Administration and Enforcement Procedures - Fair Wages and Hours of Labour Act and Regulations

OPD 870
Effective May 2005

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1.  Purpose

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This directive replaces OPD 870 dated August 28, 1987 and OPD 882 dated February 18, 1986.

The purpose of this directive is twofold:

• to establish procedures to be applied consistently throughout the Labour Program of Human Resources and Skills Development Canada (HRSDC – Labour Program); and
• to define the legal and administrative roles and responsibilities of those involved in the administration of the Fair Wages and Hours of Labour Act (the Act) and the Fair Wages and Hours of Labour Regulations (the Regulations) to ensure a uniform approach to the application of the Act and Regulations.

2.  Scope

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This directive applies to the regions and the Labour Standards and Workplace Equity Division (LSWE).

It deals with the provision and receipt of information to and from federal contracting authorities, the handling of complaints concerning non-payment of rates listed on the Schedule of wage rates for federal construction contracts, and inspections for the monitoring of compliance.

3.  Background

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In 1997, the Minister of Labour announced the reinstatement of the use of Schedules of wage rates for federal construction contracts. Subsequent to a pilot project testing an industry focused method of developing Schedules, the Stanley Commission of Inquiry was called in 1998 to consider other means of Schedule development.

The Fair Wages and Hours of Labour Regulations were amended according to the Commission's recommendations. The new Regulations came into force on September 29, 1999. Therefore, the need has arisen to revise existing policies and procedures in accordance with the regulatory amendments.

4.  Authority

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This directive is issued under the authority of the Director General, National Labour Operations Directorate, HRSDC – Labour Program. Complaints of non-payment of rates according to the Schedule of wage rates for federal construction contracts to, or of discrimination against, workers on federal construction contracts are handled by HRSDC – Labour Program under the authority of the Act, paragraphs 6(f) and (j), and the Regulations, section 13, paragraph 14(c), and section 16.

5.  Definitions

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In this directive,

"Apprentice" means a person who is registered in a trades training program for which the training content and process, the program duration and the rates of pay for work under the program are established under the authority of provincial or territorial legislation. « apprenti »

"Competent worker" means a journeyperson or an unlicensed or uncertified worker who has sufficient training and work experience in a trade to be considered competent in the performance of the normal work of the trade by the employer of that worker. « travailleur qualifié »

"Construction" means "the fitting together, framing or building (of a thing)" (Concise Oxford dictionary, Seventh Edition, 1982); "to form by ordering and uniting materials by gradual means into a composite whole" (Miriam Webster online). In general, the term refers to the creation of a new structure. « construction »

"Contracting authority" means a department of the Government of Canada, or a federal Crown Corporation as defined in subsection 83(1) of the Financial Administration Act. « adjudicateur »

"Demolition" means to "tear down – to take apart, to break to pieces, smash; to do away with, destroy – to ruin the structure, … or condition of" (Merriam Webster Dictionary), to "pull or throw down (building)" (Oxford Dictionary). « démolition »

"District" means a geographical area where the prevailing wages for competent workers are fairly consistent or relatively uniform. (Federal Court decision – Kinetic Construction Ltd. v. Minister of Labour et al, July 25, 2000). « district »

"Federal construction contract" means a contract issued by a federal contracting authority for the construction, remodelling, repair or demolition of federal real property where the contract contains the Fair Wages and Hours of Labour "Labour Conditions" document and the applicable Schedule(s) of wage rates for federal construction contracts. « contrat fédéral de construction »

"Inspector" means a person appointed by the Minister of Labour under section 249 of the Canada Labour Code. « inspecteur »

"Journeyperson" means a person with a license or certificate of qualification issued by the provincial or territorial government for the specified trade. « compagnon »

"Labour Regional Head" means the most senior position in Human Resources and Skills Development Canada – Labour Program within a region. « chef régional du travail »

"Maintenance" is defined as "the upkeep of property or equipment, to keep in an existing state (as of repair, efficiency, or validity): preserve from failure or decline maintain machinery: keep up, keep going, keep in repair" (Oxford Dictionary). « entretien »

"Real property" means "land…, including mines…, buildings, structures, …and other fixtures on, above or below the surface of the land,…" belonging to Her Majesty in right of Canada (Federal Real Property and Federal Immovables Act, 1991, c. 50, section 2). « biens réels »

