Appeal of Wage Determination Rates
“Whether you actually can or can't fight city hall is of little relevance. Either way, when the need arises, you must!”
This is a short primer on the appeal of Service Contract Act (“SCA”) and Davis-Bacon Act wage determination (“WD”) wage rates and fringe benefits.
It all starts with the Wage & Hour Division’s (“WHD”) Division of Wage Determinations. Any interested party can furnish a written submission pointing out lagging prevailing wage rates to WHD and presenting additional wage data for them to consider as they issue new WDs. WHD can correct prior errors and make updates and changes to the new WD at the time of reissue. But this can only be done prior to the issuance of the WD. Thus, time may be of the essence, particularly if you want to influence the next annual update.
It is a data driven process originating in some Bureau of Labor Statistics (“BLS”) data. An interested party can pull that survey date off the BLS website. WHD imposes a burden on the petitioner to present its own proof the WD is lagging – so consider what private sector data is available. There are subscription services that sometimes furnish the wage and benefit data, and some states have government agencies who assemble the data. And there can be pertinent collective bargaining agreements (“CBAs”) and the like. The Office of Personnel Management (“OPM”) also has survey data online for blue collar worker’s wages.
Once WHD issues a wage determination, the clock start running every time a government solicitation or new option year approaches. WHD will only correct a WD if the appeal is filed at least 10 days before the award or option year starts, and they may moot the appeal even if you file then, saying it is too late for them to change things since they move very s-l-o-w-l-y. There are strict timeliness rules in vol. 29 of the Code of Federal Regulations. Accordingly, it is important to feed WHD the information as soon as possible, and give them sufficient lead time to review and use it.
If you don’t like the WD, unless WHD has issue a final decision at a lower level, ordinarily you must appeal to the Wage and Hour Administrator for a final decision of the WHD. There is a new Administrator who took office at the end of April 2019. Her name is Cheryl Stanton. See my May 1st blog -- https://www.awrcounsel.com/blog/2019/5/1/cheryl-stanton-is-in-the-saddle-as-wh-administrator.
If you don’t like the Administrator’s decision, there is an option for a record based appeal to the Administrative Review Board (“ARB”). They have final administrative appeal jurisdiction. As we discussed, there are three new January 2019 judges appointed to the ARB. See my February 19th blog -- https://www.awrcounsel.com/blog/2019/2/18/the-new-appointment-of-members-to-the-dol-arb-is-a-small-step-forward. The ARB issues final agency decisions for the US Department of Labor, and they can be appealed (usually) to the U.S. District Court under the Administrative Procedures Act (“APA”).
The appeal of the SCA Health and Welfare (“H&W”) fringe benefit rates are even more problematic. It is a national H&W rate based on national data. As far as I know, there has only been one challenge, and that was by the Service Employees International Union (“SEIU”) back in the 1980’s. They were successful, however, in getting DOL to settle and revise their survey procedures. That ended up boosting up the H&W rate significantly over a few years into the early 1990’s. The H&W rate is based on a national average, so it tends to lag in large urban metropolitan areas, which have higher wages and benefits. It too is based on BLS data. I suppose it can be challenged, but I am not aware of anyone doing so in many years. That dispute would likely end up in court and would take years and much legal expense to fight “city hall”.