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A Guide to Prevailing Wage Laws in Connecticut
III. Information for Contractors and Subcontractors

Investigation Process

During the course of an investigation, DOL wage enforcement agents interview workers, employers, and others connected with a project. They also examine payroll records, time records, daily logs, cancelled checks, fringe benefit and pension contributions, and other documents either at the job site or at the location where the contractor maintains the employment records for the business. Figure I summarizes the steps an agent may take in the complaint investigation process. (As noted on figure I, most of the same steps may be followed by DOL agents when they conduct a routine inspection.)

If a violation of the law is found, the DOL agent calculates the amount of back wages owed individual workers. If the contractor or subcontractor is willing to reimburse the workers but cannot pay the entire amount immediately, the agent may develop a repayment plan and monitor adherence to that plan.

If a contractor or subcontractor refuses to make restitution, the options available to the department depend on whether or not the project has been completed. If the project is still active and the party violating the law is still owed money, the contracting agency or the general contractor/prime contractor on the project can be asked to pay the workers out of those funds. If the project has been completed, the Department of Labor can refer the case to the collections unit within the Office of the Attorney General, which will pursue repayment.  The department also has enforcement options to pursue enforcement and collection through criminal prosecution.

The department can also seek imposition of civil and criminal penalties on employers that violate the prevailing wage law. Paying the back wages owed to workers does not preclude other penalties, but the department is more likely to pursue legal action against businesses that refuse to provide restitution to workers who were underpaid. The imposition of civil penalties is mandated by statute and handled separately by the Department of Labor. Cases for criminal prosecution are referred to the Office of the Chief State's Attorney. Cases are reviewed to determine the nature of the violations and prior history. If the violations are determined to be serious, the case will be referred to the Commissioner of Labor recommending debarment.

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General/Prime Contractor's Liability

 

Liability of General Contractors/Prime Contractors When Subcontractors Fail to pay Prevailing Wage Rates

 

The Department of Labor's position is that a general contractor/prime contractor is liable for wages due to all workers of a subcontractor when the subcontractor fails to pay its workers the prevailing rate of pay on a public works project subject to Connecticut General Statutes Section 31-53.   Under the statute, it is the responsibility of the general contractor/prime contractor to ensure that the proper prevailing rate of pay is paid to their own workers as well as other workers on the project. Toward this end, each general contractor/prime contractor executes the Contractor’s Wage Certification Form, which is a sworn statement that they and all of their subcontractors will pay all workers on the project the proper prevailing rate of pay.

 

The Attorney General's office has confirmed in writing its opinion that the general contractor/prime contractor is, in fact, liable in such circumstances based on an analysis of the statutory language of Connecticut General Statutes Section 31-53 and 31-53a.  In 2004, the Department of Labor successfully pursued a general contractor in civil court for prevailing wages due to the subcontractor’s employees:  C.J.M. Services, Inc., et al. Commissioner of Labor v CJM 268Conn. 283(2004).

 

This division will continue to request that the general contractor/prime contractor withhold payments to the subcontractor from funds retained under the contract for violations which occurred.  In such cases, if the subcontractor is in violation of the law, it is also in breach of their contract, relieving the general contractor/prime contractor from its obligation to promptly pay the subcontractor.

Although this department has pursued a general contractor/prime contractor for payment of wages to a subcontractor's workers, the practice of the Wage and Workplace Standards Division has always been to utilize this option as a last resort only when it is clear that any further attempts to collect from the subcontractor are futile.

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Who is Covered Under the Prevailing Wage Law?

Prevailing Wage is required to be paid to all Laborers and Mechanics who perform work on the project Site in a classification listed on the prevailing wage rate schedule. 

Laborer and Mechanic is defined to include ALL WORKERS whose duties are manual or physical in nature as distinguished from mental or managerial.   It does not include workers whose duties are primarily administrative, executive, professional, or clerical.  Generally, mechanics are considered workers who use TOOLS or who are performing the work of a TRADE. 

THE Site of Work is limited to the physical place, where the construction called for in the contract, will remain when the work on it has been completed.

The Department of Labor looks to the Davis-Bacon Act for interpretation and enforcement:

  • Site of Work is limited to the physical place or places where the construction called for in the contract remains after the work is completed, and other adjacent or virtually adjacent property used by the contractor that would be reasonable to include in the site of the work.
     

