Protecting the Rights of Construction Workers

The following true stories illustrate the daily work of Labor Relations Specialists in the Office of Labor Relations (OLR), Atlanta Regional Office, and how the OLR fulfills its mission to ensure compliance with federal prevailing wage requirements throughout Region IV.

HUD Office of Labor Relations - Protecting the Rights of Construction Workers

Representatives of the Department of Housing and Urban Development came calling recently, bringing good news to construction workers in Nashville, Tennessee. The workers were to receive wage restitution for work they performed helping build an FHA-insured housing development. For some, the substantial amounts would make the difference between losing their home and keeping it.

The project on which they worked was subject to federal laws (the Davis-Bacon and Related Acts), which requires prevailing wages to be paid to all laborers and mechanics employed on the project. Prevailing hourly wages are determined by the U.S. Department of Labor (DOL) through surveys of wages paid in localities such as Nashville. The prevailing wages, at minimum, must be paid to all workers according to the classification of work performed.

HUD staff in the Office of Labor Relations reviewed payroll and other documentation submitted by contractors and found workers had not received the local prevailing wage for the work they performed. In all, HUD determined that $162,456.90 in restitution was due to over 70 affected workers engaged in painting, carpentry, and drywall trades.

The violations were found through routine compliance monitoring of the kind performed by OLR staff every day. While wage underpayments of this magnitude do not occur on every HUD project, staff must be vigilant to detect evidence of miss-classification, underpayment, and fraud every day.

Absent OLR's efforts, the workers in Nashville would not have received fair treatment under the law.

HUD Office of Labor Relations and the U.S. Department of Labor Cooperation Leads to Justice for Construction Workers

On another Tennessee project, located in Knoxville, a subcontractor underpaid many workers performing electrical duties. As a result, restitution was paid to 64 employees, totaling $73,662.64.

Through a routine review of certified payrolls submitted by a subcontractor, a Labor Relations Specialist noted warning signs that laborers might have performed electrical work without receiving the appropriate hourly wage for the trade. Worse, further review indicated many payrolls were falsified. More documents were reviewed, workers interviewed, and the contractor contacted. In this case, the subcontractor refused to comply.

OLR staff explained to the subcontractor that the duties performed by the "laborers" (such as wiring apartments, installing underground electrical conduits, meter services, installing electrical outlets, installing electrical switches, pulling and running wires) were the duties of the electricians trade. Nevertheless, the subcontractor disagreed with our findings and insisted the workers were unskilled laborers, not skilled electricians. He further argued the men were homeless, living in halfway houses, and what should matter most is he was doing them a favor by employing them. Nevertheless, under the law (the Davis-Bacon and Related Acts), all laborers and mechanics performing work on the project site must be paid the prevailing wage rate for the work actually performed. In this case, the contractor was getting by on cheap labor for skilled work.

HUD works closely with the Department of Labor (DOL), especially on investigative cases. The Atlanta OLR contacted the Knoxville DOL office for assistance in this matter; the local DOL investigator was able to obtain additional information substantiating Atlanta's initial findings, further develop the case, and proceed to recommend debarment of the subcontractor.

Postscript - During the investigation, the subcontractor in violation abandoned the job. The general contractor was responsible for ensuring all workers on the project site were paid properly, in accordance with applicable laws. After meeting with his attorneys and DOL investigators, the general contractor agreed to pay all affected workers the back pay owed to them.

The Office of Labor Relations in Atlanta serves HUD Region IV (Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, Puerto Rico, South Carolina, Tennessee, and the U.S. Virgin Islands). For further information, please visit the main OLR Web Page on HUD's website.

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