From: Staffing

Federal Contractors

This section covers the following wage and hour laws and executive orders that apply strictly to federal contractors:

• Executive Order 13658.
• The Walsh-Healey Public Contracts Act.
• The Davis-Bacon and Related Acts.
• The Contract Work Hours and Safety Standards Act.
• The McNamara-O’Hara Service Contract Act.

Executive Order 13658

Executive Order 13568, signed by President Obama on February 12, 2014, establishes the minimum wage for federal contractors and subcontractors. A final rule regarding the order was issued on October 1, 2014.

Executive Order Minimum Wage

The minimum wage for federal contractors and subcontractors is $10.35 per hour and increases to $10.60 per hour on January 1, 2019. The minimum wage for federal contractors and subcontractors is adjusted annually based on the Consumer Price Index for Urban Wage Earners and Clerical Workers.

Tipped Workers

The minimum wage for tipped employees is $ $7.25 per hour and increases to $7.40 per hour on January 1, 2019. This minimum wage for tipped employees will increase in subsequent years until it is at least 70 percent of the executive order minimum wage. Tipped employees must receive tips amounting to at least the difference between the cash wage paid and the executive order minimum wage.

Coverage

Executive Order 13658 applies to new contracts and replacements for expiring contracts with the federal government that result from solicitations issued on or after January 1, 2015, or to contracts that are awarded outside the solicitation process on or after January 1, 2015.

Executive Order 13658 applies to four major categories of contractual agreements:

1. Procurement contracts for construction covered by the Davis-Bacon Act (DBA).
2. Service contracts covered by the Service Contract Act (SCA).
3. Concessions contracts, including any concessions contract excluded from the SCA by the Department of Labor’s regulations at 29 CFR 4.133(b).
4. Contracts in connection with federal property or lands and related to offering services for federal employees, their dependents, or the general public.

Procurement Contracts for Construction

Under the final rule, any contract covered by the DBA and its implementing regulations is subject to the executive order minimum wage requirement. The executive order does not apply, however, to contracts that are subject only to the Davis-Bacon and Related Acts (DBRA).

Service Contracts

Both procurement and nonprocurement contracts that are subject to the SCA and its implementing regulations are subject to the executive order minimum wage requirement.

Contracts for Concessions

The final rule defines concessions contract as a contract under which the federal government grants a right to use federal property, including land or facilities, for furnishing services. The term concessions contract includes, but is not limited to, a contract whose principal purpose is to furnish food, lodging, automobile fuel, souvenirs, newspaper stands, and/or recreational equipment, regardless of whether the services are of direct benefit to the government, its personnel, or the general public. The executive order thus covers all concession contracts with the federal government, including those excluded from SCA coverage by regulations, such as concession contracts with the federal government to operate souvenir shops or to provide food or lodging in national parks.

Contracts in Connection with Federal Property

The final rule interprets this provision as generally including leases of federal property, including space and facilities, and licenses to use such property entered into by the federal government for the purpose of offering services to the federal government, its personnel, or the general public. For example, a lease of space in a federal building from a federal agency to a business to operate a coffee shop to serve federal employees and/or the general public is covered by the executive order.

Contracts Not Covered by the Executive Order and the Final Rule

The executive order and the final rule contain certain narrow exclusions from coverage for the following types of contractual agreements:

• Grants.
• Contracts and agreements with and grants to Indian Tribes under Public Law 93-638, as amended.
• Any procurement contracts for construction that are not subject to the DBA (i.e., procurement contracts for construction under $2,000).
• Any contracts for services, except for those otherwise expressly covered by the final rule, that are exempted from coverage under the SCA or its implementing regulations. For example, the SCA exempts contracts for public utility services, including electric light and power, water, steam, and gas, from its coverage (see 41 U.S.C. 6702(b)(5); 29 CFR 4.120). It additionally exempts employment contracts providing for direct services to a federal agency by an individual, such as a contract with an individual to provide sign language interpretation for an event (see 41 U.S.C. 6702(b)(6); 29 CFR 4.121). Such contracts would also be exempt from coverage of the executive order and the final rule.