  • Fabrication plants, mobile factories, batch plants, job headquarters, and tool yards are part of the site of work if:
     

    1. they are dedicated exclusively or nearly so to the contract AND,

    2. are located adjacent or virtually adjacent to the actual construction location.
       

  • Not included: permanent home offices, fabrication plants, batch plants, tool yards whose location and continuance in operation are determined without regard to a particular project.


Who is required to be paid prevailing wage and who is exempt?

INDIVIDUALS NOT COVERED under the prevailing wage law:

Architects, engineers, draftspersons, Security Guards / Watchmen, Material Suppliers or Carriers, Manufacturers, Supervisors, Superintendents, Project Managers who do not perform any trade/classification work, Government/State/Municipal employees, and Truck Driver Owner/Operators delivering material to site or hauling off site except for time actually on site is covered (computed to nearest unit of 15 minutes)

INDIVIDUALS/WORKERS WHO ARE COVERED under the prevailing wage law:

Employees, family members – spouse, children, parents, etc., Owners, Equal Partner, Majority or equal corporate officer, LLC majority or equal member, Bona fide Independent Contractors determined based on site work only, Independent Contractors who do not meet the “ABC Test”, working supervisors, Truck Drivers on site transporting and distributing materials, and Clean-up work performed as a condition to the acceptance of the building as satisfactorily complete  -  window scraping, window washing, sweeping.

Independent Contractors vs. Employee

EFFECTIVE 10/01/2005 ALL WORKERS who perform work ON SITE must be paid prevailing wage.  Independent contractors are no longer exempt from the payment of prevailing wage.  Currently, the Department of Labor also must determine if an Employer/Employee relationship exists on the site of work.  A contract, certificate of insurance, 1099’s, business cards, and certified payrolls are not the sole determining factors.

DOL WILL MAKE A DETERMINATION BASED UPON THE FOLLOWING:

  • Bid Documents and Specifications for subcontract requirements

  • Consumer Protection Licensing requirements

  • Examine the portion of the specifications performed by the alleged independent contractor

  • Observe the work being performed – independent or side by side

  • Review IRS 20 Common Law Factors and IRS SS-8 Questionnaire

  • Determine if the on site work being performed meets all 3 criteria defined in C.G.S. Section 31-222 (ABC TEST)
     

    1. The worker is free from control and direction in connection with the performance of such service, both under his contract and in fact, AND

    2. Such service is performed either outside the usual course of business for which the service is performed, AND

    3. Such individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed.

The Department of Labor has found misclassification to commonly occur in the following trades: Sheetrocker, Taper, Flooring/Tile Setter, Masonry, and Carpentry.

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Wage Payment Laws 31-71a-i and other Connecticut General Statutes

The following represents a summary of selected laws; sections 31-69a through 31-76k. To review the full text, consult Connecticut General Statutes.

Sec. 31-71a. Payment of Wages; Definitions. Whenever used in sections 31-71a to 31-71i, inclusive; (1) "Employer" includes any individual, partnership, association, joint stock company, trust, corporation, the administrator or executor of the estate of a deceased person, the conservator of the estate of an incompetent, or the receiver, trustee, successor or assignee of any of the same, employing any person; including the State and any political subdivision thereof; (2) "Employee" includes any person suffered or permitted to work by an employer; (3) "Wages " means compensation for labor or services rendered by an employee, whether the amount is determined on a time, task, piece, commission or other basis of calculation; (4) "Commissioner" means the labor commissioner.

Sec. 31-71b. Weekly payment of wages. (a) Except as otherwise provided in section 12-34b, each employer, by himself, his agent or representative, shall pay weekly all moneys due each employee on a regular pay day, designated in advance by the employer, by cash, by negotiable checks or, upon an employee's written request, by credit to such employee's account in any bank which has agreed with the employer to accept such wage deposits. (b) The end of the pay period for which payment is made on a regular pay day shall be not more than eight days before such regular pay day, provided, if such regular pay day falls on an non-work day, payment shall be made on the preceding work day.

