Assistant Commissioner PHILLIPS. No sir.

No sir. On building con

struction, we set the labor scale-negotiated union scale. Commissioner CABE. Is it the same throughout the State of Ten

nessee?

Assistant Commissioner PHILLIPS. No sir.

Commissioner CABE. Are you talking about highways?

Assistant Commissioner PHILLIPS. On highway work, we set it on a statewide basis. The U.S. Department of Labor is hurting Ten

nessee.

Commissioner CABE. In Kentucky, we say that Tennessee is hurting us. In other words, we do have these problems between the agencies in terms of interpretation. In fact, we very recently had a meeting with some United States Steel people on a little different problem.

What about your classification problem? Let's get into enforcement. A rate has been determined by negotiations, by hearings, or however your determination is made, for the construction site by a number of different kinds of job classifications. You are now trying to enforce it. You are trying to be sure that the employer is paying, say, $4.12 for operators; $3.12 for labor; or $4.25 for carpenters. What do you do classification wise? This gets involved again in determination. A person makes a complaint. One thing I want to be discussed today is, what do you do?

Commissioner DUVALL. I think we have too much to discuss here to get in both: makeup of the law itself, and the administrative procedure. We should have either one or the other here and try to complete it, because I do not think we can do a good job on both. It is too broad a subject.

Commissioner OTERO. I think, one easy way to explain the problem of classification would be for you to adopt a description of the work to be performed by the various classifications. This would be your guideline for enforcement. So if you get a complaint on this classification, you can go back to your definition. Of course, this is real ticklish, because you are trying to solve a problem that various labor organizations have not been able to solve themselves for many, many years.

Commissioner CABE. You are not going to get it all solved.

Commissioner OTERO. The only thing I can suggest is define the work to be performed by the various trades only to the extent already agreed upon to the satisfaction of the various trades. Do not get caught in the middle of a jurisdictional dispute or cause them yourself. All you can do is stay out of it if it develops into

a problem. Perhaps they can take it to the courts and let them fight it out.

Would you please give a brief outline of what you consider the basic essentials that we should include in an ideal public works minimum wage law.

Commissioner CABE. We cannot do that! [Laughter.] I will say that there is going to be some information from the Bureau of Labor Standards soon on that. They are working on a draft at the present time. Again, that was one of the reasons for this discussion. There may be some more followup on this.

CONFEREE (New Jersey). (New Jersey). Barker had a committee

About 3 years ago Commissioner

Commissioner CABE. 1963, I believe.

CONFEREE. studying what provisions a prevailing law should include. "Smokey" has a point on this joint Federal-State jurisdiction. In New Jersey, our determination covers who lets the contract. If a public body in New Jersey lets a contract, we maintain State jurisdiction. Frequently, those contracts are paid by Federal funds. So you have joint Federal-State jurisdiction. You have two sets of wage scales-one under the Federal act and one under the State act. I find that our State rates are higher. Frequently, in New Jersey, unionized contractors are losing contracts to out-of-State contractors and State nonunion contractors, because Federal scales are not the prevailing rates. I state that flatly. Frequently, Federal determinations are not the prevailing rates because they are not up on contract changes. They are from 6 months to 1 year behind in making determination; so it is a problem.

Commissioner CABE. May we hear experiences from other States? Chairman BRADSHAW. We have the same problem in Delaware. Commissioner DUVALL. On the 9010 highway program, rates are requested from both Federal and State. Both sets are incorporated in the specifications. There doesn't seem to be any misunderstanding between the Federal agency and my office that the higher minimum shall prevail.

CONFEREE. This is what I want to bring up. I may be laboring under the wrong impression. It has always been the policy that the higher of the two rates shall prevail. I have never had any trouble. CONFEREE (New Jersey). We determine on county basis. I have a specific case. The Phillipsburg Housing Authority let a housing contract with plumbing rates not prevailing in that area. A nonunion firm got the contract. We received a complaint from the union. We made the inspection and found the complaint valid under our statute. We ordered the public authority to withhold the funds. They contacted the PHA counsel in New York and said,

"Don't listen to the State. They have no rate. It is strictly a Federal job. They have no right to hold funds." So, here is an area where there should be cooperation.

Commissioner CABE. My experience has been that whichever rate is higher, that one will prevail. In fact, this is what disturbs me, I never know who enforces what. But the housing authority most consistently has done so in our State.

CONFEREE (New Jersey). I have a letter from their attorney in New York in which they stated that this is a Federal job and the State has no business there; that we have no right to withhold funds.

Commissioner CABE. I don't know if I would do it. When I first came in, I tried to get that statement withdrawn, because our law does agree that if it is a Federal project, we do not prevail. I tried to get them to withdraw it, and they simply refused. They ignored me. They kept putting it in. I didn't know how we could live with it. But we have. The higher rate has prevailed and it hasn't disturbed me. I have not lost any sleep over it.