The Department of Labor also notes that the executive order does not apply to contracts for the manufacturing or furnishing of materials, supplies, articles, or equipment to the federal government, i.e., those subject to the Walsh-Healey Public Contracts Act.

Workers Not Entitled to the Executive Order Minimum Wage

Workers performing on or in connection with covered federal contracts whose wages are governed by the FLSA, the SCA, or the DBA are generally entitled to receive the executive order minimum wage for all time spent performing on or in connection with covered federal contracts. The executive order therefore generally applies to the following categories of workers performing on or in connection with covered federal contracts:

• Employees who are entitled to the FLSA minimum wage.
• Service employees who are entitled to prevailing wages under the SCA.
• Laborers and mechanics who are entitled to prevailing wages under the DBA. The executive order specifically provides that workers whose wages are calculated pursuant to special certificates issued under 29 U.S.C. 214(c) are entitled to receive the executive order minimum wage.

If a worker is entitled to a wage rate higher than the executive order minimum wage pursuant to another federal, state, or local law (e.g., the SCA or DBA), the worker must be paid the higher wage rate.

The Department of Labor’s final rule specifically notes that the minimum wage protections of the executive order extend broadly to protect FLSA-, SCA-, and DBA-covered workers performing “on” covered contracts (i.e., workers directly performing the specific services or construction called for by the contract’s terms) as well as workers performing “in connection with” covered contracts (i.e., workers performing other duties necessary to the performance of the contract). For example, the executive order minimum wage applies to FLSA-covered workers who provide support on SCA- and DBA-covered contracts that is necessary for the performance of the contract, such as an FLSA-covered security guard monitoring a DBA-covered project for the entire work week.

Workers Not Covered by the Executive Order and the Final Rule

The executive order and the final rule contain a few limited exclusions from coverage for certain workers. For example, workers who are employed in a bona fide executive, administrative, or professional capacity and who consequently are exempt from the FLSA’s minimum wage and overtime requirements are not entitled to receive the executive order minimum wage. FLSA-covered workers performing “in connection with” covered contracts are also excluded from coverage of the executive order if they spend less than 20 percent of their work hours in a particular workweek performing in connection with covered contracts.

Contracting Agency Obligations

The final rule sets forth the responsibilities of contracting agencies under the executive order. Contracting agencies are responsible for ensuring that the contract clause implementing the executive order minimum wage requirement is included in any new contracts or solicitations for contracts covered by the executive order. Contracting agencies are also responsible for withholding funds when a contractor or subcontractor fails to abide by the terms of the applicable contract clause, such as by failing to pay the required executive order minimum wage, and for forwarding any complaints alleging a contractor’s noncompliance with Executive Order 13658 to the Wage and Hour Division (WHD).

Contractor Obligations

The Department of Labor’s final rule sets forth certain obligations that contractors and subcontractors must fulfill in order to comply with the executive order. For example, contractors and subcontractors must include the executive order contract clause in any covered lower-tiered subcontracts. They also must notify all workers performing on or in connection with a covered contract of the applicable minimum wage rate under the executive order. Contractors and subcontractors must pay covered workers the executive order minimum wage for all hours worked on or in connection with covered contracts, and must comply with pay frequency and recordkeeping obligations. Finally, the final rule prohibits the taking of kickbacks from wages paid to workers on covered contracts as well as retaliation against any worker for exercising his or her rights under the executive order or the implementing regulations.

Enforcement

Complaints may be filed with the WHD by any person or entity that believes a violation of the executive order or its implementing regulations has occurred. The final rule contains a mechanism for WHD investigations and informal complaint resolution, as appropriate; it also specifies remedies and sanctions for violations of the executive order and its implementing regulations, including the payment of back wages and debarment. The final rule also includes an administrative process, including administrative hearings, to resolve disputes of fact or law.

