(e) The actual number of jobs studied within these occupational groups was fewer than in the area wage surveys and tabulations on fringe-benefit data were limited to paid holidays, paid vacations, and plans for health, insurance, and pensions.

316 BLS SCA food and laundry surveys.-At the request of the Branch, BLS conducts studies of selected laundry and dry cleaning occupations in establishments with 20 or more workers in laundries, laundry services, and cleaning and dyeing plants (Industry 721, as defined in the 1967 edition of the Standard Industrial Classification Manual). Also studied under the SCA survey program are selected food service occupations in establishments employing 50 or more workers in eating and drinking places (SIC 581) and hotels, tourist courts, and motels (SIC 7011). Both types of SCA surveys report only earnings data.

317 BLS SCA forestry and land management surveys.-At the Branch's request, BLS conducts surveys of forestry and land management in certain western localities.

318 Coordinated Federal Wage System Surveys.-Federal wage surveys used in preparing wage schedules for nonsupervisory blue-collar direct hires cover a cross-section of industries to which Federal blue-collar employees are oriented. In defined areas, data are obtained from representative establishments for benchmark classifications in:

(a) Most manufacturing industries (SIC 19-26 and 28-38 excluding SIC 27 and 39),

(b) Transportation, communication, and public utilities (SIC 40, 41 (except 413), 42, 45, 48, and 49),

(c) Wholesale trade (SIC 50), and

(d) Finance, insurance, and real estate (SIC 651 only).

Fewer industries are covered than in BLS surveys-notable exceptions being retail trade and services (SIC 53-59 and 70-89)-and only earnings data are reported. From the raw data, CFWS develops wage schedules providing rates for some 15 grades of nonsupervisory employees, with 3 step rates for each grade. Toward providing a wage-rate structure which reflects the overall pattern and level of wage rates prevailing in the wage area and which sets pay distinctions in keeping with work distinctions, CFWS establishes a straight payline with uniform cents-per-hour pay differentials for successive grades throughout the schedule. If the payline so constructed, however, fails reasonably well to coincide with the prevailing rate, CFWS modifies the payline with "turns" or "elbows" to provide the best fit to the local rate structure.

319 Other wage surveys.

(a) Wage surveys are conducted by nonfederal governmental jurisdictions such as states, counties, and municipalities. Surveys by state governments are frequently made by the state employment security commission or employment service. (b) Typical of state surveys is one conducted by the Wisconsin State Employment Service for 21 areas within the State. Earnings data are reported for selected occupations on a cross-industry basis in manufacturing establishments with 50 or more workers and nonmanufacturing establishments with 10 or more workers. The establishment-size criterion is mitigated in some areas in order to provide adequate representation. Data is reported in a format similar to that used by BLS in area wage surveys.

(c) Another example of a nonfederal wage survey is conducted in Los Angeles County by a joint Salary Survey Committee representing the City, the County, city school districts, and the City Housing Authority. Selected for study are some 59 benchmark jobs for use in determining compensation for comparable jobs in the 4 governmental agencies, required by law to pay prevailing rates in the community. This survey covers private firms in 6 major types of industry as well as the employment of government agencies other than the 4 sponsors.

(d) Data on pay rates in Hawaii are reported by the Hawaii Employers' Council in a study conducted jointly by the Council, the State Department of Personnel Services, civil service departments of the City and County of Honolulu, and the counties of Hawaii, Mani, and Kauai. This survey covers private firms and government agencies on the basis of industrial classification, size, and island representation, and aims to represent 40 percent of the total employment in each industry group. Studied are some 98 clerical, trade, technical, and professional jobs.

320 Collective bargaining agreements.

(a) General.-In order for a collective bargaining agreement to be acceptable as a source of data for the issuance of a wage determination under the SCA pro

gram the Branch must establish that the agreement covers a majority of the workers in the particular classification in a locality. In this regard, information is solicited from the appropriate labor union as to the workers covered by the agreement together with estimates of the percentage of workers under the agreement in comparison with all workers in the locality.

(b) Available data.-Collective bargaining agreements usually provide wage and fringe-benefit data for one or more years and wage information ordinarily consists of rates for one or more journeyman classifications for the life of the contract. Rates may be provided for experience, or length of service, as well as for beginning, casual, part-time, and apprentice workers. In addition, these agreements typically provide for fringe benefits such as paid holidays and vacations, plans for health, welfare, and pensions, and other bona fide contributions paid for the benefit of workers covered by the agreement.

