covered by either, it is recommended to place the fringe benefits in the Standards. If apprentice fringe benefits are not the same in the Collective Bargaining Agreement and Standards, determine why.

Tips to Succeed: 1. Compare apprentice ratios in CBA(s) to Standards. 2. Compare apprentice ratio to contractor's use of apprentices on Federal jobs. 3. Compare the apprentice fringe benefit rate in the CBA to the Standards.

While performing the above, it is also recommended to compare the apprentice wage rates in the Collective Bargaining Agreement(s) to the Standards. At times, one document may be updated and not the other, so it is recommended to review both documents to create consistency. If you update your Standards due to outdated apprentice ratios, wages or fringe benefits, remember to submit the updated Standards to your registered agency for approval and to update their computer system to match how the program is being conducted.

Germaine

Law Firm,

PLLC

www.germainelawfirm.com

jennifer@germainelawfirm.com

/germainelawfirm.com

319-449-6969

Jennifer

E.

Germaine

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July 2018 | Volume 2

From the Desk of Jennifer E. Germaine: Make Your Education a Priority When was the last time you attended training on how to run your apprenticeship program? I highly recommend every trustee and coordinator of an apprenticeship program attend regular continuing education courses to further your understanding of the latest trends and legal issues affecting the program. Your apprenticeship program is a highly regulated organization, and only by receiving regular education will you be able to identify issues and risks that may threaten your program. Attending educational programs is also a great way to see how other programs are dealing with current trends and issues. I frequently provide educational content to apprenticeship programs. The presentation typically lasts an hour. Some of my most recent topics include: • Fiduciary Duties to the Apprenticeship Program • Spotting Prohibited Transactions in Your Program • How to Determine and Combat Sexual Harassment and Discrimination in your Training Program • Leadership Roles and Trust Fund Meetings The International Foundation of Employee Benefit Plans offers training specific to apprenticeship programs at the following conferences: • New Trustees Institute, Saturday, October 13, 2018 Monday, October 15, 2018 in New Orleans • Annual Employee Benefits Conference, Sunday, October 14, 2018 - Wednesday, October 17, 2018 in New Orleans • Institute for Apprenticeship, Training and Educational Programs, Monday, January 14, 2019 - Wednesday, January 16, 2019 in Miami More information can be found at www.ifebp.org. Your national association or union may also provide valuable training. Germaine

Law Firm,

PLLC

www.germainelawfirm.com

jennifer@germainelawfirm.com

/germainelawfirm.com

319-449-6969

Jennifer

E.

Germaine

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Germaine Law Firm JATC Bulletin  

Be Aware of Apprentice Issues on Federal Construction Jobs

Germaine Law Firm JATC Bulletin  

Be Aware of Apprentice Issues on Federal Construction Jobs

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