U.S. Department of LaborEmployment Standards Administration

(Non)Compliance Monitoring

What to look for and how to find it … (Davis-Bacon payrolls)

U.S. Department of LaborEmployment Standards Administration

Payroll reviews…Ensure all laborers and mechanics no less

than the required pay based on:Type of work performedHours worked, including any overtime

Monitoring for violations not compliance

U.S. Department of LaborEmployment Standards Administration

Types of violations… Face of the record

InadvertentEasily resolvedIf early, not too costly

Concealed (falsification)WillfulIndependent validation / investigationBigger bucks / bigger impact

U.S. Department of LaborEmployment Standards Administration

Why DOL?

ResourcesTrained investigatorsBroader scope of authorityPotential for debarment

U.S. Department of LaborEmployment Standards Administration

Compliance FactorsType of work performed (classification)Number of hours worked (straight time and

overtime)Wage rate for the classificationActual payment to the worker

U.S. Department of LaborEmployment Standards Administration 6

Spot-Check PayrollsReview for major tradesDetect patternsCompare on-site interviewsFocus on falsificationEnsure corrections, as needed

U.S. Department of LaborEmployment Standards Administration

1st things 1st…Sort by employer / arrange by dateCheck the signatureCheck the data If not, require resubmission – never return

payrolls for correction

U.S. Department of LaborEmployment Standards Administration

Next steps…Face of the record

Work classifications / pay ratesHoursApprentices / traineesComputationsRequire corrections if neededRestitution on correction certified payroll

U.S. Department of LaborEmployment Standards Administration

A closer look…Concealed violations

MisclassificationReduced hoursDeficient rate of pay / fringe benefitsUnauthorized deductionsKickbacks

U.S. Department of LaborEmployment Standards Administration

Payroll Falsification IndicatorsPayrolls data are simplePatterns over timeAnomalies / mistakesWhat’s false / what’s true?

U.S. Department of LaborEmployment Standards Administration

Ratio 1:1…Example:

10 Laborers : 2 Electricians

U.S. Department of LaborEmployment Standards Administration

Ratio 1:1?Misclassification

Possible exceptions: Landscaping; cement; paving

What is false / what may be true

U.S. Department of LaborEmployment Standards Administration

Too few / irregular hours…Examples:

No 40 hour workweeksCrew doesn’t work togetherHours reported in 10th or 100th

fractions

U.S. Department of LaborEmployment Standards Administration

Too few / irregular hours?Reduction of hours / backing into hoursHours reduced to fit fabricated calculation

Earnings ÷ WD rate = false hours What is false / what may be true

U.S. Department of LaborEmployment Standards Administration

Computation discrepancies…Examples:

Hours x rate of pay ≠ gross earnedRound gross earned from uneven DB

wage rates

U.S. Department of LaborEmployment Standards Administration

Computation discrepancies? Insufficient hourly rate / piece workHourly wage / piece rate can’t meet DB rateEr disregards math to match gross earnings /

net payWhat is false / what may be true

U.S. Department of LaborEmployment Standards Administration

Extraordinary deductions…Examples:

Unidentified / disproportionate deductions

Savings / other deduction ≥ take home pay

U.S. Department of LaborEmployment Standards Administration

Extraordinary deductions?Kickback or basic underpaymentEr takes “cut” from the back endWhat is false / what may be true

U.S. Department of LaborEmployment Standards Administration

Worker complaint… All manner of underpayment / falsification schemes

Employer pays in cashEmployer “cashes” pay checks“Ghost” employees

U.S. Department of LaborEmployment Standards Administration

Compliance excess…Employer submits employee “labor

releases”Employer submits unrequired /

unrequested documents

U.S. Department of LaborEmployment Standards Administration

Next steps… Validate suspected violations

What happened / what do you needHow much restitution / LDs

Contact Federal funding agency / DOL? Request employee addresses / SSNs

Send questionnaires (customize – what’s false/what’s true)

Target on-site interviews

U.S. Department of LaborEmployment Standards Administration 22

On-Site InterviewsValidate / test payroll data (inspector’s

observations / employee perspective)Get a “good” story – focus on suspect activityDevelop complaints / substantiate suspected

violationsTarget interviews

U.S. Department of LaborEmployment Standards Administration

Record of Employee Interview (HUD-11 / HUD-11SP)

U.S. Department of LaborEmployment Standards Administration

More steps…Assess the dataEstimate restitution / CWHSSA L/DsConsider withholding

U.S. Department of LaborEmployment Standards Administration

Then what? Informal consultation

Nature of the violationsScope of violations

Send summary / documents Cooperate / ensure withholding Monitor for non-compliance

U.S. Department of LaborEmployment Standards Administration

At any point… Contact the Federal funding agency / DOL if:

You have any questionsNeed assistanceThere is any suggestion that kickbacks are

involved

U.S. Department of LaborEmployment Standards Administration

Resources… DOL Wage and Hour Division

http://www.dol.gov/esa/whd www.dol.gov/esa/whd/recovery

HUD Office of Labor Relationswww.hud.gov/offices/olr

Wage Determinations On-Linewww.wdol.gov