(c) Service requirement.— A collective bargaining agreement usually provides certain minimum service or work requirements establishing eligibility for fringe benefits under the agreement. The Branch reflects these qualifications in wage determinations.

321 Existing prevailing-rate data.-Data on prevailing wage rates exist in the form of wage decisions issued under the Davis-Bacon and Related Acts (DBRA) or by various states or municipalities with similar statutes, and in the form of Coordinated Federal Wage System pay schedules.

(a) Decisions under the Davis-Bacon and Related Acts.-Wage decisions issued under the Davis-Bacon and Related Acts-which cover construction, alteration and/or repair, including painting and decorating, of a public building or public work-list the wage rates and fringe benefits determined to be prevailing for construction trades and crafts workers. Such decisions are published by the Wage and Labor Standards Administration under procedures prescribed in 29 CFR 1.. The Branch may adopt the wage rates and fringe benefits so determined for use in SCA wage determinations when-after evaluating information furnished by the contracting agency, contractors, and labor organizations-it can establish that a Government contract is not covered by the DBRA and that work under the contract is typically performed by construction workers at actual construction wages.

(b) Coordinated Federal Wage System pay schedules.

(1) A CFWS pay schedule lists the rates of pay established from survey data For example, the occupational class of light truckdriver is rated 5, carpenter is BLS. For nonsupervisory employees, a CFWS schedule usually lists 15 grades with 3 step rates per grade:

(A) Step 1 is an entrance rate,

(B) Step 2 applies after 26 weeks of creditable service, and

(C) Step 3 applies after 78 weeks of creditable service.

(2) Jobs or classifications are graded according to classification standards. For example, the occupational class of light truckdriver is rated 5, carpenter is rated 9, and electrician is rated grade 10.

(3) After determining the appropriate grade for a CFWS job according to classification standards, the latest wage rate prescribed for the job can be ascertained. The Branch may use CFWS pay schedules to determine wage rates prevailing under the SCA program if it is established that such rates are, in fact, prevailing. For example, if the service to be performed under a contemplated service contract is now being performed in-house at a military installation by wage-board employees, the Branch may adopt CFWS pay-schedule rates since they in fact prevail. This may be done only when the installation is remote from an SMSA or is not physically identified with the central metropolitan area and may otherwise be properly treated as an enclave.

322 Incumbent-contractor data.-The Branch may obtain wage and fringebenefit data from a contractor currently performing on a Government service contract for the purpose of issuing a wage determination applicable to a contemplated contract in the same locality for the same services. For example, a Government installation may be in an isolated location for which no survey data are available, or the service contract may specify occupational classes for which data are not readily obtainable, necessitating some other source for determining wage rates and fringe benefits. The Branch generally confines this procedure to determinations for installations in remote areas for which surveys are impracticable—either because no establishments in the area meet survey criteria, or because specified occupational classes are not employed in the area.

335 Locality.-When a wage determination will apply only to a particular installation, the "best" information may be those wages actually being paid at that installation. Within a survey area, a wage determination based on rates paid at a facility, or separate enclave, is appropriate only if the facility cannot reasonably be considered part of the larger metropolitan area. For example, a facility located in the heart of a metropolitan area is not considered a separate enclave for the purpose of applying wage-benefit standards different from those prevailing may ordinarily be considered a separate enclave because of its generally recognized identity as a facility with discrete wage patterns often at variance with the larger area.

336 Documentation.-Each wage determination issued by the Branch is supported by a docket setting forth the legal basis for its issuance: the source of the data relied on, representations concerning prevalence of the data, the standard of what is "prevailing," and the necessity for initiating issuance of the wage determination. The docket also contains relevant background material such as survey data, wage schedules, collective bargaining agreements, and representations concerning dominance. A copy of the docket is available for public inspection at the national office of the Wage and Hour Division.

337

Sources of determined rates.-The source forming the basis for the issuance of a wage determination controls the measure or standard of what is "prevailing.” Various sources of determined rates are discussed below.