Assistant Commissioner PHILLIPS. That is true, what you say. Where it is 100 percent Federal money on nursing homes, post offices, etc.—they are going to establish a wage scale lower than the State scale. Follow me? Then, 6 months, or 3 or 4 years later, the State wants to build a school-a dormitory for girls, a dormitory for boys, etc. And the Federal Government has a little money in it, say, 15 or 20 percent. We establish a wage scale; the Federal Government establishes a wage scale, and it goes to an architect. He in turn sends it out in bid form. The contractors bid on the low end of it because they say, "We are going to pay the State scale." It causes you a lot of trouble. They call us and say, "You have the rate for plumber at $4, and the Federal Government has $3.50." So I say, "Pay the $3.50." We are not going to argue.

Commissioner BARKER. Just as soon as I determine my rates, I write to Mr. Charles Donahue of the U.S. Department of Labor and say, in effect, that he will find enclosed the 1966 prevailing rate determinations for highway construction, heavy construction, and building construction for each of the 55 counties of West Virginia; that they shall remain in effect no longer than 15 months; and that he will be notified of any modification on our part.

CONFEREE. We do the same thing.

Commissioner BARKER. That has worked.

CONFEREE. It will on highway work but it won't on building

construction.

Commissioner CABE. At this meeting, we are finding varied experiences among the States with the same agencies in Washington. Some are communicating too well, and some not enough.

Mr. BORTZ. Mr. Chairman, I think this has been a very informative discussion. I would like to make two observations. I think all of the delegates know that the administration of the prevailing wage rate law has been in the Office of the Solicitor of the U.S. Department of Labor. We will do this. When we get a copy of the transcript of this discussion this morning, we will transmit it to the Solicitor, so he will be aware of the concerns and the comments which you have expressed here.

The second comment relates to a matter which, I think, Commissioner Barker touched on a moment ago. Those of you who attended the Secretary's conference in March will recall that there was some comment with respect to a development of a draft of a prevailing wage rate law. Since then, we have, in the Bureau, with the assistance of attorneys from the Solicitor's Office, developed a draft. The discussion this morning suggested several items which I am not sure that the draft in its present form covers, or covers adequately. But we do have a draft. We intend to review it a little more in light of your discussion this morning. Then the next logical step, I think, would be either to send it to all the labor commissioners or, if the IAGLO wants, to have a committee working on this so it can be reviewed and further discussed. Those are the two comments.

Commissioner CABE. We have time for one more question.

Director LAURETA. I do not know if any of the other States have had any success with this particular problem. I am glad Mr. Bortz mentioned the Solicitor's Office attempt, or at least the Department of Labor's attempt, to bring out some guidelines for the States. We wrote to the Solicitor about 2 years ago and never received a reply. Our primary inquiry was on the procedure or the methods used by the Solicitor's Office in determining prevailing wages. We did not receive an answer. About a year later, we followed up on that same question, and still, we received no satisfactory answer. It appears to us that the method being used by the Solicitor in determining prevailing wages is a dark secret. If any State has received an answer as to how the Solicitor manages to get the prevailing wage, we would like you to tell us how they do it to see if we can correct our methods. Or, if the Solicitor is following a wrong method, we would like to help him correct his procedure. [Laughter.]

Commissioner DUVALL. In answer to that, I think some State laws have stronger provisions than the Federal statutes.

Commissioner CABE. I think there is another answer. Part of this shows up in the discussion we have had this morning. And that is the variety of things our laws cover. In many States, if you talk only about State construction or highway construction, then

those States have no difficulty because many of them have control of all contracting agencies; many States have used a negotiated rate. If they don't use a negotiated rate-short of any political pressures -they have the right to determine what they want to use. It doesn't really matter what anybody says about it, because they are the contracting agencies.

But when you move away from that-and please note that many prevailing wage laws cover only that-the laws cover things that many States do entirely by policy, something that has evolved over the years with or without laws because, again, they are the contracting agencies, or they are able to say that this is the way we are able to best use the many processes.

When you move away from that, and you tell somebody else what the rate shall be, your problem often becomes substantially greater. In fact, I think I personally can go a step further and say that sometimes I don't know how the administrator in the Solicitor's Office determines the wage rate-and I don't know really how Carl Cabe determines it either. Because, in my own State, we have a hearing and we have submission of materials, etc. I am quite aware that the materials and all of them go over my desk; I wish they didn't, but they do of the hearings that we have held in each county, the data presented, sometimes are most voluminous. But sometimes, they are next to nothing. I have on occasions even held another hearing, because they were so poor. My experience has been that it has not increased very much. This is also true with you. One thing I have often asked the men when they are talking about the U.S. Solicitor's rates, "Do you send in information?" Too many times, not all, but too many times, they have not sent in information. So they may be in the same boat that the fellow here is in-trying to determine the rate in a number of situations in Kentucky with almost no data available.

One thing we talked about yesterday was, How do we cover a law that has the variety this one does with a group this size in an hour's time? I think we did better than some thought we would. We talked about the variety of the laws. We covered municipals and building; getting into maintenance work and municipalities; doing our own contracting; and speaking of either increasing the control of the prevailing wage law or the bidding law within the State. We talked about what happens when the rate changes; and when the prevailing rate is a negotiated rate, does it prevail or does the negotiated rate prevail. I believe at least two of our State commissioners said that as far as their departments were concerned, the prevailing rate would be the one that would continue. We have