Sec. 31-71c. Payment of wages on termination of employment. (a) Whenever an employee voluntarily terminates his employment, the employer shall pay the employee's wages in full not later than the next regular pay day, as designated under section 31-71b, either through the regular payment channels or by mail. (b) Whenever an employer discharges an employee, the employer shall pay the employee's wages in full no later than the business day next succeeding the date of such discharge. (c) When work of any employee is suspended as a result of a labor dispute, or when an employee for any reason is laid off, the employer shall pay in full to such employee the wages earned by him not later than the next regular pay day, as designated under section 31-71b.

Sec. 31-71d. Payment where wages disputed. (a) In case of a dispute over the amount of wages, the employer shall pay, without condition and within the time set by sections 31-71a to 31-71i, inclusive, all wages, or parts thereof, conceded by him to be due, and the employee shall have all remedies provided by law, including those under said sections as to recovery of any balance claimed. (b) The acceptance by an employee of a payment under this section shall not constitute a release as to the balance of his claim and any release required by an employer as a condition to payment shall be void.

Sec. 31-71e. Withholding of part of wages. No employer may withhold or divert any portion of an employee's wages unless (1) the employer is required to do so by state or federal law, or (2) the employer has written authorization from the employee for deductions on a form approved by the commissioner, or (3) the deductions are authorized by the employee, in writing, for medical, surgical or hospital care or service, without financial benefit to the employer and recorded in the employer's wage record book, or (4) the deductions are for contributions attributable to automatic enrollment, as defined in section 2 of this act, in a retirement plan described in Section 401(k), 403(b), 408, 408A, or 457 of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, established by the employer.

Sec. 31-71f. Employer to furnish employee certain information. Each employer shall: (1) Advise his employees in writing, at the time of hiring, of the rate of remuneration, hours of employment and wage payment schedules, and (2) make available to his employees, either in writing or through a posted notice maintained in a place accessible to his employees, any employment practices and policies or change therein with regard to wages, vacation pay, sick leave, health and welfare benefits and comparable matters.

Sec. 31-71g. Penalty. Any employer or any officer or agent of an employer or any other person authorized by an employer to pay wages who violates any provision of this part may be: (1) Fined not less than two thousand nor more than five thousand dollars or imprisoned not more than five years or both for each offense if the total amount of all unpaid wages owed to an employee is more than two thousand dollars; (2) fined not less than one thousand nor more than two thousand dollars or imprisoned not more than one year or both for each offense if the total amount of all unpaid wages owed to an employee is more than one thousand dollars but not more than two thousand dollars; (3) fined not less than five hundred nor more than one thousand dollars or imprisoned not more than six months or both for each offense if the total amount of all unpaid wages owed to an employee is more than five hundred but not more than one thousand dollars; or (4) fined no less than two hundred nor more than five hundred dollars or imprisoned not more than three months or both for each offense if the total amount of all unpaid wages owed to an employee is five hundred dollars or less .

Sec. 31-71h. Regulations. The commissioner is authorized to issue regulations for the establishment of procedures for carrying out the provisions of sections 31-71a to 31-71i, inclusive.

Sec. 31-71i. Waiver of weekly payment requirement. The commissioner may, upon application, waive the provisions of section 31-71b with respect to any particular week or weeks, and may also, upon application, permit any employer, subject to the provisions of this section to establish regular payday less frequently than weekly, provided each employee affected shall be paid in full at least once in each calendar month on a regularly established schedule. 

Sec. 31-72. Civil action to collect wage claim or arbitration award. When any employer fails to pay an employee wages in accordance with the provisions, of sections 31-71a to 31-71i, inclusive or fails to compensate an employee in accordance with section 31-76k or where an employee or a labor organization representing an employee institutes an action to enforce an arbitration award which requires an employer to make an employee whole or to make payments to an employee welfare fund, such employee or labor organization may recover, in a civil action, twice the full amount of such wages, with costs and such reasonable attorney's fees as may be allowed by the court, and any agreement between him and his employer for payment of wages other than as specified in said sections shall be no defense to such action The labor commissioner may collect the full amount of any such unpaid wages, payments due to an employee welfare fund or such arbitration award, as well as interest calculated in accordance with the provisions of section 31-265 from the date the wages or payment should have been received, had payment been made in a timely manner. In addition, the labor commissioner may bring any legal action necessary to recover twice the full amount of unpaid wages, payments due to an employee welfare fund or arbitration award, and the employer shall be required to pay the costs and such reasonable attorney's fee as may be allowed by the court. The commissioner shall distribute any wages, arbitration awards or payments due to an employee welfare fund collected pursuant to this section to the appropriate person.