330-359 DETERMINING THE PREVAILING WAGE RATE

330 General.-The Service Contract Act and relevant regulations require that covered contracts include provisions specifying the minimum wages to be paid the various classes of service employees employed on the contract. Exempt from the determined-wage section of the act are all contracts for which no such wage has been determined for any occupational class of service employees to be employed thereunder. In order to apply to a contract, a wage determination must contain a rate for at least one of the occupational classes of service employees to be employed under the contract.

331 Prevailing wage rate.-Section 302, above, sets forth the principles to be followed in determining what rate prevails. Depending on the data source, the Branch encounters several standards of the prevailing rate-for example, the median wage rate, the mean rate, the collective-bargaining rate, or the CFWSGS rate. The rule of "best" information, as compared and related to all available data, is followed in determining what rate in fact prevails.

332

"Best" information available.-The "best" information is that sufficient to establish a probative basis upon which the Branch can issue a wage determination. The kind of information which is "best" varies depending on:

(a) The occupational class of the service employee,

(b) The availability of all types of relevant data sources, and
(c) The locality to which the wage determination applies.

333 Occupational class.-The kind of information on which the Branch bases issuance of a wage determination is, in most cases, governed by the occupational class of service employees who will perform on a contemplated contract. In areas where survey data are available, the Branch typically relies on those data for specified occupational classes. In cases where construction-type employees are specified, the Branch may rely on rates determined to prevail in decisions under the Davis-Bacon and Related Acts. In other cases, the specified occupational class may dictate a wage determination based on an appropriate collective bargaining agreement-for example, the classes of elevator maintenance employees, certain truckdrivers, and window washers-when relevant survey data are unavailable.

334 Availability of data.—What is "best" also depends on the kinds of information available. For example, in localities where BLS survey data are lacking, the Branch may rely on CFWS survey data. Or if there are no survey data for a specified occupational class, the Branch may rely on wage information from state employment officers, incumbent contractors, or Federal GeneralService salary schedules, or by "slotting" the rate for specified occupational class according to its equivalence to a similar class for which data can be obtained.

340 Survey-based wage determinations.-A survey-based wage determination (WD) relies on median or mean (average) wage data which are considered

accurately representative of wages prevailing in the area covered by the survey. The wage rate for such a WD is determined on the basis of recurring median or mean data for those classes of services employees:

(a) For which such data are available-for example, janitor, porter, cleaner, and

(b) Which can be "slotted" equivalent to those classes for which data are available-for example, mess attendant and grounds-maintenance laborer wages based on those for janitor, porter, cleaner.

The WD is applied to a locality corresponding to the geographic area covered by the wage survey, typically a Standard Metropolitan Statistical Area.

341 Adjacent-installation application.-A wage determination may be applied to a particular facility or military installation which is located in such close proximity to a survey area that the facility is regarded as part of the survey area for the purpose of applying survey data. The Branch obtains information concerning the degree of social and economic integration between a facility and its nearby survey area from the incumbent contractor and contracting officer and from standard references such as the Rand-McNally Commercial Atlas, for information on the trading area of the county in which the facility is located, and U.S. Census of Population Journey-to-Work data, which provide information about social and economic integration between metropolitan areas and adjacent counties.

342 Prevailing standards.—In evaluating an incoming SF 98 toward determining the minimum rate prevailing for a specified class of workers in a specified locality, the Branch analyzes relevant surveys with a view to adopting the reported median or mean rate or some other standard of prevailing, maintaining strict controls and limitations against adoption of an unrealistic or inflationary rate. Two common situations in which exhaustive interlevel discussion of a proposed rate is mandatory concern, first, the tentative selection of a rate alternative to one reported in an available survey and, second, the analysis of atypical survey patterns.

In the first instance, interlevel Branch discussion is always required if initial evaluation indicates that—rather than determining the prevailing rate to be a median or mean reported in a recent survey, it is more appropriate to adopt either the previously determined rate, some other standard of the prevailing rate, or no minimum wage rate at all.

Interlevel Branch discussion is also required, in the second instance, when during evaluation a comparison of the rate reported in the latest survey with the previously determined rate or, in the absence of a previously determined rate, with the corresponding rate reported in the preceding survey-shows a decrease, no change, or an annual increase exceeding 5 percent. This routine comparison often leads to further analysis of the actual extent of the survey and of the general trends it suggests; successive samples may be uncomparable because the later report includes observations of industrial sectors not previously studied, or the wage trend for a specific occupational class may suspiciously proceed in a direction strikingly counter to the observed pattern for all other surveyed employment.

