Introduction:

In the world of federally assisted construction projects, ensuring compliance with fair labor standards is paramount. The Davis-Bacon Act (DBA) and its related acts, collectively known as the DBRA, play a crucial role in this regard. A recent case involving E.T. Simonds Construction Company highlights the significance of prevailing wage rates under these acts. 

Background: Illinois Department of Transportation Bid and Labor Case

E.T. Simonds Construction Company, the prime contractor and the petitioner in this case, was awarded a construction contract in Illinois. To carry out this project, the petitioner hired Mark Basler Excavating as a subcontractor to provide truck drivers for the transportation of waste materials. A total of six truck drivers, including the owner, Mr. Mark Basler, were employed for this purpose.

Following an investigation into the alleged prevailing wage violations by the U.S. Department of Labor's Wage and Hour Division, a hearing took place at the Office of Administrative Law Judges (OALJ). During the hearing, the OALJ partially granted the Administrator's Motion for Summary Judgment. This decision stated that the Basler truck drivers should fall under the jurisdiction of the Davis-Bacon Act (DBA) and thus be entitled to receive prevailing wages.

The Administrative Law Judge (ALJ) further found that the Basler truck drivers spent a significant amount of time on the construction worksite. As a result, they were considered to be covered by the DBA and should receive prevailing wages accordingly.

To settle the matter, the ALJ issued an Order Approving Joint Stipulation Regarding Damages. However, the petitioner was not satisfied with this decision and chose to appeal the order to the Board.

Davis-Bacon Act and Proposed Revisions and Interpretation by the Department of Labor

The Davis-Bacon Act (DBA) establishes a requirement for contractors and subcontractors to pay their employees the prevailing wage rate. This means that workers must receive at least the minimum wage set for their particular job and location.

When it comes to federal contracts for public building construction that exceed $2,000, employers are obligated to pay their laborers and mechanics the prevailing wage and any fringe benefits directly at the job site. The "site of the work" refers to the physical location where the construction is taking place, as well as any other significant areas where the construction project is being carried out. It's worth noting that the DBA's coverage is determined based on the location of the worker's job, not including off-site mechanics and laborers. 

Following a judicial decision known as the Midway case, the Department of Labor published proposed revisions to its regulations. These changes state that time spent at a dedicated facility and the transportation between that facility and the actual construction site are still considered covered under the DBA.

The Department of Labor disagrees with the Midway decision's exclusion of all material delivery truck drivers from the prevailing wage requirements. They assert that truck drivers who transport materials or supplies from one location to another are entitled to receive the prevailing wages. It's important to note that the Department clarifies that the Midway decision does not exempt truck drivers from receiving prevailing wages for the time spent on the actual job site.

However, the Department introduces a "rule of reason" to determine if prevailing wages should be applied to on-site time. Essentially, if the time spent on the job site is deemed to be minimal or insignificant ("de minimis"), the wage requirements may not apply. It's important to highlight that material delivery truck drivers who solely drop off construction materials are not covered under the Department's regulations.

To ensure consistent enforcement and interpretation, the Department's Field Operation Handbook includes these principles as guidance for investigators. Specific sections, namely 15e22(a)(1)(2) and 15e22(b)(3), highlight that truck drivers can be considered covered if their time spent on the project site is not deemed “de minimis.”

Petitioner's Arguments and Department's De minimis Rule

Material transportation drivers play a vital role in construction projects by ensuring the timely delivery and transportation of materials to and from worksites. However, the question of whether these drivers are covered by the Department's De minimis rule under the Davis Bacon Act (DBA) and related federal regulations covering wage determination introduces a nuanced discussion.

The petitioner challenges the Department's "de minimis" rule and argues that material transportation drivers should not fall under the DBA's coverage. One argument put forth by the petitioner is that the de minimis standard may lead to inconsistent classification and treatment of drivers who perform the same tasks, thus potentially rendering the regulation "void for vagueness." This contention highlights the need for clarity and a consistent approach in determining the job classification of material transportation drivers under the DBA.

The Department's regulations explicitly address the coverage of transportation drivers, stating that they are covered when their time spent on the worksite exceeds the de minimis threshold. In other words, if a material transportation driver's presence and activities at the worksite extend beyond a minimal duration, they may fall under the umbrella of the DBA and its prevailing wage requirements.

However, it is important to note that the DBA coverage does not automatically extend to material transportation drivers whose sole purpose on the worksite is to transport materials from a remote offsite location. In such cases, where the driver's role is limited to transportation without direct involvement in the construction work, the DBA coverage may not apply.

The Department's regulations, along with the Midway decision, recognize that material transportation drivers who spend only a few minutes at the worksite, focusing solely on dropping off or picking up materials, may not be considered covered under the DBA. This recognition acknowledges that these drivers' primary function is transportation rather than direct participation in construction activities.

Determining the coverage of material transportation drivers under the DBA requires a balanced approach, considering both the driver's function at the worksite and the actual amount of time spent on the site. Taking into account the totality of the circumstances, including the employee's role in relation to the construction work being performed, the services provided on the worksite, and the duration of time spent at the project site, is essential for an accurate and comprehensive analysis.

ALJ's Decision: Basler Drivers' Time on Worksite Supported

The ALJ's decision affirming that Basler drivers spent more than a de minimis amount of time on the worksite has been supported, rejecting the petitioner's argument. After careful examination, the ALJ concluded that Basler drivers made repeated trips to the construction site, dedicating approximately 25% of their workday on site. This finding was based on strong evidence presented in the record.

There is no genuine issue of material fact regarding the time spent by Basler's drivers on the worksite. The record supports the ALJ's conclusion that their time on site was more than de minimis, exceeding the minimum threshold to be considered insignificant.

Furthermore, the ALJ's decision to grant summary judgment on whether material transportation drivers are covered by the Davis-Bacon Act (DBA) was affirmed. This decision solidifies the position that these drivers are indeed covered under the DBA, reinforcing the importance of complying with its prevailing wage requirements.

Overall, the ALJ's rulings in this matter regarding the time spent on the worksite by Basler drivers and their coverage under the DBA have been supported, highlighting the prevailing wage obligations for material transportation drivers on public works projects.

Conclusion

In this case, the ARB supported the imposition of prevailing wage rates on material transportation drivers based on their function and the time spent on-site. Relying on the Department's regulations, relevant court cases, and the declarations of truck drivers, the ARB concluded that no genuine issue of material fact existed. This case serves as a reminder of the importance of adhering to prevailing wage rates in federally assisted construction projects, ensuring fair labor standards and protecting the rights of workers.

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