Sec 31-76k Payment of fringe benefits upon termination of employment. If an employer policy or collective bargaining agreement provides for the payment of accrued fringe benefits upon termination, including but not limited to paid vacations, holidays, sick days and earned leave, and an employee is terminated without having received such accrued fringe benefits, such employee shall be compensated for such accrued fringe benefits exclusive of normal pension benefits in the form of wages in accordance with such agreement or policy but in no case less than the earned average rate for the accrual period pursuant to sections 31-71a to 31-71i, inclusive.

See. 31-69a. Civil Penalty. In addition to the penalties provided in part III of Chapter 557 or of Chapter 558 of the general statutes, any employer, officer, agent, or other person who violates any provision of part III of Chapter 557 or Chapter 558 of the general statutes, or both shall be liable to the labor department for a civil penalty of three hundred dollars for each violation of said chapters. The Labor Commissioner has promulgated regulations to implement the assessment of the civil penalty. (amended by P.A. 97-263 to $300.00, effective October 1, 1997).

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Time Record Keeping Requirements: Section 31-60-12(c)

OVERTIME - ONE AND ONE-HALF TIMES THE EMPLOYEES REGULAR RATE OF PAY AFTER 40 HOURS PER WEEK. FOR EXCEPTIONS - SEE SECTION 31-76i OF THE CONNECTICUT GENERAL STATUTES

Sec. 31-60-12 Records.

  1. For the purpose of this regulation, "true and accurate records" means accurate legible records for each employee showing:

    1. His name;

    2. his home address;

    3. the occupation in which he is employed;

    4. the total daily and total weekly hours worked, showing the beginning and ending time of each work period, computed to the nearest unit of 15 minutes;

    5. his total hourly, daily or weekly basic wage;

    6. his overtime wage as a separate item from his basic wage;

    7. additions to or deductions from his wages each pay period;

    8. his total wages paid each pay period;

    9. such other records as are stipulated in accordance with sections 31-60-1 through 31-60-16.
       

  2. The labor commissioner may authorize the maintenance of wage records and the retention of both wage and hour records as outlined either in whole or in part at a place other than the place of employment when it is demonstrated that the retention of such records at the place of employment either

    1. works an undue hardship on the employer without materially benefiting the inspection procedures of the labor department, or

    2. is not practical for enforcement purposes. Where permission is granted to maintain wage records at other than the place of employment, a record of total daily and weekly hours worked by each employee shall also be available for inspection in connection with such wage records.
       

  3. In the case of an employee who spends 75% or more of his working time away from his employer's place of business and the maintaining of time records showing the beginning and ending time of each work period for such employee either imposes an undue hardship upon the employer or exposes him to jeopardy because of his inability to control the accuracy of such entries, a record of total daily and total weekly hours will be approved as fulfilling the record-keeping requirements of this section. However, in such cases, the original time entries shall be made by the employee in his own behalf  and the time entries made by the employee shall be used as the basis for payroll records.
     

  4. The employer shall maintain and retain for a period of 3 years the following information and data on each individual employed in a bona fide executive, administrative or professional capacity;

    1.  His name;

    2.  his home address;

    3.  the occupation in which he is employed;

    4. his total wages paid each work period;

    5. the date of payment and the pay period covered by payment.

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Civil Penalties Regulations for Wage Violations Regulations

 

The regulations of Connecticut State Agencies are amended by adding Sections 31-71h-1 through 31-71h-6, inclusive, as follows:

 

Sec. 31-71h-1. Definitions

 

For the purposes of Section 31-71h-1 through 31-71h-6, inclusive, of these Regulations, the following definitions apply:

  1. "Civil penalty" means a penalty of $300.00 for each violation of part 111 of Chapter 557 or Chapter 558.

  2. "Commissioner" means the Labor Commissioner, whose mailing address is Labor Department, 200 Folly Brook Boulevard, Wethersfield, Connecticut 06109, or his designee.

  3. "Division" means the Wage and Workplace Standards Division which is responsible for enforcement of part III of Chapter 557 and Chapter 558 of the Connecticut General Statutes whose mailing address is Labor Department, 200 Folly Brook Boulevard, Wethersfield, Connecticut 06109.