The Walsh-Healey Public Contracts Act

The Walsh-Healey Public Contracts Act (PCA), located at 41 C.F.R. 50 – 50-210, requires contractors engaged in the manufacturing or furnishing of materials, supplies, articles, or equipment to the U.S. government (or the District of Columbia) to pay employees who produce, assemble, handle, or ship goods under contracts exceeding $10,000, as follows:

• The federal minimum wage for all hours worked.
• Time and one-half their regular rate of pay for all hours worked over 40 in a workweek.

Coverage

The PCA applies to contractors with contracts in excess of $10,000 for the manufacturing or furnishing of materials, supplies, articles, or equipment to the U.S. government or the District of Columbia. The PCA covers employees who produce, assemble, handle, or ship goods under these contracts.

Exemptions

The PCA does not apply to executive, administrative, and professional employees, or to outside salespersons exempt from the minimum wage and overtime provisions of the FLSA, nor does it apply to certain office and custodial workers.

In addition, the following contracts are not covered by the PCA:

• Purchases of materials, supplies, articles, or equipment as may usually be bought in the “open market.”
• Purchases of perishables.
• Purchases of agricultural products from the original producers.
• Contracts made by the Secretary of Agriculture for the purchase of agricultural commodities or products.
• Contracts for public utility services and certain transportation and communication services.
• Supplies manufactured or furnished outside the U.S. (including Puerto Rico) or the Virgin Islands.
• Contracts administratively exempted by the Secretary of Labor in special circumstances because of the public interest or to avoid serious impairment of government business.

Posting Requirements

Every employer performing work covered by the PCA is required to post WH-1313, Employee Rights on Government Contracts (including any applicable wage determination) at the site of the work in a prominent and accessible place where employees can easily see it.

If the contractor employs workers with disabilities under special minimum wage certificates, the WH-1284, Notice to Workers with Disabilities/Special Minimum Wage poster must also be posted. This poster explains the conditions under which special minimum wages may be paid. It must be posted in a conspicuous place on the employer’s premises where it can be readily seen by employees and the parents or guardians of workers with disabilities.

Record keeping

Under the PCA, contractors and subcontractors are required to maintain certain records, which must be available for inspection by the Wage and Hour Division. Records providing the following information for each covered employee must be kept on file for at least three years from their last date of entry:

• Name, address, sex, and occupation.
• Date of birth of each employee under age 19. If the employer has obtained a certificate of age, the following must be recorded:
  • The title and address of the office issuing the certificate.
  • The number of the certificate.
  • The date of issuance of the certificate.
  • The name, address, and date of birth of the minor as the name appears on the certificate.
• Wage and hour records, which include:
  • The rate of wages and the amount paid each pay period.
  • The hours worked each day and each week.
  • The period during which the employee worked on a government contract.
  • The number of the contract.

The employer must maintain records providing the following information for at least two years from their last date of entry, or their last effective date, if later:

• Basic employment and earnings records such as daily timecards, time sheets or records showing amounts of work accomplished.
• Wage rate tables.
• Work time schedules.

Penalties

Contractors and subcontractors who violate the PCA may be subject to the following penalties:

• The under payment of wages and overtime pay may result in the withholding of contract payments in amounts sufficient to reimburse the under payment.
• The penalty for employing underage minors or convicts is $25 per day per person, for which contract payments may also be withheld.

The Department of Labor may also bring legal action to collect wage under payment and fines for illegally employing minors and convicts. Willful violations may subject the employer to cancellation of the current contract and debarment from future federal contracts for a three-year period.

Interaction with Other Laws

State and local laws regulating wages and hours of work may also apply to employment subject to the PCA. When this happens, the employer must observe the law setting the stricter standard.

Employers should note that the PCA and FLSA may apply simultaneously to the same employer.