"Remodelling" means to "alter the structure of, remake, to make anew or in a different form" (Merriam Webster Collegiate Dictionary, 10^th edition, 1994); structure is the "supporting framework or essential parts" (Oxford Dictionary), "the action of building – (build – to form by ordering and uniting materials by gradual means into a composite whole)" (Merriam Webster Dictionary). In general, this term foresees an intrusion into the structure of the building. « restauration »

"Repair" means to "restore by replacing a part or putting together what is torn or broken" (Merriam Webster Dictionary); to "restore to good condition…" (Oxford Dictionary). In general, the term refers to work essential to the continuing existence of a structure, requiring more significant work than foreseen by maintenance activities. « réparation »

"Survey" refers to the Construction Industry Wage Rate Survey conducted by Statistics Canada from time to time under contract with the Labour Branch of HRSDC. « sondage »

6.  Guiding Principles

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6.1  The principles of procedural fairness and natural justice apply to the present directive, and officials involved are obligated to give the parties a reasonable opportunity to make representation and to be heard on matters pertaining to a complaint under the Act.

6.2  HRSDC – Labour Program officials must perform their duties in an objective, unbiased manner.

6.3  The legislation is intended to remove the issue of wages as an element of the bidding process on federal government construction contracts, and to provide workers on valid "federal construction contracts" with a method of resolving complaints of unfair pay practices or discrimination.

6.4  If a construction contract contains the Fair Wages and Hours of Labour "Labour Conditions" and a Schedule of wage rates for federal construction contracts, a complaint may be accepted for investigation while that contract is live regardless of any uncertainty on the part of HRSDC – Labour Program officials that a contracting authority issued the contract, or that the contract is for construction, in order to protect the interests of the complainant.

7.  Procedures

7.1 Distribution of Schedules of wage rates for federal construction contracts

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(a)  Distribution within HRSDC – Labour Program

One month before the effective date of the Schedule, or as soon as reasonably practicable before the effective date, Labour Standards Operations at NHQ (LSOPS/NHQ) will return dated Schedules of wage rates for federal construction contracts to the Labour Regional Head of the region to which the Schedules pertain. A copy is also forwarded to the Technical Advisor, Labour Standards, for each region.

As soon as possible after receipt of the dated Schedules, regional officials will provide the Schedules of wage rates for federal construction contracts for their regions to each HRSDC – Labour Program point of service in their region.

(b)  Distribution to contracting authorities

LSOPS/NHQ will liaise with the Treasury Board Advisory Committee on Contracting – Construction (TBACC-C), comprised of Head Office representatives of the federal departments responsible for most construction contracting. The purpose of the NHQ liaison is to ensure the education of senior contracting officials with regard to their compliance with the Act, and provide a means for federal contracting authorities to contribute to the development of policies and procedures which will apply to their contracting activities.

One month before the effective date, or as soon as reasonably practicable before the effective date, LSOPS/NHQ will distribute dated Schedules of wage rates to TBACC C members.

Labour officials in each region are responsible for establishing and maintaining contact with the regional or local offices of contracting authorities. The purpose of these contacts is to facilitate the exchange of contract information and Schedules at the local level and with contracting authorities who may not be represented at TBACC-C.

Labour officials may distribute Schedules for their region to their local contacts immediately after they have received them.

(c)  Distribution to the general public

On the respective effective dates, LSOPS/NHQ will post Schedules of wage rates for federal construction contracts for all regions on the Labour Branch's federal construction contracts website for use by HRSDC – Labour Program officials, contracting authorities, and the general public.

LSOPS/NHQ will respond to requests for Schedules received at NHQ from headquarters level representatives of contracting authorities and organizations representing contractors or labour groups. All other requests for Schedules will be referred to the appropriate regional office or local HRSDC – Labour Program point of service office.

Regional officials, or officials in local points of service offices, will respond to requests for Schedules of wage rates for federal construction contracts from local contracting authorities, from regional or local organizations representing workers or contractors, from contractors, and from the general public by providing copies of the relevant or requested Schedules, or referring the requester to the Internet federal construction contracts website.

Regional officials will respond to requests for copies of the Apprentice Tables regardless of the source of the request.

NOTE:  It is the responsibility of the contracting authority to include the applicable Schedule of wage rates for federal construction contracts and the "Labour Conditions" document in tenders for construction contracts and in the awarded contracts (understood through Regulation 6).