343 Median wage rate.-The Branch usually adopts the median rate as prevailing in a survey-based wage determination since the median defines a measure or standard for the majority—that is, it designates position: half the employees surveyed received more than the median and half received less. In other words, not less than the median wage rate was paid to a majority of survey employees. Accordingly, the median wage rate is adopted as prevailing when probative information supports that action (see below). In the absence of published median wage data, the Branch tries to ascertain them; for example, it regularly requests tape read-outs of median data for the occupational classes of "cook I" and "cook II" directly from BLS, although the Bureau only publishes data for the combined class of "cook". Or, if a frequency distribution is acceptable but the median is unreported, the Branch computes it.

(a) Adoption of median as prevailing.-The Branch does not automatically adopt the median wage as prevailing; it first considers other appropriate courses of action such as:

(1) The adoption of another measure of the pevailing rate, for example, the mean or weighted-average rate,

(2) The adoption of no rate, or

(3) Reaffirmation that a previously determined wage still prevails.

(b) Factors opposed to adopting the median. Factors which may justify adoption of some standard of prevailing wage alternative to that of the median rate include:

(1) Intraplant variation of more than 15 percent between the rate shown by BLS to exist on a regional or national basis and the rate reported by the survey, or that previously determined for another class, or the previously determined rate, if applicable, for the same class,

(2) Availability of wage information for the same or similar classes of employees outside scope of the survey, for example, information obtained from other surveys, employee and employer associations, selected occupational employment data, or data on employment under civil service systems and state employment offices and on university employment in college communities.

(3) Material change in the prevailing wage level subsequent to a survey such as a negotiated increase that significantly affects the wage level of the employee class surveyed.

(4) Significant change in the level of wages, comparing the most recent survey to its predecessor, as reflected by a proportionately greater increase in the mean rate than has occurred in the median, and

(5) Variation of the proposed median by more than 10 percent above the rate for the comparable occupational class under the Coordinated Federal Wage System (section 354, below).

344 Mean wage rate.-If one or more of the factors enumerated above persuade the Branch not to adopt the median wage rate as prevailing for a specified occupational class, it scrutinizes the mean rate to decide whether that can reasonably be shown to be more representative of the wages in fact prevailing in the specified locality, supported by one or more of the following atypical survey patterns:

T

(a) A small survey sample-fewer than 50 establishments in scope-notwithstanding the fact that 90 percent or more of the establishments within scope were surveyed,

(b) A small number of observations either relative to the number of observations for other occupational classes or under 50 workers, or

(c) Statistical deviation such as a skewed or multimodal frequency distribution that biases the median because of large concentrations of observations toward either end of the distribution curve. Even though the selection of the mean initially appears justified on the basis of any single factor, the Branch does not determine the mean to be prevailing before considering and measuring all probative factors. While the Branch applies no hard and fast rule in adopting the mean over the median as prevailing, it inclines toward this determination whenever other reported survey data are consistent with and overwhelmingly support that selection.

345 Previously determined rate.-In lieu of adopting the survey median or mean as the rate prevailing, the Branch in some cases finds it more appropriate to rely on a rate previously determined to prevail, thereby continuing that rate in effect until probative information becomes available requiring the wage determination to be revised. There are, generally two typical instances in which the Branch may deem it appropriate to continue in effect a previously determined rate:

(a) When the median and the mean rates in the most recent survey are both at or below the existing determined rate for an occupational class, the Branch may consider them unrepresentative of wages in fact prevailing in the locality under the following circumstances:

(1) If the most recent survey exemplifies one or more of the atypical characteristics noted in section 344, above,

(2) If the recent survey reflects changes rather than changes in paid wages, for example, if the scope of the survey has been expanded to include the pay practices of lower-paying establishments, or

(3) If this course of action is supported by available information from the pertinent state employment office concerning changes of wage levels in the locality.

(b) If one standard of prevailing in the most recent survey is at or below the rate previously determined for a current wage determination and the other standard of prevailing is above the previously determined rate, the Branch considers continuing reliance on the rate previously determined to prevail. It does not shift the standard on which the wage determination is based merely because another standard will yield a higher or a lower wage rate. But shifting the