The Davis-Bacon and Related Acts

The Davis-Bacon Act (40 U.S.C.A. §§ 3141 – 3148) requires that each contract over $2,000 — to which the United States or the District of Columbia is a party for the construction, alteration, or repair of public buildings or public works — contain a clause setting forth the minimum wages to be paid to various classes of laborers and mechanics employed under the contract. Under the act, contractors or their subcontractors must pay workers employed directly upon the site of the work no less than the locally prevailing wages and fringe benefits paid on projects of a similar character. The Davis-Bacon Act directs the Secretary of Labor to determine such local prevailing wage rates.

In addition to the Davis-Bacon Act itself, Congress has added prevailing wage provisions to approximately 60 statutes, which assist construction projects through grants, loans, loan guarantees, and insurance. These “Related Acts” involve construction in such areas as transportation, housing, air and water pollution reduction, and health. If a construction project is funded or assisted under more than one federal statute, the Davis-Bacon prevailing wage provisions may apply to the project if any of the applicable statutes requires payment of Davis-Bacon wage rates.

The Secretary of Labor is responsible for determining the prevailing wage rate. Apprentices may be employed at less than the predetermined rates if they are in an apprenticeship program registered with the Department of Labor or with a state apprenticeship agency recognized by the department. Similarly, trainees may be employed at less than predetermined rates if they are in a training program certified by the Department of Labor.

Required Stipulations

Every contract covered by the Davis-Bacon Act must contain stipulations that:

• The contractor or subcontractor must pay all mechanics and laborers employed directly on the worksite as follows:
  • Unconditionally and at least once a week.
  • Without subsequent deduction or rebate on any account.
  • All full amounts accrued at the time of payment.
  • Computed at wage rates not less than those stated in the advertised specifications, regardless of any contractual relationship that may be alleged to exist between the contractor or subcontractor and the laborers and mechanics.
• The contractor will post the scale of wages to be paid in a prominent and easily accessible place at the worksite.
• There may be withheld from the contractor an amount of accrued payments, as the contracting officer deems necessary, to compensate laborers and mechanics employed by the contractor or any subcontractor on the work the difference between the following, and not refunded to the contractor or subcontractors or their agents:
  • The rates of wages required by the contract to be paid laborers and mechanics on the work.
  • The rates of wages received by the laborers and mechanics.

Termination of Work on Failure to Pay Agreed Wages

Every contract must also contain a provision that if the contracting officer finds that any laborer or mechanic employed by the contractor or any subcontractor directly on the worksite covered by the contract has been or is being paid a rate of wages less than the rate of wages required by the contract to be paid, the federal government — by written notice to the contractor — may terminate the contractor’s right to proceed with the work or the part of the work as to which there has been a failure to pay the required wages.

The government may have the work completed, by contract or otherwise, and the contractor and the contractor’s sureties will be liable to the government for any excess costs the government incurs.

Discharge of Obligation

The obligation of a contractor or subcontractor to make payment in accordance with the prevailing wage determinations of the Secretary of Labor under the Davis-Bacon and Related Acts (DBRA) may be discharged by any of the following:

• Making payments in cash.
• Making contributions to a trustee or to a third person under a fund, plan, or program.
• Assuming an enforceable commitment in providing benefits to laborers and mechanics and to bear the costs of a plan or program that may be reasonably anticipated, which was communicated in writing to the laborers and mechanics affected.
• Any combination of payment, contribution, and assumption, where the aggregate of the payments, contributions, and costs is no less than the basic hourly rate of pay plus the amount for medical or hospital care, pensions on retirement or death, compensation for injuries or illness resulting from occupational activity, or insurance to provide any of the forgoing, for unemployment benefits, life insurance, disability and sickness insurance, or accident insurance, for vacation and holiday pay, for defraying the costs of apprenticeship or other similar programs, or for other bona fide fringe benefits, but only where the contractor or subcontractor is not required by other federal, state, or local law to provide any of those benefits.