7.2  Monitoring of federal construction contract work sites

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(a)  Identifying federal construction contracts subject to the Fair Wages and Hours of Labour Act and Regulations

Regional or local point of service officials may use information obtained from any available web based contracts database commonly used by federal contracting authorities to identify construction contracts let by federal contracting authorities.

Notwithstanding the above, regional or local HRSDC – Labour Program point of service officials should arrange with local representatives of contracting authorities to receive, on a regular basis, notice or copies of all construction contracts awarded which contain "Labour Conditions" and Schedules of wage rates, regardless of whether they are listed or updated in a web based database.

(b)  Workplan Inspections (scheduled inspections)

Each HRSDC – Labour Program region will include inspections of federal construction contract work sites in their Business Plan each fiscal year.

Any active contract work site identified from a computer database, from notices received from contracting authorities, from receipt of a complaint, or from information received from other 'interested parties'* may be selected for a scheduled inspection.

[* See also sections 7.2(c) – Ad hoc Inspections, and 7.3(b) – Third party allegations].

In establishing priorities for inspections under the Fair Wages and Hours of Labour Act, it may be useful to consider the location of the work site, the contracting authority involved, the type of construction, and the value of the contract. Other considerations might be whether there have been previous complaints or information about possible non-compliance concerning the same contractor or similar contracts let by the same contracting authority.

In keeping with the HRSDC – Labour Program focus on proactive activities, from time to time, as their work load allows, and with the approval of their local HRSDC – Labour Program Manager, inspectors may also conduct spontaneous federal construction contract site inspections which are beyond those scheduled in the local office work plan and not instigated by third party information.

(c)  Ad hoc Inspections

From time to time, inspectors may receive information alleging non payment of appropriate wage rates for federal construction contracts from an organization or person not working on the construction site in question. Sources of such information include, but are not limited to, unsuccessful bidders on the affected contract, labour organizers, labour representatives from unionized unsuccessful bidders, and unemployed or underemployed workers not on the site.

Depending on the information received, the availability and credibility of supporting evidence, the inspectors' work loads, and the local office or regional action plan priorities, an inspector may, with the approval of the local HRSDC – Labour Program Manager, undertake further information gathering to confirm whether the contract is a federal construction contract which is still open, which contains "Labour Conditions" and a Schedule of wage rates, and whether there may be a problem with compliance. Based on all the information, the inspector may, with the approval of the local HRSDC – Labour Program Manager, undertake an ad hoc site inspection.

Information from third parties may also be used to assist in selecting sites to be inspected or to establish priorities for scheduled inspections.* Any action taken on information received from a third party is at the discretion of the inspector with the approval of the local HRSDC – Labour Program Manager. [* See also sections 7.2(b) – Workplan Inspections and 7.3(b) – Third party allegations of this OPD].

(d)  Inspection procedures

At the time of the inspection, before entering the site, inspectors must confirm with the responsible contracting authority that the contract is active, and that it contains the "Labour Conditions" document and a Schedule of wage rates for federal construction contracts. Inspectors should also confirm with the contracting authority the effective date and zone of the most recent Schedule of wage rates provided to the contractor.

The inspector may also wish to review the contract in question to ensure that it contains the requisite clauses concerning:

• payment of wages according to the Schedule of wage rates for federal construction contracts;
  
  (Regulation 7(1))
• payment of wages according to amended Schedules of wage rates for federal construction contracts;
  
  (Regulation 7(2))
• determination of a federal construction contract wage rate for an occupation not included on the Schedules;
  
  (Regulation 8)
• non-discrimination;
  
  (Regulation 9)
• requirement for a sworn statement concerning payment of wages according to the Schedule of wage rates from the contractor before payment by the contracting authority;
  
  (Regulation 11(1)(b))
• withholding of money by the contracting authority for non-payment of rates according to the Schedule of wage rates for federal construction contracts;
  
  (Regulation 11(2))
• responsibility of the contractor for subcontractors;
  
  (Regulation 12)
• payment of monies owing to the Minister of Labour;
  
  (Regulation 13(1))
• posting of Schedules and contract provisions concerning wage rates for federal construction contracts;
  
  (Regulation 14(a))
• keeping of records;
  
  (Regulation 14(b))
• access to the site for inspection;
  
  (Regulation 14(c))
• adjustment of hours of work according to provincial laws.

