Construction

This memo is superseded by the Department of Labor Final Rule 12/20/2000

U.S. Department of Transportation Federal Highway Administration

MEMORANDUM

Background

The purpose of this memorandum is to provide policy guidance to the Divisions and States as a result of the decision reached in Building and Construction Trades Dept. V. Midway, decided on May 17, 1991. The Court of Appeals for the District of Columbia Circuit held in Midway that Department of Labor (DOL) regulations 29 C.F.R. § 5.2(j) is inconsistent with the Davis-Bacon Act, 40 U.S.C. § 276(a). The Court of Appeals ruled that the regulation, which defines work by the employees of the construction contractor or construction subcontractor," is invalid because it conflicts with the statutory objective of the Davis-Bacon Act, which is to pay prevailing wages to "mechanics and laborers employed directly upon the site of the work." In the view of the Court of Appeals, the Act covers only mechanics and laborers who work on the site of the federally-funded public building or public work, not mechanics and laborers employed off-site, such as regardless of their employer. According to the Court, material delivery Truck Drivers who come on to the site merely to drop off construction materials, are not covered by the Act even if they are employed by the government contractor.

The Court of Appeals in its analysis focused on the statutory text of the Act, and the phrase "site of the work." The Court relied on and quoted from DOL regulation 29 C.F.R. § 5.2(1) (1) in defining that the site of the work is limited to the physical place where the construction, will remain," along with performance of the contract and are "so located that it would seem reasonable to include them." 29 C.F.R. § 5.2(1) (2).

The Court, in its review of the legislative history of the Act, concluded that Congress clearly intended the Act to apply only to on-site workers and affirmatively intended it not to apply to off-site workers. In the Court's view, there is no legislative history to suggest, as the DOL has ruled, that Congress intended the employment status of the worker rather than the location of his job to be determinative of the Act's coverage.

Application of Midway to the Federal-Aid Program:

The Court of Appeals' decision is final, as neither the Solicitor General, U.S. Department of Justice, nor the union will seek appeal to the U.S. Supreme Court.

Since we have yet to receive any guidance from DOL on its reaction to Midway, the following is our interim policy and guidance based on the Midway ruling. To the extent that interim policy conflicts with any subsequently issued statement from DOL, the policy will then be accordingly modified.

The Court of Appeals ruled that material delivery Truck Drivers, who come onto the site of the work merely to drop off construction materials, are not covered by the Davis-Bacon Act even if they are employed by the government contractor, because they are not employed directly upon the site of the work. Application of the Midway ruling relative to what constitutes the "site of the work" shall continue to depend upon DOL's definition of that term as set forth in 29 C.F.R. Part 5.2(1). The regulation states that "the site of the work" is limited to the physical place or places where the construction called for in the contract will remain when work on it has been completed and other adjacent or nearby property used by the contractor or subcontractor in which construction which can reasonably be said to be included in the "site." Further it defines "site of the work" by stating that fabrication plants, mobile factories, batch plants, borrow pits, job headquarters, tool yards, etc., are part of the "site of the work" provided that they are dedicated exclusively, or nearly so, to performance of the contract or project, and are so located in proximity to the actual construction location that it would be reasonable to include them.

The DOL defines what is not included in the term "site of the work" in 29 C.F.R. Part 5.2(1) (3). Not included in the term "site of the work" are such facilities as permanent home offices, branch plant establishments, fabrication plants, and tool yards of a contractor or subcontractor whose locations and continuance in operation are determined wholly without regard to a particular Federal or federally plants, batch plants, borrow pits, tool yards, etc., of a commercial supplier or material man which are established by a supplier of materials for the project before opening of bids and not on the project site, are not included on the "site of the work." Such permanent, previously established facilities are not a part of the "site of the work," even where the operations for a period of time may be dedicated exclusively, or nearly so, to the performance of a contract.

It is important to remember that the above DOL regulation defining "site of the work" was not changed by the Midway decision. As the Midway court stated in a footnote, the validity of the "site of the work" regulation was not before the Court. What has changed is the application of this regulation to determine if a particular group of Truck Drivers or haulers are covered by the Davis-Bacon Act.

When determining whether the hauling work done by Truck Drivers falls under Davis-Bacon coverage, one must look at three scenarios:

1. If the work involves hauling being done on the actual "site of the work," that is the physical place or places where the construction called for in the contract will remain when work on it has been completed, then the truck drivers are covered by the Davis-Bacon Act and are subject to prevailing wage rates.
2. Similarly, the work involves hauling from an adjacent or nearby property dedicated exclusively, or nearly so, to performance of the contract or project, and so located in proximity to the actual construction location that it would be reasonable to include them, then the Truck drivers are again covered by the Davis-Bacon Act and are subject to prevailing wage rates.
3. However, if the work involves hauling being cone from an off-site location, for example at permanent home offices, branch plant establishments, fabrication plants, and/or tool yards of a contractor or subcontractor whose locations and continuance in operation are determined wholly without regard to a particular Federal or federally assisted contract or project, then the Truck Drivers are not covered by the Davis Bacon Act and are not subject to prevailing wage rates. Similarly, fabrication plants, batch plants, borrow pits, job headquarters, etc., of a commercial supplier or material man which are established by a supplier of materials before opening of bides and are not on the project site are not part of the "site of the work," even where the operations for a period of time may be dedicated exclusively, or nearly so, to the performance of a contract.

Because of the Midway decision, these determinations of Davis Bacon coverage must now be based solely on the location of the Truck Drivers' jobsite, rather than the employment status of the driver. These determinations of coverage must occur on a case by case basis, so it is important that the contractor indicate as early as possible how trucking and handling operations will occur on the project.

If there are any questions concerning this policy guidance, please contact Mr. Robert S. Wright (HNG-22) at FTS 366-1558 or Mr. Terence Carlson (HCC-32) at FTS 366-1395.

/s/ original signed by
Thomas O. Willett