Overtime Pay

Overtime pay to which a laborer or mechanic is entitled under any federal law is calculated using the laborer or mechanic’s regular or basic hourly rate of pay (or other alternative rate on which premium rate of overtime compensation is computed). However, where the amount of payments, contributions, or costs incurred with respect to the laborer or mechanic exceeds the applicable prevailing wage, the regular or basic hourly rate of pay (or other alternative rate) is the amount of payments, contributions, or costs actually incurred with respect to the laborer or mechanic minus the greater of the amount of contributions or costs actually incurred with respect to the laborer or mechanic or the amount determined to be owed but not actually paid.

Record keeping

Under the DBRA, covered contractors must maintain payroll and basic records for all laborers and mechanics during the course of the work and for a period of three years thereafter. These records should include:

• The name, address, and Social Security number of each employee.
• Employee work classification.
• The hourly rates of pay, including rates of contributions or costs anticipated for fringe benefits or their cash equivalents.
• The daily and weekly numbers of hours worked.
• Deductions made.
• Actual wages paid.
• If applicable, detailed information regarding various fringe benefit plans and programs, including records that show that the plan or program has been communicated in writing to the laborers and mechanics affected.
• If applicable, detailed information regarding approved apprenticeship or trainee programs

Some of these records are also required under the Fair Labor Standards Act (FLSA).

Reporting Requirements

On a weekly basis, each covered contractor and subcontractor must provide the federal agency contracting for or financing the construction project a copy of all payrolls providing the information previously listed in the Recordkeeping section for the preceding weekly payroll period. A “Statement of Compliance” must accompany each payroll submitted. The contractor, subcontractor, or the authorized officer or employee of the contractor or subcontractor who supervises the payment of wages must sign the weekly statement. Statements of Compliance are to be made on the form WH-347, Payroll (For Contractors Optional Use) or on any form with identical wording. This must be completed within seven days after the regular pay date for the pay period.

Contractors may also be asked to submit, via survey, wage data that may be used by the Wage and Hour Division to determine the locally prevailing wage rates that will apply to workers on DBA- and DBRA-covered projects. The submission of wage data is encouraged, but voluntary. Contractors and others may use Form WD-10, Report of Construction Contractor’s Wage Rates.

Posting Requirements

Every employer performing work covered by the DBRA must post the WH-1321, Employee Rights under the Davis-Bacon Act poster (including any applicable wage determination) at the worksite in a prominent and accessible place where employees may easily see it.

Penalties/Sanctions

Contractors or subcontractors found to have disregarded their obligations to employees, or to have committed aggravated or willful violations while performing work on Davis-Bacon covered projects, may be subject to contract termination and debarment from future contracts for up to three years. In addition, contract payments may be withheld in sufficient amounts to satisfy liabilities for unpaid wages and liquidated damages that result from overtime violations of the Contract Work Hours and Safety Standards Act (CWHSSA).

Falsification of certified payroll records or the required kickback of wages may subject a contractor or subcontractor to civil or criminal prosecution, the penalty for which may be fines and/or imprisonment.

Interaction with Other Laws

As stated previously, Congress has extended the Davis-Bacon prevailing wage requirements to some 60 related acts that provide federal assistance for construction through loans, grants, loan guarantees, and insurance. These acts include by reference the requirements for payment of the prevailing wages in accordance with the Davis-Bacon Act. Examples of the related acts are the American Recovery and Reinvestment Act of 2009, the Federal-Aid Highway Acts, the Housing and Community Development Act of 1974, and the Federal Water Pollution Control Act.

The Copeland Anti-Kickback Act prohibits contractors from in any way inducing an employee to give up any part of the compensation to which the employee is entitled under their contract of employment, and requires contractors to submit a weekly statement of the wages paid to each employee performing DBRA covered work. Contractors on projects subject to DBRA labor standards may also be subject to additional prevailing wage and overtime pay requirements under state and local laws. In addition, overtime work pay requirements under CWHSSA and the Fair Labor Standards Act may apply.