On site, the inspector must confirm:

• that the contracting authority has distributed the most recent applicable Schedules of wage rates, including Apprentice Tables, to all the main contractors on the site, regardless of when the original contract was signed;
• that the most recent Schedule, including the Apprentice Table, provided to the main contractor by the contracting authority is posted in a location which is visible and accessible for all workers on the site;
• that all affected subcontractors on the site are aware of and complying with the "Labour Conditions" and Schedule of wage rates in the main contract;
• that the contractor's and subcontractor's payroll records contain the name, address, classification, rate of wages to be paid, wages actually paid, and daily hours worked for each worker employed under the contract;
• that the rate of wages paid to workers in the occupations listed on the most recent Schedule of wage rates for federal construction contracts provided to the contractor is equal to or higher than the wage rates on that Schedule;
• that workers paid as apprentices have, for the trade in which they are working, an apprenticeship contract registered with the provincial or territorial department responsible for apprenticeship training in the province where the work is being performed, and that the rate of wages paid to such apprentices is equal to or higher than the rates on the Apprentice Table.

When the correct Schedule of wage rates for federal construction contracts has been posted on the site in a location accessible to all workers, and when the rate of wages actually paid to workers, according to the payroll or other records, is equal to or greater than the rates for the respective occupations on the relevant Schedule, no further action is necessary.

Refer to Section 7.6, Enforcement, of this OPD for action when no Schedule, or an incorrect Schedule, is posted, or when the rates paid are less than the applicable Schedule rates.

A Construction Site Inspection Information Sheet – Federal Construction Contracts (Appendix J) must be attached to the hard copy file for each inspection conducted, and a copy forwarded to the Manager, Labour Standards Operations at NHQ, within one month of completing the inspection. Although the information is necessary for complete analysis of the impact of the fair wages legislation, it will also assist inspectors in organizing information collected during an inspection.

7.3  Complaints

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(a)  Absence of "Labour Conditions" and Schedules of wage rates in a federal construction contract

It is the responsibility of federal contracting authorities to set contract conditions, including "Labour Conditions" and Schedules of wage rates, for all contracts they tender and award. HRSDC – Labour Program has no authority to enforce compliance with the Act by contracting authorities and, in the absence of "Labour Conditions" in the contract, HRSDC – Labour Program cannot enforce the payment of wages according to the Schedule of wage rates. Therefore, allegations that a contracting authority has not included "Labour Conditions" and Schedules of wage rates in a contract tender or contract documents must be referred back to the contracting authority concerned.

(b)  Third party allegations of non-payment of wage rates according to the Schedule

Inspectors may receive information alleging non-payment of Schedule wage rates from an organization or person not working on the construction site in question. Regardless of the source or credibility of the information, we do not accept third party allegations as a complaint – see Sections 7.2(c) – Ad hoc Inspections and 7.3(e) – Non payment of wage rates according to the Schedule of wage rates for federal construction contracts of this OPD.

(c)  Hours of work and payment of overtime work

Hours of work, including standard and maximum hours, permissions for excess hours, and when or if an overtime rate should apply, are matters under provincial jurisdiction (Fair Wages and Hours of Labour Regulations, section 6.1). Complaints concerning these issues, regardless of the source, must be filed with the provincial or territorial Ministry or department responsible for employment standards.

(d)  Apprentices

All aspects of apprenticeship training are the responsibility of the provincial or territorial government. Complaints about the use of apprentices, including but not limited to improper apprentice designations, misuse of apprentice workers, or the ratio of apprentice workers to licensed journeypersons, must be filed with the provincial or territorial Ministry or department responsible for training and education.

(e)  Non-payment of wage rates according to the Schedule of wage rates for federal construction contracts

Upon receipt of a complaint, the inspector must assess whether the complaint is admissible. The following is a list of the conditions for admissibility of a federal construction contract wages complaint:

NOTE (1):  All complaints from construction sites in Quebec must be referred to the "Commission de la construction du Québec".

NOTE (2):  If difficulties arise in determining the legal aspects of any of the following conditions, the inspector should refer the matter to the Technical Advisor, Labour Standards, who may further refer the matter to Labour Standards Operations, if necessary:

• the construction contract under which the complaint is made is active, or final payment has not yet been made to the contractor by the contracting authority;
• the contracting authority responsible for letting the contract is a federal government department or crown corporation;
• the contract is for construction, demolition, repair or remodelling;
• the contract documents contain the Fair Wages and Hours of Labour "Labour Conditions" and the appropriate Schedule(s) of wage rates for federal construction contracts;
• the complainant is an affected worker at the site in question or a designated agent of an affected worker at the site;
• the complaint is about non payment of Schedule rates.