  4. ''Employer" means any employer, officer, agent or any other person who may have violated part III of Chapter 557 or Chapter 558 of the Connecticut General Statutes.

  5. "Violation" means a failure by an employer, officer, agent or any other person to comply with any applicable provision of part III of Chapter 557 or Chapter 558.

Sec. 31-71h-2 Assessment of civil penalty

  1. In addition to and apart from any other penalties and/or remedies provided in part III Chapter 557 or Chapter 558 of the Connecticut General Statutes, the Labor Commissioner shall assess a civil penalty of $300.00 upon the following determination:
     

    1. an employer has violated a statutory provision of part III of Chapter 557; or

    2. an employer has violated a statutory provision of Chapter 558.
       

  2. In determining the number of violations committed by an employer, the Commissioner shall assess a separate civil penalty for each individual employee adversely affected by the employer's violation.
     

  3. In addition, the Commissioner may assess more than one civil penalty against an employer with respect to the same adversely affected employee if the employer has violated more than one statutory provision under Chapter 557 or Chapter 558.

Sec. 31-71h-3 Notice of violation

  1. The employer shall be notified of a civil penalty assessment by the 'Notice of Violation and Opportunity to Show Cause" which shall be sent to the employer along with the 'Notice to Employer - Unpaid Wages Due" statement, if applicable.
     

  2. In cases where there is a violation but no wages are due to any employees, the employer shall be notified of the civil penalty assessment by the "Notice of Violation and Opportunity to Show Cause" which shall be sent to the employer.
     

  3. The 'Notice of Violation and Opportunity to Show Cause" shall provide the following:

    1. the total civil penalty assessed;

    2. the right of the employer to request in writing a hearing to show cause why the civil penalty should not be assessed;

    3. an advisement that no hearing shall be granted unless a written request for hearing is received by the Division within twenty-one (21) days from the date of mailing of the notice; and

    4. the right of the employer to waive the right to request a hearing and to respond in writing to the notice within twenty-one (21) days of the date of mailing of the notice.

Sec. 31-71h-4 Request for hearing

 

Any employer who seeks to contest a civil penalty assessment shall file, within twenty-one (21) days of the date the "Notice of Violation and Opportunity to Show Cause" was issued, a written request for an opportunity to be heard which shall clearly state the reason(s) for such request, including facts to demonstrate that no violation has occurred.

 

Sec. 31-71h-5 Show cause hearing

  1. If the Commissioner determines that the employer has stated adequate facts or legal grounds to warrant a hearing, the Commissioner shall provide written notice of the hearing to show cause why a civil penalty should not be assessed and shall mail written notice to the employer of the date, time and place of the hearing. Such determination shall be within the sole discretion of the Commissioner. The notice shall inform the employer of its rights in the show cause hearing including:
     

    1.  the right to be represented by any person, including an attorney; and

    2. the right to present documentary evidence and written and/or oral argument in support of the employer's position.
       

  2. A request for postponement of a hearing so scheduled shall only be granted where the rights of an employer would be substantially prejudiced by the denial of the request or in a medical emergency. The Commissioner has sole discretion to grant such requests.

Sec. 31-71h-6 Determination of penalty

  1. Following a hearing or after the employer has waived the right to request a hearing, the Commissioner may uphold or modify the civil penalty assessment, such determination shall be within the sole discretion of the Commissioner.
     

  2. If the employer requests a hearing but the Commissioner denies the request for a hearing, the total civil penalty assessed in the Notice shall be the final civil penalty.
     

  3. If the employer does not request a hearing or respond in writing to the Notice, the total civil penalty assessed in the Notice shall be the final civil penalty unless otherwise modified by the Commissioner.

Statement of purpose: To establish procedures and guidelines necessary to implement the assessment of civil penalties for violations of part III of Chapter 557 and/or Chapter 558, established in P. A. 93-392.

 

In Witness Whereof: March 17, 1994, Ronald F. Petronella, Commissioner.

Approved by the Attorney General as to legal sufficiency in accordance with Sec. 4-169, as amended, Connecticut General Statutes; March 30, 1994.

Approved by the Legislative Regulation Review Committee in accordance with Sec. 4-170, as amended, of the General Statutes: June 21, 1994.

 

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