The Contract Work Hours and Safety Standards Act

The Contract Work Hours and Safety Standards Act (CWHSSA), found at 40 U.S.C.A. §§ 3141 – 3708, applies to federal service contracts and federal and federally assisted construction contracts over $100,000. It requires contractors and subcontractors on covered contracts to pay laborers and mechanics employed in the performance of the contracts one and one-half times their basic rate of pay for all hours worked over 40 in a workweek. The act also prohibits unsanitary, hazardous, or dangerous working conditions on federal and federally financed and assisted construction projects.

Coverage

The CWHSSA is administered by the Wage and Hour Division of the Department of Labor. The act applies to contractors and subcontractors with federal service contracts and federally funded and assisted construction contracts over $100,000. Covered contracts include those entered into by the United States, any agency or instrumentality of the United States, any territory of the United States, or the District of Columbia.

The CWHSSA also extends to federally assisted construction contracts subject to DBRA wage standards where the federal government is not a direct party, except those contracts where the federal assistance takes the form only of a loan guarantee or insurance.

Exemptions

Certain contracts are exempt from the CWHSSA. These include contracts for the following:

• Transportation by land, air, or water.
• Transmission of intelligence.
• Purchase of supplies, materials, or articles ordinarily available in the “open market.”
• Work required to be done according to provisions of the Walsh-Healey Public Contracts Act.
• Contracts administratively exempted by the Secretary of Labor in special circumstances because of the public interest or to avoid serious impairment of government business.

Posting Requirements

A notice is required to be posted on all contracts to which CWHSSA applies. The notice to be posted depends on the type of federal procurement contract involved — either WH-1321, Employee Rights under the Davis-Bacon Actfor Davis-Bacon contracts — or, for contracts to which the McNamara-O’Hara Service Contract Act (SCA) applies, WH-1313, Employee Rights on Government Contracts must be posted. The appropriate poster(s) must be posted at the site of the work in a prominent and accessible place where it may be easily seen by employees. There is no size requirement for these posters but they must be easily readable.

Record keeping

Depending on the type of federal procurement contract involved, the record keeping requirements of the DBRA or the SCA may apply to contracts subject to the CWHSSA.

The record keeping requirement includes maintaining payroll records that provide the following information for each covered employee:

• Name, address, and Social Security number.
• Work classification.
• Hourly rates of wages paid.
• Daily and weekly number of hours worked.
• Deductions made.
• Actual wages paid.

Records must be maintained during the course of the work and for a period of three years from the completion of the contract, and be made available to the contracting agency and the Department of Labor.

Reporting Requirements

On contracts to which the labor standards provisions of the DBRA apply, each contractor and subcontractor is required to provide the federal agency a weekly statement of the wages paid to each of its employees engaged in covered work. Each payroll submitted must be accompanied by a “Statement of Compliance” using form WH-347, Payroll (For Contractors Optional Use), or any form with identical wording, certifying compliance with applicable requirements. The statement must be signed by the contractor or subcontractor, or by an authorized officer or employee of the contractor or subcontractor who supervises the payment of wages, and delivered to a representative of the federal or state agency in charge. This must be submitted within seven days after the regular pay date for the pay period.

Penalties/Sanctions

Contractors or subcontractors who violate the CWHSSA may be subject to fines, imprisonment, or both. Intentional violations of the CWHSSA may be punished by a fine or by imprisonment for up to six months, or both. Overtime wage violations may result in the assessment of liquidated damages in the sum of $25 for each calendar day an employee is allowed to work in excess of a 40-hour workweek without payment of the required overtime compensation.

Contractors or subcontractors found to have committed willful or aggravated violations of the overtime requirements may have their contracts terminated and may be declared ineligible to receive future contracts for a period of up to three years.

Interaction with Other Laws

The provisions of the CWHSSA also apply to DBRA contracts where the contract is financed in whole or in part by grants or loans from the U.S. government, or loans insured or guaranteed by the U.S. government, except where the federal assistance is only in the nature of a loan guarantee or insurance.