When an inspector determines that a complaint of non-payment of Schedule wage rates is inadmissible, the complainant shall be so informed with the "Ineligible Complaint Letter" (Appendix C or C-1).

7.4  Receiving a federal construction contract wage complaint

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While there is no statutory form to be applied, a complaint must be made in writing. However, it is preferable to use the standard Part III – Labour Standards/Fair Wages Complaint Registration Form (Appendix A, OPD 700-10, Complaints Handling) whenever possible. Use of the letters associated with notice or receipt of a complaint (Appendices B to B-2) is also recommended when time allows.

If a complaint has been signed by anyone other than the complainant, the authority of that person to act on behalf of the complainant must be confirmed by the complainant in writing. Similarly, any change in representation must be authorized by the complainant in writing. The letter "Authorization for Representation" (Appendix A) may be used to facilitate this authorization.

The complaint must identify the contractor for whom the complainant is, or was, working, and the time during which the infraction occurred. The complaint must also include the work site address, the contact person and telephone number for the contractor, and the complainant's alleged occupation on that site during the time covered by the complaint.

Since the receipt of a complaint is an administrative function, the complaint may be received by HRSDC – Labour Program support staff, an Early Resolution Officer, or any other person in the employ of HRSDC.

A complaint forwarded from another branch of HRSDC, from a provincial or territorial government office, or from another federal or provincial government agency must be accepted as if the complainant had filed the complaint in the correct location themselves.

A person contacting HRSDC – Labour Program by phone or via the Internet with a federal construction contract wage complaint must be advised to submit the complaint in writing and where to deliver or send the complaint. Wherever practicable, the complainant will be provided with a complaint form in the most convenient manner for the complainant, whether by regular mail, by fax, by e-mail, or in person.

In the event that a complaint form cannot be provided, or cannot be provided in time for a person to complete and return it before the contract in question expires or is completed, the complainant must be advised of the essential information, as outlined above, to be included in a letter which will constitute the complaint. The complainant must also be advised of the most expeditious method of providing the written complaint to the responsible HRSDC – Labour Program office.

7.5  Investigating a federal construction contract wage complaint

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Having confirmed that the complaint is an admissible federal construction contract wage complaint, the inspector should immediately contact the contracting authority informally to ensure that monies are still available (should a holdback request be necessary) and to advise the contracting authority that an investigation is underway.

In conducting the investigation, the inspector must:

• confirm that Schedules are posted on the work site in a location accessible to all workers;
• verify that the effective date on the posted Schedule is the latest version provided to the contractor by the contracting authority, and that the posted Schedule is the correct one for the location of the work site;
• confirm the occupation of the complainant;

NOTE (1):  If the occupation of the complainant is not on the Schedule of wage rates for federal construction contracts, the inspector will assign the most similar occupation from the Schedule by comparing the National Occupational Classification (NOC) code and job description which best defines the work actually done by the complainant to the NOC codes and job descriptions for the occupations on the Schedule.

NOTE (2):  Apprentices must have proof that their apprenticeship contract is registered with the provincial or territorial department or Ministry responsible for training, and of their level/year in the provincial apprenticeship program for the occupation in which they are working.

• from the payroll records, determine the hourly wage exclusive of any additional amounts for such items as benefits, bonuses, or special allowances, and calculate the wages paid for the regular and overtime hours worked by the complainant during the complaint period;
• compare the hourly wages actually paid to the rates on the Schedule of wage rates, including the Apprentice Table if appropriate, for the complainant's occupation.

If, subsequent to an investigation in which the complainant has not requested anonymity, the contractor is found to be in compliance with the "Labour Conditions", including the Schedule of wage rates, in the contract, the inspector shall send the "Complainant's Notice of Compliance" (Appendix C-2) to the complainant, and also send a copy to the affected contractor.

When the contractor is found to be in compliance with the "Labour Conditions", and the complainant has requested anonymity so that the investigation has been handled as an inspection, the inspector shall send the "Complainant's Notice of Compliance" (Appendix C-2) to the complainant, but shall not send a copy to the contractor.

If the inspector has notified the contracting authority of the investigation, and the contractor is found to be in compliance with the "Labour Conditions" in the contract, the inspector must advise the contracting authority of the finding to ensure that there is no undue hindrance of the contractor's business.

