Section 9.5 - Special Labor Provisions for Public Works Contracts(a) Purpose. Government Code, Chapter 2258, requires payment of the general prevailing rate of per diem wages, including legal holidays and overtime work, in the locality in which work is to be performed for each craft or type of worker needed to execute a public works contract on behalf of the state. This section prescribes the policies and procedures by which the Texas Department of Transportation will ascertain the prevailing rate of wages, and will administer and enforce the prevailing rate of wages as required by Government Code, Chapter 2258.(b) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise. (1) Area engineer - The chief administrative officer in charge of an area office of the department.(2) Building contract - A contract awarded by the department for the construction or repair of a department building structure, but not designated by the department as a maintenance contract.(3) Commission - The Texas Transportation Commission.(4) Complainant - A worker who files a complaint under this section.(5) Contractor - A firm awarded a public works contract.(6) Department - The Texas Department of Transportation.(7) District engineer - The chief administrative officer in charge of a district of the department.(8) Highway improvement contract - A contract awarded under Transportation Code, Chapter 223, for the improvement of a segment of the state highway system, but not designated by the department as routine maintenance.(9) Prevailing wage rate - The general prevailing rate of per diem wages, including legal holidays and overtime work, in the locality in which work is to be performed for each craft or type of worker needed to execute a public works contract on behalf of the state.(10) Public works contract - A building contract or a highway improvement contract.(c) Determination of prevailing wage rate. (1) Highway improvement contracts. (A) For highway improvement contracts, the department shall adopt prevailing wage rates as prescribed by Government Code, Chapter 2258.(B) For purposes of this paragraph, contributions made or costs reasonably anticipated for bona fide fringe benefits under the Davis-Bacon Act, §1(b)(2), on behalf of workers are considered wages paid to such workers. Whenever the prescribed minimum wage rate in the contract for workers includes a fringe benefit which is not expressed as an hourly rate, the contractor or subcontractors, as appropriate, shall either pay the benefit as stated in the wage determinations or shall pay another bona fide fringe benefit or an hourly cash equivalent.(2) Building contract. For building contracts, the department shall adopt the prevailing wage rate for each job classification as determined by the General Services Commission.(d) Contract procedures. (1) Contract specification. The department shall specify the applicable prevailing wage rates in its public works contracts and in the call for bids for such contracts. The specified rates shall apply as minimum wage rates for contracts. Failure of the department to specify the prevailing wage rate in the call for the contract shall relieve the contractor and any subcontractors from liability under Government Code, Chapter 2258.(2) Contractor responsibility. The contractor is responsible for carrying out the requirements of this section and it shall be the contractor's responsibility to ensure that each subcontractor working on the project complies with these requirements.(3) Rate by class and type. The prevailing wage rate shall be indicated in the contract for each class and type of worker whose services are considered necessary to execute the contract. These rates shall govern as minimum wage rates for the contract and shall be conspicuously posted on the project site by the contractor for inspection by all workers employed on the project.(4) Apprentices and trainees. (A) Apprentices and trainees may work at less than the predetermined minimum wage rate for work they perform when they are employed pursuant to and individually registered in a bona fide apprenticeship or trainee program registered with the United States Department of Labor, Employment and Training Administration. Proof of registration will be submitted to the department.(B) The allowable ratio of apprentices or trainees to journeyman-level employees on the project site in any craft classification shall not be greater than the ratio permitted to contractor or subcontractor under the registered program.(5) Additional classification. (A) This paragraph applies to highway improvement contracts.(B) If the work performed by a worker is not covered by a job classification in the department's wage determination, the contractor or subcontractor shall submit a request to the department for an additional classification with a recommended wage rate and supporting documentation. The recommendations must be based on industry practice and the rate of comparable classifications. The department may modify or disapprove the recommended classification minimum wage rate within 30 days of receipt if the department determines that the recommended classification minimum wage rate is not based on industry practice and the rate of comparable classifications.(C) The additional classification minimum wage rate established by the department will be effective retroactive to the first day on which work is performed in the job classification.(6) Overtime wages. The contractor or subcontractor shall pay overtime wages pursuant to the requirements of the Fair Labor Standards Act, 29 United States Code §201, et seq.