The McNamara-O’Hara Service Contract Act

The McNamara-O’Hara Service Contract Act (SCA), located at 41 U.S.C.A. § 351 et seq., requires contractors and subcontractors performing services on prime contracts in excess of $2,500 to pay service employees in various classes no less than the wage rates and fringe benefits found prevailing in the locality, or the rates (including prospective increases) contained in a predecessor contractor’s collective-bargaining agreement as provided in wage determinations issued by the Department of Labor. These determinations are incorporated into the contract.

For contracts equal to or less than $2,500, contractors are required to pay the federal minimum wage of $7.25 per hour effective July 24, 2009. Contractors must also, under the provisions of the CWHSSA and the FLSA, pay employees at least one and one-half times their regular rate of pay for all hours worked over 40 in a workweek. Finally, employers must notify employees working in connection with the contract of the compensation due them under the wage and fringe benefits provisions of the contract.

Coverage

The SCA covers contracts and any bid specifications in excess of $2,500, whether negotiated or advertised, entered into by federal and District of Columbia agencies where the principal purpose of the contract is to furnish services in the United States through the use of service employees. The definition of a service employee includes any employee engaged in performing services on a covered contract other than a bona fide executive, administrative, or professional employee.

The act does not apply to certain types of contractual services. These statutory exemptions include:

• Contracts for construction, alteration, and/or repair of public buildings or public works, including painting and decorating (those covered by the Davis-Bacon Act).
• Work required in accordance with the provisions of the Walsh-Healey Public Contracts Act.
• Contracts for transporting freight or personnel where published tariff rates are in effect.
• Contracts for furnishing services by radio, telephone, telegraph, or cable companies subject to the Communications Act of 1934.
• Contracts for public utility services.
• Employment contracts providing for direct services to a federal agency by an individual or individuals.
• Contracts for operating postal contract stations for the U.S. Postal Service.
• Services performed outside the United States (except in territories administered by the United States, as defined in the act).
• Contracts administratively exempted by the Secretary of Labor in special circumstances because of the public interest or to avoid serious impairment of government business.

Posting Requirements

Every employer performing work covered by the SCA is required to provide each employee working on the contract notice of the SCA payment and fringe benefit requirements for the different classes of service employees and to post WH-1313, Employee Rights on Government Contracts (including any applicable wage determination) at the site of the work in a prominent and accessible place where it may be easily seen by employees.

If the contractor employs workers with disabilities under special minimum wage certificates, the WH-1284, Notice to Workers with Disabilities/Special Minimum Wage poster must also be posted. This poster explains the conditions under which special minimum wages may be paid. It must be posted in a conspicuous place on the employer’s premises where it can be readily seen by employees and the parents or guardians of workers with disabilities.

Record keeping

Under the SCA, contractors and subcontractors are required to maintain certain records for each employee performing work on the covered contract. Basic records, such as name, address, and Social Security number of each employee must be maintained for three years from completion of the work. In addition, records on the following must be maintained for three years:

• The correct work classification(s), wage rate(s), and fringe benefits provided (or cash equivalent payments provided in lieu of fringe benefits).
• The total daily and weekly compensation of each employee.
• The number of daily and weekly hours worked by each employee.
• Any deductions, rebates, or refunds from each employee’s compensation.
• Any list of a predecessor contractor’s employees that had been furnished showing employee’s length of service information.
• A list of wages and fringe benefits for those classes of workers conformed to the wage determination attached to the contract.

Penalties/Sanctions

Violations of the SCA may result in contract terminations and liability for any resulting costs to the government, withholding of contract payments in sufficient amounts to cover wage and fringe benefit underpayments, legal action to recover the underpayments, and debarment from future contracts for up to three years.

Interaction with Other Laws

The SCA applies only to contracts awarded by the federal government or the District of Columbia. As previously noted, contractors are required to compensate employees working in connection with covered contracts for overtime work in accordance with the overtime pay standards of the FLSA and the CWHSSA.