7.6  Enforcement

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(a)  Incorrect Schedule provided

When the Schedule posted is the most recent Schedule provided to the contractor by the contracting authority, and it is outdated or for the incorrect zone, the inspector shall:

• inform the responsible local/regional contracting authority of their obligations under subsection 6(3) of the Fair Wages and Hours of Labour Regulations;
• provide the local/regional contracting authority with the appropriate Schedule of wage rates for federal construction contracts and request that they comply with the Regulations by advising all contractors on the site, in writing, of the new Schedule;
• through regional management, report on the situation and action taken, by e-mail, fax or correspondence, to the Manager of Labour Standards Operations at NHQ;
• through regional management, report in writing to the Manager of Labour Standards Operations at NHQ if, after being notified of their responsibility under the Regulations, the contracting authority does not provide written notice of new Schedules to contractors on the site.

Upon receipt of a report of non-compliance by a contracting authority, the Manager of Labour Standards Operations at NHQ will advise the Headquarters level of the affected contracting authority about their obligations under the Fair Wages and Hours of Labour Act and Regulations, and negotiate the contracting authority's Headquarters level assistance in ensuring compliance at all levels of their organization.

(b)  Incorrect Schedule posted

If the posted Schedule is not the most recent one provided by the contracting authority, or is a Schedule for a different zone, the inspector shall advise the contractor of the correct Schedule and request that it be posted. Although a verbal request is sufficient, a written compliance request in the form of an "Assurance of Voluntary Compliance – Federal Construction Contracts" (Appendix D) is preferable if the time remaining before completion of the contract allows.

The inspector shall immediately notify the contracting authority that the posted Schedule was incorrect and advise them of any action taken and the current status of the situation.

(c)  Schedule not posted

If the contractor has not posted the applicable Schedule of wage rates for federal construction contracts on the work site in a location accessible to all workers, the inspector shall advise the contractor of the requirement to post the Schedule and request compliance. Although a verbal request is sufficient, a written compliance request in the form of an "Assurance of Voluntary Compliance – Federal Construction Contracts" (Appendix D) is preferable if the time remaining before completion of the contract allows.

The inspector shall also immediately notify the contracting authority that the Schedule was not posted and advise them of any action taken and the current status of the situation.

(d)  Schedule rates not paid

Regardless of the compliance status of the contracting authority under 7.6(a) or the contractor/ subcontractor under 7.6(b) or (c) of this OPD, if the hourly rates paid to workers are less than the rates on the most recent Schedule of wage rates provided to the contractor by the contracting authority, the inspector shall determine the amount owing to the worker(s) within the context of the Fair Wages and Hours of Labour Act.

The inspector shall apply the appropriate schedule rate to each worker's regular hours worked on the contract, as well as a rate of at least 1 and ½ times the schedule rate for all time paid by the employer at an overtime rate. The regular wages and overtime pay actually paid to the worker during the time period in question shall be subtracted from the calculated amount to determine the amount owed to the worker under the Fair Wages and Hours of Labour Act and Regulations. The inspector shall immediately advise the affected contractor/subcontractor of the amounts owing.

Corresponding adjustments to other amounts which may be considered to be wages under Part III of the Canada Labour Code, such as general holiday pay or vacation pay, require knowledge of provincial legislation beyond the mandate of the Labour Program inspector. Therefore, workers whose regular and overtime wages have been changed under the Fair Wages and Hours of Labour Act should be referred to the provincial or territorial Ministry responsible for labour or employment standards in order to have these amounts corrected.

To ensure that funds will be available for holdback if required, the inspector shall immediately notify the contracting authority verbally, by e-mail or by fax, that the contractor/subcontractor has not paid the wage rates stipulated in the Schedule applicable to the work site, and advise the authority of any action taken.

If there is a lack of response to a verbal request for compliance, the contract is active, and the time remaining to complete the contracted work allows, an "Assurance of Voluntary Compliance – Federal Construction Contracts" (Appendix D) shall be used to ensure that the contractor/subcontractor will commence paying Schedule rates, and stipulate a date by which the assessed arrears must be paid.

In determining the date by which payment must be made, the inspector shall consider the time remaining for completion of the contract, the contracting authority's payment schedule for monies owed to the contractor, and the outstanding amount of the contract value (if available from the contracting authority).