(e) Records and inspections. (1) For those projects funded wholly with state funds, the contractor and all subcontractors shall keep, or cause to be kept, copies of weekly payrolls for review by the department. Payroll records should show the name, occupation, number of hours worked each day, and per diem wages paid each worker together with a complete record of all deductions made from those wages. Only deductions made in accordance with the regulations issued by the United States Department of Labor (29 Code of Federal Regulations Part 3) are permitted. The initial payroll for each worker shall also indicate the employee's address and phone number. For those projects funded wholly, or in part, with federal funds, record and inspection requirements as codified in 29 Code of Federal Regulations Part 3 will apply.(2) The contractor and subcontractor shall attach an affidavit to each payroll record certifying that the payroll is an accurate report of the full wages due and paid to each worker employed by the contractor and/or subcontractor.(3) The contractor and subcontractor shall keep originals or copies of canceled payroll checks issued for each payroll record. These canceled checks shall be provided to the department upon request.(4) All payroll records and related canceled checks shall be retained by the contractor and subcontractor for a period of three years after completion of the project.(f) Enforcement. (1) Violation. A contractor or subcontractor in violation of the prevailing wage rate is liable for penalties as set forth in this section.(2) Initiation of proceeding. A proceeding under this section to enforce the prevailing wage rate may be initiated by the filing of a complaint in accordance with paragraph (3) of this subsection or by the department on its own motion subsequent to review of records submitted in accordance with subsection (e) of this section.(3) Filing a complaint. A worker who is not paid the prevailing wage rate specified in the contract for his or her classification may file a complaint with the department's area engineer responsible for monitoring the project's completion. A complaint involving a building contract may be filed with the responsible area engineer or with the director of the department's Maintenance Division. The complainant shall provide, in writing, the following information: (A) name, phone number, and address;(D) period when violation occurred and daily work hours during the period;(E) pay rate received and amount due; and(F) any information necessary to support the complaint.(4) Investigation. Within five days of receipt of a complaint, including necessary supporting information, or at any time upon its own motion, the department will provide written notice to the contractor or subcontractor of an alleged violation. The contractor or subcontractor shall have ten days in which to respond in writing to the information presented against it.(5) Good cause determination. (A) The director of the department's Construction Division shall determine, within 30 calendar days of the date a complaint is filed whether good cause exists to believe that a contractor or subcontractor has committed a violation of the contract's prevailing wage rate requirements. Such determination will be based upon information submitted by the complainant, the contractor or subcontractor, and in accordance with subsection (e) of this section. The department shall provide written notice of its determination to the contractor and/or subcontractor and to the complainant. The department shall retain any amount due under the contract pending a final determination of the violation.(B) For building contracts, the determination of good cause shall be made by the director of the department's Maintenance Division.(6) Discrimination. A contractor or subcontractor shall not discriminate against any employee filing a complaint under the provisions of Government Code, Chapter 2258.(7) Appeal. If the department determines that good cause does not exist, the complainant may file an appeal in accordance with §1.21 et seq. of this title (relating to Procedures in Contested Cases).(8) Resolution. If the department provides written notice to the parties that good cause exists, the parties shall have 14 days from the date of the written determination to voluntarily resolve the wage dispute by written agreement. If the parties fail to voluntarily resolve the dispute, the issue of the alleged violation, any penalties owed to the department, and any amounts owed to the worker shall be submitted to binding arbitration in accordance with the provisions of Civil Practice and Remedies Code, Chapter 171. The department is not a party to the arbitration proceeding.(9) Reimbursement. (A) If the arbitrator determines that a violation of this section occurred and awards backpay, the department shall use any amounts retained under this subsection to reimburse the worker and collect any penalties due under subsection (g) of this section. The department shall issue a check to the complainant within 30 days after receiving the arbitrator's decision.(B) If the worker and the contractor or subcontractor voluntarily resolve the wage dispute, a signed written agreement which specifies the terms of the agreement shall be submitted to the director of the department's Construction Division. If the agreement calls for backpay, a signed statement from the worker which acknowledges receipt of the backpay must be attached to the agreement. The department shall release any amounts retained within seven days of receiving this information.(g) Penalties. A contractor or subcontractor who violates the prevailing minimum wage requirements of a public works contract is liable to the department for a penalty of $60 for each worker employed, for each calendar day, or portion thereof, such worker is paid less than the minimum wage rate stipulated in the contract. The money collected under this subsection shall be used by the department to offset the costs incurred in the administration of this section.43 Tex. Admin. Code § 9.5
The provisions of this §9.5 adopted to be effective August 19, 1994, 19 TexReg 6120; amended to be effective February 20, 2000, 25 TexReg 1145; amended to be effective January 2, 2002, 26 TexReg 11047