(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;
    (B) employer;
    (C) job classification;
    (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.


Source Note: 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