If there is a lack of response to a verbal request for compliance and/or an AVC, or if there is insufficient time remaining on the contract to allow for the use of these notifications, the inspector shall use the "Letter of Determination – Federal Construction Contracts" (Appendix E) to inform the contractor/ subcontractor in writing of the amount owing, and to request in writing that the contractor/subcontractor pay the outstanding amount and commence immediately to pay the Schedule rates for the balance of the time remaining on the contract.

When the contractor/subcontractor pays the amount(s) owing, whether through HRSDC – Labour Program or directly to the affected worker(s), the appropriate letter(s) shall be used to:

• acknowledge receipt of cheques by HRSDC – Labour Program (Appendix D-1);
• acknowledge payment of amounts owing directly to the affected worker(s) (Appendix D-2);
• disburse monies received from the contractor payable to the affected worker(s) (Appendix D-3);
• notify the affected worker(s) of the receipt of a cheque and the impending redistribution of the monies (Appendix D-4).

When the inspector has notified the contracting authority of an investigation, and the contractor/subcontractor has paid the amount owing as a result of a verbal request, or the issuance of an "Assurance of Voluntary Compliance – Federal Construction Contracts" (Appendix D), or a "Letter of Determination – Federal Construction Contracts" (Appendix E), the inspector must immediately advise the contracting authority of the contractor's/ subcontractor's compliance to ensure that there is no undue hindrance of the contractor's business.

(e)  Enforcement with subcontractors

If a subcontractor on the site has not paid the wage rates stipulated in the applicable Schedule, the inspector shall immediately notify the primary contractor verbally, by e-mail or by fax, of the finding and of actions taken and actions proposed concerning the subcontractor. The inspector shall then immediately notify the contracting authority of the investigation according to section 7.6(d) of this OPD – Enforcement: Schedule rates not paid – to ensure that holdback monies will be available if required.

When the inspector has notified the primary contractor and contracting authority of an investigation, and the subcontractor has paid the amount owing as a result of a verbal request, or the issuance of an "Assurance of Voluntary Compliance – Federal Construction Contracts" (Appendix D), or a "Letter of Determination – Federal Construction Contracts" (Appendix E), the inspector must immediately advise both the primary contractor and the contracting authority of the subcontractor's compliance.

If the subcontractor does not pay the amounts owing and otherwise comply with the "Labour Conditions" in the contract by the stipulated date, the inspector must so advise the primary contractor and remind the primary contractor of their obligation according to Section 12 of the Fair Wages and Hours of Labour Regulations. The inspector must also provide a reasonable opportunity for the primary contractor to obtain payment from the subcontractor, or to pay the amounts owing on behalf of the subcontractor before proceeding to a holdback request. The "Primary Contractor's Notice" (Appendix E-1) shall be used to notify a primary contractor of a subcontractor's non-compliance.

(f)  Non-payment of wages

Workers on federal construction sites may file complaints under the Fair Wages and Hours of Labour Act to obtain unpaid wages for work performed under the federal construction contract. The wage rate for the complainant's occupation on the applicable Schedule of wage rates for federal construction contracts is the maximum rate the inspector may assess as owing for the hours worked on the federal construction contract.

Complaint investigation and enforcement procedures for non-payment of wages are the same as those for non-payment of Schedule rates. [See 7.4 of this OPD – Receiving a federal construction contract wage complaint; 7.5 – Investigating a federal construction contract wage complaint and 7.6(d) – Enforcement: Schedule rates not paid].

When the Fair Wages and Hours of Labour Act does not apply, or where the worker's hourly rate is normally greater than the Schedule rate for the occupation and the worker wishes to obtain all of the owed wages, the inspector should advise the complainant to file a claim directly to the responsible contracting authority under the Wages Liability Act.
http://laws.justice.gc.ca/en/W-1/ index.html

NOTE:  Claims must be filed within two months of the 'infraction', and payment is dependant on contract monies still being available (as with a holdback).

When wages cannot be obtained through the Fair Wages and Hours of Labour Act or the Wages Liability Act, such as when no holdback monies are available, or for wage complaints concerning work on non-federal contracts, the complainant must be referred to the provincial Ministry responsible for employment standards.

(g)  Holdback

If the contractor/subcontractor does not pay the amounts owing to workers within the time established by the inspector, and, in the case of a non-compliant subcontractor, the primary contractor also does not pay the amounts owing on behalf of the subcontractor, the inspector shall request that the contracting authority hold back the assessed arrears from the monies still owed to the main contractor. A formal "Holdback Request" (Appendix F) must be used.

The request for a holdback must be signed by the Labour Regional Head, or designate.

At the time the request for holdback is made to the contracting authority, another written request for compliance, and a copy of the "Holdback Request" (Appendix F), must be sent by registered mail to, or served on, the main contractor, and if applicable, the subcontractor concerned. A formal "Contractor's Notice of Holdback Request" (Appendix G) must be used.

If the contractor does not comply as requested in the "Contractor's Notice of Holdback Request" (Appendix G) by the date stipulated in the notice, the Labour Regional Head, or designate, shall send a "Request for Payment of Holdback" (Appendix H) to the contracting authority to request that the held back monies be forwarded to the HRSDC – Labour Program office responsible for the inspection/investigation for disbursement to the affected worker(s).

Monies received under the application of the Fair Wages and Hours of Labour Act shall be placed in the non-interest bearing Labour Suspense Account and disbursed to the affected workers as soon as reasonably practicable.

(h)  Cancellation of holdback request

If the contractor/subcontractor pays the workers the assessed arrears and has commenced payment of Schedule wage rates, or higher, by the date stipulated in the "Holdback Notice", the Labour Regional Head, or designate, shall so advise the contracting authority and confirm that the monies held back may now be disbursed to the contractor according to the contract agreement. The appropriate letter is the "Cancellation of Holdback Request" (Appendix I).

8.  Responsibilities

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The Director General, National Labour Operations Directorate, HRSDC – Labour Program, is responsible for:

• ensuring uniform application of the present directive within HRSDC – Labour Program;
• responding to recommendations from the Senior Director, LSWE, concerning:
• modifications to the present directive,
• the allocation of resources, including budget funds for surveys or other services required from Statistics Canada, for the administration of the Fair Wages and Hours of Labour Act and Regulations.

The Senior Director, LSWE, is responsible for:

• ensuring uniform application of the present directive within LSWE;
• making recommendations to the Director General, National Labour Operations Directorate, HRSDC – Labour Program, concerning:
• modifications to the present directive,
• the allocation of resources for the implementation of the Act and Regulations;
• responding to recommendations from the Manager, Labour Standards Operations, concerning:
• modifications to the present directive,
• NHQ resources required for administration of the Act and Regulations,
• monitoring and enforcement procedures at all levels within HRSDC – Labour Program.

The Manager of Labour Standards Operations at NHQ is responsible for:

• making recommendations to the Senior Director, LSWE, concerning:
• modifications to the present directive,
• the allocation of NHQ resources for the implementation of the Act and Regulations, including budget funds for surveys or other services required from Statistics Canada, and
• monitoring and enforcement procedures at all levels within HRSDC – Labour Program;
• the distribution of Schedules to all HRSDC – Labour Program regional offices, to national levels of contracting authorities and, when requested, to national representatives of contractor and labour organizations;
• the publishing and maintenance of schedules and related information on the Internet; and
• the development of this directive and other policies concerning administration of the Act and Regulations, and of procedures for responding to complaints.

Labour Regional Heads are responsible for:

• ensuring uniform application of the present directive within their respective regions;
• establishing a liaison with contracting authorities in their respective regions and providing advice to them concerning compliance with the Act and Regulations;
• distributing Schedules to contracting authorities at the regional level;
• establishing a liaison with provincial or territorial labour and contractor organizations in order to understand the construction industry within the region, and provide these interested parties with Schedules and information about the application of the Act and Regulations; and
• notifying contracting authorities of non-compliant contractors and requesting the application of sanctions, including the holdback of contract funds.

Local HRSDC – Labour Program Managers are responsible for:

• ensuring uniform application of the present directive within their respective local HRSDC – Labour Program points of service;
• establishing a liaison with local contracting authorities and providing them with advice about compliance with the Act and Regulations;
• distributing Schedules to local contracting authorities;
• establishing a liaison with local labour and contractor organizations in order to understand the construction industry within the local area, and to provide these interested parties with Schedules and information about the application of the Act and Regulations;
• providing Schedules and advice to the general public;
• scheduling programmed inspections of federal construction contract work sites in their annual business plans; and
• accepting and investigating complaints under the Act and Regulations.

9.  Effective Date

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This revised procedure is effective as of the date of issuance.